[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported unaudited interim results for H1 2024, with revenue down 30.6% to HK$72,309 thousand, gross profit down 35.0% to HK$55,397 thousand, and loss attributable to owners narrowing to HK$5,130 thousand | Metric | | | For the six months ended June 30 | | | :--- | :--- | :--- | :--- | :--- | | | | | 2024 | 2023 | | Revenue | | HK$ thousand | 72,309 | 104,131 | | Gross profit | | HK$ thousand | 55,397 | 85,233 | | Loss before tax | | HK$ thousand | (5,130) | (14,290) | | Loss attributable to owners of the Company | | HK$ thousand | (5,130) | (12,327) | | Gross profit margin | | % | 76.6 | 81.9 | | Loss attributable to owners of the Company margin | | % | (7.1) | (11.8) | | — Loss per share | Basic and diluted | HK$ | (0.02) | (0.05) | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated statement of profit or loss and other comprehensive income and financial position, showing decreased revenue, narrowed loss, and improved net liabilities [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement details the company's financial performance, showing revenue, cost of sales, gross profit, other income, expenses, and the resulting loss for the period | Metric | Note | For the six months ended | | | :--- | :--- | :--- | :--- | | | | June 30, 2024 (HK$ thousand) | June 30, 2023 (HK$ thousand) | | Revenue | 3 | 72,309 | 104,131 | | Cost of sales | | (16,912) | (18,898) | | **Gross profit** | | **55,397** | **85,233** | | Other income | | 2,463 | 2,004 | | Other gains and losses | 5 | (5,539) | (961) | | Selling and distribution costs | | (24,838) | (37,508) | | Administrative expenses | | (31,389) | (61,987) | | Finance costs | | (1,224) | (1,071) | | **Loss before tax** | 6 | **(5,130)** | **(14,290)** | | Taxation | 7 | — | — | | **Loss for the period** | | **(5,130)** | **(14,290)** | | Other comprehensive income | | | | | Exchange reserve released on deconsolidation of overseas subsidiaries | | 1,448 | — | | **Total comprehensive expense for the period** | | **(3,682)** | **(12,279)** | | Loss for the period attributable to: | | | | | Owners of the Company | | (5,130) | (12,327) | | Non-controlling interests | | — | (1,963) | | **Total** | | **(5,130)** | **(14,290)** | | Total comprehensive expense for the period attributable to: | | | | | Owners of the Company | | (3,682) | (11,011) | | Non-controlling interests | | — | (1,268) | | **Total** | | **(3,682)** | **(12,279)** | | Loss per share Basic and diluted (HK$) | 9 | (0.02) | (0.05) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the company's assets, liabilities, and equity at the end of the reporting period, highlighting changes in financial position | Metric | Note | As at June 30, 2024 (HK$ thousand) | As at December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | :--- | | **Non-current assets** | | | | | Property, plant and equipment | | 26,071 | 27,758 | | Investment properties | | 2,100 | 2,100 | | Loan to an associate | | 5,757 | 5,236 | | Deferred tax assets | | 2,852 | 3,804 | | Deposits and prepayments for life insurance policies | | 1,944 | 1,930 | | Lease deposits and prepayments | | 3,568 | 4,474 | | **Total non-current assets** | | **42,292** | **45,302** | | **Current assets** | | | | | Inventories | | 15,149 | 13,324 | | Trade and other receivables | 10 | 20,382 | 23,494 | | Loan to an associate | | 38,765 | 38,765 | | Pledged time deposits | | 21,223 | 21,223 | | Bank balances and cash | | 38,074 | 40,002 | | **Total current assets** | | **133,593** | **136,808** | | **Current liabilities** | | | | | Trade and other payables | 11 | 108,544 | 131,424 | | Contract liabilities | | 70 | 151 | | Amounts due to related companies | | 7,863 | 10,449 | | Loan from a related company | | 10,692 | 10,692 | | Lease liabilities | | 14,243 | 14,845 | | Other borrowings — due within one year | | 15,000 | 15,000 | | Tax payable | | 275 | 178 | | **Total current liabilities** | | **156,687** | **182,739** | | **Net current liabilities** | | **(23,094)** | **(45,931)** | | **Total assets less current liabilities** | | **19,198** | **(629)** | | **Non-current liabilities** | | | | | Employee benefit obligations | | 1,665 | 1,665 | | Lease liabilities | | 11,224 | 13,878 | | **Total non-current liabilities** | | **12,889** | **15,543** | | **Net assets / (liabilities)** | | **6,309** | **(16,172)** | | **Capital and reserves** | | | | | Share capital | | 2,428 | 2,428 | | Reserves | | (4,389) | (707) | | **Equity attributable to owners of the Company** | | **(1,961)** | **1,721** | | Non-controlling interests | | 8,270 | (17,893) | | **Total equity** | | **6,309** | **(16,172)** | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details the basis of preparation, accounting policies, segment information, revenue, taxation, loss per share, receivables/payables, and post-reporting events, including going concern uncertainties [1. Basis of Preparation](index=6&type=section&id=1.%20Basis%20of%20Preparation) This section outlines the accounting standards used for financial statement preparation, addresses issues of lost records, and discusses the company's going concern uncertainties - The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the HKICPA, and include applicable disclosures required by the Listing Rules of the Stock Exchange of Hong Kong Limited and the Hong Kong Companies Ordinance[9](index=9&type=chunk) - After the retirement of former executive director Mr. Yang Jun, the company was unable to locate certain books, records, and supporting documents for Shang Ying International Group and Shang Ying Retail Group[10](index=10&type=chunk)[11](index=11&type=chunk) - For financial statement preparation, the directors decided to consolidate the carrying amounts of assets and liabilities, and the results and cash flow data of Shang Ying International Group and Shang Ying Retail Group for the six months ended June 30, 2023[12](index=12&type=chunk) - The company's shares have been suspended from trading since April 2, 2024, with limited working capital. The Group has entered into an agreement to dispose of its financial services business (Shang Ying Capital Group), but its books and records are considered inadequate[12](index=12&type=chunk)[13](index=13&type=chunk) - Shang Ying Internet Medical (Shanghai) Co., Ltd. had its bankruptcy liquidation application accepted on April 29, 2024, and a liquidator appointed on May 6, leading to the Company losing control and deconsolidating it from that date[14](index=14&type=chunk) - As of the end of the reporting period, the Group recorded a net loss of approximately **HK$5,130 thousand** (2023: HK$14,290 thousand), with current liabilities exceeding current assets by approximately **HK$23,094 thousand**, and total liabilities exceeding total assets by approximately **HK$998 thousand**[15](index=15&type=chunk) - The Board believes that, considering the **HK$50,000 thousand** financial support from non-executive director Mr. Zhang Mingqi and the derecognition of certain subsidiary liabilities, the Group will have sufficient working capital to continue as a going concern[15](index=15&type=chunk) - Despite these plans, the outcome of management's efforts to address significant doubts about the going concern ability remains uncertain, thus a material uncertainty exists regarding the Group's ability to continue as a going concern in the foreseeable future[16](index=16&type=chunk) [2. Principal Accounting Policies](index=9&type=section&id=2.%20Principal%20Accounting%20Policies) This section details the accounting policies applied in the condensed consolidated financial statements, including the adoption of new and revised HKFRSs - The condensed consolidated financial statements are prepared on a historical cost basis, using the same accounting policies and methods of computation as the 2023 annual financial statements, except for the application of certain revised Hong Kong Financial Reporting Standards[17](index=17&type=chunk) - Several revised Hong Kong Financial Reporting Standards were first applied in this interim period, including lease liabilities in sale and leaseback transactions and classification of liabilities as current or non-current, but had no significant impact on financial position or performance[18](index=18&type=chunk) - New and revised Hong Kong Financial Reporting Standards that have been issued but are not yet effective are listed, and are not expected to have a significant impact on the Group's current and prior period financial position, performance, and/or disclosures[19](index=19&type=chunk) [3. Revenue](index=11&type=section&id=3.%20Revenue) This section provides a breakdown of revenue by source, sales channel, and timing of recognition for the reporting periods Disaggregation of Revenue from Contracts with Customers | Revenue Source | June 30, 2024 (HK$ thousand) | June 30, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Footwear products | 72,309 | 100,660 | | Health products | — | — | | Financial services | — | 3,369 | | Online medical services | — | 102 | | **Total** | **72,309** | **104,131** | Sales Channels | Sales Channel | June 30, 2024 (HK$ thousand) | June 30, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Retail | 70,281 | 98,466 | | Wholesale | 2,028 | 2,194 | | Internet | — | 102 | | Corporate | — | 3,369 | | **Total** | **72,309** | **104,131** | Timing of Revenue Recognition | Timing of Recognition | June 30, 2024 (HK$ thousand) | June 30, 2023 (HK$ thousand) | | :--- | :--- | :--- | | At a point in time | 72,309 | 100,660 | | Over time | — | 3,471 | | **Total** | **72,309** | **104,131** | [4. Operating Segments](index=12&type=section&id=4.%20Operating%20Segments) This section presents financial information segmented by business activities and geographical regions, detailing external sales and segment results - The Group's reportable segments include trading of footwear products, trading of health products, financial services, and online medical services[25](index=25&type=chunk) Segment Revenue and Results for the Six Months Ended June 30, 2024 | Segment | External Sales (HK$ thousand) | Segment Results (HK$ thousand) | | :--- | :--- | :--- | | Trading of footwear products | 72,309 | 2,428 | | Trading of health products | — | — | | Financial services | — | — | | Online medical services | — | — | | **Total segments** | **72,309** | **2,428** | | Unallocated income | | 584 | | Unallocated expenses | | (8,142) | | **Loss before tax** | | **(5,130)** | Segment Revenue and Results for the Six Months Ended June 30, 2023 | Segment | External Sales (HK$ thousand) | Segment Results (HK$ thousand) | | :--- | :--- | :--- | | Trading of footwear products | 100,660 | (1,254) | | Trading of health products | — | (697) | | Financial services | 3,369 | 360 | | Online medical services | 102 | (4,457) | | **Total segments** | **104,131** | **(6,048)** | | Unallocated income | | 978 | | Unallocated expenses | | (9,220) | | **Loss before tax** | | **(14,290)** | Geographical Information | Region | June 30, 2024 (HK$ thousand) | June 30, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong | 64,592 | 95,061 | | Australia | — | — | | Macau | 7,717 | 8,968 | | Mainland China | — | 102 | | **Total** | **72,309** | **104,131** | [5. Other Gains and Losses](index=13&type=section&id=5.%20Other%20Gains%20and%20Losses) This section details the components of other gains and losses, including net exchange gains/losses and loss on deconsolidation of a subsidiary Other Gains and Losses | Item | June 30, 2024 (HK$ thousand) | June 30, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Net exchange (gain) / loss | 7 | (961) | | Loss on deconsolidation of a subsidiary | (5,554) | — | | Gain on disposal of property, plant and equipment | 8 | — | | **Total** | **(5,539)** | **(961)** | [6. Loss Before Tax](index=14&type=section&id=6.%20Loss%20Before%20Tax) This section itemizes expenses and income deducted from or credited to loss before tax, such as depreciation and staff costs Items Deducted From / (Credited to) Loss Before Tax | Item | June 30, 2024 (HK$ thousand) | June 30, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 8,033 | 6,042 | | Premiums for life insurance policies | 15 | 13 | | Staff costs, including directors' emoluments | 21,608 | 39,130 | | Reversal of provision for inventories (credited to cost of sales) | (10,520) | (13,177) | | Cost of inventories recognised as an expense (including net reversal of provision for inventories) | 16,912 | 18,898 | [7. Taxation](index=14&type=section&id=7.%20Taxation) This section explains the tax treatment across different jurisdictions, noting no tax provision due to tax losses or lack of taxable profits - The Company, incorporated in the Cayman Islands, along with Group entities incorporated in the British Virgin Islands, had no taxable profits in either period[30](index=30&type=chunk) - Hong Kong profits tax is calculated under a two-tiered profits tax rate regime, but no provision for Hong Kong profits tax was made as the Group's carried forward tax losses were sufficient to offset estimated taxable profits for the current year[31](index=31&type=chunk) - No provision was made for Macau complementary tax, Taiwan income tax, and PRC enterprise income tax as the relevant entities had no taxable profits in either period[31](index=31&type=chunk)[32](index=32&type=chunk) [8. Dividends](index=15&type=section&id=8.%20Dividends) This section confirms that no dividends were paid, declared, or proposed during the interim period - No dividends were paid, declared, or proposed during the interim period, and the Board decided not to pay dividends for the interim period[33](index=33&type=chunk) [9. Loss Per Share](index=15&type=section&id=9.%20Loss%20Per%20Share) This section details the calculation of basic and diluted loss per share based on the loss attributable to owners and weighted average shares Loss Per Share Calculation | Metric | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company (HK$ thousand) | 5,130 | 12,327 | | Weighted average number of ordinary shares (thousand shares) | 242,845 | 242,845 | | **Basic and diluted loss per share (HK$)** | **(0.02)** | **(0.05)** | [10. Trade and Other Receivables](index=16&type=section&id=10.%20Trade%20and%20Other%20Receivables) This section outlines credit terms for sales and provides an aging analysis of trade receivables - Credit terms for retail sales of footwear products range from **30 to 60 days**, while for wholesale footwear products, trading of health products, and financial services, credit terms range from **30 to 90 days**[35](index=35&type=chunk) Aging Analysis of Trade Receivables | Aging | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Within 30 days | 2,734 | 8,398 | | 31 to 60 days | 1,239 | 196 | | 61 to 90 days | — | 210 | | Over 90 days | 70 | — | | **Total** | **4,043** | **8,804** | [11. Trade and Other Payables](index=16&type=section&id=11.%20Trade%20and%20Other%20Payables) This section specifies the average credit period for trade payables and presents their aging analysis - The average credit period for trade payables is **30 days**[36](index=36&type=chunk) Aging Analysis of Trade Payables | Aging | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Within 30 days | 1,709 | 2,769 | | 31 to 60 days | — | 215 | | 61 to 90 days | — | — | | Over 90 days | 1,700 | 1,677 | | **Total** | **3,409** | **4,661** | [12. Events After the Reporting Period](index=17&type=section&id=12.%20Events%20After%20the%20Reporting%20Period) This section details significant events occurring after the reporting period, including subsidiary bankruptcy liquidation and disposal agreements - Shang Ying Medical's bankruptcy liquidation application was accepted on April 29, 2024, and a liquidator was appointed on May 6, leading to the Company losing control over its assets and operations[37](index=37&type=chunk) - The Group completed the disposal of its subsidiary, Shang Ying International Group, to an independent third party in April 2025[37](index=37&type=chunk) - The Group entered into a sale and purchase agreement with an independent third party in September 2025 for the disposal of its subsidiary, Shang Ying Retail Group, which remains uncompleted as of the announcement date[38](index=38&type=chunk) - The Group entered into a sale and purchase agreement with an independent third party in September 2025 for the disposal of Shang Ying Capital Group, which remains uncompleted as of the announcement date[39](index=39&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews business performance and financial condition, noting declining footwear revenue and stagnant other services, outlining future strategies and challenges including going concern and foreign exchange risk [Business Review and Future Developments](index=18&type=section&id=Business%20Review%20and%20Future%20Developments) This section reviews the performance of various business segments, highlighting the decline in footwear revenue and stagnation in other services, along with future strategic focuses - During the reporting period, the footwear business accounted for **100%** of the Company's revenue, while health products and online medical services businesses remained stagnant[40](index=40&type=chunk) - Footwear business revenue was approximately **HK$72,300 thousand**, a **28.2% decrease** from the same period last year, primarily due to weak consumer sentiment and ongoing economic uncertainty[41](index=41&type=chunk) - Health products business segment revenue was **zero**, mainly due to business stagnation[42](index=42&type=chunk) - Financial services business revenue was **zero**, primarily due to business stagnation, and DSG Securities (Hong Kong) Limited has applied to reduce its Type 1 regulated activity[43](index=43&type=chunk) - Online medical services business revenue was **zero**, mainly due to business stagnation and Shang Ying Medical entering bankruptcy proceedings[44](index=44&type=chunk) - Moving forward, the company will focus more on diversifying footwear products, exploring potential business collaborations, and introducing new brands with growth potential and high gross margins; DSG Group will continue to focus on developing its financing advisory business and exploring new market opportunities, such as Singapore[45](index=45&type=chunk) [Financial Review](index=19&type=section&id=Financial%20Review) This section provides a detailed financial overview, including revenue, cost of sales, gross profit, and key expense items, noting a narrowed loss before tax - The Group's revenue for the reporting period was approximately **HK$72,300 thousand**, a decrease of approximately **30.6%** compared to the same period last year, mainly due to reduced footwear business revenue[46](index=46&type=chunk) - Footwear business revenue was approximately **HK$72,300 thousand**, a **28.2% decrease** from the same period last year, with Hong Kong retail points decreasing to **27** and Macau increasing to **3**[47](index=47&type=chunk) - Revenue from health products business, financial services business, and online medical services business was **zero**, primarily due to business stagnation[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) - Cost of sales was approximately **HK$16,900 thousand**, accounting for approximately **23.4%** of revenue, a decrease from the same period last year, mainly due to reduced footwear product revenue[51](index=51&type=chunk) - Gross profit was approximately **HK$55,400 thousand**, a decrease of approximately **35.0%** from the same period last year; gross profit margin was approximately **76.6%**, a decrease[52](index=52&type=chunk) - Staff costs were approximately **HK$21,600 thousand**, accounting for approximately **29.9%** of revenue, a decrease from the same period last year[53](index=53&type=chunk) - Depreciation accounted for approximately **11.1%** of revenue, an increase from approximately **5.8%** in the same period last year[54](index=54&type=chunk) - Finance costs were approximately **HK$1,200 thousand**, primarily comprising interest expenses arising from lease liabilities[55](index=55&type=chunk) - Loss before tax was approximately **HK$5,100 thousand**, a significant narrowing from approximately **HK$14,300 thousand** in the same period last year[56](index=56&type=chunk) [Liquidity and Financial Resources](index=21&type=section&id=Liquidity%20and%20Financial%20Resources) This section discusses the company's funding sources, including internal cash flow, bank borrowings, and shareholder support, along with cash and short-term liabilities - The Group funds its operations with internally generated cash flow, bank borrowings, and financial support from the Company's shareholders[57](index=57&type=chunk) - As at June 30, 2024, bank balances and cash were approximately **HK$38,100 thousand**, a decrease of approximately **4.8%** from December 31, 2023. Short-term other borrowings were approximately **HK$15,000 thousand**, and long-term lease liabilities were approximately **HK$11,200 thousand**[57](index=57&type=chunk) [Pledge of Assets](index=21&type=section&id=Pledge%20of%20Assets) This section identifies specific assets pledged as collateral for bank borrowings and financing facilities - As at June 30, 2024, investment properties, land and buildings, deposits and prepayments for life insurance policies, pledged time deposits, and land and buildings of related companies were pledged to secure bank borrowings and banking facilities granted to the Group[58](index=58&type=chunk) [Gearing Ratio](index=22&type=section&id=Gearing%20Ratio) This section presents the gearing ratio and explains its significant increase due to the reported loss Gearing Ratio | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Gearing ratio (total liabilities divided by total equity) | 237.8% | -92.8% | - The gearing ratio increased significantly, primarily due to the Group recording a loss during the reporting period[59](index=59&type=chunk) [Material Investments Held, Material Acquisitions or Disposals of Subsidiaries, Associates and Joint Ventures](index=22&type=section&id=Material%20Investments%20Held%2C%20Material%20Acquisitions%20or%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) This section confirms the absence of material investments or significant acquisitions/disposals of subsidiaries, associates, or joint ventures during the reporting period - During the reporting period, the Group held no material investments, nor were there any material acquisitions or disposals of subsidiaries, associates, and joint ventures[60](index=60&type=chunk) [Treasury Policy](index=22&type=section&id=Treasury%20Policy) This section outlines the group's treasury policy aimed at controlling operations, reducing borrowing costs, and maintaining adequate cash levels - The Group's adopted treasury policy aims to improve control over its treasury operations and reduce borrowing costs, striving to maintain adequate levels of cash and cash equivalents[61](index=61&type=chunk) - The Board will consider various funding sources based on the Group's capital requirements to ensure financial resources are utilized in the most cost-effective and efficient manner, and will review and evaluate the treasury policy periodically[61](index=61&type=chunk) [Announcements Made Pursuant to Rule 3.7 of the Takeovers Code](index=22&type=section&id=Announcements%20Made%20Pursuant%20to%20Rule%203.7%20of%20the%20Takeovers%20Code) This section details announcements regarding the appointment of receivers over pledged shares and the subsequent cessation of their appointment - On May 7, 2020, the Company received a letter regarding the appointment of joint and several receivers and managers over **123,993,617 shares** of the Company (representing approximately **51.06%** of the issued shares) held by Shang Ying Financial Holdings Limited, and the receivers may seek potential buyers for the pledged shares[62](index=62&type=chunk) - According to the monthly update announcement on July 22, 2025, the receivers ceased to be joint and several receivers and managers of the pledged shares effective June 2, 2025, and the offer period ended on the same day, as the Company believed an offer for the pledged shares was unlikely to materialize soon[63](index=63&type=chunk) [Foreign Exchange Risk](index=23&type=section&id=Foreign%20Exchange%20Risk) This section discusses the group's exposure to foreign exchange fluctuations from sales and purchases denominated in various currencies - The Group's sales and purchases during the reporting period were largely denominated in HK$, RMB, MOP, SGD, EUR, USD, and AUD, exposing it to foreign exchange fluctuation risks[64](index=64&type=chunk) - RMB is not freely convertible, and the MOP currency market is relatively small and undeveloped, with future exchange rates potentially influenced by government control, economic developments, and geopolitical changes[64](index=64&type=chunk) - The Group manages its foreign currency risk by closely monitoring foreign currency exchange rate movements and had not entered into any foreign currency forward contracts to hedge foreign currency risk as at June 30, 2024[64](index=64&type=chunk) [Human Resources](index=23&type=section&id=Human%20Resources) This section provides information on employee numbers, remuneration policies, and staff training initiatives - As at June 30, 2024, the Group employed **114 employees**, a decrease from **130 employees** as at December 31, 2023[65](index=65&type=chunk) - Remuneration packages are generally determined by reference to current market terms, individual qualifications, and experience, with various training activities conducted to enhance staff performance[65](index=65&type=chunk) [Dividends](index=23&type=section&id=Dividends) This section reiterates the board's decision not to declare an interim dividend for the reporting period - The Board has resolved not to declare an interim dividend for the reporting period[66](index=66&type=chunk) [Purchase, Sale and Redemption of the Company’s Listed Securities](index=23&type=section&id=Purchase%2C%20Sale%20and%20Redemption%20of%20the%20Company%E2%80%99s%20Listed%20Securities) This section confirms that neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period, nor did they hold any treasury shares[67](index=67&type=chunk) [Other Information](index=24&type=section&id=Other%20Information) This section covers corporate governance, directors' securities trading compliance, audit committee duties, post-reporting events, publication details, and the continued suspension of share trading [Corporate Governance](index=24&type=section&id=Corporate%20Governance) This section confirms the board's review and compliance with the Corporate Governance Code during the reporting period - The Board has reviewed the Company's corporate governance practices and is satisfied that the Company has complied with the code provisions in Part 2 of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules throughout the reporting period[68](index=68&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=24&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) This section confirms that all directors have complied with the Model Code for Securities Transactions by Directors of Listed Issuers - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules, and after specific enquiry with the directors, each confirmed compliance with the required standards throughout the reporting period[69](index=69&type=chunk) [Audit Committee](index=24&type=section&id=Audit%20Committee) This section describes the Audit Committee's review of accounting policies, risk management, internal controls, and financial reporting for the period - The Company's Audit Committee, comprising three independent non-executive directors, has reviewed the Group's principal accounting policies adopted with management and discussed risk management, internal control systems, and financial reporting matters, including the unaudited consolidated financial statements for this reporting period[70](index=70&type=chunk) [Material Events After the Reporting Period](index=24&type=section&id=Material%20Events%20After%20the%20Reporting%20Period) This section confirms no other material events occurred after the reporting period, beyond those disclosed in the notes to the financial statements - Save for the matters disclosed in Note 12 to the consolidated financial statements and above in this announcement, there were no other material events concerning the Group after the reporting period[71](index=71&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=24&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This section provides information on the publication of the interim results announcement and the upcoming interim report - This interim results announcement of the Company has been published on the website of the Stock Exchange and the Company's website. The Company's 2023 interim report will be despatched to the Company's shareholders and published on the aforementioned websites in due course[72](index=72&type=chunk) [Acknowledgement](index=24&type=section&id=Acknowledgement) This section expresses gratitude to the management, staff, shareholders, business partners, banks, and auditors for their support - The Board would like to express its gratitude to the Group's management and all staff for their tireless efforts and dedication, and also to its shareholders, business partners, collaborators, bankers, and auditors for their strong support to the Group[73](index=73&type=chunk) [Continued Suspension of Trading](index=25&type=section&id=Continued%20Suspension%20of%20Trading) This section informs shareholders and potential investors about the continued suspension of trading in the company's shares until resumption guidance is met - At the Company's request, trading in the Company's shares on the Stock Exchange was suspended from 9:00 a.m. on April 2, 2024, and will remain suspended until the resumption guidance is met[74](index=74&type=chunk) - Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Company's securities[75](index=75&type=chunk)

[Corporate Information](index=2&type=section&id=Corporate%20Information) This chapter provides core company details, including board members, committee structures, principal bankers, auditors, and contact information [Company Overview](index=2&type=section&id=Corporate%20Information_Overview) This chapter outlines the company's basic information, including board members, committee structures, principal bankers, auditors, share registrars, and contact details - The Board of Directors includes Chairman Dr. Mok Sai Hong, Vice Chairman Mr. Cheung Wo Sang, Managing Director Mr. Fan Fang Yi, Ms. Mok Wan Pik, Ms. Li Huan, Non-executive Director Dr. Lau Chun Man, and three Independent Non-executive Directors Professor Chiu Yin Wan, Mr. Cheung Chi Ming, and Dr. Lau Hiu Yan[6](index=6&type=chunk) - The Audit Committee Chairman is Mr. Cheung Chi Ming, the Nomination Committee Chairman is Dr. Mok Sai Hong, and the Remuneration Committee Chairman is Mr. Cheung Chi Ming[6](index=6&type=chunk) - Principal bankers include Agricultural Bank of China, Bank of China (Hong Kong), China Construction Bank, Industrial and Commercial Bank of China, Postal Savings Bank of China, and The Hongkong and Shanghai Banking Corporation[6](index=6&type=chunk) - The company's auditor is Fan Chan & Co. CPA Limited, and the stock code is **00681**[6](index=6&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's financial and operational performance, including segment-specific results, liquidity, capital structure, and future outlook [Business Review](index=4&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review) The Group experienced a revenue decline but profit growth in H1 2025, driven by natural gas market recovery and business segment adjustments, with a slight decrease in gross profit margin Key Financial Data for H1 2025 (Compared to H1 2024) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :-------------------- | :-------------------- | :------- | | Revenue | 1,228 | 1,362 | -9.84% | | Profit | 77.50 | 66.61 | +16.35% | | Basic EPS | 0.72 cents | 0.49 cents | +46.94% | | Gross Profit Margin | 12.17% | 12.31% | -0.14% | - The decrease in gross profit margin was primarily due to a lower gross profit margin in the gas distribution business[10](index=10&type=chunk)[12](index=12&type=chunk) - In H1 2025, China's natural gas consumption was approximately **211.97 billion cubic meters**, a year-on-year decrease of **0.9%**; natural gas production was approximately **130.83 billion cubic meters**, a year-on-year increase of **5.8%**; and natural gas imports were approximately **82.775 billion cubic meters**, a year-on-year decrease of **7.8%**[9](index=9&type=chunk)[12](index=12&type=chunk) [Piped Gas Transmission and Distribution Business](index=5&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Piped%20Gas%20Transmission%20and%20Distribution%20Business) Piped gas transmission and distribution revenue decreased by 8.57% year-on-year, but gross profit margin increased due to improved margins from sales and connections Piped Gas Transmission and Distribution Business Performance (H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Change (%) | | :--- | :-------------------- | :-------------------- | :------- | | Revenue | 582,950,000 | 637,608,000 | -8.57% | | % of Total Revenue | 47.47% | 46.82% | +0.65% | | Gross Profit Margin | 11.95% | 11.54% | +0.41% | - The increase in gross profit margin was primarily due to higher gross profit margins from piped gas sales and piped gas connections[13](index=13&type=chunk)[15](index=15&type=chunk) [Piped Gas Connection](index=5&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Piped%20Gas%20Transmission%20and%20Distribution%20Business_Piped%20Gas%20Connection) Piped gas connection fee revenue significantly decreased by 29.78%, despite an increase in new residential and commercial user connections and cumulative user numbers Piped Gas Connection Business Performance (H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Change (%) | | :--- | :-------------------- | :-------------------- | :------- | | Revenue | 28,473,000 | 40,547,000 | -29.78% | | % of Piped Gas Transmission and Distribution Revenue | 4.88% | 6.36% | -1.48% | - During the period, **7,327 new residential users** and **327 new industrial and commercial users** were connected[14](index=14&type=chunk)[16](index=16&type=chunk) - As of June 30, 2025, cumulative connected residential users reached **595,388** (a year-on-year increase of approximately **3.65%**), and cumulative connected industrial and commercial users reached **13,463** (a year-on-year increase of approximately **6.55%**)[14](index=14&type=chunk)[16](index=16&type=chunk) [Piped Gas Sales](index=6&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Piped%20Gas%20Transmission%20and%20Distribution%20Business_Piped%20Gas%20Sales) Piped gas sales revenue and volume both decreased, primarily due to lower demand during the period, especially a significant reduction in industrial and commercial user sales Piped Gas Sales Business Performance (H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Change (%) | | :--- | :-------------------- | :-------------------- | :------- | | Revenue | 554,477,000 | 597,061,000 | -7.13% | | % of Piped Gas Transmission and Distribution Revenue | 95.12% | 93.64% | +1.48% | Piped Gas Sales Volume (H1 2025 vs. H1 2024) | Customer Type | H1 2025 (million cubic meters) | H1 2024 (million cubic meters) | Change (%) | | :--- | :----------------------------- | :----------------------------- | :------- | | Total Sales Volume | 213.56 | 233.60 | -8.58% | | Residential Users | 81.67 | 77.34 | +5.60% | | Industrial and Commercial Users | 131.89 | 156.27 | -15.60% | - The decrease in revenue was primarily due to lower demand during the period[18](index=18&type=chunk)[20](index=20&type=chunk) [Cylinder Gas Supply Business](index=6&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Cylinder%20Gas%20Supply%20Business) Cylinder gas supply business saw declines in sales volume and revenue, but gross profit margin improved due to a greater decrease in procurement prices than selling prices Cylinder Gas Supply Business Performance (H1 2025 vs. H1 2024) | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :----------- | :----------- | :------- | | Sales Volume | 48,054 tonnes | 52,094 tonnes | -7.76% | | Sales Revenue | RMB 270,033,000 | RMB 331,480,000 | -18.54% | | % of Total Revenue | 21.99% | 24.34% | -2.35% | | Gross Profit Margin | 28.01% | 25.22% | +2.79% | - The increase in gross profit margin was due to a greater decrease in procurement prices than in selling prices[23](index=23&type=chunk)[26](index=26&type=chunk) - The Group actively developed new users and expanded its sales market while maintaining existing customers[19](index=19&type=chunk)[22](index=22&type=chunk) [Gas Distribution Business](index=7&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Gas%20Distribution%20Business) Gas distribution business revenue and sales volume increased, but gross profit margin declined as the decrease in selling prices slightly exceeded the decrease in costs Gas Distribution Business Performance (H1 2025 vs. H1 2024) | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :----------- | :----------- | :------- | | Revenue | RMB 373,777,000 | RMB 347,595,000 | +7.53% | | Sales Volume | 99,334 tonnes | 90,772 tonnes | +9.43% | | % of Total Revenue | 30.44% | 25.53% | +4.91% | | Gross Profit Margin | 0.78% | 1.01% | -0.23% | - The decrease in gross profit margin was mainly due to the selling price reduction slightly exceeding the cost reduction, while sales revenue growth was driven by increased sales volume[25](index=25&type=chunk)[27](index=27&type=chunk) - This business requires minimal investment but establishes a market advantage at lower costs, supporting the Group's downstream terminal operations[24](index=24&type=chunk)[27](index=27&type=chunk) [Food Ingredients Supply and FMCG Business](index=8&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Food%20Ingredients%20Supply%20and%20Fast-moving%20Consumer%20Good%20%28%22FMCG%22%29%20Business) Food ingredients supply and FMCG business revenue significantly decreased due to a change in operating model, but the segment loss narrowed substantially Food Ingredients Supply and FMCG Business Performance (H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Change (%) | | :--- | :-------------------- | :-------------------- | :------- | | Revenue | 1,329,000 | 45,008,000 | -97.05% | | % of Total Revenue | 0.10% | 3.31% | -3.21% | | Segment Loss | 622,000 | 2,391,000 | -74.07% | - The significant decrease in revenue was due to a change in the operating model, as the Group progressively signed agreements with third parties in 2024 to transfer the food ingredients supply and FMCG business for third-party operation and management[29](index=29&type=chunk)[30](index=30&type=chunk)[33](index=33&type=chunk) - The Group continues to promote its own FMCG brands and receives fixed monthly income or commission income based on a percentage of monthly turnover[29](index=29&type=chunk)[33](index=33&type=chunk) [New Projects During the Period](index=8&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_New%20Project%20During%20the%20Period) No significant new businesses were added during the reporting period - There were no significant new businesses during the period[31](index=31&type=chunk)[34](index=34&type=chunk) [Other Gains and Losses](index=8&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Other%20Gains%20and%20Losses) Other gains and losses for the period resulted in a loss of approximately RMB 6.307 million, an increase of approximately RMB 7.616 million from the prior period, mainly due to increased exchange losses and impairment losses on expected credit Other Gains and Losses (H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Change (RMB) | | :--- | :-------------------- | :-------------------- | :------------ | | Total | (6,307,000) | 1,309,000 | (7,616,000) | - The increase in loss was primarily due to increased exchange losses and impairment losses on expected credit[32](index=32&type=chunk)[35](index=35&type=chunk) [Other Income](index=9&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Other%20Income) Other income for the period was approximately RMB 15.157 million, a decrease of approximately RMB 4.706 million from the prior period, mainly due to reduced bank interest income and net sales of gas appliances Other Income (H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Change (RMB) | | :--- | :-------------------- | :-------------------- | :------------ | | Total | 15,157,000 | 19,863,000 | (4,706,000) | - The decrease was mainly due to reduced bank interest income and net income from sales of gas appliances[36](index=36&type=chunk)[40](index=40&type=chunk) [Finance Costs](index=9&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Finance%20Costs) Finance costs for the period were approximately RMB 1.620 million, a decrease of approximately RMB 0.277 million from the prior period, mainly due to reduced interest on lease liabilities Finance Costs (H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Change (RMB) | | :--- | :-------------------- | :-------------------- | :------------ | | Total | 1,620,000 | 1,897,000 | (277,000) | - The decrease was primarily due to reduced interest on lease liabilities[37](index=37&type=chunk)[41](index=41&type=chunk) [Selling and Distribution Expenses](index=9&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Selling%20and%20Distribution%20Expenses) Selling and distribution expenses for the period were approximately RMB 67.100 million, a decrease of approximately RMB 7.193 million from the prior period, mainly due to reduced wages and labor costs Selling and Distribution Expenses (H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Change (RMB) | | :--- | :-------------------- | :-------------------- | :------------ | | Total | 67,100,000 | 74,293,000 | (7,193,000) | - The decrease was mainly due to reduced wages and labor costs[38](index=38&type=chunk)[42](index=42&type=chunk) [Administrative Expenses](index=9&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Administrative%20Expenses) Administrative expenses for the period were approximately RMB 52.755 million, a decrease of approximately RMB 8.981 million from the prior period, mainly due to reduced depreciation of property, plant and equipment and lease expenses Administrative Expenses (H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Change (RMB) | | :--- | :-------------------- | :-------------------- | :------------ | | Total | 52,755,000 | 61,736,000 | (8,981,000) | - The decrease was mainly due to reduced depreciation of property, plant and equipment and lease expenses[39](index=39&type=chunk)[43](index=43&type=chunk) [Share of Results of Associates](index=10&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Share%20of%20Results%20of%20Associates) Share of profit from associates for the period was approximately RMB 16.950 million, an increase of approximately RMB 4.377 million from the prior period, mainly due to increased profits generated by associates Share of Profit of Associates (H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Change (RMB) | | :--- | :-------------------- | :-------------------- | :------------ | | Total | 16,950,000 | 12,573,000 | +4,377,000 | - The increase was primarily due to higher profits generated by the Company's associates during the period[45](index=45&type=chunk)[49](index=49&type=chunk) [Share of Results of Joint Ventures](index=10&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Share%20of%20Results%20of%20Joint%20Ventures) Share of profit from joint ventures for the period was approximately RMB 34.395 million, a significant increase of approximately RMB 21.625 million from the prior period, mainly due to increased profits generated by joint ventures Share of Profit of Joint Ventures (H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Change (RMB) | | :--- | :-------------------- | :-------------------- | :------------ | | Total | 34,395,000 | 12,770,000 | +21,625,000 | - The increase was primarily due to higher profits generated by the Company's joint ventures during the period[46](index=46&type=chunk)[50](index=50&type=chunk) [Income Tax Expenses](index=10&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Income%20Tax%20Expenses) Income tax expenses for the period were approximately RMB 10.689 million, an increase of approximately RMB 1.104 million from the prior period, mainly due to increased current tax Income Tax Expenses (H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Change (RMB) | | :--- | :-------------------- | :-------------------- | :------------ | | Total | 10,689,000 | 9,585,000 | +1,104,000 | - The increase was primarily due to higher current tax expenses[47](index=47&type=chunk)[51](index=51&type=chunk) [Liquidity and Capital Resources](index=10&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Liquidity%20and%20Capital%20Resources) The Group's operations and capital expenditures are funded by operating cash flow, internal liquidity, and bank borrowings, with sufficient financial resources for future needs - The Group's funding sources for operations and capital expenditures include operating cash flow, internal liquidity, and bank borrowings[48](index=48&type=chunk)[52](index=52&type=chunk) - The Group possesses sufficient financial resources to meet future capital expenditures and operational requirements[48](index=48&type=chunk)[52](index=52&type=chunk) [Borrowing Structure](index=11&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Borrowing%20Structure) As of June 30, 2025, the Group's total borrowings decreased, with a significant reduction in short-term borrowings and an increase in long-term borrowings due after one year Borrowing Structure (As of June 30, 2025 vs. December 31, 2024) | Indicator | June 30, 2025 (RMB) | December 31, 2024 (RMB) | Change (RMB) | | :--- | :-------------------- | :-------------------- | :------------ | | Total Borrowings | 77,850,000 | 88,250,000 | (10,400,000) | | Short-term Borrowings | 45,100,000 | 83,550,000 | (38,450,000) | | Long-term Borrowings | 32,750,000 | 4,700,000 | +28,050,000 | - Annual interest rates for loans ranged from the People's Bank of China base rate plus **0.00% to 1.35%** (December 31, 2024: minus **0.25% to plus 1.00%**)[53](index=53&type=chunk)[57](index=57&type=chunk) - Approximately **RMB 62,750,000** of loans were secured by assets with a carrying amount of approximately **RMB 133,942,000**, with the remainder being unsecured loans[53](index=53&type=chunk)[57](index=57&type=chunk) [Capital Structure](index=11&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Capital%20Structure) The Group's long-term capital comprises equity attributable to owners and liabilities, affirmed by a healthy debt-to-capital ratio - The Group's long-term capital, comprising equity attributable to owners and liabilities, is affirmed by a healthy debt-to-capital ratio[54](index=54&type=chunk)[58](index=58&type=chunk) [Foreign Exchange Risk](index=11&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Foreign%20Exchange%20Risk) The Group faces no significant foreign exchange fluctuation risk in its operations as most revenue and expenses are denominated in RMB within China - The Group's operations are entirely within China, with the vast majority of revenue and expenses denominated in RMB, thus facing no significant foreign exchange fluctuation risk in its operations[55](index=55&type=chunk)[59](index=59&type=chunk) - Currently, the Group has no foreign currency hedging policy but closely monitors market exchange rate trends and makes appropriate adjustments when necessary[55](index=55&type=chunk)[59](index=59&type=chunk) [Capital and Other Commitments](index=11&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Capital%20and%20Other%20Commitments) As of June 30, 2025, the Group's capital commitments were approximately RMB 30.864 million, an increase from year-end 2024, primarily for regional pipeline network construction Capital Commitments (As of June 30, 2025 vs. December 31, 2024) | Indicator | June 30, 2025 (RMB) | December 31, 2024 (RMB) | Change (RMB) | | :--- | :-------------------- | :-------------------- | :------------ | | Total | 30,864,000 | 23,019,000 | +7,845,000 | - Primarily for regional pipeline network construction[56](index=56&type=chunk)[60](index=60&type=chunk) [Contingent Liabilities](index=12&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Contingent%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[62](index=62&type=chunk)[66](index=66&type=chunk) [Events After the Reporting Period](index=12&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Event%20After%20the%20End%20of%20the%20Reporting%20Period) No significant events occurred after the end of the reporting period - No significant events occurred after the end of the reporting period[63](index=63&type=chunk)[67](index=67&type=chunk) [Employees](index=12&type=section&id=Management%20Discussion%20and%20Analysis_Business%20Review_Employees) As of June 30, 2025, the Group had approximately 4,900 employees, mostly in China, with remuneration based on responsibilities, performance, profitability, and market conditions - As of June 30, 2025, the Group had approximately **4,900 employees**, with the majority based in mainland China[64](index=64&type=chunk)[68](index=68&type=chunk) - Employee remuneration is determined by reference to their responsibilities within the Group, the Group's business performance, profitability, and market conditions[64](index=64&type=chunk)[68](index=68&type=chunk) - In addition to pensions, individual employees may receive discretionary bonuses and/or share options as incentives for their work performance[64](index=64&type=chunk)[68](index=68&type=chunk) [Prospects and Outlook](index=12&type=section&id=Management%20Discussion%20and%20Analysis_Prospects%20and%20Outlook) The Group anticipates growth opportunities in natural gas and LPG businesses due to China's low-carbon energy transition, while enhancing profitability in food supply and FMCG through third-party management - China's energy structure is transitioning towards low-carbon and environmentally friendly sources, with natural gas playing an increasingly prominent role as a key component in the shift towards low-carbon industries[65](index=65&type=chunk)[69](index=69&type=chunk) - Natural gas and liquefied petroleum gas will remain the Group's primary commodities in its gas business, with the government actively promoting high-quality development of the gas industry[70](index=70&type=chunk)[73](index=73&type=chunk) [Piped Gas Transmission and Distribution Business Outlook](index=13&type=section&id=Management%20Discussion%20and%20Analysis_Prospects%20and%20Outlook_Piped%20Gas%20Transmission%20and%20Distribution%20Business%20Outlook) The Group remains confident in the future piped gas market, driven by China's economic recovery, accelerated energy consumption growth, and ongoing urban gas pipeline upgrades - In H1 2025, China's economy continued its upward trend, with accelerated growth in overall energy consumption[71](index=71&type=chunk)[74](index=74&type=chunk) - China is advancing the renovation and intelligent upgrade of urban gas pipelines, aiming to largely complete the aging pipeline renovation tasks by the end of 2025[71](index=71&type=chunk)[74](index=74&type=chunk) - The Group remains confident in the future piped gas market, continuously ensuring safe and efficient operation of facilities and robust supply for residential use[71](index=71&type=chunk)[74](index=74&type=chunk) [Cylinder Gas Supply Business Outlook](index=13&type=section&id=Management%20Discussion%20and%20Analysis_Prospects%20and%20Outlook_Cylinder%20Gas%20Supply%20Business%20Outlook) Cylinder gas will maintain its significant role in the national energy structure as a flexible, convenient, efficient, and clean complement to piped gas supply - Cylinder gas is widely used in residential life, commercial activities, and industrial manufacturing due to its flexible, convenient, efficient, clean supply, and broad application scenarios[72](index=72&type=chunk)[75](index=75&type=chunk) - Cylinder gas effectively compensates for the shortcomings of piped gas in terms of coverage and supply flexibility, enhancing the overall stability and safety of the energy system[72](index=72&type=chunk)[75](index=75&type=chunk) - As a relatively clean and efficient energy form, cylinder gas will continue to hold a significant position in the national energy structure, serving as an effective supplement to piped gas supply[72](index=72&type=chunk)[75](index=75&type=chunk) [Gas Distribution Business Outlook](index=14&type=section&id=Management%20Discussion%20and%20Analysis_Prospects%20and%20Outlook_Gas%20Distribution%20Business%20Outlook) The Group will capitalize on LNG's broad application prospects to expand its gas distribution scale, increase sales and revenue, and ensure sustainable, safe, and efficient gas operations - Liquefied natural gas (LNG), as an efficient and clean energy source, has broad application prospects in industrial, power generation, and transportation sectors[77](index=77&type=chunk)[80](index=80&type=chunk) - The Group will seize industry development opportunities in gas distribution, striving to expand its distribution scale and steadily increase gas sales and revenue[77](index=77&type=chunk)[80](index=80&type=chunk) - The Group will continue to ensure the safe and efficient operation of its gas business, guarantee residential gas supply, actively develop industrial gas usage, expand market share, and achieve sustainable development[78](index=78&type=chunk)[80](index=80&type=chunk) [Food Ingredients Supply and FMCG Business Outlook](index=14&type=section&id=Management%20Discussion%20and%20Analysis_Prospects%20and%20Outlook_Food%20Ingredients%20Supply%20and%20FMCG%20Business%20Outlook) The food ingredients supply and FMCG business, under third-party management, will benefit from efficient processes, reduced operating costs, and economic recovery to enhance profitability - Transferring the food ingredients supply and FMCG business to third-party operation will help open new markets and achieve mutual benefits[79](index=79&type=chunk)[81](index=81&type=chunk) - Under third-party management, efficient processes will be introduced to reduce operating costs and enhance the profitability of the food ingredients supply and FMCG business[79](index=79&type=chunk)[81](index=81&type=chunk) - With the full normalization of economic and social operations, pro-consumption policies are taking effect, continuously unleashing consumption potential and accelerating the recovery of service consumption[79](index=79&type=chunk)[81](index=81&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the Group's financial performance, including revenue, profit, and other comprehensive income for the period [Performance Overview](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income_Performance%20Overview) The Group's H1 2025 revenue decreased, but profit and total comprehensive income grew due to significantly increased share of profit from associates and joint ventures, and reduced selling and administrative expenses Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30, 2025) | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | Change (%) | | :--- | :----------------- | :----------------- | :--------------- | :------- | | Revenue | 1,228,089 | 1,361,691 | (133,602) | -9.81% | | Cost of sales and services | (1,078,625) | (1,194,087) | 115,462 | -9.67% | | Gross Profit | 149,464 | 167,604 | (18,140) | -10.82% | | Other gains and losses | (6,307) | 1,309 | (7,616) | -581.82% | | Other income | 15,157 | 19,863 | (4,706) | -23.69% | | Finance costs | (1,620) | (1,897) | 277 | -14.60% | | Selling and distribution expenses | (67,100) | (74,293) | 7,193 | -9.68% | | Administrative expenses | (52,755) | (61,736) | 8,981 | -14.55% | | Share of results of associates | 16,950 | 12,573 | 4,377 | +34.81% | | Share of results of joint ventures | 34,395 | 12,770 | 21,625 | +169.34% | | Profit before tax | 88,184 | 76,193 | 11,991 | +15.74% | | Income tax expense | (10,689) | (9,585) | (1,104) | +11.52% | | Profit for the period | 77,495 | 66,608 | 10,887 | +16.35% | | Total comprehensive income for the period | 76,260 | 57,972 | 18,288 | +31.55% | Profit and Total Comprehensive Income for the Period Attributable to (For the six months ended June 30, 2025) | Attributable to | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | | :--- | :----------------- | :----------------- | :--------------- | | Profit for the period attributable to owners of the Company | 64,190 | 43,394 | 20,796 | | Profit for the period attributable to non-controlling interests | 13,305 | 23,214 | (9,909) | | Total comprehensive income attributable to owners of the Company | 62,757 | 34,542 | 28,215 | | Total comprehensive income attributable to non-controlling interests | 13,503 | 23,430 | (9,927) | - Basic earnings per share was **RMB 0.72 cents** (2024: **RMB 0.49 cents**)[85](index=85&type=chunk) [Condensed Consolidated Statement of Financial Position](index=17&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the Group's assets, liabilities, and equity at the end of the reporting period [Financial Position Overview](index=17&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position_Financial%20Position%20Overview) As of June 30, 2025, the Group's total assets and equity increased, with notable changes in joint venture interests, inventory, bank deposits, trade receivables, and borrowing structures Condensed Consolidated Statement of Financial Position (As of June 30, 2025 vs. December 31, 2024) | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (RMB '000) | Change (%) | | :--- | :----------------------- | :----------------------- | :--------------- | :------- | | **Non-current Assets** | **2,301,220** | **2,271,277** | **29,943** | **+1.32%** | | Property, plant and equipment | 741,798 | 738,471 | 3,327 | +0.45% | | Interests in joint ventures | 1,114,138 | 1,082,948 | 31,190 | +2.88% | | **Current Assets** | **1,086,407** | **1,097,076** | **(10,669)** | **-0.97%** | | Inventories | 68,250 | 43,729 | 24,521 | +56.08% | | Trade, bills and other receivables and prepayments | 251,221 | 323,239 | (72,018) | -22.28% | | Time deposits | 180,000 | 120,313 | 59,687 | +49.61% | | Bank balances and cash | 561,440 | 578,906 | (17,466) | -3.02% | | **Current Liabilities** | **526,546** | **593,466** | **(66,920)** | **-11.28%**| | Trade and other payables | 232,867 | 247,023 | (14,156) | -5.73% | | Bank borrowings - due within one year | 45,100 | 83,550 | (38,450) | -46.02% | | **Net Current Assets** | **559,861** | **503,610** | **56,251** | **+11.17%**| | **Total Equity** | **2,801,440** | **2,745,629** | **55,811** | **+2.03%** | | **Non-current Liabilities** | **59,641** | **29,258** | **30,383** | **+103.85%**| | Bank borrowings - due after one year | 32,750 | 4,700 | 28,050 | +596.81% | [Condensed Consolidated Statement of Changes in Equity](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement details changes in the Group's equity components, including profit, other comprehensive income, and dividend payments [Equity Movements](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity_Equity%20Movements) The Group's total equity increased in H1 2025, primarily driven by profit attributable to owners of the Company, despite fair value changes in equity instruments and dividends paid to non-controlling interests Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30, 2025) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (RMB '000) | | :--- | :----------------------- | :----------------------- | :--------------- | | Total Equity | 2,801,440 | 2,745,629 | 55,811 | | Equity attributable to owners of the Company | 2,581,002 | 2,518,245 | 62,757 | | Non-controlling interests | 220,438 | 227,384 | (6,946) | - Total comprehensive income for the period was **RMB 76,260,000**, of which **RMB 62,757,000** was attributable to owners of the Company and **RMB 13,503,000** to non-controlling interests[89](index=89&type=chunk) - Fair value changes of equity instruments at fair value through other comprehensive income (net of tax) for the period resulted in a loss of **RMB 1,447,000**[89](index=89&type=chunk) - Dividends of **RMB 27,856,000** were paid to non-controlling interests of subsidiaries during the period[89](index=89&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes the Group's cash inflows and outflows from operating, investing, and financing activities [Cash Flow Summary](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows_Cash%20Flow%20Summary) The Group experienced a net decrease in cash and cash equivalents in H1 2025, primarily due to reduced net cash from operating activities and increased net cash used in financing activities, with investing activities shifting from net cash generation to net cash usage Condensed Consolidated Statement of Cash Flows (For the six months ended June 30, 2025) | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | | :--- | :----------------- | :----------------- | :--------------- | | Net cash generated from operating activities | 10,997 | 12,797 | (1,800) | | Net cash (used in) generated from investing activities | (1,583) | 137,090 | (138,673) | | Net cash used in financing activities | (26,880) | (24,454) | (2,426) | | Net (decrease) increase in cash and cash equivalents | (17,466) | 125,433 | (142,899) | | Cash and cash equivalents at beginning of period | 578,906 | 393,033 | 185,873 | | Cash and cash equivalents at end of period | 561,440 | 518,466 | 42,974 | [Notes to the Condensed Consolidated Financial Statements](index=22&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 [General Information](index=22&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_General%20Information) The Company, incorporated in Bermuda and listed on the HKEX, is ultimately controlled by Dr. Mok Sai Hong, primarily engaging in piped gas, cylinder gas, gas distribution, and food supply businesses in China - The Company was incorporated in Bermuda on November 13, 1996, and listed on the Main Board of The Stock Exchange of Hong Kong Limited on April 24, 1997[92](index=92&type=chunk)[97](index=97&type=chunk) - The Company's ultimate controlling party is Dr. Mok Sai Hong, who is also the Chairman and Executive Director of the Company[93](index=93&type=chunk)[97](index=97&type=chunk) - The Group is principally engaged in piped gas transmission and distribution, cylinder gas supply, gas distribution, and food ingredients supply and fast-moving consumer goods businesses in the People's Republic of China[94](index=94&type=chunk)[97](index=97&type=chunk) [Basis of Preparation and Principal Accounting Policies](index=22&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The unaudited condensed consolidated financial statements are prepared under HKAS 34 and Listing Rules, using a historical cost basis with certain financial instruments measured at fair value, with no significant impact from new HKFRS adoptions - The unaudited condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[96](index=96&type=chunk)[98](index=98&type=chunk) - The financial statements are prepared on a historical cost basis, except for certain financial instruments which are measured at fair value[99](index=99&type=chunk)[102](index=102&type=chunk) - The adoption of the revised Hong Kong Financial Reporting Standards (including HKAS 21 (Amendment) Lack of Exchangeability) during the period had no significant impact on the Group's financial position, performance, and/or disclosures for the current and/or prior periods[105](index=105&type=chunk)[106](index=106&type=chunk)[110](index=110&type=chunk) [Segment Information](index=24&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Segment%20Information) The Group operates four segments: piped gas, cylinder gas, gas distribution, and food supply, with all revenue and non-current assets derived from China, showing varied performance across segments - The Group's operating segments include: (i) piped gas transmission and distribution; (ii) cylinder gas supply; (iii) gas distribution; and (iv) food ingredients supply and FMCG[108](index=108&type=chunk)[118](index=118&type=chunk) Segment Revenue from External Customers (For the six months ended June 30, 2025) | Segment | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | Change (%) | | :--- | :----------------- | :----------------- | :--------------- | :------- | | Piped Gas Transmission and Distribution | 582,950 | 637,608 | (54,658) | -8.57% | | Cylinder Gas Supply | 270,033 | 331,480 | (61,447) | -18.54% | | Gas Distribution | 373,777 | 347,595 | 26,182 | +7.53% | | Food Ingredients Supply and FMCG | 1,329 | 45,008 | (43,679) | -97.05% | | **Total** | **1,228,089** | **1,361,691** | **(133,602)** | **-9.81%** | Segment Profit (Loss) (For the six months ended June 30, 2025) | Segment | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | | :--- | :----------------- | :----------------- | :--------------- | | Piped Gas Transmission and Distribution | 38,513 | 39,980 | (1,467) | | Cylinder Gas Supply | 5,025 | 17,069 | (12,044) | | Gas Distribution | 1,453 | 1,955 | (502) | | Food Ingredients Supply and FMCG | (622) | (2,391) | 1,769 | | **Total** | **44,369** | **56,613** | **(12,244)** | - The Group's operations are primarily conducted in China, with all revenue derived from China, and the physical location of all non-current assets is in China[124](index=124&type=chunk)[128](index=128&type=chunk) [Other Gains and Losses](index=28&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Other%20Gains%20and%20Losses) Other gains and losses for the period resulted in a loss of RMB 6.307 million, a shift from a gain in the prior period, mainly due to increased net exchange losses and impairment losses under the expected credit loss model Details of Other Gains and Losses (For the six months ended June 30, 2025) | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | | :--- | :----------------- | :----------------- | :--------------- | | Loss on disposal of property, plant and equipment | (442) | (3,700) | 3,258 | | Net exchange losses | (3,287) | (576) | (2,711) | | Gain on disposal of subsidiaries | 322 | 5,371 | (5,049) | | Gain on disposal of financial assets at fair value through profit or loss | 94 | – | 94 | | Impairment losses under expected credit loss model, net of reversal - receivables from customer contracts | (1,071) | (2,258) | 1,187 | | Impairment losses under expected credit loss model, net of reversal - other receivables | (1,923) | 2,472 | (4,395) | | **Total** | **(6,307)** | **1,309** | **(7,616)** | [Other Income](index=29&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Other%20Income) Other income for the period was approximately RMB 15.157 million, a decrease from the prior period, mainly due to reduced bank interest income and net sales of gas appliances and materials Details of Other Income (For the six months ended June 30, 2025) | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | | :--- | :----------------- | :----------------- | :--------------- | | Bank interest income | 1,041 | 2,722 | (1,681) | | Government grants | 33 | 438 | (405) | | Net rental income | 1,506 | 1,258 | 248 | | Maintenance service income | 2 | 58 | (56) | | Net sales of gas appliances and materials | 6,620 | 7,495 | (875) | | Others | 5,955 | 7,892 | (1,937) | | **Total** | **15,157** | **19,863** | **(4,706)** | [Finance Costs](index=29&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Finance%20Costs) Finance costs for the period were approximately RMB 1.620 million, a decrease from the prior period, primarily due to reduced interest on lease liabilities Details of Finance Costs (For the six months ended June 30, 2025) | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | | :--- | :----------------- | :----------------- | :--------------- | | Interest on bank borrowings | 1,538 | 1,572 | (34) | | Interest on lease liabilities | 82 | 325 | (243) | | **Total** | **1,620** | **1,897** | **(277)** | [Profit Before Tax](index=30&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Profit%20Before%20Tax) Profit before tax is stated after deducting staff costs, inventory costs, various depreciation and amortization, and contract costs for gas connection construction, with staff costs increasing and inventory and gas connection costs decreasing Details of Items Deducted from Profit Before Tax (For the six months ended June 30, 2025) | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | | :--- | :----------------- | :----------------- | :--------------- | | Staff costs (including directors' emoluments) | 87,800 | 74,292 | 13,508 | | Cost of inventories recognised as expense | 1,061,697 | 1,166,653 | (104,956) | | Depreciation of property, plant and equipment | 22,186 | 23,594 | (1,408) | | Depreciation of right-of-use assets | 2,515 | 2,656 | (141) | | Depreciation of investment properties | 2,076 | – | 2,076 | | Amortisation of intangible assets | 615 | 615 | – | | Contract costs recognised as expense for gas connection construction contracts | 16,928 | 27,434 | (10,506) | [Income Tax Expenses](index=30&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Income%20Tax%20Expense) Income tax expenses increased during the period, primarily due to China corporate income tax, with some subsidiaries benefiting from preferential tax rates in western regions and for small-profit enterprises Details of Income Tax Expenses (For the six months ended June 30, 2025) | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | | :--- | :----------------- | :----------------- | :--------------- | | China corporate income tax - current tax | 11,148 | 9,758 | 1,390 | | China corporate income tax - under-provision in prior periods | (295) | 58 | (353) | | Deferred tax | (164) | (231) | 67 | | **Total** | **10,689** | **9,585** | **1,104** | - The applicable corporate income tax rate for the Group's PRC subsidiaries ranges from **15% to 25%**[142](index=142&type=chunk)[145](index=145&type=chunk) - Certain subsidiaries operating in the western regions are granted a preferential tax rate of **15%** by local tax authorities, effective from January 1, 2021, to December 31, 2030[142](index=142&type=chunk)[145](index=145&type=chunk) - For small-profit enterprises, the portion of annual taxable income is calculated at a reduced rate of **25%** of its taxable income, with an applicable corporate income tax rate of **20%** (effective from January 1, 2023, to December 31, 2027)[143](index=143&type=chunk)[146](index=146&type=chunk) [Dividends](index=32&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Dividend) No dividends were paid or proposed by the Group during the six months ended June 30, 2025, nor have any been proposed since the end of the reporting period - No dividends were paid or proposed during the six months ended June 30, 2025 (2024: nil)[147](index=147&type=chunk)[148](index=148&type=chunk) - No dividends have been proposed since the end of the reporting period[147](index=147&type=chunk)[148](index=148&type=chunk) [Earnings Per Share](index=32&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Earnings%20Per%20Share) Basic earnings per share attributable to owners of the Company increased to RMB 0.72 cents, with no diluted earnings per share presented due to the absence of potential ordinary shares Earnings Per Share (For the six months ended June 30, 2025) | Indicator | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :---------------- | :---------------- | | Basic Earnings Per Share | 0.72 | 0.49 | - The profit for the period attributable to owners of the Company used in calculating basic earnings per share was **RMB 64,190,000** (2024: **RMB 43,394,000**)[150](index=150&type=chunk) - The weighted average number of ordinary shares used in calculating basic earnings per share was **8,934,561,203 shares**[150](index=150&type=chunk) - Diluted earnings per share for both periods are not presented as there were no outstanding potential ordinary shares during these periods[150](index=150&type=chunk)[151](index=151&type=chunk) [Movements in Property, Plant and Equipment](index=33&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Movements%20in%20Property%2C%20Plant%20and%20Equipment) During the six months ended June 30, 2025, the Group acquired property, plant and equipment amounting to approximately RMB 25.513 million Acquisition of Property, Plant and Equipment (For the six months ended June 30, 2025) | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :-------------- | :-------------- | | Acquisition Amount | 25,513,000 | 31,130,000 | [Trade, Bills and Other Receivables and Prepayments](index=33&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Trade%2C%20Bills%20and%20Other%20Receivables%20and%20Prepayments) As of June 30, 2025, the Group's total trade, bills, and other receivables and prepayments decreased, with an increase in trade receivables and a decrease in bills and other receivables, and a credit period of 0 to 180 days for customers Total Trade, Bills and Other Receivables and Prepayments (As of June 30, 2025 vs. December 31, 2024) | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (RMB '000) | | :--- | :----------------------- | :----------------------- | :--------------- | | Total | 251,221 | 323,239 | (72,018) | Ageing Analysis of Trade Receivables (Net of Provision for Credit Losses) (As of June 30, 2025 vs. December 31, 2024) | Ageing | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :----------------------- | :----------------------- | | 0 to 90 days | 57,666 | 41,501 | | 91 to 180 days | 4,563 | 3,596 | | Over 180 days | 5,526 | 5,170 | | **Total** | **67,755** | **50,267** | Ageing Analysis of Bills Receivables (As of June 30, 2025 vs. December 31, 2024) | Ageing | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :----------------------- | :----------------------- | | 0 to 90 days | 250 | 2,948 | | 91 to 180 days | – | 1,121 | | Over 180 days | – | 60 | | **Total** | **250** | **4,129** | - The Group's policy is to grant its customers a credit period ranging from **0 to 180 days**[156](index=156&type=chunk) [Trade and Other Payables](index=35&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables decreased, with a reduction in trade payables and a significant increase in amounts due to non-controlling interests of subsidiaries Total Trade and Other Payables (As of June 30, 2025 vs. December 31, 2024) | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (RMB '000) | | :--- | :----------------------- | :----------------------- | :--------------- | | Total | 232,867 | 247,023 | (14,156) | Ageing Analysis of Trade Payables (As of June 30, 2025 vs. December 31, 2024) | Ageing | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :----------------------- | :----------------------- | | 0 to 90 days | 58,560 | 77,113 | | 91 to 180 days | 12,595 | 11,647 | | Over 180 days | 26,222 | 23,509 | | **Total** | **97,377** | **112,269** | - Amounts due to non-controlling interests of subsidiaries significantly increased to **RMB 16,375,000** (2024: **RMB 196,000**)[159](index=159&type=chunk) - The average credit period for purchases of goods is **90 days**[158](index=158&type=chunk) [Bank Borrowings](index=35&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Bank%20Borrowings) As of June 30, 2025, the Group's total bank borrowings decreased, with a significant reduction in short-term borrowings and a notable increase in long-term borrowings, mostly secured and linked to the People's Bank of China loan prime rate Bank Borrowings (As of June 30, 2025 vs. December 31, 2024) | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (RMB '000) | | :--- | :----------------------- | :----------------------- | :--------------- | | Due within one year | 45,100 | 83,550 | (38,450) | | Due after one year | 32,750 | 4,700 | 28,050 | | **Total** | **77,850** | **88,250** | **(10,400)** | - All secured and unsecured bank borrowings are loan prime rate borrowings, with annual interest rates ranging from the People's Bank of China base rate plus **0.00% to 1.35%** (December 31, 2024: minus **0.25% to plus 1.00%**)[160](index=160&type=chunk)[162](index=162&type=chunk) - Approximately **RMB 62,750,000** of loans are secured by certain assets with a carrying amount of approximately **RMB 133,942,000**, with the remainder being unsecured loans[161](index=161&type=chunk)[162](index=162&type=chunk) [Share Capital](index=36&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Share%20Capital) As of June 30, 2025, the Company's authorized and issued and fully paid share capital remained unchanged Share Capital (As of June 30, 2025 vs. December 31, 2024) | Indicator | June 30, 2025 (Number of Shares) | December 31, 2024 (Number of Shares) | | :--- | :----------------------- | :----------------------- | | Authorised ordinary shares (par value HKD 0.07 each) | 38,000,000,000 | 38,000,000,000 | | Issued and fully paid ordinary shares | 8,934,561,203 | 8,934,561,203 | - The issued and fully paid share capital remained **HKD 625,419,000** (**RMB 564,507,000**) at both the beginning and end of the reporting period[165](index=165&type=chunk) [Share-Based Payment Transactions](index=37&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Share-Based%20Payment%20Transactions) The Company has a share option scheme to incentivize eligible participants, but no share options were outstanding, granted, exercised, lapsed, or cancelled during the six months ended June 30, 2025, or as of December 31, 2024 - The Company has a share option scheme to encourage and reward eligible participants who have contributed to the Group's successful operations[166](index=166&type=chunk)[168](index=168&type=chunk) - As of June 30, 2025, and December 31, 2024, no share options were outstanding, granted, exercised, lapsed, or cancelled under the share option scheme[167](index=167&type=chunk)[168](index=168&type=chunk) [Acquisition / Disposal of Subsidiaries](index=38&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Acquisition%20%2F%20Disposal%20of%20Subsidiaries) The Group made no significant subsidiary acquisitions during the period but disposed of equity interests in three subsidiaries engaged in cylinder gas sales and distribution, realizing gains on disposal - No significant subsidiaries were acquired during the period[169](index=169&type=chunk)[171](index=171&type=chunk) Overview of Subsidiary Disposals (H1 2025) | Subsidiary Name | % of Equity Disposed | Cash Consideration (RMB) | Gain on Disposal (RMB) | Net Cash Outflow from Disposal (RMB) | | :--- | :----------- | :---------------- | :---------------- | :------------------------------ | | Qiannan Zhongmin Gas Co., Ltd. | 100% | 70,000 | 311,000 | (80,000) | | Wengan Zhongmin Gas Co., Ltd. | 51% | 15,000 | 5,000 | (1,000) | | Fuquan Zhongmin Gas Co., Ltd. | 50% | 50,000 | 6,000 | 46,000 | - All disposed subsidiaries were primarily engaged in cylinder gas sales and distribution[170](index=170&type=chunk)[175](index=175&type=chunk)[179](index=179&type=chunk) [Fair Value Measurement of Financial Instruments](index=41&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Fair%20Value%20Measurement%20of%20Financial%20Instruments) The Group measures its unlisted equity instruments at fair value through other comprehensive income on a recurring basis, primarily using Level 3 valuation techniques based on market multiples and a lack of marketability discount, resulting in a decrease in other comprehensive income - The Group measures its equity instruments at fair value through other comprehensive income on a recurring basis at each reporting period end[182](index=182&type=chunk)[186](index=186&type=chunk) - Valuation techniques are primarily based on market multiples (such as Enterprise Value to Earnings Before Interest, Tax, Depreciation and Amortisation (EV/EBITDA) and Price-to-Book Ratio (P/B)) and a lack of marketability discount of **20.4%**[187](index=187&type=chunk)[189](index=189&type=chunk) Fair Value of Unlisted Equity Instruments at Fair Value Through Other Comprehensive Income (As of June 30, 2025 vs. December 31, 2024) | Entity Business | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :----------------------- | :----------------------- | | Manufacturing and sales of glass products | 70,426 | 78,145 | | Banking | 27,238 | 21,451 | | Sales and distribution of cylinder gas and gas appliances | 6,477 | 5,525 | | Sales and distribution of cylinder gas and gas appliances (another entity) | – | 345 | | Sales and distribution of kitchenware | 295 | 307 | | Sales and distribution of cylinder gas | 2,150 | 2,260 | | Sales and distribution of cylinder gas (no business currently) | 1,900 | 1,900 | | **Total** | **108,486** | **109,933** | - There were no transfers between Level 1, Level 2, and Level 3 during the six months ended June 30, 2025[193](index=193&type=chunk)[196](index=196&type=chunk) [Material Related Party Transactions](index=45&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Material%20Related%20Party%20Transactions) The Group engaged in various material related party transactions, including procurement and sales of natural gas and cylinder gas, goods trading, consulting service fees, and rental payments, all conducted on agreed terms Material Related Party Transactions (For the six months ended June 30, 2025) | Transaction Type | Related Party | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :----------------- | :----------------- | | Purchase of natural gas | Shaanxi Provincial Natural Gas Co., Ltd. | 98,017 | 107,672 | | Purchase of cylinder gas | Yunnan Jiehua Clean Energy Development Co., Ltd. Jiehua Chemical Branch | 3,791 | 8,337 | | Purchase of cylinder gas | Yunnan Xianfeng Chemical Co., Ltd. | 1,425 | 15,443 | | Payment of consulting service fees | Fuzhou Futie Anran Gas Co., Ltd. | 1 | – | | Purchase of goods | Fuzhou Development Zone Anran Gas Co., Ltd. | 20 | 137 | | Sales of cylinder gas | Funing Fuxiang Oxygen Acetylene Plant | – | 30 | | Sales of goods | Yunnan Baijiang Gas Co., Ltd. | 477 | 122 | | Payment of rent | Mile Xinyuan Gas Co., Ltd. | 53 | 53 | | Payment of rent | Funing Fuxiang Oxygen Acetylene Plant | – | 50 | | Purchase of cylinder gas | Baijiang Southwest Gas Co., Ltd. | 1,891 | – | | Receipt of consulting service fees | Fuzhou Futie Anran Gas Co., Ltd. | 31 | – | - The above transactions were conducted on terms agreed between the parties[200](index=200&type=chunk)[202](index=202&type=chunk) - Directors are considered the Group's only key management personnel, and their emoluments are disclosed in Note 7[201](index=201&type=chunk)[203](index=203&type=chunk) [Capital Commitments](index=47&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Capital%20Commitments) As of June 30, 2025, the Group's capital commitments were approximately RMB 30.864 million, an increase from year-end 2024, primarily for the acquisition of property, plant and equipment and right-of-use assets, largely related to regional pipeline network construction Capital Commitments (As of June 30, 2025 vs. December 31, 2024) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (RMB '000) | | :--- | :----------------------- | :----------------------- | :--------------- | | Acquisition of property, plant and equipment | 22,317 | 7,232 | 15,085 | | Acquisition of right-of-use assets | 8,547 | 15,787 | (7,240) | | **Total** | **30,864** | **23,019** | **7,845** | - Primarily for regional pipeline network construction[60](index=60&type=chunk) [Major Non-Cash Transactions](index=47&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Major%20Non-Cash%20Transaction) There were no major non-cash transactions during the period - There were no major non-cash transactions during the period[207](index=207&type=chunk)[210](index=210&type=chunk) [Contingent Liabilities](index=47&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Contingent%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[208](index=208&type=chunk)[211](index=211&type=chunk) [Events After the Reporting Period](index=47&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements_Event%20After%20the%20End%20of%20the%20Reporting%20Period) No significant events occurred after the end of the reporting period - No significant events occurred after the end of the reporting period[209](index=209&type=chunk)[212](index=212&type=chunk) [Disclosure of Interests](index=48&type=section&id=Disclosure%20of%20Interests) This section details the interests of directors and substantial shareholders in the company's shares and related securities [Directors' Interests in Shares, Underlying Shares or Debentures](index=48&type=section&id=Disclosure%20of%20Interests_Directors%27%20Interests%20in%20Shares%2C%20Underlying%20Shares%20or%20Debentures) As of June 30, 2025, several directors held long positions in the Company's shares, with Dr. Mok Sai Hong and Ms. Mok Wan Pik holding the largest proportions through corporate interests, and no other interests or arrangements for share/debenture purchases Directors' Long Positions in the Company's Shares (As of June 30, 2025) | Director Name | Personal Interest (Number of Shares) | Corporate Interest (Number of Shares) | Total (Number of Shares) | Approximate Percentage of Issued Ordinary Shares (%) | | :--- | :--- | :--- | :--- | :--- | | Dr. Mok Sai Hong | – | 3,795,132,762 | 3,795,132,762 | 42.48 | | Ms. Mok Wan Pik | – | 3,795,132,762 | 3,795,132,762 | 42.48 | | Mr. Cheung Wo Sang | 338,271,282 | – | 338,271,282 | 3.79 |

[Company Information](index=3&type=section&id=Company%20Information) This section provides key details about the company's executive and independent non-executive directors, auditor, stock code, and listing date - Executive Directors include Dr. Ji Pengcheng (Chairman and CEO), Mr. Zhang Bin, Mr. He Liang, and Mr. Tong Jian[4](index=4&type=chunk) - Independent Non-Executive Directors include Mr. Hong Weili, Mr. Song Shiji, Mr. Wang Jingbo, and Ms. Li Dan[4](index=4&type=chunk) - The company's auditor is Deloitte Touche Tohmatsu[4](index=4&type=chunk) - The company's stock code is SEHK: 2416, and its listing date was May 25, 2023[5](index=5&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) This section summarizes the key financial performance for the six months ended June 30, 2025, compared to the same period last year, showing growth in revenue, profit before tax, profit and total comprehensive income for the period, adjusted net profit, and adjusted EBITDA Key Financial Data for H1 2025 (Unaudited) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 699,640 | 646,888 | 8.2 | | Cost of Sales | (411,700) | (369,917) | 11.3 | | Gross Profit | 287,940 | 276,971 | 4.0 | | Profit Before Tax | 54,064 | 21,269 | 154.2 | | Profit and Total Comprehensive Income for the Period | 45,745 | 16,481 | 177.6 | | Adjusted Net Profit* | 51,179 | 30,714 | 66.6 | | Adjusted EBITDA* | 384,989 | 320,628 | 20.1 | - Adjusted net profit is defined as net profit for the period adjusted by adding back share-based payment expenses[6](index=6&type=chunk) - EBITDA is defined as profit and total comprehensive income for the period, adding back net finance costs, income tax expense, depreciation, and amortization[6](index=6&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This section details the company's business operations, financial performance, market strategies, and future outlook for H1 2025, highlighting revenue and profit growth driven by pay-as-you-go office IT solutions, increased customer and in-service device counts, and AI business exploration, alongside operational efficiency improvements, enhanced remanufacturing capabilities, and active capital management [Business Review](index=6&type=section&id=Business%20Review) In H1 2025, the company focused on providing one-stop office IT solutions via a subscription model for enterprise clients, particularly SMEs, achieving growth in customer and in-service device counts, launching proprietary IT equipment to address macroeconomic challenges, and making initial progress in AI business [Competitive Strengths](index=6&type=section&id=Competitive%20Strengths) The company leverages its position as the largest office IT solutions provider, offering flexible subscription models and comprehensive support to enhance customer experience and capital flow - As the largest office IT integrated solutions provider nationwide, the company offers 24/7 uninterrupted IT support and maintenance, enhancing customer experience[8](index=8&type=chunk) - The pay-as-you-go subscription model allows customers flexible equipment access based on demand, avoiding purchase costs and promoting capital flow and business development[8](index=8&type=chunk) - Providing one-stop office IT integrated solutions offers extensive technical support to customers, avoiding the hassle of dealing with multiple vendors[8](index=8&type=chunk) [Revenue Streams](index=6&type=section&id=Revenue%20Streams) The company's revenue primarily stems from pay-as-you-go office IT integrated solutions, equipment sales, and SaaS product subscriptions - Revenue is primarily generated through pay-as-you-go subscription models for office IT integrated solutions, including hardware, equipment configuration, deployment, O&M support, performance optimization, and equipment management services[10](index=10&type=chunk) - Equipment sales are offered through installment payments for new devices, buyouts of used devices by existing subscribers, or sales of used devices via online bidding platforms[10](index=10&type=chunk) - The company develops SaaS products like "Yipandian" to help enterprise customers manage assets and inventory, charging annual subscription fees[10](index=10&type=chunk) [Disclosure of Key Operating Data](index=8&type=section&id=Disclosure%20of%20Key%20Operating%20Data) Key operating metrics for H1 2025 show growth in active, subscription, and core customer numbers, an increase in devices in service, and an improved net cash retention rate Changes in Key Operating Indicators | Indicator | 2024 | 2025 | Change | | :--- | :--- | :--- | :--- | | Active Customer Count (as of June 30) | 49,737 | 52,357 | 5.3% increase | | Subscription Customer Count (as of June 30) | 48,705 | 51,769 | 6.3% increase | | Core Customer Count (as of June 30) | 26,436 | 27,709 | 4.8% increase | | Number of Devices in Service (as of June 30) | 1,329,721 | 1,480,599 | 11.3% increase | | Net Cash Retention Rate | 88.8% | 96.8% | 8.0 percentage points improvement | | Net Cash Retention Rate for Pay-as-you-go Office IT Integrated Solutions | 90.0% | 96.4% | 6.4 percentage points improvement | - In H1 2025, the equipment utilization rate remained high at **88.9%**[14](index=14&type=chunk) [Increase in Customer Count and Improvement in New Customer Quality](index=9&type=section&id=Increase%20in%20Customer%20Count%20and%20Improvement%20in%20New%20Customer%20Quality) The company achieved growth in active and core customer numbers, along with an increase in devices in service, driven by effective sales strategies and service optimization - Active customer count grew to **52,357**, a **5.3% year-on-year increase**, attributed to sales strategies, new product R&D, enhanced technological advantages, and optimized service capabilities[15](index=15&type=chunk) - Core customer count increased to **27,709**, a **4.8% year-on-year increase**, with core customers accounting for **86.5%** of devices in service[17](index=17&type=chunk) - The number of devices in service exceeded **1.48 million**, and increased customer density optimized engineer service efficiency and quality[17](index=17&type=chunk) [Impact of Macroeconomic Conditions and New Product R&D](index=10&type=section&id=Impact%20of%20Macroeconomic%20Conditions%20and%20New%20Product%20R%26D) The company responded to a "weak recovery" macroeconomic environment by launching proprietary IT equipment to reduce monthly subscription fees and increase per-customer device subscriptions for existing clients - The "weak recovery" macroeconomic environment led SMEs to seek cost reduction and efficiency improvements, putting pressure on average monthly subscription fees[18](index=18&type=chunk) - The company launched proprietary IT equipment, significantly lowering monthly subscription fees to meet SME office IT needs[18](index=18&type=chunk) - Driven by new product launches and sales strategies, the average number of subscribed devices per existing customer increased from **29 to 31**[18](index=18&type=chunk) [Implementation and Active Exploration of AI Business](index=10&type=section&id=AI%20Business%20Implementation%20and%20Active%20Exploration) The company is actively exploring AI business by launching self-developed AI PC workstations to meet market demand for local large model deployment, aiming to enhance office IT efficiency for SMEs - Responding to market demand for AI PC hardware, the company launched its self-developed Yidianyun AP series workstations, supporting local deployment of large models and generating significant subscription demand[19](index=19&type=chunk) - This product helps SMEs achieve local large model deployment at minimal cost, enhancing office IT efficiency[19](index=19&type=chunk) - The company will continue to deepen its presence in the AI field, helping SMEs build their own AI capabilities and serving the enterprise service market[19](index=19&type=chunk) [Outlook](index=11&type=section&id=Outlook) The company plans to enhance product offerings, strengthen its sales team, improve digital remanufacturing capabilities, and leverage its ESG attributes to address SME recovery challenges and capitalize on asset-light operating opportunities - The company will focus on product enhancement, planning to launch several key products in H2 2025 to optimize and refine its product matrix[20](index=20&type=chunk) - Sales team operations will be strengthened through recruitment and training of excellent sales talent, and AI-based business analytics will be applied to improve sales efficiency and effectiveness[20](index=20&type=chunk) - Investment and R&D in remanufacturing technology will be increased to enhance digital capabilities, reduce per-unit remanufacturing costs, with independently developed keyboard detection robots already in production[20](index=20&type=chunk) - The core business possesses ESG attributes, extending equipment lifespan through remanufacturing and reducing waste and carbon emissions[21](index=21&type=chunk) - Significant growth in active customer count and devices in service indicates the company has overcome adverse factors and returned to a growth trajectory, with market penetration of office IT integrated solutions expected to continue increasing[21](index=21&type=chunk) [Significant Events After the Reporting Period](index=11&type=section&id=Significant%20Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the company subscribed to cash management wealth management products totaling USD 26,534,700 to enhance capital utilization and increase income from idle funds - Between June 6, 2025, and July 9, 2025, the company subscribed to wealth management products totaling **USD 26,534,700** from Shenwan Hongyuan Securities (Hong Kong)[22](index=22&type=chunk) - These cash management products have an expected annualized return rate of **2%-4.5%**, an investment period not exceeding one year, are redeemable at any time, and carry low risk[55](index=55&type=chunk) - The subscriptions were funded by the Group's surplus cash reserves[22](index=22&type=chunk) [Financial Analysis](index=12&type=section&id=Financial%20Analysis) In H1 2025, the company's revenue grew by **8.2%** primarily driven by pay-as-you-go office IT integrated solutions, while gross profit margin slightly decreased, profit before tax, profit for the period, adjusted net profit, and EBITDA all significantly increased, reflecting effective cost control and improved operational efficiency [Revenue](index=12&type=section&id=Revenue) Revenue for H1 2025 increased by **8.2%** year-on-year, primarily driven by growth in pay-as-you-go office IT integrated solutions and equipment sales Revenue Composition and Change (for the six months ended June 30) | Revenue Segment | 2025 (RMB thousands) | Share (%) | 2024 (RMB thousands) | Share (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Pay-as-you-go Office IT Integrated Solutions | 625,893 | 89.5 | 576,875 | 89.2 | 8.5 | | Equipment Sales | 67,915 | 9.7 | 64,077 | 9.9 | 6.0 | | SaaS and Other Services | 5,832 | 0.8 | 5,936 | 0.9 | (1.8) | | **Total** | **699,640** | **100.0** | **646,888** | **100.0** | **8.2** | - Revenue from pay-as-you-go office IT integrated solutions increased by **8.5%**, mainly due to significantly improved sales efficiency from effective sales strategies and a robust sales operation system, leading to rapid growth in customer count and per-customer subscribed devices[24](index=24&type=chunk) - Equipment sales revenue increased by **6.0%**, primarily due to an increase in the volume of equipment sold compared to the same period last year[25](index=25&type=chunk) - SaaS and other services revenue decreased by **1.8%**, mainly due to reduced system development revenue and external maintenance services[26](index=26&type=chunk) [Cost of Sales](index=13&type=section&id=Cost%20of%20Sales) Total cost of sales increased by **11.3%** to **RMB 411.7 million**, primarily due to higher depreciation costs from an increase in subscribed equipment - Total cost of sales was **RMB 411.7 million**, an **11.3% increase** from the same period last year, primarily due to increased equipment depreciation costs[27](index=27&type=chunk) Cost of Sales Composition and Change (for the six months ended June 30) | Cost of Sales Segment | 2025 (RMB thousands) | Share (%) | 2024 (RMB thousands) | Share (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Pay-as-you-go Office IT Integrated Solutions | 338,890 | 82.3 | 301,701 | 81.6 | 12.3 | | Equipment Sales | 70,613 | 17.2 | 66,963 | 18.1 | 5.5 | | SaaS and Other Services | 2,197 | 0.5 | 1,253 | 0.3 | 75.3 | | **Total** | **411,700** | **100.0** | **369,917** | **100.0** | **11.3** | - Cost of sales for pay-as-you-go office IT integrated solutions increased by **12.3%**, mainly due to higher depreciation costs resulting from an increase in the number of subscribed devices[29](index=29&type=chunk) - Equipment sales cost increased by **5.5%**, primarily due to an increase in the volume of equipment sold compared to the same period last year[30](index=30&type=chunk) [Gross Profit and Gross Profit Margin](index=14&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Total gross profit increased by **4.0%** to **RMB 287.9 million**, while the overall gross profit margin decreased from **42.8% to 41.2%** - Total gross profit was **RMB 287.9 million**, a **4.0% year-on-year increase**; gross profit margin decreased from **42.8% to 41.2%**[31](index=31&type=chunk) Gross Profit and Gross Profit Margin Composition and Change (for the six months ended June 30) | Segment | 2025 Gross Profit (RMB thousands) | 2025 Gross Profit Margin (%) | 2024 Gross Profit (RMB thousands) | 2024 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Pay-as-you-go Office IT Integrated Solutions | 287,003 | 45.9 | 275,174 | 47.7 | | Equipment Sales | (2,698) | (4.0) | (2,886) | (4.5) | | SaaS and Other Services | 3,635 | 62.3 | 4,683 | 78.9 | | **Total** | **287,940** | **41.2** | **276,971** | **42.8** | - Gross profit margin for pay-as-you-go office IT integrated solutions decreased by **1.8 percentage points**, primarily due to increased depreciation costs from a higher number of devices[33](index=33&type=chunk) - Equipment sales loss decreased by **6.5%**, and the loss rate decreased by **0.5 percentage points**, mainly due to the company adjusting its sales strategies and product categories based on market conditions[34](index=34&type=chunk) [Research and Development Expenses](index=15&type=section&id=Research%20and%20Development%20Expenses) Research and development expenses decreased by **9.1%** to **RMB 30.0 million**, primarily due to lower cloud server costs and improved bargaining power - Research and development expenses were **RMB 30.0 million**, a **9.1% year-on-year decrease**, mainly due to lower cloud server costs and improved bargaining power[35](index=35&type=chunk) [General and Administrative Expenses](index=15&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses decreased by **39.8%** to **RMB 42.6 million**, primarily due to reduced share-based payment expenses and enhanced office efficiency through AI tools - General and administrative expenses were **RMB 42.6 million**, a **39.8% year-on-year decrease**, mainly due to reduced share-based payment expenses and improved overall office efficiency through the use of AI tools[36](index=36&type=chunk) [Other Income](index=15&type=section&id=Other%20Income) Other income increased by **6.6%** to **RMB 7.3 million**, primarily due to government grants received from Beijing and Chengdu to support foreign-invested enterprises - Other income was **RMB 7.3 million**, a **6.6% year-on-year increase**, mainly due to government subsidies received from Beijing and Chengdu to support foreign-invested enterprises during the period[37](index=37&type=chunk) [Other Gains and Losses](index=15&type=section&id=Other%20Gains%20and%20Losses) Net loss from other gains and losses increased by **36.1%** to **RMB 8.7 million**, primarily due to higher losses from the write-off of leased computer equipment - Net loss was **RMB 8.7 million**, a **36.1% year-on-year increase**, mainly due to increased losses from the write-off of leased computer equipment[38](index=38&type=chunk) [Impairment Losses Under Expected Credit Loss Model, Net of Reversals](index=15&type=section&id=Impairment%20Losses%20Under%20Expected%20Credit%20Loss%20Model%2C%20Net%20of%20Reversals) Impairment losses increased by **RMB 1.8 million** to **RMB 15.5 million**, primarily due to an increase in trade receivables driven by revenue growth - Impairment losses were **RMB 15.5 million**, an increase of **RMB 1.8 million** year-on-year, mainly due to increased trade receivables resulting from the company's revenue growth[39](index=39&type=chunk) [Finance Costs](index=16&type=section&id=Finance%20Costs) Finance costs increased by **RMB 5.2 million** to **RMB 63.1 million**, driven by increased borrowing volume to support market expansion and equipment procurement, despite a decrease in borrowing interest rates - Finance costs were **RMB 63.1 million**, an increase of **RMB 5.2 million** year-on-year, mainly due to increased borrowing volume to support market expansion and equipment procurement, while borrowing interest rates continued to decline[40](index=40&type=chunk) - Borrowing interest rates ranged from **2.15% to 12%** (compared to **3.15% to 12%** in the same period of 2024)[48](index=48&type=chunk) [Income Tax Expense](index=16&type=section&id=Income%20Tax%20Expense) Income tax expense increased to **RMB 8.3 million** from **RMB 4.8 million** in the prior year, primarily due to the recognition of deferred tax - Income tax expense was **RMB 8.3 million**, compared to **RMB 4.8 million** in the same period of 2024, mainly due to the recognition of deferred tax[41](index=41&type=chunk) [Profit and Total Comprehensive Income for the Period](index=16&type=section&id=Profit%20and%20Total%20Comprehensive%20Income%20for%20the%20Period) Profit for the period increased by **RMB 29.3 million** to **RMB 45.7 million**, representing a **177.6% year-on-year growth** - Profit for the period was **RMB 45.7 million**, an increase of **RMB 29.3 million** compared to **RMB 16.5 million** in the same period of 2024, representing a **177.6% year-on-year increase**[42](index=42&type=chunk) [Adjusted Profit (Non-IFRS Measure)](index=16&type=section&id=Adjusted%20Profit%20(Non-IFRS%20Measure)) Adjusted net profit for the period increased by **66.6%** year-on-year Adjusted Net Profit Reconciliation (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit and Total Comprehensive Income for the Period | 45,745 | 16,481 | | Add: Share-based Payment Expenses | 5,434 | 14,233 | | **Adjusted Net Profit for the Period** | **51,179** | **30,714** | - Adjusted net profit increased by **66.6%** year-on-year[6](index=6&type=chunk) [EBITDA and Adjusted EBITDA (Non-IFRS Measure)](index=17&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20(Non-IFRS%20Measure)) Adjusted EBITDA for the period increased by **20.1%** year-on-year EBITDA and Adjusted EBITDA Reconciliation (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit and Total Comprehensive Income for the Period | 45,745 | 16,481 | | Add: Net Finance Costs | 61,392 | 54,340 | | Add: Income Tax Expense | 8,319 | 4,788 | | Add: Depreciation | 263,860 | 230,581 | | Add: Amortization | 239 | 205 | | **EBITDA** | **379,555** | **306,395** | | Add: Share-based Payment Expenses | 5,434 | 14,233 | | **Adjusted EBITDA** | **384,989** | **320,628** | - Adjusted EBITDA increased by **20.1%** year-on-year[6](index=6&type=chunk) [Capital Management, Financing, and Financial Policies](index=18&type=section&id=Capital%20Management%2C%20Financing%2C%20and%20Financial%20Policies) The company is committed to maintaining its going concern ability, providing shareholder returns, and ensuring sufficient cash flow through prudent financing policies to support business expansion and operational needs - The primary objectives of capital management are to maintain going concern ability, provide returns to shareholders, and sustain an optimal capital structure to enhance long-term shareholder value[46](index=46&type=chunk) - Management regularly reviews the capital structure, considering the cost of capital and risks associated with various types of capital[46](index=46&type=chunk) - Prudent financing and financial policies are adopted to maintain sufficient cash flow for business expansion, capital expenditures, and general working capital requirements[46](index=46&type=chunk) [Cash Position](index=18&type=section&id=Cash%20Position) As of June 30, 2025, the company's cash and cash equivalents decreased, primarily denominated in RMB, HKD, and USD - As of June 30, 2025, cash and cash equivalents decreased from **RMB 556.7 million** as of December 31, 2024, to **RMB 400.6 million**[47](index=47&type=chunk) - The Group's cash and cash equivalents are primarily denominated in RMB, HKD, and USD[47](index=47&type=chunk) [Borrowings](index=18&type=section&id=Borrowings) As of June 30, 2025, the company's borrowings totaled **RMB 1,488.6 million**, with a significant portion due within one year, while average borrowings increased and interest rates decreased - As of June 30, 2025, borrowings totaled **RMB 1,488.6 million**, of which approximately **RMB 892.9 million** are due within one year[48](index=48&type=chunk) - For the six months ended June 30, 2025, the average balance of current and non-current borrowings was **RMB 1,552.7 million**, a **7.7% increase** from the same period last year[48](index=48&type=chunk) - Borrowing interest rates ranged from **2.15% to 12%** (compared to **3.15% to 12%** in the same period of 2024), all denominated in RMB[48](index=48&type=chunk) [Capital Gearing Ratio](index=18&type=section&id=Capital%20Gearing%20Ratio) As of June 30, 2025, the company's capital gearing ratio decreased, indicating an optimization of financial leverage - As of June 30, 2025, the capital gearing ratio was **160.9%**, lower than **168.5%** as of December 31, 2024[49](index=49&type=chunk) [Foreign Exchange and Exchange Rate Risk](index=19&type=section&id=Foreign%20Exchange%20and%20Exchange%20Rate%20Risk) The company primarily operates in China with RMB-denominated revenues and expenses, but foreign currency-denominated assets and liabilities expose it to exchange rate risk, with management monitoring and considering future hedging measures - The Group primarily conducts its business in China, with most revenues and expenses denominated in RMB[50](index=50&type=chunk) - Certain bank balances, other financial assets, other payables, and other financial liabilities are denominated in foreign currencies, exposing the Group to foreign exchange risk[50](index=50&type=chunk) - Currently, there is no foreign currency hedging policy, but management monitors foreign exchange risk and will consider appropriate hedging measures if necessary[50](index=50&type=chunk) [Contingent Liabilities](index=19&type=section&id=Contingent%20Liabilities) As of the end of the reporting period, the company had no significant contingent liabilities - As of June 30, 2025, the company had no significant contingent liabilities[51](index=51&type=chunk) [Pledge of Group Assets](index=19&type=section&id=Pledge%20of%20Group%20Assets) As of June 30, 2025, the company pledged leased computer equipment and right-of-use assets with a net book value of approximately **RMB 1,562.6 million** as collateral for bank and other financial institution borrowings - As of June 30, 2025, the Group pledged leased computer equipment and right-of-use assets with a net book value of approximately **RMB 1,562.6 million** as collateral for bank and other financial institution borrowings[52](index=52&type=chunk) [Capital Expenditures](index=19&type=section&id=Capital%20Expenditures) Capital expenditures for H1 2025 totaled **RMB 386.4 million**, primarily for acquiring leased computer equipment and right-of-use assets, funded mainly by customer subscription cash flows and borrowings - Capital expenditures for H1 2025 were **RMB 386.4 million** (H1 2024: **RMB 426.0 million**)[53](index=53&type=chunk) - Capital expenditures included the acquisition of leased computer equipment of **RMB 177.7 million** and right-of-use assets of **RMB 208.7 million**[53](index=53&type=chunk) - Capital expenditures were primarily funded by cash flows from customer subscriptions, bank, and other borrowings[53](index=53&type=chunk) [Significant Investments Held](index=19&type=section&id=Significant%20Investments%20Held) The company subscribed to low-to-medium risk cash management wealth management products to optimize capital utilization and increase income from idle funds, but held no significant investments representing **5%** or more of total assets as of the reporting period end - Between June 6, 2025, and July 9, 2025, the Group subscribed to cash management wealth management products totaling **USD 26,534,700**, with an expected annualized return rate of **2%-4.5%**, an investment period not exceeding one year, and redeemable at any time[55](index=55&type=chunk) - As of June 30, 2025, the fair value of these wealth management products was **RMB 143,287 thousand**, representing approximately **4.1%** of the Group's total assets[55](index=55&type=chunk) - As of June 30, 2025, the company held no significant investments in investee companies representing **5%** or more of its total assets[56](index=56&type=chunk) [Major Acquisitions and Disposals](index=20&type=section&id=Major%20Acquisitions%20and%20Disposals) During the reporting period, the company did not engage in any major acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the company had no major acquisitions or disposals of subsidiaries, associates, or joint ventures[57](index=57&type=chunk) [Future Plans for Major Investments or Capital Assets](index=20&type=section&id=Future%20Plans%20for%20Major%20Investments%20or%20Capital%20Assets) As of the end of the reporting period, the company had no detailed future plans for major investments or capital assets - As of June 30, 2025, we had no detailed future plans for major investments or capital assets[58](index=58&type=chunk) [Employees and Remuneration](index=20&type=section&id=Employees%20and%20Remuneration) As of June 30, 2025, the company's full-time employee count decreased, but it continues to attract and retain talent through competitive remuneration, performance bonuses, and training programs, also utilizing the 2023 Share Scheme to incentivize directors and employees for long-term development - As of June 30, 2025, the Group had **1,238** full-time employees (December 31, 2024: **1,430** employees)[59](index=59&type=chunk) - In H1 2025, the Group's employee remuneration (excluding directors' remuneration) was approximately **RMB 136 million** (H1 2024: approximately **RMB 144 million**)[59](index=59&type=chunk) - The company offers competitive remuneration, performance bonuses, and other incentives to employees, along with regular internal and induction training programs[59](index=59&type=chunk)[60](index=60&type=chunk) - Under the 2023 Share Scheme, share options and share awards were conditionally granted to Dr. Ji Pengcheng and Mr. Zhang Bin, with exercise/vesting contingent upon achieving business and financial milestones in five equal tranches[64](index=64&type=chunk) - On June 13, 2025, the company granted a total of **5,760,000** share options and **2,821,400** share awards to **146** eligible participants[67](index=67&type=chunk) [Corporate Governance and Other Information](index=22&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's corporate governance practices, including compliance with the Corporate Governance Code, board composition, compliance with the Model Code for Securities Transactions, audit committee responsibilities, share repurchases, significant litigation, use of global offering proceeds, changes in directors' information, disclosure of directors' and substantial shareholders' interests, and updates on employee incentive schemes [Interim Dividend](index=23&type=section&id=Interim%20Dividend) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[68](index=68&type=chunk) [Compliance with Corporate Governance Code](index=23&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company has complied with all applicable code provisions of the Corporate Governance Code, with the Chairman and CEO roles held by Dr. Ji, an arrangement the Board deems appropriate and beneficial to business development under existing checks and balances - For the six months ended June 30, 2025, the company complied with all applicable code provisions of the SEHK Corporate Governance Code[69](index=69&type=chunk) - The roles of Chairman and CEO are combined and held by Dr. Ji, an arrangement the Board believes provides strong and consistent leadership with sufficient checks and balances, without compromising the balance of power and accountability[69](index=69&type=chunk)[70](index=70&type=chunk) [Compliance with Model Code for Securities Transactions by Directors](index=23&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) All directors confirmed their compliance with the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules throughout the reporting period - Following specific inquiries to all Directors, all Directors confirmed their compliance with the required standards set out in the Model Code for the six months ended June 30, 2025[72](index=72&type=chunk) [Audit Committee](index=24&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing and overseeing financial reporting processes and internal control systems, and has reviewed the Group's condensed consolidated financial statements - The Audit Committee comprises three independent non-executive directors: Mr. Wang Jingbo (Chairman), Mr. Hong Weili, and Ms. Li Dan[73](index=73&type=chunk) - Its primary responsibilities include reviewing and overseeing the Group's financial reporting processes and internal control systems, and reviewing and approving connected transactions[73](index=73&type=chunk) - The Audit Committee, together with the Board, has reviewed the Group's unaudited interim condensed consolidated financial statements and interim results announcement for the six months ended June 30, 2025[73](index=73&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=24&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the reporting period, the company repurchased and cancelled a portion of its ordinary shares on the SEHK for a total consideration of **HKD 26,371,999**, aiming to enhance net asset value per share and/or earnings per share - For the six months ended June 30, 2025, the company repurchased a total of **14,792,500** ordinary shares on the SEHK for a total consideration (before expenses) of **HKD 26,371,999**[74](index=74&type=chunk) - As of June 30, 2025, the company cancelled a total of **46,013,500** treasury shares[74](index=74&type=chunk) - The share repurchases aimed to enhance net asset value per share and/or earnings per share, aligning with the overall interests of the company and its shareholders[74](index=74&type=chunk) [Significant Litigation](index=25&type=section&id=Significant%20Litigation) As of the end of the reporting period and the latest practicable date, the company was not involved in any significant litigation or arbitration - For the six months ended June 30, 2025, and as of the latest practicable date, the company was not involved in any significant litigation or arbitration[76](index=76&type=chunk) [Use of Proceeds from Global Offering](index=25&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) The net proceeds from the global offering, approximately **HKD 97.0 million**, have been utilized as planned for market promotion, R&D investment, enhancing remanufacturing capabilities, and working capital, with remanufacturing capabilities and working capital fully utilized - The net proceeds from the global offering, approximately **HKD 97.0 million**, had no changes in their intended use[77](index=77&type=chunk) Intended Use and Utilization of Net Proceeds from Global Offering (as of June 30, 2025) | Intended Use | Percentage (%) | Available (HKD millions) | Utilized (HKD millions) | Unutilized (HKD millions) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | | Investment in Market Promotion and Sales & Service Network Improvement | 40.0 | 38.8 | 29.8 | 9.0 | Before end of 2025 | | Investment in R&D and Diversification of Service Content | 30.0 | 29.1 | 25.0 | 4.1 | Before end of 2025 | | Enhancement of Remanufacturing Capabilities and Operational Efficiency | 20.0 | 19.4 | 19.4 | 0.0 | – | | Working Capital and General Corporate Purposes | 10.0 | 9.7 | 9.7 | 0.0 | – | | **Total** | **100.0** | **97.0** | **83.9** | **13.1** | | [Changes in Directors' Information](index=26&type=section&id=Changes%20in%20Directors'%20Information) Effective June 13, 2025, Mr. Hong Weili ceased to be a member of the Nomination Committee, and Ms. Li Dan was appointed as a member - Effective June 13, 2025, Mr. Hong Weili, an independent non-executive director, ceased to be a member of the Board's Nomination Committee, and Ms. Li Dan, an independent non-executive director, was appointed as a member of the Nomination Committee[79](index=79&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures of the Company and its Associated Corporations](index=26&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%2C%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) This section discloses the interests of directors and the chief executive in the company's shares, with Dr. Ji and Mr. Zhang holding significant proportions through controlled corporations and jointly held interests Directors' and Chief Executive's Interests in the Company's Shares (as of June 30, 2025) | Name | Nature of Interest | Number of Shares Held | Approximate Percentage of Interest (%) | | :--- | :--- | :--- | :--- | | Dr. Ji | Interest in controlled corporation | 77,372,780 shares | 14.49 | | | Jointly held interest with other parties | 66,611,730 shares | 12.47 | | | Beneficial owner | 15,243,000 shares | 2.85 | | Mr. Zhang | Interest in controlled corporation | 51,581,860 shares | 9.66 | | | Jointly held interest with other parties | 98,045,650 shares | 18.36 | | | Beneficial owner | 9,600,000 shares | 1.80 | | Mr. He Liang | Beneficial owner | 3,367,913 shares | 0.63 | | Mr. Tong Jian | Beneficial owner | 3,853,811 shares | 0.72 | - Dr. Ji and Mr. Zhang, together with Dr. Ji's entities, Mr. Zhang's entities, Huaqing Hongyi, Huaqing Yuyi, and Huaqing Kuaiyi, form a single largest shareholder group and are deemed to have an interest in the shares held by other members[83](index=83&type=chunk) [Substantial Shareholders' Interests and Short Positions in the Company's Shares and Underlying Shares](index=28&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20the%20Company's%20Shares%20and%20Underlying%20Shares) This section discloses the interests of substantial shareholders (excluding directors and the chief executive) in the company's shares, including Dr. Ji's entities, Mr. Zhang's entities, Huaqing Kuaiyi, Huaqing Hongyi, Huaqing Yuyi, Source Code, and Matrix Substantial Shareholders' Interests in the Company's Shares (as of June 30, 2025) | Name/Entity | Nature of Interest | Number of Shares Held | Approximate Percentage of Interest (%) | | :--- | :--- | :--- | :--- | | Dr. Ji's Entities | Beneficial owner | 77,372,780 shares | 14.49 | | | Jointly held interest with other parties | 81,854,730 shares | 15.33 | | Mr. Zhang's Entities | Beneficial owner | 51,581,860 shares | 9.66 | | | Jointly held interest with other parties | 107,645,650 shares | 20.16 | | Huaqing Kuaiyi | Interest in controlled corporation | 5,429,870 shares | 1.02 | | | Jointly held interest with other parties | 153,797,640 shares | 28.80 | | Huaqing Hongyi | Beneficial owner | 2,237,140 shares | 0.42 | | | Jointly held interest with other parties | 156,990,370 shares | 29.40 | | Huaqing Yuyi | Beneficial owner | 3,192,730 shares | 0.60 | | | Jointly held interest with other parties | 156,034,780 shares | 29.22 | | Source Code | Beneficial owner | 121,789,300 shares | 22.81 | | Matrix | Beneficial owner | 76,018,370 shares | 14.24 | | Koala Fund | Beneficial owner | 34,609,950 shares | 6.48 | [Employee Incentive Schemes](index=30&type=section&id=Employee%20Incentive%20Schemes) The company operates a Pre-IPO Share Option Scheme and a 2023 Share Scheme to attract, incentivize, and retain talent, with share options and awards granted to directors and employees under the 2023 scheme, some linked to business and financial milestones, and certain option exercise prices reset for better incentives [Pre-IPO Share Option Scheme](index=30&type=section&id=Pre-IPO%20Share%20Option%20Scheme) The Pre-IPO Share Option Scheme, approved on February 25, 2022, ceased granting options from January 1, 2024, with some options exercised or forfeited during the period - The Pre-IPO Share Option Scheme was approved by shareholders on February 25, 2022, and no further share options have been granted since January 1, 2024[88](index=88&type=chunk)[164](index=164&type=chunk) Changes in Pre-IPO Share Option Scheme (as of June 30, 2025) | Indicator | Number of Share Options | Weighted Average Exercise Price (USD) | Remaining Life (Years) | | :--- | :--- | :--- | :--- | | Outstanding as of January 1, 2025 | 18,143,724 | 0.65 | 5.73 | | Exercised | (940,627) | 0.00005 | | | Forfeited or Cancelled | (2,172,531) | 0.89 | | | **Outstanding as of June 30, 2025** | **15,030,566** | **0.66** | **5.09** | - The number of exercisable share options as of June 30, 2025, was **12,170,000**[165](index=165&type=chunk) [2023 Share Scheme](index=32&type=section&id=2023%20Share%20Scheme) The 2023 Share Scheme, adopted on January 26, 2024, aims to attract, incentivize, and retain eligible participants, encouraging their contribution to the company's long-term development and interests - The 2023 Share Scheme was adopted on January 26, 2024, aiming to attract, incentivize, and retain eligible participants, and encourage their contribution to the company's long-term development and interests[94](index=94&type=chunk) Changes in Share Options and Share Awards under 2023 Share Scheme (as of June 30, 2025) | Indicator | Number of Share Options | Number of Share Awards | | :--- | :--- | :--- | | Outstanding as of January 1, 2025 | 32,964,000 | 800,262 | | Granted during the period | 24,960,000 | 7,621,400 | | Exercised during the period | (124,350) | (124,350) | | Lapsed during the period | (32,869,750) | (326,150) | | Cancelled during the period | (89,350) | | | **Outstanding as of June 30, 2025** | **24,955,050** | **7,961,312** | - Some share options and share awards granted to Dr. Ji, Mr. Zhang, Mr. He Liang, Mr. Tong Jian, and **144** eligible participants are linked to business and financial milestones such as the number of subscribed devices, monthly subscription business revenue, and monthly subscription business gross profit[105](index=105&type=chunk)[106](index=106&type=chunk) - On June 13, 2025, the company reset the exercise price of the original share options and recognized an incremental fair value of **RMB 23,689,000**[167](index=167&type=chunk)[168](index=168&type=chunk) - During this interim period, the Group recognized total expenses of **RMB 5,434,000** for the grant of share options[170](index=170&type=chunk) [Directors' Rights to Purchase Shares or Debentures](index=38&type=section&id=Directors'%20Rights%20to%20Purchase%20Shares%20or%20Debentures) During the reporting period, no director, their spouse, or minor children were granted rights to benefit from purchasing company shares or debentures, nor did any director exercise such rights - For the six months ended June 30, 2025, no director or their respective spouse or minor children were granted rights to benefit from purchasing the company's shares or debentures, nor did any director exercise any such rights[113](index=113&type=chunk) [Continuing Disclosure Obligations Under Listing Rules](index=38&type=section&id=Continuing%20Disclosure%20Obligations%20Under%20Listing%20Rules) Except as disclosed in this interim report, the company has no other disclosure obligations under Listing Rules 13.20, 13.21, and 13.22 - Except as disclosed in this interim report, the company has no other disclosure obligations under Listing Rules 13.20, 13.21, and 13.22[114](index=114&type=chunk) [Approval of Interim Report](index=38&type=section&id=Approval%20of%20Interim%20Report) The Board approved and authorized the release of the Group's interim report and unaudited interim condensed consolidated results for the six months ended June 30, 2025, on August 25, 2025 - The Board approved and authorized the release of the Group's interim report and unaudited interim condensed consolidated results for the six months ended June 30, 2025, on August 25, 2025[115](index=115&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=38&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) Deloitte Touche Tohmatsu has reviewed the company's condensed consolidated financial statements in accordance with International Standard on Review Engagements 2410, concluding that no material matters were found to suggest the statements were not prepared in accordance with International Accounting Standard 34 - Deloitte Touche Tohmatsu has reviewed the Group's condensed consolidated financial statements for the six months ended June 30, 2025, in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity"[73](index=73&type=chunk)[117](index=117&type=chunk) - Based on the review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34[118](index=118&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=40&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the condensed consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2025, showing growth in the company's revenue, gross profit, profit before tax, and profit for the period Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 699,640 | 646,888 | | Cost of Sales | (411,700) | (369,917) | | Gross Profit | 287,940 | 276,971 | | Profit Before Tax | 54,064 | 21,269 | | Income Tax Expense | (8,319) | (4,788) | | Profit and Total Comprehensive Income for the Period | 45,745 | 16,481 | | Basic Earnings Per Share (RMB) | 0.09 | 0.03 | | Diluted Earnings Per Share (RMB) | 0.09 | 0.03 | [Condensed Consolidated Statement of Financial Position](index=41&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section presents the condensed consolidated statement of financial position as of June 30, 2025, indicating a slight increase in total assets, growth in total equity, and a minor decrease in total liabilities Summary of Condensed Consolidated Statement of Financial Position (as of June 30, 2025) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 2,408,709 | 2,375,438 | | Current Assets | 1,106,858 | 1,138,377 | | **Total Assets** | **3,515,567** | **3,513,815** | | **Equity and Liabilities** | | | | Total Equity | 1,262,337 | 1,235,750 | | Non-current Liabilities | 900,983 | 897,603 | | Current Liabilities | 1,352,247 | 1,380,462 | | **Total Liabilities** | **2,253,230** | **2,278,065** | | **Total Equity and Liabilities** | **3,515,567** | **3,513,815** | - As of June 30, 2025, the Group's current assets were **RMB 245,389,000** less than its current liabilities, but the directors believe the Group will have sufficient financial resources to meet its working capital requirements for the next twelve months[130](index=130&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=43&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section presents the condensed consolidated statement of changes in equity for the six months ended June 30, 2025, illustrating the impact of profit and total comprehensive income, share-based payment recognition, and share repurchases and cancellations on equity Summary of Condensed Consolidated Statement of Changes in Equity (for the six months ended June 30) | Indicator | January 1, 2025 (RMB thousands) | Profit and Total Comprehensive Income for the Period (RMB thousands) | Share-based Payments (RMB thousands) | Share Repurchases and Cancellations (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Share Capital | 200 | – | – | (17) | 183 | | Share Premium | 4,044,076 | – | – | (76,771) | 3,969,109 | | Share-based Payment Reserve | 108,387 | – | 5,434 | (1,804) | 112,017 | | Accumulated Losses | (2,845,381) | 45,745 | – | – | (2,799,636) | | **Total** | **1,235,750** | **45,745** | **5,434** | **(24,551)** | **1,262,337** | - Profit and total comprehensive income for the period was **RMB 45,745 thousand**[126](index=126&type=chunk) - Share-based payments of **RMB 5,434 thousand** were recognized for equity settlement[126](index=126&type=chunk) - Repurchase of shares (to be cancelled) amounted to **RMB 24,551 thousand**[126](index=126&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=44&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section presents the condensed consolidated statement of cash flows for the six months ended June 30, 2025, showing net cash generated from operating activities, but a net decrease in cash and cash equivalents due to investing and financing activities Summary of Condensed Consolidated Statement of Cash Flows (for the six months ended June 30) | Activity Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 241,810 | 244,199 | | Net Cash (Used in)/Generated from Investing Activities | (52,144) | 6,248 | | Net Cash Used in Financing Activities | (345,621) | (348,898) | | **Net Decrease in Cash and Cash Equivalents** | **(155,955)** | **(98,451)** | | Cash and Cash Equivalents at End of Period | 400,620 | 392,094 | - Net cash generated from operating activities was **RMB 241,810 thousand**[128](index=128&type=chunk) - Net cash used in investing activities was **RMB 52,144 thousand**, primarily due to the purchase of financial assets at fair value through profit or loss[128](index=128&type=chunk) - Net cash used in financing activities was **RMB 345,621 thousand**, primarily due to repayment of bank and other borrowings and repayment of lease liabilities[128](index=128&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=45&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, covering the basis of preparation, accounting policies, revenue and segment information, composition of various expenses and income, earnings per share calculation, dividend policy, balance sheet item details, share-based payment schemes, and related party transactions [1. General Information](index=46&type=section&id=1.%20General%20Information) The condensed consolidated financial statements are presented in RMB, which is the company's functional currency - The condensed consolidated financial statements are presented in RMB, which is also the company's functional currency[129](index=129&type=chunk) [2. Basis of Preparation of Condensed Consolidated Financial Statements](index=46&type=section&id=2.%20Basis%20of%20Preparation%20of%20Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated financial statements are prepared in accordance with IAS 34 and the SEHK Listing Rules, and presented on a going concern basis, as management believes sufficient financial resources are available despite current assets being less than current liabilities - The condensed consolidated financial statements have been 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 of Hong Kong Limited[130](index=130&type=chunk) - As of June 30, 2025, the Group's current assets were **RMB 245,389,000** less than its current liabilities[130](index=130&type=chunk) - The directors of the company believe that the Group will have sufficient financial resources to meet its future working capital requirements for the next twelve months from the end of the reporting period, and thus the condensed consolidated financial statements are prepared on a going concern basis[130](index=130&type=chunk) [3. Accounting Policies](index=47&type=section&id=3.%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, and accounting policies remain consistent with the 2024 annual consolidated financial statements, except for new/changed policies due to IFRS amendments - The condensed consolidated financial statements have been prepared on a historical cost basis[131](index=131&type=chunk) - Except for new/changed accounting policies resulting from the application of amendments to IFRS accounting standards, the accounting policies are consistent with those presented in the Group's annual consolidated financial statements for the year ended December 31, 2024[131](index=131&type=chunk) - The application of amended IFRS accounting standards during this interim period had no significant impact on the Group's financial position and performance for the current and prior periods and/or on the disclosures contained in these condensed consolidated financial statements[132](index=132&type=chunk) [4. Revenue and Segment Information](index=48&type=section&id=4.%20Revenue%20and%20Segment%20Information) The company's primary business involves providing office IT integrated solutions and other services, with all revenue generated from China, mainly categorized into pay-as-you-go office IT integrated solutions, equipment sales, and SaaS and other services, with the pay-as-you-go model being core - The Group's chief operating decision maker is identified as the Chief Executive Officer, who reviews consolidated results in making decisions about allocating resources and assessing the Group's overall performance; therefore, the Group has only one reportable segment[133](index=133&type=chunk) - All of the Group's non-current assets are located in China, and all of the Group's revenue is derived from China[133](index=133&type=chunk) Revenue Details (for the six months ended June 30) | Revenue Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Pay-as-you-go Office IT Integrated Solutions | 625,893 | 576,875 | | Equipment Sales | 67,915 | 64,077 | | Software as a Service ("SaaS") and Other | 5,832 | 5,936 | | **Total** | **699,640** | **646,888** | - Revenue from pay-as-you-go office IT integrated solutions includes equipment subscription services and office IT technical subscription services recognized under IFRS 16[135](index=135&type=chunk) - Equipment sales revenue is recognized when the customer obtains control of the goods, which is at the point of delivery to the customer[138](index=138&type=chunk) - SaaS services are generated from the Group's self-developed "Yipandian" system, and other services primarily include providing maintenance support and assistance to the Group's customers[139](index=139&type=chunk)[140](index=140&type=chunk) [5. Other Income](index=51&type=section&id=5.%20Other%20Income) Other income primarily comprises interest income from banks and installment sales receivables, government grants, and compensation income, with an increase in government grants Other Income Details (for the six months ended June 30) | Income Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest Income from Banks | 1,685 | 3,554 | | Interest Income from Installment Sales Receivables | 362 | 598 | | Government Grants | 4,046 | 1,293 | | Compensation Income | 1,166 | 1,366 | | **Total** | **7,259** | **6,811** | - Government grants primarily refer to subsidies provided by local governments in Beijing and Chengdu to support foreign-invested enterprises, reward high-tech enterprises, and subsidize stable employment for certain subsidiaries of the Group[143](index=143&type=chunk) - Compensation income refers to compensation payments made by the Group's customers for damaged equipment[144](index=144&type=chunk) [6. Other Gains and Losses, Net](index=52&type=section&id=6.%20Other%20Gains%20and%20Losses%2C%20Net) Net other gains and losses resulted in a loss of **RMB 8.7 million**, primarily due to increased losses from the write-off of leased computer equipment, partially offset by fair value gains on financial assets at fair value through profit or loss Other Gains and Losses, Net Details (for the six months ended June 30) | Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair Value Gains on Financial Assets at Fair Value Through Profit or Loss | 1,806 | 3,527 | | Subscription Fees for Financial Assets at Fair Value Through Profit or Loss | (718) | – | | Losses from Write-off of Leased Computer Equipment | (8,580) | (11,218) | | Other | (1,178) | 1,319 | | **Total** | **(8,670)** | **(6,372)** | - Losses from write-off of leased computer equipment refer to situations where the Group no longer recognizes revenue for customers with overdue payments exceeding six months, and recognizes a loss when the leased computer equipment held by the customer is written off[146](index=146&type=chunk) [7. Impairment Losses Under Expected Credit Loss Model, Net of Reversals](index=52&type=section&id=7.%20Impairment%20Losses%20Under%20Expected%20Credit%20Loss%20Model%2C%20Net%20of%20Reversals) Net impairment losses under the expected credit loss model amounted to **RMB 15.5 million**, primarily due to increased impairment losses on trade receivables Impairment Losses Details (for the six months ended June 30) | Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables | 15,425 | 14,262 | | Other Receivables | 70 | (558) | | **Total** | **15,495** | **13,704** | [8. Finance Costs](index=53&type=section&id=8.%20Finance%20Costs) Finance costs, primarily comprising interest on borrowings and lease liabilities, totaled **RMB 63.1 million**, representing an increase year-on-year Finance Costs Details (for the six months ended June 30) | Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on Borrowings | 46,539 | 43,531 | | Interest on Lease Liabilities | 16,538 | 14,363 | | **Total** | **63,077** | **57,894** | [9. Income Tax Expense](index=53&type=section&id=9.%20Income%20Tax%20Expense) Income tax expense amounted to **RMB 8.3 million**, primarily consisting of deferred tax Income Tax Expense Details (for the six months ended June 30) | Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current Corporate Income Tax | 188 | 153 | | Deferred Tax | 8,131 | 4,635 | | **Total** | **8,319** | **4,788** | [10. Profit and Total Comprehensive Income for the Period](index=54&type=section&id=10.%20Profit%20and%20Total%20Comprehensive%20Income%20for%20the%20Period) This section provides the composition of profit and total comprehensive income for the period, including various costs and expenses, with total employee benefit expenses amounting to **RMB 142.7 million** Composition of Profit and Total Comprehensive Income for the Period (for the six months ended June 30) | Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of Pay-as-you-go Office IT Integrated Solutions | 338,890 | 301,701 | | Cost of Equipment Sales | 70,613 | 66,963 | | Cost of SaaS and Other Services | 2,197 | 1,253 | | Promotion and Advertising Expenses | 1,690 | 2,245 | | Total Employee Benefit Expenses | 142,728 | 152,698 | | Expenses Related to Short-term Leases | 1,539 | 1,781 | | Depreciation of Other Right-of-Use Assets | 11,284 | 12,086 | | Amortization of Intangible Assets | 239 | 205 | [11. Earnings Per Share](index=55&type=section&id=11.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted earnings per share were **RMB 0.09**, representing an increase from the prior year Earnings Per Share Calculation (for the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company Used for Basic and Diluted EPS Calculation (RMB thousands) | 45,745 | 16,481 | | Weighted Average Number of Ordinary Shares Used for Basic EPS Calculation | 529,106,424 | 577,795,367 | | Effect of Dilutive Potential Ordinary Shares: Share Options | 6,097,197 | 1,625,270 | | Weighted Average Number of Ordinary Shares Used for Diluted EPS Calculation | 535,203,621 | 579,420,637 | | **Basic Earnings Per Share (RMB)** | **0.09** | **0.03** | | **Diluted Earnings Per Share (RMB)** | **0.09** | **0.03** | - For the six months ended June 30, 2025, **12,939,000** ordinary shares repurchased by the company were not included in the basic earnings per share calculation since the repurchase date[150](index=150&type=chunk) - For the six months ended June 30, 2025, certain share options of the company were not included in the diluted earnings per share calculation as their exercise price was higher than the average market price of the shares[151](index=151&type=chunk) [12. Dividends](index=55&type=section&id=12.%20Dividends) During this interim period, the company did not pay, declare, or propose any dividends - During this interim period, no dividends were paid, declared, or proposed (for the six months ended June 30, 2024: nil)[152](index=152&type=chunk) [13. Leased Computer Equipment and Right-of-Use Assets](index=56&type=section&id=13.%20Leased%20Computer%20Equipment%20and%20Right-of-Use%20Assets) During the reporting period, the company sold or transferred some leased computer equipment to inventory and acquired new leased computer equipment and right-of-use assets to support business expansion - During this interim period, the Group sold or transferred to inventory certain leased computer equipment with a total carrying amount of **RMB 79,070,000**[153](index=153&type=chunk) - During this interim period, the Group purchased leased computer equipment amounting to **RMB 177,695,000**[153](index=153&type=chunk) - At the commencement date of the leases, the Group recognized right-of-use assets of **RMB 208,714,000** and lease liabilities of **RMB 206,995,000**[154](index=154&type=chunk) [14. Trade and Other Receivables and Prepayments](index=56&type=section&id=14.%20Trade%20and%20Other%20Receivables%20and%20Prepayments) As of June 30, 2025, trade and other receivables and prepayments totaled **RMB 574.7 million**, with the majority of trade receivables aged within **30 days** Trade and Other Receivables and Prepayments Details (as of June 30, 2025) | Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables (net of allowance for credit losses) | 137,162 | 134,520 | | Other Receivables and Prepayments | 437,579 | 380,284 | | **Total** | **574,741** | **514,804** | Ageing Analysis of Trade Receivables (as of June 30, 2025) | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 30 days | 113,797 | 110,005 | | 31 to 60 days | 10,763 | 13,468 | | 61 to 90 days | 3,485 | 3,606 | | 91 to 180 days | 6,129 | 5,139 | | 181 to 270 days | 2,399 | 1,692 | | 271 to 360 days | 457 | 323 | | Over 360 days | 132 | 287 | | **Total** | **137,162** | **134,520** | - The Group typically grants a credit period of up to **5 days** after invoicing customers[156](index=156&type=chunk) [15. Financial Assets at Fair Value Through Profit or Loss](index=58&type=section&id=15.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, financial assets at fair value through profit or loss totaled **RMB 286.2 million**, primarily comprising structured deposits and cash management products Financial Assets at Fair Value Through Profit or Loss Details (as of June 30, 2025) | Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Structured Deposits | 20,014 | 20,029 | | Cash Management Products | 266,140 | 219,248 | | **Total** | **286,154** | **239,277** | - Structured deposits are issued by a Chinese bank, with expected returns linked to EUR/USD exchange rate fluctuations; cash management products are issued by financial institutions, denominated in USD, and linked to funds managed by fund managers[158](index=158&type=chunk) [16. Trade and Other Payables](index=59&type=section&id=16.%20Trade%20and%20Other%20Payables) As of June 30, 2025, trade and other payables totaled **RMB 126.0 million**, with the majority of trade payables aged within **12 months** Trade and Other Payables Details (as of June 30, 2025) | Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Payables | 63,508 | 34,907 | | Accrued Salaries and Benefits | 31,194 | 40,733 | | Other | 31,314 | 29,801 | | **Total** | **126,016** | **105,441** | Ageing Analysis of Trade Payables (as of June 30, 2025) | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 12 months | 49,305 | 22,549 | | 1 to 2 years | 4,941 | 4,113 | | 2 to 3 years | 3,536 | 4,327 | | Over 3 years | 5,726 | 3,918 | | **Total** | **63,508** | **34,907** | [17. Borrowings](index=59&type=section&id=17.%20Borrowings) During this interim period, the company obtained new bank and other borrowings of **RMB 436.6 million**, with interest rates ranging from **2.15% to 12.00%**, used to fund operating activities - During this interim period, the Group obtained new bank and other borrowings of **RMB 436,620,000**[160](index=160&type=chunk) - Borrowings bear interest at rates ranging from **2.15% to 12.00%** (December 31, 2024: **2.30% to 12.00%**) and are repayable in installments within five years[160](index=160&type=chunk) - The proceeds are used to fund the Group's operating activities[160](index=160&type=chunk) [18. Share Capital](index=60&type=section&id=18.%20Share%20Capital) As of June 30, 2025, the company's issued share capital was **RMB 183 thousand**, with a decrease in issued shares due to share repurchases and cancellations during the reporting period Changes in Issued Share Capital (as of June 30,

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Company Information [Board of Directors and Management](index=3&type=section&id=1.1%20董事會及管理層) This section lists the Board of Directors (including executive and independent non-executive directors) and Supervisory Committee members of Jujiang Construction Group Co., Ltd., identifying key personnel in corporate governance - The Board of Directors is chaired by Mr. Lu Yaoneng and includes **6 executive directors** and **3 independent non-executive directors**[8](index=8&type=chunk)[9](index=9&type=chunk) - Members of the Supervisory Committee include Mr. Zou Jiangtao, Mr. Chen Xiangjiang, Mr. Lu Xingliang, and Mr. Zhu Jialian[9](index=9&type=chunk) [Committees](index=3&type=section&id=1.2%20委員會) This section details the composition and chairpersons of the company's Audit Committee, Nomination Committee, Remuneration and Appraisal Committee, and Strategy Committee, reflecting the division of labor in its governance structure - The Audit Committee is chaired by Ms. Lin Feicui, the Nomination Committee by Mr. Ma Tao (re-designated from May 27, 2025), the Remuneration and Appraisal Committee by Mr. Wang Xinglong (re-designated from May 27, 2025), and the Strategy Committee by Mr. Lu Yaoneng[9](index=9&type=chunk) [Professional Advisors and Offices](index=3&type=section&id=1.3%20專業顧問及辦事處) This section provides information on the company's company secretary, authorized representatives, legal advisors, auditors, H share registrar, and principal bankers, along with addresses for its registered office, headquarters, and principal place of business in Hong Kong - The Company Secretary is Mr. Jin Shuigen, and the auditor is **Ernst & Young**[9](index=9&type=chunk) - Legal advisors include DeHeng Law Offices (Hong Kong) LLP (Hong Kong law) and Jin Tiancheng Law Firm (Chinese law)[9](index=9&type=chunk) - The China headquarters and principal place of business are located at No. 669, Qingfeng South Road (South), Tongxiang City, Zhejiang Province[10](index=10&type=chunk) [Company Basic Information](index=4&type=section&id=1.4%20公司基本信息) This section lists the company's stock code and official website, facilitating access to basic information for investors - The company's stock code is **1459**, and its official website is **www.jujiang.cn**[10](index=10&type=chunk) Financial Highlights [Key Financial Indicators](index=5&type=section&id=2.1%20核心財務指標) For the six months ended June 30, 2025, Jujiang Construction experienced significant declines in both revenue and profit, with revenue decreasing by 39.1% year-on-year and profit for the period sharply falling by 74.4%, leading to a net profit margin of 0.18% For the six months ended June 30 Key Financial Indicators | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,335,282 | 3,833,658 | (39.1) | | Gross Profit | 96,255 | 155,935 | (38.3) | | Gross Profit Margin | 4.12% | 4.07% | 0.05 | | Profit for the Period | 4,307 | 16,849 | (74.4) | | Net Profit Margin | 0.18% | 0.44% | (0.26) | | Basic and Diluted Earnings Per Share (RMB) | 0.00 | 0.03 | - | [Dividend Policy](index=5&type=section&id=2.2%20股息政策) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the first half of 2025 (first half of 2024: none)[12](index=12&type=chunk) Management Discussion and Analysis [Company Overview](index=6&type=section&id=3.1%20公司概覽) Established in 1965, Jujiang Construction Group is a leading construction enterprise in Jiaxing City, holding a national special-grade qualification for general contracting of construction projects and a Grade A design qualification for the construction industry, enabling it to provide comprehensive integrated construction solutions - Jujiang Construction was established in **1965**, making it one of the earliest construction enterprises in Jiaxing City, with **over 50 years of industry experience**[14](index=14&type=chunk) - The company obtained the national special-grade qualification for general contracting of construction projects and a Grade A design qualification for the construction industry on **January 28, 2015**[14](index=14&type=chunk) - With its special-grade qualification and engineering design qualification, the Group can provide general contracting, design, survey, and consulting services for any type and scale of building construction projects nationwide[14](index=14&type=chunk) [Macroeconomic and Industry Review](index=6&type=section&id=3.2%20宏觀經濟及行業回顧) In the first half of 2025, China's economy experienced a moderate recovery with GDP growing by 5.3% year-on-year; the real estate and construction sectors faced dual impacts from policy adjustments and market demand, characterized by "deepening differentiation and accelerating transformation," with continuous declines in real estate development investment and overall weakness in the construction industry, though government support for infrastructure increased, and green building and overseas markets emerged as new growth drivers - In the first half of 2025, China's GDP grew by **5.3% year-on-year**, indicating a moderate economic recovery[15](index=15&type=chunk) - The real estate market gradually stabilized under continuous policy adjustments, but development investment decreased by **11.2% year-on-year**, posing significant pressure on demand for the construction industry[15](index=15&type=chunk)[17](index=17&type=chunk) National Construction Industry and Real Estate Market Data for H1 2025 | Indicator | Data | Year-on-Year Change | | :--- | :--- | :--- | | Total Construction Output Value | Approx. RMB 13.6 trillion | +0.2% | | Building Construction Area | Approx. 9.46 billion square meters | -12% | | Commercial Residential Sales Area | Approx. 459 million square meters | -3.5% | | New Commercial Residential Sales Value | Approx. RMB 4.4 trillion | -5.5% | | Real Estate Development Investment | Approx. RMB 4.67 trillion | -11.2% | - The construction industry faces challenges such as liquidity pressure, extended collection cycles, and financing difficulties, but **green building** and **overseas markets** are emerging as new growth points, with fiscal policy increasing support for infrastructure[17](index=17&type=chunk) [Business Performance](index=7&type=section&id=3.3%20業務表現) Facing industry downturn pressure, Jujiang Construction's revenue and net profit for the first half of the year decreased by 39.1% and 74.4% respectively; despite this, the Group made steady progress in market expansion, securing new projects with a net value of approximately RMB 98.2 million, and advanced in engineering management, technological innovation, and digital intelligence applications, with a slight 2.7% increase in reserve price - For the six months ended June 30, 2025, the Group's revenue was approximately **RMB 2,335.3 million**, and net profit was approximately **RMB 4.3 million**, representing year-on-year decreases of approximately **39.1%** and **74.4%** respectively[18](index=18&type=chunk) - As of June 30, 2025, the reserve price slightly increased by approximately **2.7%** to approximately **RMB 16,575.9 million**[18](index=18&type=chunk) [Operating Results](index=7&type=section&id=3.3.1%20經營業績) The Group's revenue and net profit significantly declined in the first half, but by actively responding to market changes, new projects with a net value of RMB 98.2 million were secured, and the reserve price maintained growth Changes in Construction Project Reserves | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Reserve Price at Beginning of Period | 16,683.8 | 18,890.6 | | Net Price of New Projects | 2,185.1 | 1,044.0 | | Revenue Recognized | (2,293.0) | (3,787.1) | | Reserve Price at End of Period | 16,575.9 | 16,147.5 | - In the first half, new projects with a net value of approximately **RMB 98.2 million** were secured, including **6 projects over RMB 100 million**, of which **3 exceeded RMB 300 million**[23](index=23&type=chunk) [Market Expansion](index=8&type=section&id=3.3.2%20市場拓展) The Group made steady progress in market expansion, with industrial projects accounting for 82%, new contracts in Jiaxing local market accounting for 67%, and significant achievements in Yiwu market expansion, successfully bidding for several landmark projects - By project type, **industrial projects accounted for 82%**, public construction projects for 17%, and commercial residential projects for less than 1%[23](index=23&type=chunk) - By regional distribution, **new contracts in Jiaxing local market accounted for 67%**, Yiwu market for 23%, and outside the province for 2.8%[23](index=23&type=chunk) - Yiwu Company successfully bid for the Yiwu Jinyi Free Trade Zone Smart Connected Vehicle Innovation Industrial Park and supporting infrastructure project (bid amount exceeding **RMB 460 million**), marking the Group's successful "going out" strategy to develop the Yiwu market[23](index=23&type=chunk) [Project Management](index=9&type=section&id=3.3.3%20工程管理) The Group adheres to a quality-oriented approach, achieving 1 provincial "Installation Cup" and 1 "Fengming Cup" Quality Engineering Award in the first half, and completing acceptance for 5 "Nanhu Cup" Quality Engineering projects; in terms of safety production, management of hazardous projects was strengthened, resulting in 8 county-level standardized construction sites; for construction progress management, 40 progress milestones were set and advanced according to targets, with 13 projects completed - In the first half, **1 provincial "Installation Cup"** and **1 "Fengming Cup" Quality Engineering Award** were obtained, and acceptance for **5 "Nanhu Cup" Quality Engineering projects** was completed[25](index=25&type=chunk) - In the first half, **8 county-level standardized construction sites** were awarded, strengthening the safety defense line through routine process management and special inspections[25](index=25&type=chunk) - In the first half, **40 progress milestones** were set and advanced according to targets, with **13 projects completed**[25](index=25&type=chunk) [Technological Innovation and Digital Intelligence Application](index=9&type=section&id=3.3.4%20技術創新與數智化應用) Jujiang Construction continues to increase investment in technology R&D, receiving an "Excellent" rating in the 2024 Zhejiang Provincial Enterprise Technology Center evaluation, and its independently developed "Smart Material Management System" was successfully selected as a provincial innovation service case; BIM technology and smart construction site applications were deepened, with multiple projects receiving provincial awards, and active exploration of AI technology applications to enhance efficiency - Rated as **"Excellent"** in the 2024 Zhejiang Provincial Enterprise Technology Center evaluation, and the independently developed **"Smart Material Management System"** was successfully selected as one of the first batch of Zhejiang Provincial Smart Construction New Technology and New Product Innovation Service Cases[26](index=26&type=chunk) - In the first half, **2 provincial construction methods** were declared, **4 national patent applications** were accepted, **3 national patents** were granted, **3 provincial quality control achievements** were obtained, and **3 municipal quality control achievements** were obtained[27](index=27&type=chunk) - A total of **38 BIM implementation service projects** (21 external projects) and **56 smart construction site implementations** (51 external projects) were carried out in the first half[28](index=28&type=chunk) - The Tongxiang Feng Zikai Art Center (Phase I) project won the **2024 Zhejiang Provincial Smart Construction Gold Award for Application Achievements**[28](index=28&type=chunk) [Revenue Composition](index=11&type=section&id=3.3.5%20收入構成) For the six months ended June 30, 2025, construction contracting business remained the Group's primary revenue source, accounting for 98.2%, with significant declines in revenue from residential, industrial, and public construction businesses - Construction contracting business contributed approximately **98.2%** of revenue (first half of 2024: 98.8%)[30](index=30&type=chunk) Revenue Breakdown by Business and Project Type for the six months ended June 30 | Business Type | 2025 (RMB millions) | 2025 (%) | 2024 (RMB millions) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | **Construction Contracting Business** | | | | | | Residential | 809.6 | 34.7 | 1,460.2 | 38.1 | | Commercial Buildings | 453.9 | 19.4 | 489.5 | 12.8 | | Industrial | 693.3 | 29.7 | 1,261.9 | 32.9 | | Public Construction | 336.2 | 14.4 | 575.5 | 15.0 | | **Other Businesses** | | | | | | Design, Survey, and Consulting | 26.9 | 1.1 | 29.5 | 0.8 | | Sales of Construction Materials and Civil Defense Products | 15.4 | 0.7 | 17.1 | 0.4 | | **Total Revenue** | 2,335.3 | 100.0 | 3,833.7 | 100.0 | [Financial Position Analysis](index=11&type=section&id=3.4%20財務狀況分析) Jujiang Construction's revenue and gross profit both decreased in the first half, but the gross profit margin slightly increased; administrative expenses, net impairment losses on financial and contract assets, and other expenses all decreased, and finance costs declined; however, income tax expense increased, leading to a significant 74.4% reduction in profit for the period; in terms of liquidity, accounts receivable turnover days increased, and the debt-to-asset ratio rose [Revenue and Gross Profit Margin](index=11&type=section&id=3.4.1%20收入與毛利率) For the six months ended June 30, 2025, revenue decreased by 39.1% year-on-year to approximately RMB 2,335.3 million, primarily due to a reduction in construction contracting business; gross profit decreased by 38.3%, but the gross profit margin slightly increased to 4.12%, mainly benefiting from increased revenue from other higher-margin businesses, while the gross profit margin for construction contracting business declined - Revenue decreased by **39.1%** to approximately **RMB 2,335.3 million**, mainly due to a reduction of approximately **RMB 1,494.1 million** in construction contracting business, affected by the sluggish real estate market[31](index=31&type=chunk) - Gross profit decreased by **38.3%** to approximately **RMB 96.3 million**, consistent with the decrease in revenue[32](index=32&type=chunk) - Gross profit margin slightly increased from **4.07%** in the first half of 2024 to **4.12%** in the first half of 2025, mainly due to increased revenue from other businesses with higher profit margins[32](index=32&type=chunk) - The gross profit margin for construction contracting business decreased from **3.51%** in the first half of 2024 to **3.21%** in the first half of 2025, reflecting intensified market competition[32](index=32&type=chunk) [Expenses and Impairment](index=12&type=section&id=3.4.2%20費用與減值) Other income and gains increased by 25.7%, primarily due to fair value gains on financial assets related to bills receivable; administrative expenses decreased by 8.9%, mainly due to optimized headcount and cost control; net impairment losses on financial and contract assets significantly decreased by 72.8%, reflecting strengthened credit risk management; other expenses decreased by 62.4%, mainly attributable to the fair value change of financial assets involving bills receivable shifting from a loss to a gain - Other income and gains increased by **25.7%** to approximately **RMB 11.2 million**, mainly due to fair value gains of approximately **RMB 4.6 million** on financial assets related to bills receivable[33](index=33&type=chunk) - Administrative expenses decreased by **8.9%** to approximately **RMB 71.4 million**, primarily due to optimized headcount, salary adjustments, and reduced entertainment expenses[34](index=34&type=chunk) - Net impairment losses on financial and contract assets significantly decreased by **72.8%** to approximately **RMB 12.0 million**, mainly due to strengthened credit risk management and sufficient prior provisions[35](index=35&type=chunk) - Other expenses decreased by **62.4%** to approximately **RMB 3.4 million**, mainly attributable to the fair value change of financial assets involving bills receivable shifting from a loss to a gain[36](index=36&type=chunk) [Finance Costs and Taxation](index=13&type=section&id=3.4.3%20財務成本與稅務) Finance costs decreased by 13.1%, primarily due to a reduction in the average balance of interest-bearing borrowings; income tax expense increased, with the effective tax rate rising sharply from 1.5% to 33.9%, mainly affected by reduced impairment losses, withholding tax on dividends from overseas subsidiaries, and decreased tax incentives; consequently, profit for the period significantly decreased by 74.4%, and the net profit margin fell to 0.18% - Finance costs decreased by **13.1%** to approximately **RMB 14.2 million**, primarily due to a reduction in the average balance of interest-bearing bank and other borrowings[38](index=38&type=chunk) - Income tax expense increased by approximately **RMB 1.9 million** to approximately **RMB 2.2 million**, with the effective tax rate significantly increasing from **1.5% to 33.9%**[39](index=39&type=chunk) - Profit for the period decreased by **74.4%** to approximately **RMB 4.3 million**, with the net profit margin falling from **0.44% to 0.18%**[40](index=40&type=chunk) [Liquidity and Capital Structure](index=13&type=section&id=3.4.4%20流動性與資本結構) The Group's working capital primarily comes from cash generated from operating activities and interest-bearing borrowings; as of June 30, 2025, cash and cash equivalents were approximately RMB 189.2 million; the debt-to-asset ratio increased to 18.4%, mainly due to decreased cash and increased interest-bearing borrowings - As of June 30, 2025, cash and cash equivalents were approximately **RMB 189.2 million** (December 31, 2024: approximately RMB 184.0 million)[41](index=41&type=chunk) - The debt-to-asset ratio increased from **16.0%** as of December 31, 2024, to **18.4%** as of June 30, 2025, primarily due to decreased cash and increased interest-bearing bank borrowings[47](index=47&type=chunk) [Statement of Financial Position Items](index=13&type=section&id=3.4.5%20資產負債表項目) Contract assets decreased by 4.9% to approximately RMB 2,741.5 million, primarily due to reduced construction engineering contracting revenue; trade receivables and bills receivable increased by 4.8% to approximately RMB 2,266.1 million, with turnover days increasing to 173 days; trade payables and bills payable decreased by 3.5% to approximately RMB 3,158.9 million, with turnover days increasing to 262 days; total interest-bearing borrowings were approximately RMB 595.5 million, of which short-term borrowings were approximately RMB 498.0 million - Contract assets decreased by approximately **4.9%** from approximately **RMB 2,883.5 million** as of December 31, 2024, to approximately **RMB 2,741.5 million** as of June 30, 2025[43](index=43&type=chunk) - Trade and bills receivables increased by approximately **4.8%** to approximately **RMB 2,266.1 million**, with turnover days increasing from **118 days to 173 days**[44](index=44&type=chunk) - Trade and bills payables decreased by approximately **3.5%** to approximately **RMB 3,158.9 million**, with turnover days increasing from **198 days to 262 days**[45](index=45&type=chunk) - As of June 30, 2025, total short-term and long-term interest-bearing borrowings were approximately **RMB 595.5 million**, of which short-term borrowings were approximately **RMB 498.0 million**[46](index=46&type=chunk) - Approximately **RMB 131.0 million** of buildings were pledged to obtain general bank credit[46](index=46&type=chunk) [Other Financial Information](index=14&type=section&id=3.4.6%20其他財務信息) Capital expenditure for the first half was approximately RMB 3.8 million, mainly for office renovation and intangible asset-related projects; the Group had no significant capital commitments or contingent liabilities, and RMB exchange rate fluctuations had no material impact on business or financial performance - For the six months ended June 30, 2025, capital expenditure was approximately **RMB 3.8 million**, mainly related to office renovation projects and other intangible asset-related construction projects[48](index=48&type=chunk) - The Group had no significant capital commitments or contingent liabilities as of June 30, 2025[49](index=49&type=chunk)[50](index=50&type=chunk) - The vast majority of the Group's business and bank loans are transacted and accounted for in RMB, with no significant foreign exchange fluctuation risk, and no hedging policy in place[51](index=51&type=chunk) [Employees and Remuneration Policy](index=15&type=section&id=3.5%20員工及薪酬政策) As of June 30, 2025, the Group had 869 employees, with employee costs of approximately RMB 42.1 million, a 6.2% year-on-year decrease, primarily due to optimized human resource structure and salary adjustments; the Group values employee expertise and development, providing regular training - As of June 30, 2025, the Group had a total of **869 employees**[54](index=54&type=chunk) - Employee costs for the first half were approximately **RMB 42.1 million**, a year-on-year decrease of approximately **6.2%**, primarily due to optimized human resource structure and salary adjustments[54](index=54&type=chunk) - The Group enhances employee skills and technical expertise through regular training[54](index=54&type=chunk) [Future Outlook and Strategies](index=15&type=section&id=3.6%20未來展望與策略) Looking ahead to the second half, with policy support and urban renewal of the real estate market is expected to achieve supply-demand balance, and the construction industry will accelerate high-quality development; Jujiang Construction will focus on annual targets, optimize market layout, expand into Yiwu and provincial/overseas markets, strengthen cost control, deepen technological innovation and digital intelligence applications, and strictly manage quality and safety to achieve steady growth - In the second half of 2025, policies are expected to further strengthen market stabilization, with full implementation of urban renewal and land acquisition policies, and the real estate market is anticipated to accelerate towards a new dynamic balance of supply and demand[55](index=55&type=chunk) - In the second half, the Group will optimize its market layout, consolidate the Tongxiang market, vigorously expand into Yiwu and provincial/overseas markets, and improve the success rate of public bidding projects[57](index=57&type=chunk) - The Group will increase R&D investment in new technologies such as prefabricated buildings and smart construction equipment, deepen the application of "BIM + Smart Construction Site," and promote the deep integration of digital technology with project management[57](index=57&type=chunk) - Quality control will use key projects as benchmarks, strictly enforcing industry standards; safety production will implement risk-based hierarchical control and strengthen hazard investigation and remediation[57](index=57&type=chunk) Other Information [Dividend Policy](index=17&type=section&id=4.1%20股息政策) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: none)[58](index=58&type=chunk) [Securities Transactions](index=17&type=section&id=4.2%20證券交易) For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities, nor did they sell any treasury shares - 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[59](index=59&type=chunk) - As of June 30, 2025, the Company did not hold any treasury shares[59](index=59&type=chunk) [Directors' and Shareholders' Interests](index=17&type=section&id=4.3%20董事會及股東權益) This section discloses changes in Board members, as well as the interests and short positions of directors, supervisors, the chief executive, and substantial shareholders in the company's shares, and confirms that directors have no competing interests [Changes in Directors' Information](index=17&type=section&id=4.3.1%20董事信息變更) Effective May 27, 2025, Mr. Ma Tao was re-designated as Chairman of the Nomination Committee and appointed as a member of the Remuneration and Appraisal Committee, Mr. Wang Xinglong was appointed as Chairman of the Remuneration and Appraisal Committee, and Ms. Lin Feicui was appointed as a member of the Nomination Committee - Effective May 27, 2025, Mr. Ma Tao was appointed as Chairman of the Nomination Committee, Mr. Wang Xinglong was appointed as Chairman of the Remuneration and Appraisal Committee, and Ms. Lin Feicui was appointed as a member of the Nomination Committee[60](index=60&type=chunk) [Interests of Directors, Supervisors, and Chief Executive](index=17&type=section&id=4.3.2%20董事、監事及行政總裁權益) As of June 30, 2025, Executive Director Mr. Lu Yaoneng indirectly held 38.25% of the Company's equity interest through Zhejiang Jujiang Holding Group Co., Ltd., which he controls Interests of Directors/Supervisors in the Company's Shares | Director/Supervisor Name | Nature of Interest | Number of Shares Held | Approximate Percentage of Total Share Capital of the Company | | :--- | :--- | :--- | :--- | | Mr. Lu Yaoneng | Interest in controlled corporation | 204,000,000 Domestic Shares (L) | 38.25% | - Mr. Lu Yaoneng holds approximately **51.33%** interest in Zhejiang Jujiang Holding Group Co., Ltd., and is therefore deemed to have an interest in the Company's interests held by Jujiang Holding[62](index=62&type=chunk) [Major Shareholders' Interests](index=18&type=section&id=4.3.3%20主要股東權益) As of June 30, 2025, Zhejiang Jujiang Holding Group Co., Ltd. and Zhejiang Jujiang Equity Investment Management Co., Ltd. were the Company's major shareholders, directly holding 38.25% and 36.75% of the equity interest, respectively; Ms. Shen Hongfen, spouse of Mr. Lu Yaoneng, was also deemed to have an interest in Mr. Lu Yaoneng's holdings Interests of Major Shareholders in the Company's Shares | Shareholder Name | Nature of Interest | Number of Shares Held | Approximate Percentage of Total Share Capital of the Company | | :--- | :--- | :--- | :--- | | Jujiang Holding | Beneficial owner | 204,000,000 Domestic Shares (L) | 38.25% | | Ms. Shen Hongfen | Spouse's interest | 204,000,000 Domestic Shares (L) | 38.25% | | Jujiang Equity Investment | Beneficial owner | 196,000,000 Domestic Shares (L) | 36.75% | | Chen Jiahe | Beneficial owner | 9,480,000 H Shares (L) | 1.78% | [Directors' Competing Interests](index=19&type=section&id=4.3.4%20董事競爭權益) The Company's controlling shareholders, directors, and their respective close associates had no interests in any business that directly or indirectly competes or may compete with the principal business and other businesses - The Company's controlling shareholders, directors, and their respective close associates had no interests in any business that competes with the principal business[65](index=65&type=chunk) [Corporate Governance](index=19&type=section&id=4.4%20企業管治) The Company has fully complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules and has adopted the Model Code set out in Appendix C3 as a code of conduct for directors and supervisors in securities transactions, with all directors and supervisors confirming compliance with the relevant provisions - For the six months ended June 30, 2025, and up to the date of this announcement, the Company has fully complied with the code provisions of the Corporate Governance Code[66](index=66&type=chunk) - The Company has adopted the Model Code set out in Appendix C3 of the Listing Rules as a code of conduct for directors and supervisors in securities transactions, and all directors and supervisors confirm compliance with the relevant provisions[67](index=67&type=chunk) [Events After Reporting Period](index=20&type=section&id=4.5%20報告期後事項) The Group had no significant events after the reporting period that would materially affect its operations and financial performance as of the date of this report - The Group had no significant events after June 30, 2025, that would materially affect its operations and financial performance[70](index=70&type=chunk) [Audit Committee Review](index=20&type=section&id=4.6%20審核委員會審閱) The Audit Committee has discussed and reviewed the Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, with management and external auditors, and believes they comply with applicable accounting standards - The Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, and believes that the financial statements comply with applicable accounting standards[71](index=71&type=chunk) Independent Auditor's Report [Introduction](index=21&type=section&id=5.1%20引言) Ernst & Young has reviewed the interim condensed consolidated financial information of Jujiang Construction Group Co., Ltd. for the six months ended June 30, 2025, which was prepared in accordance with International Accounting Standard 34 - Ernst & Young has reviewed the interim condensed consolidated financial information of Jujiang Construction Group Co., Ltd. for the six months ended June 30, 2025[72](index=72&type=chunk) - The interim financial information was prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[72](index=72&type=chunk) [Scope of Review](index=21&type=section&id=5.2%20審閱範圍) The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, with a scope less than an audit, and therefore no audit opinion is expressed - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants[73](index=73&type=chunk) - The scope of the review is substantially less than an audit, and therefore no audit opinion is expressed[73](index=73&type=chunk) [Conclusion of Review](index=22&type=section&id=5.3%20審閱結論) Based on the review, the auditors found no matters indicating that the interim financial information was not prepared in all material respects in accordance with the requirements of International Accounting Standard 34 - The auditors did not become aware of any matters that cause them to believe that the interim financial information is not prepared, in all material respects, in accordance with the requirements of International Accounting Standard 34[75](index=75&type=chunk) Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Statement of Profit or Loss](index=23&type=section&id=6.1%20損益表) For the six months ended June 30, 2025, Jujiang Construction's revenue and gross profit both significantly decreased, with profit for the period falling by 74.4% from RMB 16,849 thousand in the prior year to RMB 4,307 thousand Interim Condensed Consolidated Statement of Profit or Loss Summary | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 2,335,282 | 3,833,658 | | Cost of Sales | (2,239,027) | (3,677,723) | | Gross Profit | 96,255 | 155,935 | | Profit Before Tax | 6,511 | 17,104 | | Income Tax Expense | (2,204) | (255) | | Profit for the Period | 4,307 | 16,849 | [Other Comprehensive Income](index=23&type=section&id=6.2%20其他全面綜合收益) For the six months ended June 30, 2025, exchange differences on translation of overseas operations resulted in a total other comprehensive income of negative RMB 248 thousand, with total comprehensive income for the period being RMB 4,059 thousand Other Comprehensive Income Summary | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Exchange differences on translation of overseas operations | (248) | (538) | | Total comprehensive income for the period (after tax) | (248) | (538) | | Total comprehensive income for the period | 4,059 | 16,311 | [Earnings Per Share](index=23&type=section&id=6.3%20每股盈利) For the six months ended June 30, 2025, basic and diluted earnings per share attributable to ordinary equity holders of the parent company were RMB 0.00, a significant decrease from RMB 0.03 in the prior year Earnings Per Share Summary | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic and Diluted Earnings Per Share | 0.00 | 0.03 | Interim Condensed Consolidated Statement of Financial Position [Assets](index=24&type=section&id=7.1%20資產) As of June 30, 2025, the Group's total non-current assets were RMB 458,281 thousand, and total current assets were RMB 5,784,938 thousand, with trade receivables and bills receivable and contract assets accounting for a larger proportion [Non-Current Assets](index=24&type=section&id=7.1.1%20非流動資產) As of June 30, 2025, total non-current assets were RMB 458,281 thousand, a decrease from RMB 477,669 thousand as of December 31, 2024 Non-Current Assets Summary | Non-Current Assets | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Property, Plant and Equipment | 116,847 | 119,823 | | Investment Properties | 69,547 | 71,281 | | Right-of-Use Assets | 14,692 | 20,730 | | Goodwill | 1,162 | 1,162 | | Other Intangible Assets | 64,761 | 68,626 | | Deferred Tax Assets | 99,840 | 99,535 | | Long-Term Deferred Assets | 91,432 | 96,512 | | **Total Non-Current Assets** | **458,281** | **477,669** | [Current Assets](index=24&type=section&id=7.1.2%20流動資產) As of June 30, 2025, total current assets were RMB 5,784,938 thousand, a slight decrease from RMB 5,836,918 thousand as of December 31, 2024; trade receivables and bills receivable increased, while contract assets decreased Current Assets Summary | Current Assets | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Inventories | 20,163 | 25,622 | | Non-Current Assets Due Within One Year | 9,217 | 8,943 | | Trade and Bills Receivables | 2,266,117 | 2,162,557 | | Contract Assets | 2,741,520 | 2,883,549 | | Prepayments, Deposits and Other Receivables | 454,734 | 442,850 | | Pledged Deposits | 103,970 | 129,361 | | Cash and Bank Balances | 189,217 | 184,036 | | **Total Current Assets** | **5,784,938** | **5,836,918** | [Liabilities](index=24&type=section&id=7.2%20負債) As of June 30, 2025, the Group's total current liabilities were RMB 4,503,939 thousand, and total non-current liabilities were RMB 97,537 thousand, with total liabilities slightly decreasing [Current Liabilities](index=24&type=section&id=7.2.1%20流動負債) As of June 30, 2025, total current liabilities were RMB 4,503,939 thousand, a decrease from RMB 4,558,141 thousand as of December 31, 2024, with trade payables and bills payable decreasing Current Liabilities Summary | Current Liabilities | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade and Bills Payables | 3,158,861 | 3,274,297 | | Other Payables and Accruals | 620,910 | 597,718 | | Bank and Other Borrowings | 497,991 | 458,536 | | Tax Payables | 226,177 | 227,590 | | **Total Current Liabilities** | **4,503,939** | **4,558,141** | [Non-Current Liabilities](index=25&type=section&id=7.2.2%20非流動負債) As of June 30, 2025, total non-current liabilities were RMB 97,537 thousand, primarily long-term borrowings, a decrease from RMB 116,636 thousand as of December 31, 2024 Non-Current Liabilities Summary | Non-Current Liabilities | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Long-Term Borrowings | 97,537 | 116,636 | | **Total Non-Current Liabilities** | **97,537** | **116,636** | [Equity](index=25&type=section&id=7.3%20權益) As of June 30, 2025, total equity was RMB 1,641,743 thousand, with equity attributable to owners of the parent company being RMB 1,603,221 thousand and non-controlling interests being RMB 38,522 thousand Equity Summary | Equity | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Share Capital | 533,360 | 533,360 | | Reserves | 1,069,861 | 1,071,145 | | Equity Attributable to Owners of the Parent Company | 1,603,221 | 1,604,505 | | Non-Controlling Interests | 38,522 | 35,305 | | **Total Equity** | **1,641,743** | **1,639,810** | Interim Condensed Consolidated Statement of Changes in Equity [Overview of Changes in Equity](index=26&type=section&id=8.1%20權益變動概覽) For the six months ended June 30, 2025, total equity attributable to owners of the parent company decreased from RMB 1,604,505 thousand at the beginning of the period to RMB 1,603,221 thousand, primarily due to negative profit for the period and a decrease in exchange fluctuation reserve Changes in Equity Attributable to Owners of the Parent Company Summary (H1 2025) | Item | RMB thousands | | :--- | :--- | | December 31, 2024 (Audited) | 1,604,505 | | Profit for the Period | (1,111) | | Exchange differences on translation of overseas operations | (173) | | Total comprehensive income for the period | (1,284) | | Transfer to special reserve | 68,891 | | Utilization of special reserve | (68,891) | | Dividends paid to non-controlling shareholders | (2,126) | | As of June 30, 2025 (Unaudited) | 1,603,221 | [Management Measures for Allocation and Use of Safety Production Expenses](index=27&type=section&id=8.2%20安全生產費用撥付使用管理辦法) In accordance with regulations from China's Ministry of Finance and Ministry of Emergency Management, the Group is required to allocate funds from after-tax profits as a safety reserve, ranging from 1.5% to 3% of the total recognized construction contract revenue, for improving construction project safety - The Group is required to allocate a sum from after-tax profits as a safety reserve, ranging from **1.5% to 3%** of the total recognized construction contract revenue[87](index=87&type=chunk) - This reserve fund can be used to improve safety in construction projects and is recognized in profit or loss when incurred, with a corresponding amount of the safety reserve utilized and transferred back to retained earnings[87](index=87&type=chunk) Interim Condensed Consolidated Statement of Cash Flows [Cash Flows from Operating Activities](index=28&type=section&id=9.1%20經營活動現金流量) For the six months ended June 30, 2025, net cash flow used in operating activities was negative RMB 13,458 thousand, an improvement from negative RMB 72,228 thousand in the prior year, primarily due to a decrease in contract assets and reduced impairment of accounts receivable Cash Flows from Operating Activities Summary | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit Before Tax | 6,511 | 17,104 | | Cash Flows Used in Operations | (13,206) | (66,996) | | Interest Received | 3,669 | 4,220 | | Income Tax Paid | (3,921) | (9,452) | | **Net Cash Flows Used in Operating Activities** | **(13,458)** | **(72,228)** | [Cash Flows from Investing Activities](index=29&type=section&id=9.2%20投資活動現金流量) For the six months ended June 30, 2025, net cash flow used in investing activities was negative RMB 3,669 thousand, mainly due to increased payments for the acquisition of property, plant, and equipment Cash Flows from Investing Activities Summary | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Payments for acquisition of property, plant and equipment | (3,806) | (2,848) | | Proceeds from disposal of property, plant and equipment | 137 | 4 | | **Net Cash Flows (Used in) / From Investing Activities** | **(3,669)** | **7,872** | [Cash Flows from Financing Activities](index=29&type=section&id=9.3%20融資活動現金流量) For the six months ended June 30, 2025, net cash flow from financing activities was RMB 22,610 thousand, a significant improvement from negative RMB 69,072 thousand in the prior year, primarily due to changes in net proceeds from and repayments of loans Cash Flows from Financing Activities Summary | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | From third-party borrowings | 12,000 | 4,000 | | Interest Paid | (14,203) | (15,479) | | Loans Received | 292,800 | 311,180 | | Loan Repayments | (266,937) | (364,875) | | Lease Principal | (1,050) | (2,098) | | Payments to non-controlling shareholders | – | (1,800) | | **Net Cash Flows From / (Used in) Financing Activities** | **22,610** | **(69,072)** | [Net Change in Cash and Cash Equivalents](index=29&type=section&id=9.4%20現金及現金等價物淨變動) For the six months ended June 30, 2025, net cash and cash equivalents increased by RMB 5,483 thousand, with cash and cash equivalents at the end of the period totaling RMB 189,217 thousand Net Change in Cash and Cash Equivalents Summary | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net increase / (decrease) in cash and cash equivalents | 5,483 | (133,428) | | Cash and cash equivalents at beginning of period | 184,036 | 263,550 | | Net effect of exchange rate changes | (302) | (662) | | **Cash and cash equivalents at end of period** | **189,217** | **129,460** | Notes to the Interim Condensed Consolidated Financial Information [Basis of Preparation and Changes in Accounting Policies](index=30&type=section&id=10.1%20編製基準及會計政策變動) The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34, presented in RMB, and is unaudited; the revised International Accounting Standard 21 "Lack of Exchangeability" adopted for the first time in this period had no impact on the Group's financial information - The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting," presented in RMB, and is unaudited[92](index=92&type=chunk)[93](index=93&type=chunk) - The revised International Accounting Standard 21 "Lack of Exchangeability" had no impact on the interim condensed consolidated financial information, as the Group's transaction and functional currencies are both convertible[94](index=94&type=chunk) [Operating Segment Information](index=31&type=section&id=10.2%20經營分部信息) The Group has two reportable operating segments: construction engineering contracting and others; for the six months ended June 30, 2025, the construction engineering contracting segment generated revenue of RMB 2,293,035 thousand and profit before tax of RMB 2,466 thousand, while the other segment generated revenue of RMB 42,247 thousand and profit before tax of RMB 8,950 thousand - The Group has two reportable operating segments: **construction engineering contracting** (providing construction services) and **others** (providing design, survey, training, and consulting services, as well as civil defense product sales)[96](index=96&type=chunk)[97](index=97&type=chunk) Segment Results for the six months ended June 30, 2025 | Indicator | Construction Engineering Contracting (RMB thousands) | Others (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | Sales to external customers | 2,293,035 | 42,247 | 2,335,282 | | Profit Before Tax | 2,466 | 8,950 | 6,511 | | Segment Results | 1,526 | 7,686 | 4,307 | Segment Assets and Liabilities (June 30, 2025) | Indicator | Construction Engineering Contracting (RMB thousands) | Others (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | Segment Assets | 6,250,132 | 321,329 | 6,243,219 | | Segment Liabilities | 4,648,486 | 190,253 | 4,601,476 | [Revenue Recognition](index=35&type=section&id=10.3%20收入確認) For the six months ended June 30, 2025, the Group's total revenue was RMB 2,335,282 thousand, with construction engineering contracting accounting for RMB 2,293,035 thousand; revenue primarily originated from mainland China, and services transferred over time were the main point of revenue recognition Revenue Information Classification for the six months ended June 30, 2025 | Classification | Construction Engineering Contracting (RMB thousands) | Others (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | **Type of Goods or Services** | | | | | Construction engineering contracting | 2,293,035 | – | 2,293,035 | | Design, survey, training and consulting | – | 26,904 | 26,904 | | Sales of construction materials and civil defense products | – | 15,343 | 15,343 | | **Total** | **2,293,035** | **42,247** | **2,335,282** | | **Geographical Market** | | | | | Mainland China | 2,274,231 | 42,247 | 2,316,478 | | Indonesia | 18,804 | – | 18,804 | | **Total** | **2,293,035** | **42,247** | **2,335,282** | | **Timing of Revenue Recognition** | | | | | Services transferred over time | 2,293,035 | 14,485 | 2,307,520 | | Goods and services transferred at a point in time | – | 27,762 | 27,762 | | **Total** | **2,293,035** | **42,247** | **2,335,282** | [Details of Other Income and Expenses](index=38&type=section&id=10.4%20其他收入及費用明細) This section details the Group's other income and gains, finance costs, components of profit before tax, and the calculation and reconciliation of income tax expense [Other Income and Gains](index=38&type=section&id=10.4.1%20其他收入及收益) For the six months ended June 30, 2025, total other income and gains were RMB 11,227 thousand, an increase from RMB 8,934 thousand in the prior year, primarily from government grants, bank interest income, and fair value gains on financial assets Other Income and Gains Analysis | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Government grants | 1,181 | 4,043 | | Bank interest income | 3,669 | 4,220 | | Other interest income | – | 74 | | Other income | 1,752 | 597 | | **Total Other Income** | **6,602** | **8,934** | | Fair value gains on financial assets | 4,625 | – | | **Total Other Income and Gains** | **11,227** | **8,934** | [Finance Costs](index=38&type=section&id=10.4.2%20財務費用) For the six months ended June 30, 2025, total finance costs were RMB 14,161 thousand, a decrease from RMB 16,287 thousand in the prior year, primarily consisting of interest on bank and other borrowings Finance Costs Analysis | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 13,987 | 15,883 | | Interest on lease liabilities | 174 | 404 | | **Total** | **14,161** | **16,287** | [Components of Profit Before Tax](index=39&type=section&id=10.4.3%20除稅前利潤構成) For the six months ended June 30, 2025, profit before tax was RMB 6,511 thousand; total cost of sales was RMB 2,239,027 thousand, total depreciation and amortization was RMB 13,982 thousand, R&D expenses were RMB 102,835 thousand, and total net impairment losses were RMB 11,972 thousand Components of Profit Before Tax Summary | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Total cost of sales | 2,239,027 | 3,677,723 | | Total depreciation and amortization | 13,982 | 14,746 | | Research and development expenses | 102,835 | 121,880 | | Total net impairment losses | 11,972 | 43,945 | | Employee benefit expenses | 42,134 | 44,948 | | Interest income | (3,669) | (4,220) | [Income Tax Expense](index=40&type=section&id=10.4.4%20所得稅開支) For the six months ended June 30, 2025, income tax expense was RMB 2,204 thousand, a significant increase from RMB 255 thousand in the prior year. The effective tax rate rose from 1.5% to 33.9%, mainly affected by reduced impairment losses on financial and contract assets, withholding tax on dividends from overseas subsidiaries, and decreased tax incentives Income Tax Expense Analysis | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax – Mainland China | 2,215 | 5,252 | | Current income tax – Other regions | 294 | 1,996 | | Deferred income tax | (305) | (6,993) | | **Tax levied for the period** | **2,204** | **255** | - The effective tax rate increased from **1.5%** in the first half of 2024 to **33.9%** in the first half of 2025, primarily due to reduced impairment losses on financial and contract assets, leading to a decrease in deferred tax expense, as well as withholding tax on dividends from overseas subsidiaries and reduced tax incentives[39](index=39&type=chunk)[109](index=109&type=chunk) [Dividends and Earnings Per Share](index=41&type=section&id=10.5%20股息及每股盈利) This section explains the Group's dividend policy and the calculation method for earnings per share [Dividends](index=41&type=section&id=10.5.1%20股息) The Board does not recommend the payment of an interim dividend for the period ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the period ended June 30, 2025[110](index=110&type=chunk) [Earnings Per Share](index=41&type=section&id=10.5.2%20每股盈利) For the six months ended June 30, 2025, basic and diluted earnings per share attributable to ordinary equity holders of the parent company were RMB 0.00, calculated based on profit for the period and the weighted average number of ordinary shares issued, with no potential dilutive effects Basic Earnings Per Share Calculation Data | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the period attributable to ordinary equity holders of the parent company | (1,111) | 14,830 | | Weighted average number of ordinary shares issued | 533,360 | 533,360 | - As the Group had no potentially dilutive ordinary shares issued during the period, no diluted adjustment was made to the basic earnings per share amount[111](index=111&type=chunk) [Notes to the Statement of Financial Position](index=42&type=section&id=10.6%20資產負債表附註) This section provides detailed disclosures on changes, composition, aging analysis, impairment provisions, and related policies for the Group's major asset and liability items [Property, Plant and Equipment](index=42&type=section&id=10.6.1%20物業、廠房及設備) For the six months ended June 30, 2025, the Company acquired property, plant and equipment at a cost of approximately RMB 3,806 thousand and disposed of property, plant and equipment with a total net book value of approximately RMB 25 thousand, generating a net gain of approximately RMB 112 thousand - For the six months ended June 30, 2025, the cost of property, plant and equipment acquired was approximately **RMB 3,806 thousand**[114](index=114&type=chunk) - The disposal of property, plant and equipment generated a net gain of approximately **RMB 112 thousand**[114](index=114&type=chunk) [Trade and Bills Receivables](index=43&type=section&id=10.6.2%20應收賬款及應收票據) As of June 30, 2025, trade and bills receivables totaled RMB 2,266,117 thousand, an increase from December 31, 2024; impairment provision for trade receivables was RMB 351,023 thousand, and the Group maintains strict control over outstanding receivables Trade and Bills Receivables Summary | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables measured at amortized cost | 2,053,569 | 2,210,219 | | Impairment provision | (351,023) | (340,514) | | Net trade receivables | 1,702,546 | 1,869,705 | | Fair value of bills receivable | 563,571 | 292,852 | | **Total** | **2,266,117** | **2,162,557** | Aging Analysis of Trade Receivables (Net) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 599,487 | 443,781 | | 3 to 6 months | 182,147 | 225,683 | | 6 months to 1 year | 197,552 | 549,330 | | 1 to 2 years | 504,353 | 404,268 | | 2 to 3 years | 158,381 | 169,253 | | 3 to 4 years | 56,255 | 67,287 | | 4 to 5 years | 4,371 | 10,103 | | **Total** | **1,702,546** | **1,869,705** | - Net impairment losses on trade receivables increased from **RMB 340,514 thousand** at the beginning of the period to **RMB 351,023 thousand** at the end of the period[117](index=117&type=chunk) [Contract Assets](index=44&type=section&id=10.6.3%20合同資產) As of June 30, 2025, the net book value of contract assets was RMB 2,741,520 thousand, primarily arising from construction services, with an impairment provision of RMB 151,560 thousand Contract Assets Summary | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Construction services | 2,881,210 | 3,035,759 | | Design, survey and consulting | 11,870 | – | | **Total** | **2,893,080** | **3,035,759** | | Impairment | (151,560) | (152,210) | | **Net Book Value** | **2,741,520** | **2,883,549** | [Prepayments, Deposits and Other Receivables](index=45&type=section&id=10.6.4%20預付款項、按金及其他應收款項) As of June 30, 2025, the net book value of prepayments, deposits, and other receivables was RMB 454,734 thousand, with an impairment provision of RMB 45,544 thousand Prepayments, Deposits and Other Receivables Summary | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Prepayments | 359,220 | 340,212 | | Deposits and other receivables | 141,058 | 146,069 | | **Total** | **500,278** | **486,281** | | Impairment provision | (45,544) | (43,431) | | **Net Book Value** | **454,734** | **442,850** | - Net impairment losses on deposits and other receivables increased from **RMB 43,431 thousand** at the beginning of the period to **RMB 45,544 thousand** at the end of the period[119](index=119&type=chunk) [Cash and Cash Equivalents and Pledged Deposits](index=46&type=section&id=10.6.5%20現金及現金等價物以及已抵押存款) As of June 30, 2025, cash and bank balances were RMB 189,217 thousand, and time deposits were RMB 103,970 thousand; pledged deposits primarily included pledged migrant worker wages and bank loans and bills Cash and Cash Equivalents and Pledged Deposits Summary | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash and bank balances | 189,217 | 184,036 | | Time deposits | 103,970 | 129,361 | | **Total** | **293,187** | **313,397** | | Less: Pledged time deposits | | | | Pledged migrant worker wages | (79,352) | (86,926) | | Pledged bank loans and bank bills | (2,151) | (12,923) | | Other restricted cash and cash equivalents | (22,467) | (29,512) | | **Cash and Cash Equivalents** | **189,217** | **184,036** | - RMB is not freely convertible into other currencies, but the Group can convert it through authorized banks[121](index=121&type=chunk) [Trade and Bills Payables](index=47&type=section&id=10.6.6%20貿易應付款項及應付票據) As of June 30, 2025, trade and bills payables totaled RMB 3,158,861 thousand, a decrease from December 31, 2024; most payables were due within 6 months Aging Analysis of Trade and Bills Payables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 6 months | 1,971,544 | 1,863,775 | | 6 months to 1 year | 276,261 | 375,385 | | 1 to 2 years | 409,752 | 478,948 | | 2 to 3 years | 303,020 | 339,212 | | Over 3 years | 198,284 | 216,977 | | **Total** | **3,158,861** | **3,274,297** | - Trade and bills payables are non-interest bearing and are normally settled within a period of three to six months[123](index=123&type=chunk) [Other Payables and Accruals](index=47&type=section&id=10.6.7%20其他應付款項及預提費用) As of June 30, 2025, other payables and accruals totaled RMB 620,910 thousand, an increase from December 31, 2024, mainly comprising other taxes payable, contract liabilities, and other payables Other Payables and Accruals Summary | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Other taxes payable | 250,004 | 297,490 | | Contract liabilities | 234,624 | 197,999 | | Other payables | 126,359 | 81,124 | | Accrued salaries, wages and benefits | 7,797 | 21,105 | | Dividends payable | 2,126 | – | | **Total** | **620,910** | **597,718** | - The above amounts are unsecured, non-interest bearing, and have no fixed repayment terms[124](index=124&type=chunk) [Interest-Bearing Bank and Other Borrowings](index=48&type=section&id=10.6.8%20計息銀行及其他借款) As of June 30, 2025, current interest-bearing borrowings totaled RMB 497,991 thousand, and non-current interest-bearing borrowings totaled RMB 97,537 thousand; some borrowings were pledged with buildings, and some were jointly guaranteed by the controlling shareholder and related parties Interest-Bearing Bank and Other Borrowings Summary (June 30, 2025) | Borrowing Type | Effective Interest Rate (%) | Maturity | RMB thousands | | :--- | :--- | :--- | :--- | | **Total Current** | | | **497,991** | | Lease liabilities | 4.90 | 2025-2026 | 4,016 | | Bank loans – pledged/guaranteed | 3.10-4.70 | 2025-2026 | 353,650 | | Bank loans – guaranteed | 4.15-5.50 | 2025-2026 | 85,000 | | Bank loans – pledged | 5.50 | 2025 | 35,000 | | Current portion of long-term bank loans – guaranteed | 4.41 | 2025-2026 | 20,325 | | **Total Non-Current** | | | **97,537** | | Lease liabilities | 4.90 | 2026-2032 | 4,902 | | Bank loans – guaranteed | 4.41 | 2026-2030 | 92,635 | - As of June 30, 2025, buildings with a carrying amount of approximately **RMB 130,982 thousand** were pledged to secure general banking facilities granted to the Group[125](index=125&type=chunk) - Approximately **RMB 471,650 thousand** of interest-bearing bank and other borrowings were jointly guaranteed by the Group's controlling shareholder and other related parties[125](index=125&type=chunk) [Share Capital](index=49&type=section&id=10.6.9%20股本) As of June 30, 2025, the Company's share capital was RMB 533,360 thousand, consistent with December 31, 2024 Share Capital Summary | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Share Capital | 533,360 | 533,360 | [Commitments and Contingent Liabilities](index=49&type=section&id=10.7%20承擔及或然負債) At the end of the reporting period, the Group had no significant commitments or contingent liabilities - At the end of the reporting period, the Group had no significant commitments[126](index=126&type=chunk) [Related Party Transactions](index=49&type=section&id=10.8%20關連方交易) This section disclosed the Group's major transactions with related parties, including construction engineering contracting services, purchases, lease payments, and outstanding balances, and listed the total remuneration of directors and supervisors Major Related Party Transactions for the six months ended June 30 | Transaction Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Provision of construction engineering contracting and consulting services to fellow subsidiaries | 4,073 | 4,617 | | Purchases from a company (whose controlling shareholder is a key management personnel of the Company's parent company) | – | 47 | | Lease payments to fellow subsidiaries | 1,193 | 1,694 | - Approximately **RMB 471,650 thousand** of the Group's interest-bearing bank loans and other borrowings were jointly guaranteed by the controlling shareholder and other related parties[127](index=127&type=chunk) Outstanding Balances with Related Parties (June 30, 2025) | Item | RMB thousands | | :--- | :--- | | Trade and bills receivables: fellow subsidiaries | 30,724 | | Trade payables: fellow subsidiaries | 1,439 | | Other receivables: fellow subsidiaries | 20 | | Contract assets: fellow subsidiaries | 9,882 | | Contract liabilities: fellow subsidiaries | 1,360 | Total Remuneration of Directors and Supervisors | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Short-term employee benefits | 2,046 | 1,983 | | Post-employment benefits | 62 | 65 | | **Total remuneration paid to key management personnel** | **2,108** | **2,048** | [Fair Value of Financial Instruments](index=51&type=section&id=10.9%20金融工具公允價值) This section discloses the carrying amounts and fair values of the Group's financial instruments, classified by fair value hierarchy; bills receivable are categorized as Level 2 fair value measurements, and there were no transfers between fair value measurement levels for financial assets or liabilities during the period Carrying Amounts and Fair Values of Financial Assets (June 30, 2025) | Item | Carrying Amount (RMB thousands) | Fair Value (RMB thousands) | | :--- | :--- | :--- | | Bills receivable | 563,571 | 563,571 | | Long-term receivables | 91,432 | 91,432 | | **Total** | **655,003** | **655,003** | Carrying Amounts and Fair Values of Financial Liabilities (June 30, 2025) | Item | Carrying Amount (RMB thousands) | Fair Value (RMB thousands) | | :--- | :--- | :--- | | Interest-bearing bank and other borrowings (excluding lease liabilities) | 586,610 | 586,610 | Assets Measured at Fair Value (June 30, 2025) | Item | Quoted prices in active markets (Level 1) (RMB thousands) | Significant observable inputs (Level 2) (RMB thousands) | Significant unobservable inputs (Level 3) (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Bills receivable | – | 563,571 | – | 563,571 | - During the period, there were no transfers between Level 1 and Level 2 fair value measurements, nor any transfers into or out of Level 3, for financial assets and financial liabilities[134](index=134&type=chunk) [Events After Reporting Period and Approval of Financial Statements](index=53&type=section&id=10.10%20報告期後事項及財務報表批准) The Group had no significant events after the reporting period requiring disclosure. These financial statements were approved by the Board of Directors and authorized for issue on August 20, 2025 - The Group had no significant events after the reporting period requiring disclosure[135](index=135&type=chunk) - These financial statements were approved by the Board of Directors and authorized for issue on **August 20, 2025**[136](index=136&type=chunk)

[Definitions](index=3&type=section&id=Definitions) This section provides definitions of key terms and abbreviations used in the report to ensure a clear understanding of its content [Company Information](index=6&type=section&id=Company%20Information) This section outlines basic information about Rongta Technology (Xiamen) Group Co., Ltd., including company name, board and supervisory committee members, committee compositions, registered and principal places of business, listing information, legal advisors, and auditors - The company's Chinese name is 容大合眾（廈門）科技集團股份公司, and its English name is **Rongta Technology (Xiamen) Group Co., Ltd.**[9](index=9&type=chunk) - The Board of Directors comprises Mr. Xu Kaiming (Chairman), Mr. Xu Kaihe, Ms. Lin Yanqin (Executive Directors), and Dr. Lin Junhua, Dr. Yu Xiaoou, Dr. Huang Liqin (Independent Non-executive Directors)[10](index=10&type=chunk) - The company's H-shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited, stock code **9881**[10](index=10&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This section details the Group's business performance, financial position, future strategic outlook, and key risk factors, highlighting a **10.4% revenue decrease** and a shift to loss, driven by external factors, product performance, and increased listing expenses, as the Group implements strategic initiatives like capacity expansion and R&D [Business Review](index=8&type=section&id=Business%20Review) The Group's revenue decreased by **10.4%** to **RMB 145.6 million** due to external factors and product line performance, while the gross profit margin remained stable at **27.2%** through cost control and R&D investment Business Performance Overview | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 145.6 | 162.5 | -10.4% | | Gross Profit Margin | 27.2% | 27.0% | +0.2pp | - The decrease in revenue was primarily impacted by external factors such as tighter import policies in Africa, geopolitical influences in Europe, and delayed client projects[14](index=14&type=chunk) - Sales of **printing equipment** (slowing demand for portable learning printers), **weighing scales** (declining traditional weighing scale sales), and **POS terminals/PDAs** (tighter import policies in Algeria) all decreased[14](index=14&type=chunk) [Outlook](index=8&type=section&id=Outlook) The Group is expanding Malaysian production capacity for supply chain resilience, establishing a Wuhan R&D center for IoT and AI integration by 2026, deepening Southeast Asia and Middle East market cooperation, and promoting AI weighing scales and industrial printers globally, while financially controlling receivables, optimizing financing costs, and utilizing listing proceeds for strategic investments - Expanding Malaysian production scale to enhance international supply chain resilience; the Wuhan R&D center is expected to operate in **2026**, strengthening IoT and AI technology integration[15](index=15&type=chunk) - Deepening cooperation in Southeast Asia and the Middle East, participating in international exhibitions to promote **AI weighing scales** and **industrial-grade printing equipment**, and increasing promotion of hazardous waste products domestically[15](index=15&type=chunk) - Iterating **AI smart scales** to integrate SaaS functions, developing modular POS terminals; strictly controlling accounts receivable, optimizing financing costs, and utilizing net proceeds of approximately **HKD 131.2 million** from the listing to support strategic investments[16](index=16&type=chunk) [Financial Review](index=9&type=section&id=Financial%20Review) This section reviews key financial indicators for the reporting period, including revenue, costs, profit, various expenses, and net profit, noting a **10.4% year-on-year revenue decrease** and a shift from profit to loss, primarily due to delayed client project approvals, product specification improvements, increased listing expenses, and higher R&D investment [Revenue](index=9&type=section&id=Revenue) During the reporting period, the Group's revenue was approximately **RMB 145.6 million**, a **10.4% decrease** from approximately **RMB 162.5 million** in the same period of 2024, mainly due to slower approval progress for some client projects and further improvements requested by clients before product delivery Revenue Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 145.6 | 162.5 | -10.4% | - The decrease in revenue was primarily due to slower approval progress for some client projects and clients requesting further improvements to product specifications before delivery[18](index=18&type=chunk) [Revenue by Product and Service Segment](index=9&type=section&id=Revenue%20by%20Product%20and%20Service%20Segment) During the reporting period, revenue from all major product lines decreased, with printing equipment revenue down **8.3%**, weighing scales down **11.4%**, and POS terminals/PDAs down **23.2%**, primarily due to delayed client projects, unsuccessful bids by downstream distributors, and tighter import policies in Algeria Revenue Breakdown by Product Segment (RMB thousand) | Product Segment | H1 2025 | H1 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Printing Equipment | 100,453 | 109,534 | -8.3% | | Weighing Scales | 24,034 | 27,133 | -11.4% | | POS Terminals and PDAs | 12,363 | 16,088 | -23.2% | | Accessories and Other Purchased Products | 7,877 | 8,716 | -9.7% | | Others | 890 | 1,020 | -12.7% | | **Total** | **145,617** | **162,491** | **-10.4%** | - Sales of printing equipment decreased mainly due to slower approval progress for some new client projects and product specification improvements[19](index=19&type=chunk) - Sales of POS terminals and PDAs decreased primarily due to tighter import policies in Algeria, with import licenses expected to be issued in H2 2025[19](index=19&type=chunk) [Cost of Sales](index=10&type=section&id=Cost%20of%20Sales) During the reporting period, cost of sales was approximately **RMB 106.0 million**, a **10.6% decrease** from the same period in 2024, primarily due to the Group's effective cost control, leading to corresponding reductions in raw materials, manufacturing, and transportation costs Cost of Sales Breakdown (RMB thousand) | Cost of Sales Item | H1 2025 | H1 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Raw Material Costs | 84,875 | 100,974 | -15.9% | | Labor Costs | 13,686 | 13,028 | +5.1% | | Direct Production Expenses | 1,714 | 1,915 | -10.5% | | Depreciation and Amortization | 4,575 | 4,118 | +11.1% | | Impairment (Reversal) of Inventories | (429) | (2,660) | -83.9% | | Others | 1,614 | 1,245 | +29.6% | | **Total** | **106,035** | **118,620** | **-10.6%** | - The decrease in cost of sales was mainly attributable to the Group's effective cost control, resulting in corresponding reductions in material, manufacturing, and transportation costs[22](index=22&type=chunk) [Gross Profit and Gross Profit Margin](index=10&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) During the reporting period, gross profit was approximately **RMB 39.6 million**, a **RMB 4.3 million year-on-year decrease**, while the gross profit margin remained relatively stable at approximately **27.2%**, an increase of **0.2 percentage points** from the same period last year Gross Profit and Gross Profit Margin Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Gross Profit | 39.6 | 43.9 | -9.8% | | Gross Profit Margin | 27.2% | 27.0% | +0.2pp | [Other Income](index=10&type=section&id=Other%20Income) During the reporting period, other income was approximately **RMB 6.3 million**, a **19.2% year-on-year decrease**, primarily due to reduced government grants, including R&D-related subsidies and operating VAT refund subsidies Other Income Comparison (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Other Income | 6.3 | 7.8 | -19.2% | - The decrease in other income was mainly due to reduced government grants (R&D-related subsidies and operating VAT refund subsidies)[24](index=24&type=chunk) [Net Other Gains](index=11&type=section&id=Net%20Other%20Gains) During the reporting period, net other gains were approximately **RMB 0.7 million**, a significant **600.0% year-on-year increase**, primarily due to no foreign exchange forward contract losses in H1 2025 and increased net gains from disposal of property, plant, and equipment Net Other Gains Comparison (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Net Other Gains | 0.7 | 0.1 | +600.0% | - The increase in gains was mainly due to no foreign exchange forward contracts in H1 2025 and increased net gains from the disposal of property, plant, and equipment[26](index=26&type=chunk) [Selling and Marketing Expenses](index=11&type=section&id=Selling%20and%20Marketing%20Expenses) During the reporting period, selling and marketing expenses were approximately **RMB 13.6 million**, a **7.1% year-on-year increase**, primarily due to higher labor costs for sales personnel, increased advertising and other marketing expenses (due to more exhibitions), and higher service fees from increased e-commerce platform promotion Selling and Marketing Expenses Comparison (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 13.6 | 12.7 | +7.1% | - Selling and marketing expenses increased mainly due to higher labor costs for sales personnel, increased advertising and other marketing expenses (more exhibitions), and higher e-commerce platform service fees[27](index=27&type=chunk) [General and Administrative Expenses](index=11&type=section&id=General%20and%20Administrative%20Expenses) During the reporting period, general and administrative expenses were approximately **RMB 31.4 million**, a significant **80.5% year-on-year increase**, primarily due to non-recurring listing expenses incurred from the company's shares being listed on the Stock Exchange in June 2025 General and Administrative Expenses Comparison (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | General and Administrative Expenses | 31.4 | 17.4 | +80.5% | - The significant increase in expenses was primarily due to non-recurring listing expenses incurred from the company's shares being listed on the Stock Exchange in June 2025[28](index=28&type=chunk) [Research and Development Expenses](index=11&type=section&id=Research%20and%20Development%20Expenses) During the reporting period, R&D expenses were approximately **RMB 9.3 million**, a **52.5% year-on-year increase**, primarily due to an increase in R&D personnel and benefits, as well as a decrease in capitalized R&D projects R&D Expenses Comparison (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | R&D Expenses | 9.3 | 6.1 | +52.5% | - The increase in R&D expenses was mainly due to an increase in R&D personnel and benefits, as well as a decrease in capitalized R&D projects[29](index=29&type=chunk) [Impairment Losses on Financial Assets (Provision)/Reversal](index=12&type=section&id=Impairment%20Losses%20on%20Financial%20Assets%20(Provision)%2FReversal) During the reporting period, an impairment loss provision of **RMB 79 thousand** on financial assets was recorded, compared to a reversal of **RMB 122 thousand** in the same period of 2024, primarily due to delayed settlement by certain clients during the reporting period Impairment Losses on Financial Assets Comparison (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Impairment Losses (Provision)/Reversal on Financial Assets | (79) | 122 | - The impairment loss shifted from a reversal to a provision, primarily due to delayed settlement by certain clients during the reporting period[30](index=30&type=chunk) [Finance Income and Costs](index=12&type=section&id=Finance%20Income%20and%20Costs) During the reporting period, net finance costs were approximately **RMB 1.0 million**, a **42.9% year-on-year increase**, primarily due to a decrease in interest income from bank deposits, whereas the same period in 2024 had more interest income from USD deposits Net Finance Income and Costs Comparison (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Net Finance Costs | (1.0) | (0.7) | +42.9% | - The increase in net finance costs was mainly due to a decrease in interest income from bank deposits, whereas the same period in 2024 had more interest income from USD deposits[31](index=31&type=chunk) [Income Tax (Credit)/Expense](index=12&type=section&id=Income%20Tax%20(Credit)%2FExpense) During the reporting period, an income tax credit of approximately **RMB 2.4 million** was recorded, compared to an income tax expense of approximately **RMB 0.6 million** in the same period of 2024, primarily due to the recognition of deferred tax assets as the Group incurred a loss during the period Income Tax (Credit)/Expense Comparison (RMB million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Income Tax (Credit)/Expense | 2.4 (Credit) | (0.6) (Expense) | - Income tax shifted from an expense to a credit, primarily due to the Group's loss during the reporting period and the recognition of deferred tax assets[32](index=32&type=chunk) [Net Profit and Net Profit Margin](index=12&type=section&id=Net%20Profit%20and%20Net%20Profit%20Margin) During the reporting period, net profit shifted from a profit of **RMB 14.4 million** in the same period of 2024 to a loss of **RMB 6.4 million**, with the net profit margin decreasing from **8.9%** to **-4.4%**, primarily due to increased listing expenses, decreased revenue, and higher R&D expenses Net Profit and Net Profit Margin Comparison (RMB million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Profit | (6.4) (Loss) | 14.4 (Profit) | | Net Profit Margin | -4.4% | 8.9% | - Net profit shifted from profit to loss, primarily due to increased non-recurring listing expenses, decreased revenue, and higher R&D expenses[33](index=33&type=chunk) [Adjusted Net Profit (Non-IFRS Measure)](index=12&type=section&id=Adjusted%20Net%20Profit%20(Non-IFRS%20Measure)) Adjusted net profit (excluding the impact of listing expenses) was **RMB 12.3 million**, a decrease from **RMB 21.6 million** in the same period of 2024, with an adjusted net profit margin of **8.5%**, down from **13.3%** last year, as this non-IFRS measure aims to better reflect the Group's underlying operating performance Adjusted Net Profit Comparison (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit/(Loss) for the Period | (6,398) | 14,413 | | Add: Listing Expenses | 18,746 | 7,172 | | **Adjusted Net Profit** | **12,348** | **21,585** | | **Adjusted Net Profit Margin** | **8.5%** | **13.3%** | - Adjusted net profit (non-IFRS measure) aims to exclude the impact of listing expenses and share-based payments to better reflect the Group's underlying operating performance[36](index=36&type=chunk) [Liquidity and Financial Resources](index=13&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains a prudent capital management policy with ample liquidity, as cash and cash equivalents significantly increased by **1,897.4%** to **RMB 151.8 million** at the end of the reporting period, primarily due to proceeds from the global offering, and the gearing ratio decreased to **42.2%**, indicating an improved financial structure [Cash and Cash Equivalents](index=13&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, total cash and cash equivalents were approximately **RMB 151.8 million**, a significant increase of **1,897.4%** from December 31, 2024, primarily due to the proceeds from the global offering Cash and Cash Equivalents Comparison (RMB million) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 151.8 | 7.6 | +1,897.4% | - The significant increase in cash and cash equivalents was primarily due to the proceeds from the global offering[38](index=38&type=chunk) [Debt](index=14&type=section&id=Debt) As of June 30, 2025, the Group's debt primarily included borrowings of approximately **RMB 145.7 million** and lease liabilities of approximately **RMB 0.1 million**, with all borrowings bearing fixed interest rates, and the Group closely monitoring interest rate risk Debt Composition (RMB million) | Debt Type | June 30, 2025 | | :--- | :--- | | Borrowings | 145.7 | | Lease Liabilities | 0.1 | - All borrowings bear fixed interest rates, and the Group currently does not hedge interest rate risk but will monitor it closely[39](index=39&type=chunk) [Capital Structure](index=14&type=section&id=Capital%20Structure) As of June 30, 2025, the Group's net assets were approximately **RMB 307.1 million**, a significant increase from **RMB 160.1 million** as of December 31, 2024 Net Assets Comparison (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Assets | 307.1 | 160.1 | [Capital Expenditure](index=14&type=section&id=Capital%20Expenditure) During the reporting period, capital expenditure was approximately **RMB 35.4 million**, an increase of **RMB 23.6 million** from the same period last year, primarily for the construction of the Malaysia production base, including land, construction, and equipment investments Capital Expenditure Comparison (RMB million) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Capital Expenditure | 35.4 | 11.8 | +23.6 | - The increase in capital expenditure was mainly due to investments in the construction of the Malaysia production base during the reporting period, including land, construction, and equipment[41](index=41&type=chunk) [Capital Commitments](index=14&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had no significant capital commitments - As of June 30, 2025, the Group had no significant capital commitments[42](index=42&type=chunk) [Borrowings](index=14&type=section&id=Borrowings) As of June 30, 2025, total bank borrowings were approximately **RMB 145.7 million**, all due within two years and bearing fixed interest rates, with the Group having approximately **RMB 140.0 million** in undrawn bank credit facilities Bank Borrowings (RMB million) | Metric | June 30, 2025 | | :--- | :--- | | Total Bank Borrowings | 145.7 | | Undrawn Bank Credit Facilities | 140.0 | - All outstanding bank borrowings bear fixed interest rates, are denominated in RMB, and are due within two years[43](index=43&type=chunk) [Lease Liabilities](index=14&type=section&id=Lease%20Liabilities) Lease liabilities decreased from **RMB 0.2 million** as of December 31, 2024, to **RMB 0.1 million** as of June 30, 2025, primarily due to a reduction in the balance from lease payments and related interest payments Lease Liabilities Comparison (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Lease Liabilities | 0.1 | 0.2 | [Contingent Liabilities](index=14&type=section&id=Contingent%20Liabilities) Except for the civil litigation disclosed in the prospectus and the July 2025 announcement, the Group had no other significant contingent liabilities as of June 30, 2025 - Except for the disclosed civil litigation, as of June 30, 2025, the Group had no significant contingent liabilities[45](index=45&type=chunk) [Employees and Remuneration Policy](index=15&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had **653 employees** with total employee benefit expenses of approximately **RMB 40.0 million**, offering fair career development opportunities, training, performance bonuses, and an employee shareholding scheme to incentivize staff Employee and Remuneration Overview | Metric | June 30, 2025 | | :--- | :--- | | Number of Employees | 653 | | Total Employee Benefit Expenses (RMB million) | 40.0 | - The Group has an employee shareholding scheme, holding company shares through Xiamen Gaoli Hezhong and Xiamen Gaoli Zhongcheng platforms, accounting for approximately **2.03%** of the total issued shares[48](index=48&type=chunk)[147](index=147&type=chunk) [Pledge of Assets](index=15&type=section&id=Pledge%20of%20Assets) Certain bank loans of the Group are secured by mortgages on the new Xiamen production base in Tongan District, Xiamen City, China, with a total carrying value of approximately **RMB 118.9 million** as of June 30, 2025 Asset Pledge Information (RMB million) | Pledged Asset Type | Carrying Value as of June 30, 2025 | | :--- | :--- | | New Xiamen Production Base Mortgage | 118.9 | [Significant Investments, Acquisitions and Disposals](index=15&type=section&id=Significant%20Investments%2C%20Acquisitions%20and%20Disposals) As of June 30, 2025, the Group held no significant investments and had no material acquisitions or disposals of subsidiaries, associates, or joint ventures, and while it subscribed to wealth management products for cash management, it did not utilize proceeds from the global offering for this purpose - As of June 30, 2025, the Group held no significant investments and had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[50](index=50&type=chunk) - The Group subscribed to wealth management products for cash management purposes but did not utilize proceeds from the global offering[50](index=50&type=chunk) [Plans for Material Investments or Capital Assets](index=16&type=section&id=Plans%20for%20Material%20Investments%20or%20Capital%20Assets) On July 30, 2025, Shanghai Rongta Zhizhi Technology Co., Ltd., a wholly-owned subsidiary of the Group, signed an agreement to acquire industrial buildings in Qingpu District, Shanghai, with a total gross floor area of approximately **1,810.59 square meters**, for **RMB 42,910,983**, to be funded by internal resources, with no other major investment plans currently apart from this acquisition and those disclosed in the prospectus - The Group's wholly-owned subsidiary, Shanghai Rongta Zhizhi Technology Co., Ltd., signed an agreement on July 30, 2025, to acquire two industrial buildings in Qingpu District, Shanghai, with a total gross floor area of approximately **1,810.59 square meters**, for **RMB 42,910,983**[51](index=51&type=chunk) - The acquisition will be funded by the Group's internal resources, and proceeds from the global offering will not be used to pay the total consideration[52](index=52&type=chunk) [Gearing Ratio](index=16&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was approximately **42.2%**, a decrease from **52.5%** as of December 31, 2024, primarily due to the increase in shareholders' equity resulting from the company's share listing Gearing Ratio Comparison | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing Ratio | 42.2% | 52.5% | -10.3pp | - The decrease in the gearing ratio was primarily due to the increase in shareholders' equity resulting from the company's shares being listed on the Stock Exchange in June 2025[53](index=53&type=chunk) [Currency and Foreign Exchange Risk](index=16&type=section&id=Currency%20and%20Foreign%20Exchange%20Risk) The Group faces foreign exchange risk from USD-denominated revenue and some costs, as well as HKD-denominated global offering proceeds, with no significant difficulties or impacts during the reporting period, and while there is currently no foreign exchange hedging policy, management monitors and considers hedging - The Group faces foreign exchange risk arising from USD-denominated revenue and some costs, as well as HKD-denominated proceeds from the global offering[54](index=54&type=chunk) - No significant difficulties or impacts occurred during the reporting period, and while there is currently no foreign exchange hedging policy, management will monitor and consider hedging[54](index=54&type=chunk) [Material Events After the Reporting Period](index=16&type=section&id=Material%20Events%20After%20the%20Reporting%20Period) Except as disclosed in this interim report, no material events affecting the Group have occurred from June 30, 2025, up to the date of this interim report - Except as disclosed in this interim report, no material events affecting the Group have occurred from June 30, 2025, up to the date of this interim report[55](index=55&type=chunk) [Condensed Consolidated Interim Statement of Comprehensive Income](index=17&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) This statement presents the condensed consolidated interim comprehensive income for the six months ended June 30, 2025, and the corresponding period in 2024, showing the Group's shift from profit to loss, primarily due to decreased revenue and increased expenses Condensed Consolidated Interim Statement of Comprehensive Income (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 145,617 | 162,491 | | Cost of Sales | (106,035) | (118,620) | | Gross Profit | 39,582 | 43,871 | | Operating (Loss)/Profit | (7,801) | 15,696 | | Net Finance Costs | (1,004) | (682) | | (Loss)/Profit Before Income Tax | (8,805) | 15,014 | | Income Tax Expense | 2,407 | (601) | | **(Loss)/Profit and Total Comprehensive Income for the Period** | **(6,398)** | **14,413** | | Basic and Diluted (Loss)/Earnings Per Share (RMB per share) | (0.08) | 0.18 | [Condensed Consolidated Interim Statement of Financial Position](index=18&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) This statement presents the condensed consolidated interim financial position as of June 30, 2025, and December 31, 2024, indicating a significant increase in the Group's total assets and shareholders' equity due to the listing, alongside an increase in total liabilities Condensed Consolidated Interim Statement of Financial Position (RMB thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 183,506 | 156,254 | | Current Assets | 347,754 | 180,874 | | **Total Assets** | **531,260** | **337,128** | | **Equity** | | | | Total Equity | 307,057 | 160,063 | | **Liabilities** | | | | Non-current Liabilities | 17,908 | 31,883 | | Current Liabilities | 206,295 | 145,182 | | **Total Liabilities** | **224,203** | **177,065** | | **Total Equity and Liabilities** | **531,260** | **337,128** | [Condensed Consolidated Interim Statement of Changes in Equity](index=20&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) This statement presents the condensed consolidated interim changes in equity for the six months ended June 30, 2025, and the corresponding period in 2024, showing a substantial increase in share capital and reserves in 2025 due to the listing, despite a loss incurred during the period Condensed Consolidated Interim Statement of Changes in Equity (RMB thousand) | Metric | Share Capital | Reserves | Retained Earnings | Total | | :--- | :--- | :--- | :--- | :--- | | **Balance as of January 1, 2025** | **76,333** | **20,044** | **63,686** | **160,063** | | Loss for the Period | – | – | (6,398) | (6,398) | | Shares Issued upon Listing | 18,400 | 149,592 | – | 167,992 | | Capitalized Listing Expenses after Listing | – | (14,451) | – | (14,451) | | Foreign Currency Translation Differences | – | (149) | – | (149) | | **Balance as of June 30, 2025** | **94,733** | **155,036** | **57,288** | **307,057** | | **Balance as of January 1, 2024** | **80,000** | **45,149** | **57,557** | **182,706** | | Profit for the Period | – | – | 14,413 | 14,413 | | Dividend Distribution | – | – | (1,500) | (1,500) | | Repurchase of Ordinary Shares | (3,667) | (28,823) | – | (32,490) | | **Balance as of June 30, 2024** | **76,333** | **16,326** | **70,470** | **163,129** | [Condensed Consolidated Interim Statement of Cash Flows](index=21&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Cash%20Flows) This statement presents the condensed consolidated interim cash flows for the six months ended June 30, 2025, and the corresponding period in 2024, indicating cash outflow from operating activities in 2025, but a significant increase in cash inflow from financing activities, leading to a net increase in cash and cash equivalents Condensed Consolidated Interim Statement of Cash Flows (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash (Used in)/Generated from Operating Activities | (31,027) | 12,067 | | Net Cash Used in Investing Activities | (36,883) | (33,667) | | Net Cash Generated from Financing Activities | 212,558 | 24,307 | | **Net Increase in Cash and Cash Equivalents** | **144,648** | **2,707** | | Cash and Cash Equivalents at End of Period | 151,779 | 17,917 | - In H1 2025, there was cash outflow from operating activities, but cash inflow from financing activities significantly increased, primarily due to proceeds from the issuance of shares[65](index=65&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=22&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes to the condensed consolidated interim financial statements, explaining the Group's accounting policies, financial risk management, composition and changes in various financial data, and related party transactions, offering essential context and details for understanding the financial statements [1 General Information of the Group](index=22&type=section&id=1%20General%20Information%20of%20the%20Group) Rongta Technology (Xiamen) Group Co., Ltd., incorporated in China, primarily manufactures and sells automatic identification and data collection (AIDC) equipment, including specialized printers, weighing scales, POS terminals, and PDA devices, with its shares listed on the Main Board of the Hong Kong Stock Exchange since June 10, 2025 - The Company primarily engages in the manufacturing and sale of automatic identification and data collection (AIDC) equipment in China, including specialized printers, weighing scales, point-of-sale ("POS") terminals, and personal digital assistant ("PDA") devices, and provides related solutions[66](index=66&type=chunk) - The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since **June 10, 2025**[67](index=67&type=chunk) [2 Basis of Preparation](index=22&type=section&id=2%20Basis%20of%20Preparation) The condensed consolidated interim financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2024, with adopted accounting policies consistent with the 2024 financial statements, except for newly adopted and revised standards - The condensed consolidated interim financial statements are prepared in accordance with International Accounting Standard ("IAS") 34 "Interim Financial Reporting"[71](index=71&type=chunk) - The accounting policies adopted in the preparation of these condensed consolidated interim financial statements are consistent with those followed in the preparation of the 2024 financial statements, except for the adoption of new and revised standards[71](index=71&type=chunk) [3 Significant Accounting Policies](index=23&type=section&id=3%20Significant%20Accounting%20Policies) This section outlines the principal accounting policies adopted in preparing the condensed consolidated interim financial statements, consistent with the 2024 financial statements, and lists newly adopted and revised standards for this reporting period, such as the amendment to IAS 21, as well as standards not yet effective, like amendments to IFRS 9 and 18 - The principal accounting policies adopted in the preparation of these condensed consolidated interim financial statements are consistent with those applied in the 2024 financial statements, except for the adoption of new and revised standards[72](index=72&type=chunk) - The Group has adopted the amendment to IAS 21 "Lack of Exchangeability" and is currently assessing the full impact of new and revised standards not yet effective, such as amendments to IFRS 9 and 18[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) [4 Estimates](index=24&type=section&id=4%20Estimates) The preparation of interim financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of financial items, with the significant judgments and sources of estimation uncertainty made by management during this reporting period being the same as those in the 2024 financial statements - The preparation of interim financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expenses[77](index=77&type=chunk) - In preparing these condensed consolidated interim financial statements, the significant judgments made by management and the key sources of estimation uncertainty are the same as those applied in the 2024 financial statements[77](index=77&type=chunk) [5 Financial Risk Management](index=24&type=section&id=5%20Financial%20Risk%20Management) This section describes the market risks (currency and interest rate risks), credit risk, and liquidity risk faced by the Group, along with its risk management plans, noting that the Group's risk management policies have not changed since the end of the previous year, and detailing the assessment methods for credit and liquidity risks, as well as fair value estimations [5.1 Financial Risk Factors](index=24&type=section&id=5.1%20Financial%20Risk%20Factors) The Group faces market risks (currency and interest rates), credit risk, and liquidity risk, with credit risk primarily arising from cash and cash equivalents, trade receivables, and other financial assets, managed through transactions with reputable institutions and regular client credit assessments, while liquidity risk is managed by maintaining sufficient cash and bank financing [(a) Credit Risk](index=24&type=section&id=(a)%20Credit%20Risk) The Group's credit risk primarily stems from cash and cash equivalents, trade receivables, and other financial assets, with low credit risk for cash and cash equivalents due to transactions with state-owned or reputable financial institutions in China, while trade receivables credit risk is managed through credit policies, continuous credit assessments, and the simplified approach under IFRS 9 for measuring expected credit losses - The Group is exposed to credit risk from cash and cash equivalents, trade and bills receivable, and other financial assets measured at amortized cost[80](index=80&type=chunk) - Credit risk for cash and cash equivalents is low, as the Group only transacts with state-owned or reputable financial institutions in China[81](index=81&type=chunk) - Credit risk for trade receivables is managed through credit policies, continuous credit assessments, and the simplified approach under IFRS 9 for measuring expected credit losses[82](index=82&type=chunk) Expected Credit Loss Provision for Trade and Bills Receivable (RMB thousand) | Aging | Carrying Amount as of June 30, 2025 | Expected Loss Rate as of June 30, 2025 | Total Loss Provision as of June 30, 2025 | Carrying Amount as of December 31, 2024 | Expected Loss Rate as of December 31, 2024 | Total Loss Provision as of December 31, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Current | 55,461 | 0.46% | (253) | 57,590 | 0.02% | (12) | | Within Six Months | 2,482 | 5.00% | (124) | 7,545 | 0.68% | (51) | | Within Twelve Months | 234 | 29.91% | (70) | 1,306 | 20.83% | (272) | | Over One Year | 38 | 100.00% | (38) | 137 | 56.20% | (77) | | **Total** | **58,215** | **0.83%** | **(485)** | **66,578** | **0.62%** | **(412)** | [(b) Liquidity Risk](index=27&type=section&id=(b)%20Liquidity%20Risk) The Group manages liquidity risk by maintaining sufficient cash and cash equivalents and regularly monitoring its liquidity position, with an analysis of contractual undiscounted cash flows for financial liabilities showing that most liabilities, including trade payables and borrowings, are due within one year - Prudent liquidity risk management involves maintaining sufficient cash and cash equivalents and regularly monitoring liquidity risk[90](index=90&type=chunk) Financial Liabilities Maturity Analysis (RMB thousand) | Liability Type | Less than One Year (June 30, 2025) | One to Two Years (June 30, 2025) | Total (June 30, 2025) | Less than One Year (December 31, 2024) | One to Two Years (December 31, 2024) | Total (December 31, 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Trade Payables | 38,374 | – | 38,374 | 43,811 | – | 43,811 | | Accrued Expenses and Other Payables (excluding staff salaries and benefits payable and VAT and other taxes payable) | 9,092 | – | 9,092 | 7,254 | – | 7,254 | | Borrowings | 127,745 | 17,908 | 145,653 | 57,942 | 31,379 | 89,321 | | Interest on Borrowings | 1,754 | 20 | 1,774 | 1,704 | 230 | 1,934 | | Lease Liabilities | 129 | – | 129 | 126 | 65 | 191 | | **Total** | **177,094** | **17,928** | **195,022** | **110,837** | **31,674** | **142,511** | [5.2 Fair Value Estimation](index=29&type=section&id=5.2%20Fair%20Value%20Estimation) This section describes the Group's fair value measurement of financial instruments, primarily financial assets at fair value through profit or loss (wealth management products), categorized into three levels based on the observability of input data, with fair value of wealth management products estimated using the discounted cash flow method, and a sensitivity analysis of significant unobservable input data (expected return rate) disclosed [(a) Fair Value Measurement Hierarchy for Fair Value Measurements](index=29&type=section&id=(a)%20Fair%20Value%20Measurement%20Hierarchy%20for%20Fair%20Value%20Measurements) This section describes the Group's fair value measurement hierarchy for financial instruments, categorized into three levels based on the observability of input data: Level 1 (quoted prices in active markets), Level 2 (valuation techniques using observable market data), and Level 3 (instruments with one or more significant inputs not based on observable market data) - The Group categorizes its financial instruments into three levels according to accounting standards, providing an indication of the reliability of inputs used to determine fair value[96](index=96&type=chunk) - Level 1 refers to quoted prices in active markets, Level 2 refers to valuation techniques using observable market data, and Level 3 refers to instruments where one or more significant inputs are not based on observable market data[96](index=96&type=chunk) [(b) Valuation Techniques Used to Determine Fair Values](index=30&type=section&id=(b)%20Valuation%20Techniques%20Used%20to%20Determine%20Fair%20Values) The fair value of wealth management products is estimated using the discounted cash flow method based on management's judgments and estimated expected returns, while the fair value of foreign currency forward contracts is estimated using quotes provided by banks, with no changes in valuation methods during the reporting period, and a sensitivity analysis for Level 3 financial assets disclosed - The fair value of wealth management products is estimated using the discounted cash flow method based on management's judgments and estimated expected returns[97](index=97&type=chunk) Fair Value Estimation of Level 3 Financial Assets (RMB thousand) | Metric | June 30, 2025 | December 31, 2024 | Unobservable Input Data | Input Data Range (June 30, 2025) | Input Data Range (December 31, 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Financial Assets at Fair Value Through Profit or Loss – Wealth Management Products | 27,216 | 22,422 | Expected Return Rate | 2.12-2.28% | 2.23-2.67% | - If the price of the relevant instruments increases/decreases by **10%**, the Group's pre-tax profit would increase/decrease by approximately **RMB 2,721,600** (June 30, 2025) and **RMB 4,885,000** (December 31, 2024), respectively, due to gains/losses on financial instruments classified as at fair value through profit or loss[100](index=100&type=chunk) [6 Revenue and Segment Information](index=31&type=section&id=6%20Revenue%20and%20Segment%20Information) This section provides the Group's revenue and segment information, confirming that the Group primarily manufactures and sells AIDC equipment in China, with revenue disaggregated by product and service, and customer location, noting a decrease in revenue across all product lines during the reporting period, and disclosing information related to contract liabilities and unsatisfied performance obligations [(a) Description of Segments and Principal Activities](index=31&type=section&id=(a)%20Description%20of%20Segments%20and%20Principal%20Activities) The Group primarily engages in the manufacturing and sale of specialized printers, weighing scales, POS terminals, and PDA devices in China, and provides related solutions, with the decision-makers viewing this business as a single operating segment for strategic decisions and resource allocation, and all business and operations conducted in China - The Group primarily engages in the manufacturing and sale of automatic identification and data collection (AIDC) equipment in China, including specialized printers, weighing scales, POS terminals, and PDA devices, and provides related solutions[101](index=101&type=chunk) - The decision-makers review the operating results of this business as a single operating segment to make strategic decisions and allocate resources[101](index=101&type=chunk) [(b) Disaggregation of Revenue](index=31&type=section&id=(b)%20Disaggregation%20of%20Revenue) During the reporting period, the Group's total revenue was **RMB 145.6 million**, with printing equipment contributing the most, but all product lines experienced a year-on-year decrease in revenue, and revenue from both China and overseas markets also decreased Revenue Breakdown by Product and Service (RMB thousand) | Product and Service | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Printing Equipment | 100,453 | 109,534 | | Weighing Scales | 24,034 | 27,133 | | POS Terminals and PDAs | 12,363 | 16,088 | | Accessories and Other Purchased Products | 7,877 | 8,716 | | Others | 890 | 1,020 | | **Total** | **145,617** | **162,491** | Revenue Breakdown by Customer Location (RMB thousand) | Customer Location | H1 2025 | H1 2024 | | :--- | :--- | :--- | | China | 74,193 | 79,816 | | Overseas Countries | 71,424 | 82,675 | | **Total** | **145,617** | **162,491** | [(c) Contract Liabilities](index=32&type=section&id=(c)%20Contract%20Liabilities) As of June 30, 2025, the Group's contract liabilities amounted to **RMB 7,782 thousand**, related to non-refundable advance payments from customers, with **RMB 7,715 thousand** of revenue recognized during the reporting period related to the opening balance of contract liabilities Contract Liabilities (RMB thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contract Liabilities | 7,782 | 7,715 | Revenue Recognized Related to Contract Liabilities (RMB thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Revenue Recognized (included in opening balance of contract liabilities) | 7,715 | 10,307 | [(d) Unsatisfied Performance Obligations](index=33&type=section&id=(d)%20Unsatisfied%20Performance%20Obligations) The Group's vast majority of contracts have a duration of one year or less, thus the transaction price allocated to unsatisfied or partially unsatisfied performance obligations is not disclosed - The Group's vast majority of contracts have a duration of one year or less, thus the transaction price allocated to unsatisfied or partially unsatisfied performance obligations is not disclosed[106](index=106&type=chunk) [7 Expenses by Nature](index=33&type=section&id=7%20Expenses%20by%20Nature) This section details expenses by nature, including raw materials and consumables, employee benefits, listing expenses, amortization, and depreciation, noting an increase in total expenses during the reporting period, with a significant rise in listing expenses Expenses Breakdown by Nature (RMB thousand) | Expense Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Raw Materials and Consumables Used | 84,883 | 97,815 | | Employee Benefit Expenses | 39,985 | 37,072 | | Listing Expenses | 18,746 | 7,172 | | Amortization of Intangible Assets | 3,297 | 2,916 | | Depreciation of Property, Plant and Equipment | 2,162 | 2,127 | | **Total Expenses Deducted in Profit or Loss** | **160,302** | **154,839** | - Listing expenses significantly increased from **RMB 7,172 thousand** in H1 2024 to **RMB 18,746 thousand** in H1 2025[106](index=106&type=chunk) [8 Net Finance Income and Costs](index=34&type=section&id=8%20Net%20Finance%20Income%20and%20Costs) During the reporting period, net finance costs amounted to **RMB 1,004 thousand**, an increase from **RMB 682 thousand** in the same period of 2024, primarily due to a decrease in interest income from bank deposits Net Finance Income and Costs (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Finance Income | 259 | 673 | | Finance Costs | (1,263) | (1,355) | | **Net Finance Costs** | **(1,004)** | **(682)** | - The decrease in finance income was mainly due to reduced interest income from bank deposits[107](index=107&type=chunk) [9 Income Tax Expense](index=34&type=section&id=9%20Income%20Tax%20Expense) During the reporting period, an income tax credit of **RMB 2,407 thousand** was recorded, compared to an income tax expense of **RMB 601 thousand** in the same period of 2024, primarily due to the recognition of deferred tax assets as the Group incurred a loss, with the Group enjoying a **15% preferential tax rate** as a high-tech enterprise in China, and its Chinese subsidiaries qualifying for "small-profit enterprise" tax incentives [(a) China Corporate Income Tax ("CIT")](index=35&type=section&id=(a)%20China%20Corporate%20Income%20Tax%20(%22CIT%22)) The Company enjoys a **15% preferential income tax rate** as a high-tech enterprise in China, valid until **2026**, and its Chinese subsidiaries qualify as "small-profit enterprises," benefiting from a reduced taxable income (25% or 50%) and a **20% CIT rate** - The Company enjoys a **15% preferential income tax rate** as a high-tech enterprise, valid until **2026**[109](index=109&type=chunk) - Chinese subsidiaries that qualify as "small-profit enterprises" benefit from a reduced taxable income (25% or 50%) and a **20% CIT rate**[110](index=110&type=chunk) [(b) Malaysia and Singapore Income Tax](index=35&type=section&id=(b)%20Malaysia%20and%20Singapore%20Income%20Tax) The Group's subsidiary incorporated in Malaysia is subject to Malaysian income tax at a rate of **24%**, while its subsidiary incorporated in Singapore is subject to Singapore income tax at a rate of **17%** - The Group's subsidiary incorporated in Malaysia is subject to Malaysian income tax at a rate of **24%**[111](index=111&type=chunk) - The Group's subsidiary incorporated in Singapore is subject to Singapore income tax at a rate of **17%**[112](index=112&type=chunk) [10 Earnings Per Share](index=36&type=section&id=10%20Earnings%20Per%20Share) During the reporting period, basic and diluted loss per share was **RMB 0.08**, compared to earnings of **RMB 0.18** in the same period of 2024, reflecting the Group's shift from profit to loss Earnings Per Share Comparison | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | (Loss)/Profit Attributable to Owners of the Company (RMB thousand) | (6,398) | 14,413 | | Weighted Average Number of Ordinary Shares (thousand shares) | 76,333 | 78,167 | | **Basic and Diluted (Loss)/Earnings Per Share (RMB per share)** | **(0.08)** | **0.18** | - The Company had no potentially dilutive ordinary shares outstanding during the reporting period, thus diluted earnings per share are equal to basic earnings per share[114](index=114&type=chunk) [11 Dividends](index=36&type=section&id=11%20Dividends) For the six months ended June 30, 2025, no dividends were paid, declared, or proposed (compared to **RMB 1,500,000** in the same period of 2024) Dividend Payout (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Dividends Paid/Declared/Proposed | – | 1,500 | [12 Property, Plant and Equipment, Right-of-use Assets, Investment Properties and Intangible Assets](index=37&type=section&id=12%20Property%2C%20Plant%20and%20Equipment%2C%20Right-of-use%20Assets%2C%20Investment%20Properties%20and%20Intangible%20Assets) This section presents the changes in the Group's property, plant and equipment, right-of-use assets, investment properties, and intangible assets, noting additions of **RMB 6,379 thousand** to property, plant and equipment and **RMB 2,876 thousand** to intangible assets during the reporting period Asset Movement Overview (RMB thousand) | Asset Type | Balance as of January 1, 2025 | Additions | Depreciation/Amortization | Disposals | Balance as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 84,444 | 6,379 | (2,162) | (4,458) | 84,203 | | Right-of-use Assets | 4,682 | – | (108) | – | 4,574 | | Investment Properties | 39,953 | – | (502) | – | 39,451 | | Intangible Assets | 23,021 | 2,876 | (3,297) | – | 22,600 | [13 Inventories](index=38&type=section&id=13%20Inventories) As of June 30, 2025, the Group's total inventories amounted to **RMB 64,350 thousand**, a slight decrease from December 31, 2024, with a net reversal of inventory impairment of **RMB 429 thousand** recognized during the reporting period Inventories Breakdown (RMB thousand) | Inventory Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw Materials | 42,932 | 44,431 | | Work-in-progress | 3,903 | 779 | | Finished Goods | 25,941 | 28,091 | | Less: Inventory Impairment Provision | (8,426) | (8,855) | | **Total** | **64,350** | **64,446** | - For the six months ended June 30, 2025, a net reversal of inventory impairment of approximately **RMB 429,000** was recognized[118](index=118&type=chunk) [14 Trade and Bills Receivable](index=38&type=section&id=14%20Trade%20and%20Bills%20Receivable) As of June 30, 2025, net trade and bills receivable amounted to **RMB 57,730 thousand**, a decrease from December 31, 2024, with receivables due within **180 days** accounting for the majority, and the Group applying the simplified approach under IFRS 9 to provide for expected credit losses Trade and Bills Receivable Breakdown (RMB thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bills Receivable | 48 | 937 | | Trade Receivables – Third Parties | 58,167 | 65,641 | | Less: Impairment Provision | (485) | (412) | | **Total** | **57,730** | **66,166** | Aging Analysis of Trade Receivables (RMB thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 180 Days | 57,895 | 64,198 | | 181 to 360 Days | 234 | 1,306 | | Over 360 Days | 38 | 137 | | **Total** | **58,167** | **65,641** | - The Group applies the simplified approach under IFRS 9 to provide for expected credit loss provisions[120](index=120&type=chunk) [15 Prepayments and Other Receivables](index=40&type=section&id=15%20Prepayments%20and%20Other%20Receivables) As of June 30, 2025, total prepayments and other receivables amounted to **RMB 45,179 thousand**, a significant increase from December 31, 2024, primarily due to a substantial growth in prepaid expenses and prepayments for raw materials Prepayments and Other Receivables Breakdown (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepaid Expenses | 26,741 | 1,593 | | Prepayments for Raw Materials | 8,770 | 1,938 | | Recoverable VAT | 4,861 | 7,771 | | Recoverable Current Income Tax | 1,962 | – | | Other Receivables – Recoverable Deposits | 936 | 621 | | Prepaid Listing Expenses | – | 5,342 | | Others | 2,007 | 3,058 | | Less: Impairment Provision | (98) | (92) | | **Total** | **45,179** | **20,231** | - The significant increase in prepayments and other receivables was primarily due to a substantial growth in prepaid expenses and prepayments for raw materials[122](index=122&type=chunk) [16 Financial Assets and Liabilities at Fair Value Through Profit or Loss](index=40&type=section&id=16%20Financial%20Assets%20and%20Liabilities%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the Group's financial assets at fair value through profit or loss primarily consisted of wealth management products, amounting to **RMB 27,216 thousand**, an increase from December 31, 2024, with the Group designating these investments as financial assets at fair value through profit or loss based on its risk management and investment strategies Financial Assets at Fair Value Through Profit or Loss (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Investment in Wealth Management Products | 27,216 | 22,422 | Movement in Investment in Wealth Management Products (RMB thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Opening Balance | 22,422 | 11,504 | | Additions | 127,706 | 115,400 | | Disposals | (123,030) | (94,238) | | Gains on Financial Assets at Fair Value Through Profit or Loss | 118 | 1,119 | | **Closing Balance** | **27,216** | **33,785** | - The Group manages and assesses the performance of these investments on a fair value basis according to its risk management and investment strategies[124](index=124&type=chunk) [17 Cash and Cash Equivalents and Restricted Cash](index=42&type=section&id=17%20Cash%20and%20Cash%20Equivalents%20and%20Restricted%20Cash) As of June 30, 2025, total cash and cash equivalents amounted to **RMB 151,779 thousand**, a significant increase from December 31, 2024, with HKD-denominated cash accounting for the largest proportion, reflecting the impact of the global offering proceeds Cash and Cash Equivalents Breakdown (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash on Hand and Bank Balances | 149,550 | 6,955 | | Other Cash and Cash Equivalents | 2,229 | 654 | | **Total** | **151,779** | **7,609** | Cash and Cash Equivalents by Currency (RMB thousand) | Currency | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | RMB | 4,406 | 6,881 | | USD | 11,699 | 687 | | HKD | 134,263 | – | | Malaysian Ringgit | 1,158 | – | | Others | 253 | 41 | | **Total** | **151,779** | **7,609** | - The significant increase in HKD-denominated cash primarily reflects the impact of the global offering proceeds[125](index=125&type=chunk) [18 Share Capital](index=43&type=section&id=18%20Share%20Capital) As of June 30, 2025, issued and fully paid share capital was **RMB 94,733 thousand**, an increase from December 31, 2024, primarily due to the issuance of **18,400,000 ordinary shares** on June 10, 2025, upon the company's listing, raising gross proceeds of approximately **HKD 185,555,681** Share Capital Movement Summary (RMB thousand) | Item | Number of Shares | Share Capital | | :--- | :--- | :--- | | Balance as of January 1, 2025 | 76,333,000 | 76,333 | | Shares Issued upon Listing | 18,400,000 | 18,400 | | **Balance as of June 30, 2025** | **94,733,000** | **94,733** | - On June 10, 2025, the Company issued **18,400,000 ordinary shares** at a price of **HKD 10.08** per share, raising gross proceeds of approximately **HKD 185,555,681**[126](index=126&type=chunk) [19 Reserves](index=44&type=section&id=19%20Reserves) As of June 30, 2025, total reserves amounted to **RMB 155,036 thousand**, a significant increase from January 1, 2024, primarily due to an increase in capital reserves from the listing, partially offset by capitalized listing expenses and foreign currency translation differences Reserves Breakdown (RMB thousand) | Reserve Type | Capital Reserve | Statutory Reserve | Other Comprehensive Income | Share-based Compensation | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | **Balance as of January 1, 2025** | **(8,946)** | **16,025** | **–** | **12,965** | **20,044** | | Shares Issued upon Listing | 149,592 | – | – | – | 149,592 | | Capitalized Listing Expenses after Listing | (14,451) | – | – | – | (14,451) | | Foreign Currency Translation Differences | – | – | (149) | – | (149) | | **Balance as of June 30, 2025** | **126,195** | **16,025** | **(149)** | **12,965** | **155,036** | - According to relevant Chinese laws and regulations, Chinese subsidiaries are required to appropriate **10%** of their annual statutory net profit to the statutory surplus reserve[129](index=129&type=chunk) [20 Trade Payables](index=45&type=section&id=20%20Trade%20Payables) As of June 30, 2025, total trade payables amounted to **RMB 38,374 thousand**, a decrease from December 31, 2024, with all trade payables due within one year Trade Payables Breakdown (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Payables – Third Parties | 38,374 | 43,811 | - All trade payables are due within one year and are denominated in RMB[130](index=130&type=chunk) [21 Accruals and Other Payables](index=45&type=section&id=21%20Accruals%20and%20Other%20Payables) As of June 30, 2025, total accruals and other payables amounted to **RMB 20,107 thousand**, a decrease from December 31, 2024, primarily due to reductions in staff salaries and benefits payable, VAT and other taxes payable, and listing expenses payable Accruals and Other Payables Breakdown (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Staff Salaries and Benefits Payable | 7,690 | 9,510 | | Other Accrued Expenses and Payables | 6,741 | 2,502 | | VAT and Other Taxes Payable | 3,127 | 6,840 | | Listing Expenses Payable | 1,915 | 4,313 | | Payables for Purchase of Property, Plant and Equipment | 436 | 439 | | Deferred Income – Current Portion | 198 | 198 | | **Total** | **20,107** | **23,802** | - The decrease was mainly due to reductions in staff salaries and benefits payable, VAT and other taxes payable, and listing expenses payable[131](index=131&type=chunk) [22 Borrowings](index=46&type=section&id=22%20Borrowings) As of June 30, 2025, the Group's total borrowings amounted to **RMB 145,653 thousand**, mostly short-term bank borrowings, all denominated in RMB, bearing fixed interest rates with an average annual rate of **2.24%**, and largely due within one year, with some long-term bank borrowings secured by mortgages on land use rights, buildings, and investment properties Borrowings Breakdown (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current Borrowings | 17,908 | 31,379 | | Current Borrowings | 127,745 | 57,942 | | **Total Borrowings** | **145,653** | **89,321** | - Some long-term bank borrowings are secured by mortgages on the land use rights, buildings, and investment properties at the Group's headquarters in Xiamen[132](index=132&type=chunk) Carrying Value of Pledged Assets (RMB thousand) | Pledged Asset Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property, Plant and Equipment | 75,061 | 76,025 | | Right-of-use Assets | 4,434 | 4,483 | | Investment Properties | 39,451 | 39,953 | | **Total** | **118,946** | **120,461** | - Bank borrowings are denominated in RMB and bear fixed interest rates, with average annual rates of **2.24%** (June 30, 2025) and **3.03%** (December 31, 2024), respectively[134](index=134&type=chunk) [23 Related Party Transactions](index=47&type=section&id=23%20Related%20Party%20Transactions) This section discloses the Group's transactions and balances with related parties, including the ultimate controlling shareholder Mr. Xu Kaiming and Xiamen Rongxin, which he controls, noting that the Group provided short-term loans to Xiamen Rongxin during the reporting period and disclosing key management personnel compensation [(a) Related Parties of the Group](index=47&type=section&id=(a)%20Related%20Parties%20of%20the%20Group) The Group's related parties include Mr. Xu Kaiming, the ultimate controlling shareholder, and Xiamen Rongxin, the ultimate holding company controlled by him Related Party List | Related Party Name | Relationship | | :--- | :--- | | Mr. Xu Kaiming | Ultimate Controlling Shareholder | | Xiamen Rongxin | Ultimate Holding Company Controlled by Mr. Xu Kaiming | [(b) Transactions with Related Parties](index=48&type=section&id=(b)%20Transactions%20with%20Related%20Parties) During the reporting period, the Group provided short-term loans of **RMB 1,500 thousand** to Xiamen Rongxin, bearing an annual interest rate of **3%** and repayable within one year, while in the same period of 2024, Xiamen Rongxin repaid loans and offset payables Transactions with Related Parties (RMB thousand) | Transaction Type | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest Income from Xiamen Rongxin | 4 | 41 | | Loans to Xiamen Rongxin | 1,500 | – | | Repayment of Loans by Xiamen Rongxin | – | 44 | | Offset of Payables by Xiamen Rongxin | – | 32,489 | - For the period ended June 30, 2025, the Group made several short-term loans to Xiamen Rongxin, which were unsecured and non-trade in nature, bearing an annual interest rate of **3%** and repayable within one year[137](index=137&type=chunk) [(c) Balances with Related Parties](index=48&type=section&id=(c)%20Balances%20with%20Related%20Parties) As of June 30, 2025, amounts due from related parties (non-trade in nature) totaled **RMB 1,500 thousand**, all from Xiamen Rongxin Balances with Related Parties (RMB thousand) | Related Party | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Xiamen Rongxin (Amounts Due from Related Parties) | 1,500 | – | [(d) Key Management Personnel Compensation](index=48&type=section&id=(d)%20Key%20Management%20Personnel%20Compensation) For the six months ended June 30, 2025, key management personnel compensation was approximately **RMB 1,590 thousand**, an increase from **RMB 1,271 thousand** in the same period of 2024 Key Management Personnel Compensation Comparison (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Key Management Personnel Compensation | 1,590 | 1,271 | [Corporate Governance and Other Information](index=49&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section discloses the Group's corporate governance practices and other important information, including share interests of directors, supervisors, and substantial shareholders, employee shareholding schemes, use of listing proceeds, interim dividend policy, material litigation, and compliance with the Corporate Governance Code and Model Code [Directors, Supervisors and Chief Executive Interests in Shares, Underlying Shares and Debentures](index=49&type=section&id=Directors%2C%20Supervisors%20and%20Chief%20Executive%20Interests%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, Mr. Xu Kaiming held a **32.04% beneficial interest** and a **39.49% controlled corporate interest** in the Company, while Mr. Xu Kaihe held a **2.38% beneficial interest** and a **1.07% controlled corporate interest**, and jointly held a **38.53% interest** with Mr. Xu Kaiming Directors, Supervisors and Chief Executive Share Interests (as of June 30, 2025) | Name | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Xu Kaiming | Beneficial Interest | 30,354,873(L) | 32.04% | | | Controlled Corporate Interest | 37,405,685(L) | 39.49% | | Mr. Xu Kaihe | Beneficial Interest | 2,250,953(L) | 2.38% | | | Controlled Corporate Interest | 1,016,717(L)

Kafelaku Coee Holding Limited 猫屎咖啡控股有限公司 (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立的有限公司) Stock code 股份代號 : 1869 2025 Interim Report 中期報告 Contents 目錄 | Corporate Information | 2 | | --- | --- | | 公司資料 | | | Financial Highlights | 5 | | 財務摘要 | | | Condensed Consolidated Statement of Profit or Loss and | | | Other Comprehensive Income | 6 | | 簡明綜合損益及其他全面收益表 | | | Condensed Consolidated Statement of Financial Position | 7 | | 簡明綜合財務狀況表 | | | Condensed Consolidated Statements of Chan ...

Contents目錄 | 2 | Corporate Information | | --- | --- | | | 公司資料 | | 4 | Management Discussion & Analysis | | | 管理層討論及分析 | | 18 | Directors' Report | | | 董事會報告 | | 32 | Report on Review of Interim Condensed Consolidated | | | Financial Statements | | | 中期簡明綜合財務報表審閱報告 | | | Interim Condensed Consolidated Statement of | | 34 | Profit or Loss and Other Comprehensive Income | | | 中期簡明綜合損益及其他全面收益表 | | 35 | Interim Condensed Consolidated Statement of Financial Position | | | 中期簡明綜合財務狀況表 | | 37 | Interim Condensed ...

[Company Introduction](index=2&type=section&id=Company%20Introduction) [Overview](index=3&type=section&id=Overview) The company transitioned from scale expansion to efficiency-driven growth in H1 2025, optimizing its store network, product structure, and supply chain for sustainable development. - The company completed a strategic transformation from scale expansion to efficiency-driven growth in H1 2025, focusing on being a "high-quality and cost-effective fruit expert and leader"[5](index=5&type=chunk)[7](index=7&type=chunk) - This involved actively optimizing the store network, reshaping product structure, strengthening brand differentiation, and expanding the global supply chain, solidifying the foundation for long-term sustainable development[5](index=5&type=chunk)[7](index=7&type=chunk) - Terminal competitiveness was systematically enhanced, including reconstructing an efficient store network, strengthening refined member operations and scenario-based marketing, and strategically closing inefficient locations to focus on prime business districts[5](index=5&type=chunk)[8](index=8&type=chunk) - Leveraging supply chain economies of scale and technological empowerment, the company deepened domestic 2B channel coverage and explored overseas incremental markets, perfecting a "buy globally, sell globally" circulation system[6](index=6&type=chunk)[9](index=9&type=chunk) [Our Strategy](index=4&type=section&id=Our%20Strategy) The company's strategy is to be a leading expert in high-quality and cost-effective fruits. - Strategic positioning as a "high-quality and cost-effective fruit expert and leader"[11](index=11&type=chunk)[15](index=15&type=chunk) [Our Vision](index=4&type=section&id=Our%20Vision) The company envisions becoming a global leader in fruit industry ecological technology. - The vision is to become a global leading fruit industry ecological technology company[12](index=12&type=chunk)[16](index=16&type=chunk) [Our Mission](index=4&type=section&id=Our%20Mission) The company's mission is to enable everyone to enjoy a good fruit life. - The mission is to enable everyone to enjoy a good fruit life[13](index=13&type=chunk)[17](index=17&type=chunk) [Our Core Values](index=4&type=section&id=Our%20Core%20Values) Core values of conscience, trust, altruism, innovation, and results guide the company's development and conduct. - Core values are conscience, trust, altruism, innovation, and results[14](index=14&type=chunk)[18](index=18&type=chunk) - Conscience refers to having correct concepts and goodwill in development; trust means full confidence in partners; altruism is a guide for action, considering others' interests; innovation is the driving force for future development; results emphasize output and process optimization through outcomes[14](index=14&type=chunk)[18](index=18&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) [Board of Directors](index=5&type=section&id=Board%20of%20Directors) The Board of Directors, chaired by Mr. Yu Huiyong, saw changes in executive and non-executive roles during the period. - Board members include Yu Huiyong (Chairman), Xu Yanlin, Tian Xiqiu, Zhu Qidong (Executive Directors), Jiao Yue (Non-Executive Director, re-designated on April 30, 2025), Sun Kai (Non-Executive Director, resigned on May 23, 2025), and Jiang Yanbo, Ma Ruiguang, Wu Zhanchi, Zhang Yide, Zhu Fang (Independent Non-Executive Directors)[19](index=19&type=chunk)[20](index=20&type=chunk) [Audit Committee](index=5&type=section&id=Audit%20Committee) The Audit Committee, chaired by Dr. Wu Zhanchi, experienced a change in membership with Mr. Jiao Yue's appointment. - The Audit Committee is chaired by Dr. Wu Zhanchi, with Mr. Ma Ruiguang as a member; Mr. Sun Kai resigned on May 23, 2025, and Mr. Jiao Yue was appointed on the same day[20](index=20&type=chunk) [Remuneration Committee](index=5&type=section&id=Remuneration%20Committee) The Remuneration Committee is chaired by Mr. Ma Ruiguang, with Dr. Jiang Yanbo and Ms. Xu Yanlin as members. - The Remuneration Committee is chaired by Mr. Ma Ruiguang, with Dr. Jiang Yanbo and Ms. Xu Yanlin as members[20](index=20&type=chunk) [Nomination Committee](index=5&type=section&id=Nomination%20Committee) The Nomination Committee, chaired by Dr. Jiang Yanbo, saw a change in membership with Ms. Xu Yanlin's appointment. - The Nomination Committee is chaired by Dr. Jiang Yanbo, with Mr. Ma Ruiguang as a member; Mr. Yu Huiyong resigned on April 30, 2025, and Ms. Xu Yanlin was appointed on the same day[21](index=21&type=chunk) [Strategy Committee](index=5&type=section&id=Strategy%20Committee) The Strategy Committee, chaired by Mr. Yu Huiyong, experienced a change in membership with Mr. Jiao Yue's appointment. - The Strategy Committee is chaired by Mr. Yu Huiyong, with Ms. Zhu Fang as a member; Mr. Sun Kai resigned on May 23, 2025, and Mr. Jiao Yue was appointed on the same day[21](index=21&type=chunk) [Environmental, Social and Governance Committee](index=6&type=section&id=Environmental%2C%20Social%20and%20Governance%20Committee) The ESG Committee, chaired by Ms. Xu Yanlin, saw a change in membership with Mr. Zhu Qidong's appointment. - The Environmental, Social and Governance Committee is chaired by Ms. Xu Yanlin, with Ms. Zhu Fang as a member; Mr. Jiao Yue resigned on April 30, 2025, and Mr. Zhu Qidong was appointed on the same day[23](index=23&type=chunk) [Supervisory Committee](index=6&type=section&id=Supervisory%20Committee) The Supervisory Committee is chaired by Mr. Yang Xiaohu, with Mr. Zou Feng and Mr. Su Yan as members. - The Supervisory Committee is chaired by Mr. Yang Xiaohu, with Mr. Zou Feng and Mr. Su Yan as members[23](index=23&type=chunk) [Joint Company Secretaries](index=6&type=section&id=Joint%20Company%20Secretaries) Ms. Fu Xiaoyan and Ms. Tam Pak Yu serve as the Joint Company Secretaries. - The Joint Company Secretaries are Ms. Fu Xiaoyan and Ms. Tam Pak Yu[24](index=24&type=chunk) [Authorized Representatives](index=6&type=section&id=Authorized%20Representatives) Ms. Fu Xiaoyan is the Authorized Representative, with Mr. Zhu Qidong appointed following Mr. Jiao Yue's resignation. - The Authorized Representative is Ms. Fu Xiaoyan; Mr. Jiao Yue resigned on April 30, 2025, and Mr. Zhu Qidong was appointed on the same day[24](index=24&type=chunk) [Overseas Auditor](index=6&type=section&id=Overseas%20Auditor) PricewaterhouseCoopers serves as the company's overseas auditor. - The overseas auditor is PricewaterhouseCoopers[24](index=24&type=chunk) [Domestic Auditor](index=6&type=section&id=Domestic%20Auditor) Shinewing Certified Public Accountants Shenzhen Branch serves as the company's domestic auditor. - The domestic auditor is Shinewing Certified Public Accountants (Special General Partnership) Shenzhen Branch[24](index=24&type=chunk) [Registered Office](index=7&type=section&id=Registered%20Office) The registered office is located at Pagoda Technology Building in Shenzhen, China. - The registered office is located at Pagoda Technology Building, No. 2005 Shenyan Road, Pengwan Community, Haishan Street, Yantian District, Shenzhen, China[25](index=25&type=chunk) [China Headquarters](index=7&type=section&id=China%20Headquarters) The China Headquarters is located at the same address as the registered office. - The China Headquarters shares the same address as the registered office[25](index=25&type=chunk) [Principal Place of Business in Hong Kong](index=7&type=section&id=Principal%20Place%20of%20Business%20in%20Hong%20Kong) The principal place of business in Hong Kong is located at Dah Sing Financial Centre, Wan Chai. - The principal place of business in Hong Kong is located at 40/F, Dah Sing Financial Centre, 248 Queen's Road East, Wan Chai, Hong Kong[25](index=25&type=chunk) [H Share Registrar](index=8&type=section&id=H%20Share%20Registrar) Hong Kong Registrars Limited serves as the H Share Registrar. - The H Share Registrar is Hong Kong Registrars Limited[27](index=27&type=chunk) [Principal Bankers](index=8&type=section&id=Principal%20Bankers) Principal bankers include China Merchants Bank, Bank of Communications, and Shanghai Pudong Development Bank. - Principal bankers include China Merchants Bank Longhua Sub-branch, Bank of Communications Xiangzhou Sub-branch, and Shanghai Pudong Development Bank Shenzhen Fuqiang Sub-branch[27](index=27&type=chunk) [Stock Code](index=8&type=section&id=Stock%20Code) The company's stock code is 2411. - The stock code is 2411[27](index=27&type=chunk) [Company Website](index=8&type=section&id=Company%20Website) The company's official website is www.pagoda.com.cn. - The company's website is www.pagoda.com.cn[27](index=27&type=chunk) [Definitions](index=8&type=section&id=Definitions) This section provides definitions for key terms and abbreviations used in the interim report, ensuring clarity and consistency of content. - Key terms defined include "2023 Share Award Scheme", "Articles of Association", "Audit Committee", "Award", "Award Shares", "Board", "Corporate Governance Code", "China", "Company", "CSRC", "Directors", "ESG Committee", "Global Offering", "Group", "H Shares", "H Shareholder", "Hengyili Investment", "HKD", "HKFRS", "Hong Kong", "HKEX", "Model Code", "Nomination Committee", "O2O Integration", "Pagoda Investment", "Prospectus", "Remuneration Committee", "This Interim Report", "Reporting Period", "RMB", "SFO", "Shares", "Shareholders", "Shenzhen Banguo", "Shenzhen Huilin", "Strategy Committee", "Supervisors", "Unlisted Shares", "Unlisted Shareholder", "USD", and "Percentage"[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) [Performance Review and Outlook](index=13&type=section&id=Performance%20Review%20and%20Outlook) [Market Overview](index=14&type=section&id=Market%20Overview) H1 2025 saw a 2.7% rise in fresh fruit CPI, a shift to a buyer's market, declining high-end fruit prices, and a mixed import/export performance. - In H1 2025, the national fresh fruit Consumer Price Index (CPI) increased by **2.7% year-on-year**, higher than the overall CPI decrease of 0.1% in the same period, reflecting increased consumer recognition of fresh fruit's health attributes and emotional value[37](index=37&type=chunk)[39](index=39&type=chunk) - Domestic macroeconomic uncertainties persisted, shifting the consumer market from a seller's to a buyer's market, prompting fruit retail enterprises to accelerate transformation, focusing on optimizing quality-price ratio, upgrading service experience, and innovating consumption scenarios[37](index=37&type=chunk)[39](index=39&type=chunk) - Prices of traditional high-end fruits like durian, blueberries, and cherries significantly declined, accelerating their popularization; the substitution effect of domestic brands for multiple categories such as blueberries and avocados became increasingly prominent[38](index=38&type=chunk)[40](index=40&type=chunk) 2025 H1 Fruit Import and Export Value Compared to 2024 H1 | Indicator | 2025 H1 (USD billion) | Year-on-year Change (%) | | :--- | :--- | :--- | | Fruit Export Value | 37.6 | +6.2 | | Fruit Import Value | 107.4 | -5.3 | [Company Performance Overview](index=15&type=section&id=Company%20Performance%20Overview) H1 2025 saw strategic transformation, leading to a net loss and reduced revenue, but a healthier asset structure and optimized business lines. - In H1 2025, the company continued to deepen its "high-quality and cost-effective fruit expert and leader" strategy, enhancing operational efficiency through promotional activities, product structure optimization, store network adjustments, and supply chain expansion[41](index=41&type=chunk)[43](index=43&type=chunk) - Revenue and gross profit decreased, and a net loss was recorded, but the company views this as a necessary step for strategic transformation and operational quality improvement, having formed a healthier asset structure and optimized business lines[41](index=41&type=chunk)[43](index=43&type=chunk) 2025 H1 vs 2024 H1 Financial Performance Comparison | Indicator | 2025 H1 (RMB million) | 2024 H1 (RMB million) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 4,375.9 | 5,594.1 | -21.8 | | Gross Profit | 215.6 | 618.5 | -65.1 | | Profit/(Loss) Attributable to Owners of the Company | (342.1) | 88.5 | Turned from profit to loss | [Company Business Summary](index=16&type=section&id=Company%20Business%20Summary) Business highlights include retail network optimization, 2B market expansion, and category brand development, with a focus on quality and omnichannel integration. [Retail Business Group](index=16&type=section&id=Retail%20Business%20Group) The Retail Business Group optimized its store network by closing inefficient stores and enhanced omnichannel sales, despite a decline in paid members. Offline Store Network Development (As of June 30) | Store Type | 2025 (Units) | 2024 (Units) | Change (Units) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Franchised Stores (Managed by the Group) | 3,570 | 4,707 | -1,137 | -24.2 | | Franchised Stores (Others) | 805 | 1,304 | -499 | -38.3 | | Subtotal | 4,375 | 6,011 | -1,636 | -27.2 | | Self-operated Stores | 11 | 14 | -3 | -21.4 | | **Total** | **4,386** | **6,025** | **-1,639** | **-27.0** | - In H1 2025, the company optimized its national retail store layout, actively guiding franchisees to close inefficient stores and focus on advantageous locations, resulting in a **net reduction of 1,639 retail stores**, a **year-on-year decrease of approximately 27.0%**[48](index=48&type=chunk)[49](index=49&type=chunk) - Store facades were upgraded, highlighting the "Pagoda" brand and IP image to enhance brand recognition; **seven stores were opened in Indonesia**, successfully establishing a regional market presence[51](index=51&type=chunk)[52](index=52&type=chunk) - Over **20 themed stores** were launched, such as for Chinese New Year and Thai Fruit Festival, transforming shopping into social check-ins, boosting brand exposure and sales[53](index=53&type=chunk)[54](index=54&type=chunk) - Display standards and product tasting methods were optimized, and food safety training and implementation were strengthened to enhance brand credibility[56](index=56&type=chunk)[57](index=57&type=chunk) - A product portfolio of "high-traffic single products" and "extreme value-for-money seasonal products" was promoted, with **eight seasonal products** (e.g., Pa Pa Citrus, blueberries, Feizixiao lychees) seeing **store traffic increase by approximately 95.0% year-on-year** and **total sales increase by approximately 63.8% year-on-year**[58](index=58&type=chunk)[59](index=59&type=chunk) - Online orders accounted for approximately **24.7% of total orders**, with Meituan accounting for approximately 52.9%; the total number of WeChat communities increased to approximately **30,000**, with approximately **18.0 million followers**, and community group buying sales exceeded **RMB 58.0 million**, a **year-on-year increase of approximately 12.9%**[60](index=60&type=chunk)[62](index=62&type=chunk) - The total number of Douyin live-streaming customers was approximately **1.87 million**, a **year-on-year increase of approximately 64.47%**; total retail sales from Douyin live-streaming rooms were **RMB 53.49 million**, a **year-on-year increase of approximately 29.32%**[61](index=61&type=chunk)[63](index=63&type=chunk) - A cross-promotional campaign with the TV series "Chang'an Lychee" IP led to a **year-on-year increase of approximately 28.0% in lychee category sales**; gift sales as a proportion of total store retail sales increased from 12.8% to approximately **14.8%**[65](index=65&type=chunk)[67](index=67&type=chunk) - Total members accumulated to over **93.0 million**, and WeChat mini-program users accumulated to **78.58 million**, a **year-on-year increase of approximately 13.24%**; the number of paid members decreased to approximately **719,000**, a **year-on-year decrease of approximately 32.9%**, mainly due to macroeconomic uncertainties[66](index=66&type=chunk)[68](index=68&type=chunk) [2B Business Group](index=21&type=section&id=2B%20Business%20Group) The 2B Business Group expanded domestic and international markets, with direct sales slightly down due to overseas restrictions but domestic growth. - In H1 2025, the 2B Business Group expanded its customer base in domestic and international markets, establishing partnerships with several traditional supermarkets and online new retail companies[69](index=69&type=chunk)[71](index=71&type=chunk) 2B Business Group Direct Sales of Fruits and Other Food Products Revenue Comparison | Indicator | 2025 H1 (RMB million) | 2024 H1 (RMB million) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Direct Sales of Fruits and Other Food Products Revenue | 700.5 | 712.8 | -1.7 | | Overseas Market Direct Sales of Fruits | 113.3 | 141.0 | -19.6 | | Domestic Market 2B Customer Sales | 587.1 | 571.8 | +2.7 | - Shenzhen Banguo's Gross Merchandise Volume (GMV) was approximately **RMB 1.15 billion**, with **seven central warehouses** established nationwide (one new addition) and **428 city warehouses**, expanding market share[69](index=69&type=chunk)[72](index=72&type=chunk) - The government and enterprise business department focused on corporate client resources, providing diversified welfare and consumption scenario products, and expanding its sales network through online welfare platforms and cross-industry collaborations[70](index=70&type=chunk)[73](index=73&type=chunk) [Category Business Group](index=22&type=section&id=Category%20Business%20Group) The Category Business Group focused on differentiated private label brands, with signature and A-grade fruits comprising 64.5% of retail sales. - Executing the "high-quality and cost-effective fruit expert and leader" operational strategy, firmly believing that building differentiated fruit category brands can create greater market space[75](index=75&type=chunk)[77](index=77&type=chunk) - As of June 30, 2025, total sales of signature and A-grade fruits accounted for approximately **64.5% of Pagoda's total store retail sales**[75](index=75&type=chunk)[77](index=77&type=chunk) - Successfully launched **51 private label signature fruit brands** (e.g., Zhaiguanguan Lychee, Liuying Cherry Tomato), with their total retail sales accounting for approximately **14.9% of Pagoda's total store retail sales**[75](index=75&type=chunk)[77](index=77&type=chunk) - Deepened customer awareness of signature fruits by holding launch events for signature Mojianbao Red Fruit Ginseng, origin traceability activities for Huahuang Jinfeng Pineapple, and co-branded pop-up events with Weifang Kite Festival[78](index=78&type=chunk) - Continuously provided suppliers with soil improvement, agricultural management, and post-harvest preservation technologies to enhance fruit quality, secure supply, and build a high-standard supply chain ecosystem[76](index=76&type=chunk)[79](index=79&type=chunk) [Other Business Updates](index=23&type=section&id=Other%20Business%20Updates) The company upgraded its digital gift card system and introduced a "worry-free gift after-sales card" to enhance customer experience. - Upgraded the gift card mall mini-program, establishing digital gifting capabilities, breaking through the limitations of offline physical cards, offering diverse card designs and themes to meet consumer gifting needs[80](index=80&type=chunk)[81](index=81&type=chunk) - Launched the "worry-free gift after-sales card," printed via smart POS systems, allowing recipients of fruit gifts to enjoy "not tasty, return at will" after-sales service, enhancing brand credibility[80](index=80&type=chunk)[81](index=81&type=chunk) [Business Outlook and Group Strategy](index=24&type=section&id=Business%20Outlook%20and%20Group%20Strategy) Despite H1 2025 challenges, the company's strategic transformation is complete, focusing on retail optimization, 2B expansion, and category brand building for long-term value. - H1 2025 was a challenging climbing period for the "high-quality and cost-effective fruit expert and leader" strategy, but store traffic significantly increased, sales rebounded and remained stable, and store quality was further optimized[83](index=83&type=chunk)[84](index=84&type=chunk) - The retail business will iterate selection standards, strengthen freshness management, enhance quality control norms, and utilize data to upgrade scientific pricing systems, adjusting category structure and pricing strategies by city business districts[85](index=85&type=chunk) - The 2B business will continue to expand more categories and domestic and international channels, develop new fruit gift boxes, enlarge the 2B customer base, and enhance product competitiveness through exclusive distribution rights[86](index=86&type=chunk)[89](index=89&type=chunk) - Firmly execute the "global sourcing, global selling" strategy to promote the global circulation of high-quality fruits[87](index=87&type=chunk)[89](index=89&type=chunk) - In category brand building, deepen cooperation with suppliers, introduce advanced agricultural technologies, build major category brands with market competitiveness, and focus on product differentiation and food safety[87](index=87&type=chunk)[90](index=90&type=chunk) - The company firmly believes the strategy will regain consumer and franchisee confidence, consolidate market leadership, and create greater financial and social value for shareholders, customers, employees, and society through continuous strategic advancement and innovation[88](index=88&type=chunk)[91](index=91&type=chunk) [Management Discussion and Analysis](index=25&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Performance Overview](index=26&type=section&id=Financial%20Performance%20Overview) H1 2025 saw a significant decline in revenue and gross profit, resulting in a net loss due to strategic product and store network optimization. 2025 H1 vs 2024 H1 Consolidated Statement of Profit or Loss Key Data | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 4,375,873 | 5,594,124 | -21.8 | | Cost of Sales | (4,160,322) | (4,975,616) | -16.4 | | Gross Profit | 215,551 | 618,508 | -65.1 | | Operating (Loss)/Profit | (319,856) | 127,920 | Turned from profit to loss | | (Loss)/Profit Before Income Tax | (352,966) | 99,263 | Turned from profit to loss | | (Loss)/Profit for the Period | (353,251) | 83,955 | Turned from profit to loss | | (Loss)/Profit Attributable to Owners of the Company | (342,053) | 88,506 | Turned from profit to loss | [Revenue](index=27&type=section&id=Revenue) Total revenue decreased by 21.8% to RMB 4,375.9 million, mainly due to fewer franchised stores and lower-margin product optimization. - Total revenue decreased by approximately **21.8% year-on-year to RMB 4,375.9 million**, primarily from sales of fruits and other food products, accounting for **98.5% of total revenue**[96](index=96&type=chunk) 2025 H1 vs 2024 H1 Revenue by Operating Segment | Operating Segment | 2025 H1 (RMB thousand) | % of Total Revenue | 2024 H1 (RMB thousand) | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Sales of Fruits and Other Food Products | 4,308,322 | 98.5 | 5,435,726 | 97.2 | | Royalty and Franchise Income | 8,575 | 0.2 | 67,157 | 1.2 | | Membership Fee Income | 21,687 | 0.5 | 38,353 | 0.7 | | Others | 37,289 | 0.8 | 52,888 | 0.9 | | **Total** | **4,375,873** | **100.0** | **5,594,124** | **100.0** | - The decrease in revenue from franchised stores was the main reason, as the company optimized its lower-margin product portfolio and encouraged franchisees to optimize store locations, leading to a reduction in franchised stores from 6,011 to 4,375[101](index=101&type=chunk)[102](index=102&type=chunk) 2025 H1 vs 2024 H1 Sales of Fruits and Other Food Products by Distribution Channel | Distribution Channel | 2025 H1 (RMB thousand) | % of Sales of Fruits and Other Food Products | 2024 H1 (RMB thousand) | % of Sales of Fruits and Other Food Products | | :--- | :--- | :--- | :--- | :--- | | Franchised Stores | 3,076,920 | 71.4 | 4,011,787 | 73.8 | | Self-operated Stores | 14,772 | 0.3 | 21,218 | 0.4 | | Regional Agents | 479,212 | 11.1 | 627,807 | 11.5 | | Direct Sales | 700,473 | 16.3 | 712,778 | 13.1 | | Online Channels | 36,945 | 0.9 | 62,136 | 1.2 | | **Total** | **4,308,322** | **100.0** | **5,435,726** | **100.0** | - The decrease in direct sales revenue was mainly due to restrictions on the export of certain domestic fruits to overseas markets, resulting in a **year-on-year decrease of approximately 19.6%** in overseas market direct sales of fruits; domestic market 2B customer sales, however, **increased by approximately 2.7% year-on-year**[103](index=103&type=chunk)[105](index=105&type=chunk) [Cost of Sales](index=29&type=section&id=Cost%20of%20Sales) Cost of sales decreased by 16.4% to RMB 4,160.3 million, reflecting strategic product optimization in response to market conditions. - Cost of sales decreased by approximately **16.4% year-on-year to RMB 4,160.3 million**[104](index=104&type=chunk)[106](index=106&type=chunk) - Cost of inventories sold constituted the majority of cost of sales, approximately **95.9%**[104](index=104&type=chunk)[106](index=106&type=chunk) - The differing rates of decrease between cost of sales and revenue were mainly due to the company's optimization of lower-margin product offerings since H2 2024 to meet consumer demand for high-quality and cost-effective products[104](index=104&type=chunk)[106](index=106&type=chunk) [Gross Profit and Gross Margin](index=30&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit decreased by 65.1% to RMB 215.6 million, with gross margin falling to 4.9%, due to strategic product optimization. - Gross profit decreased by approximately **65.1% year-on-year to RMB 215.6 million**[107](index=107&type=chunk)[110](index=110&type=chunk) - Gross margin decreased from **11.1% in H1 2024 to 4.9% in H1 2025**[107](index=107&type=chunk)[110](index=110&type=chunk) - The decrease in gross profit and gross margin was mainly due to the company's optimization of lower-margin product offerings since H2 2024 to meet consumer demand for high-quality and cost-effective products[107](index=107&type=chunk)[110](index=110&type=chunk) - The company will continue to take proactive measures, including enriching product categories and optimizing product mix, to improve gross margin[107](index=107&type=chunk)[110](index=110&type=chunk) [Other Income](index=30&type=section&id=Other%20Income) Other income decreased by 36.4% to RMB 17.4 million, primarily due to reduced government grants for agricultural development. - Other income decreased by approximately **36.4% year-on-year to RMB 17.4 million**[108](index=108&type=chunk)[111](index=111&type=chunk) - The decrease was mainly due to a reduction in government grants related to agricultural development from **RMB 14.5 million to RMB 2.1 million**[108](index=108&type=chunk)[111](index=111&type=chunk) [Net Other Gains](index=30&type=section&id=Net%20Other%20Gains) Net other gains decreased to RMB 7.0 million, primarily due to dilution losses from a joint venture investment. - Net other gains were **RMB 7.0 million**, compared to **RMB 22.5 million in H1 2024**[109](index=109&type=chunk)[112](index=112&type=chunk) - This was mainly due to losses from the dilution of investment in joint venture Nanjing Golden Manor Agricultural Products Co., Ltd[109](index=109&type=chunk)[112](index=112&type=chunk) [Selling Expenses](index=31&type=section&id=Selling%20Expenses) Selling expenses decreased by 13.3% to RMB 257.2 million, primarily due to a reduction in sales personnel. - Selling expenses decreased by approximately **13.3% year-on-year to RMB 257.2 million**[113](index=113&type=chunk)[116](index=116&type=chunk) - The decrease was mainly due to a reduction in the number of sales personnel from **1,228 to 1,035**[113](index=113&type=chunk)[116](index=116&type=chunk) [Administrative Expenses](index=31&type=section&id=Administrative%20Expenses) Administrative expenses increased by 28.2% to RMB 216.2 million, driven by share-based payments and severance compensation. - Administrative expenses increased by approximately **28.2% year-on-year to RMB 216.2 million**[114](index=114&type=chunk)[117](index=117&type=chunk) - The increase was mainly due to **RMB 17.7 million in share-based payment expenses** from the share award scheme (zero in H1 2024)[114](index=114&type=chunk)[117](index=117&type=chunk) - And **RMB 24.0 million in severance compensation** paid for large-scale systemic layoffs in Q4 2024 (RMB 2.7 million in H1 2024)[114](index=114&type=chunk)[117](index=117&type=chunk) [Net Impairment Loss Provision on Financial Assets](index=31&type=section&id=Net%20Impairment%20Loss%20Provision%20on%20Financial%20Assets) Net impairment loss provision on financial assets increased to RMB 39.9 million, mainly due to extended aging of receivables from store closures. - Net impairment loss provision on financial assets increased from **RMB 8.9 million in H1 2024 to RMB 39.9 million in H1 2025**[115](index=115&type=chunk)[118](index=118&type=chunk) - This was mainly due to the extended aging of trade and other receivables resulting from franchised store closures, leading to increased expected credit losses[115](index=115&type=chunk)[118](index=118&type=chunk) [Research and Development Expenses](index=32&type=section&id=Research%20and%20Development%20Expenses) R&D expenses decreased by 29.9% to RMB 46.5 million, primarily due to a reduction in R&D personnel. - R&D expenses decreased by approximately **29.9% year-on-year to RMB 46.5 million**[119](index=119&type=chunk)[122](index=122&type=chunk) - The decrease was mainly due to a reduction in the number of R&D personnel from **374 to 288**[119](index=119&type=chunk)[122](index=122&type=chunk) [Net Finance Costs](index=32&type=section&id=Net%20Finance%20Costs) Net finance costs were impacted by a 57.1% decrease in finance income and a 6.4% decrease in finance costs. - Finance income decreased by approximately **57.1% year-on-year to RMB 12.0 million**, mainly due to lower interest income from bank deposits[120](index=120&type=chunk)[123](index=123&type=chunk) - Finance costs decreased by approximately **6.4% year-on-year to RMB 49.2 million**, mainly due to a reduction in bank borrowings[120](index=120&type=chunk)[124](index=124&type=chunk) [Share of Profits/(Losses) of Associates and Joint Ventures](index=32&type=section&id=Share%20of%20Profits%2F%28Losses%29%20of%20Associates%20and%20Joint%20Ventures) The company reported a net share of profits from associates and joint ventures of RMB 4.1 million, reversing a prior-year loss. - In H1 2025, the company recorded a net share of profits from associates and joint ventures of **RMB 4.1 million**, compared to a net loss of **RMB 4.0 million in H1 2024**[121](index=121&type=chunk)[125](index=125&type=chunk) - The profit was mainly contributed by Nanjing Golden Manor, which primarily engages in strawberry trading[121](index=121&type=chunk)[125](index=125&type=chunk) [Loss/(Profit) Before Income Tax](index=33&type=section&id=Loss%2F%28Profit%29%20Before%20Income%20Tax) The company reported a loss before income tax of RMB 353.0 million, primarily due to strategic product optimization and fewer franchised stores. - In H1 2025, the company recorded a loss before income tax of **RMB 353.0 million**, compared to a profit of **RMB 99.3 million in H1 2024**[126](index=126&type=chunk)[129](index=129&type=chunk) - This was mainly due to the company's optimization of lower-margin product offerings to meet consumer demand for high-quality and cost-effective products, and a reduction in the number of franchised stores[126](index=126&type=chunk)[129](index=129&type=chunk) [Income Tax Expense](index=33&type=section&id=Income%20Tax%20Expense) Income tax expense significantly decreased by 98.1% to RMB 0.3 million, primarily due to lower taxable income and tax exemptions. - Income tax expense decreased by approximately **98.1% year-on-year to RMB 0.3 million**[127](index=127&type=chunk)[130](index=130&type=chunk) - The decrease was mainly due to lower taxable income resulting from reduced operating profit, and preferential tax treatments and exemptions for some subsidiaries[127](index=127&type=chunk)[130](index=130&type=chunk) [Loss/(Profit) for the Period](index=33&type=section&id=Loss%2F%28Profit%29%20for%20the%20Period) The company reported a net loss of RMB 353.3 million for the period, resulting in an 8.1% net loss margin. - In H1 2025, the company recorded a net loss of approximately **RMB 353.3 million**, compared to a net profit of approximately **RMB 84.0 million in H1 2024**[128](index=128&type=chunk)[131](index=131&type=chunk) - The net loss margin was **8.1%**, compared to a net profit margin of **1.5% in H1 2024**[128](index=128&type=chunk)[131](index=131&type=chunk) [Non-HKFRS Measures - Adjusted Net Loss/(Profit) and Adjusted Net Loss/(Profit) Margin](index=34&type=section&id=Non-HKFRS%20Measures%20-%20Adjusted%20Net%20Loss%2F%28Profit%29%20and%20Adjusted%20Net%20Loss%2F%28Profit%29%20Margin) Adjusted net loss for H1 2025 was RMB 295.2 million, with a 6.7% adjusted net loss margin, after excluding non-recurring items. - Adjusted net profit excludes non-recurring items such as share-based payment expenses, severance compensation, and dilution loss/(gain) on investments in associates and joint ventures[132](index=132&type=chunk)[134](index=134&type=chunk) 2025 H1 vs 2024 H1 Reconciliation of Adjusted Net Loss/(Profit) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | (Loss)/Profit for the Period (under HKFRS) | (353,251) | 83,955 | | Add: Share-based Payment Expenses | 17,688 | 4,959 | | Add: Severance Compensation Related to Layoffs or Personnel Adjustments | 24,002 | 2,718 | | Add: Dilution Loss/(Gain) on Investments in Associates and Joint Ventures | 16,407 | (3,658) | | **Adjusted Net (Loss)/Profit for the Period** | **(295,154)** | **87,974** | | Net (Loss)/Profit Margin (under HKFRS) | (8.1%) | 1.5% | | **Adjusted Net (Loss)/Profit Margin** | **(6.7%)** | **1.6%** | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company's operations in H1 2025 were primarily funded by operating cash, shareholder contributions, and bank borrowings. - The company primarily funded its operations through cash generated from operations, shareholder contributions, and bank borrowings[139](index=139&type=chunk)[140](index=140&type=chunk) [Capital Structure](index=36&type=section&id=Capital%20Structure) As of June 30, 2025, net assets decreased to RMB 2,465.2 million, reflecting changes in current and non-current assets and liabilities. - As of June 30, 2025, net assets were **RMB 2,465.2 million**, a decrease from **RMB 2,810.3 million as of December 31, 2024**[141](index=141&type=chunk)[145](index=145&type=chunk) - Net assets primarily comprised current assets of **RMB 5,082.7 million**, non-current assets of **RMB 2,201.4 million**, current liabilities of **RMB 4,092.7 million**, and non-current liabilities of **RMB 726.2 million**[141](index=141&type=chunk)[145](index=145&type=chunk) [Cash and Bank Balances](index=36&type=section&id=Cash%20and%20Bank%20Balances) Cash and bank balances as of June 30, 2025, were RMB 2,316.5 million, primarily in RMB. - As of June 30, 2025, cash and bank balances were **RMB 2,316.5 million**, including unrestricted cash and cash equivalents of **RMB 1,954.9 million** and restricted bank deposits of **RMB 361.6 million**[142](index=142&type=chunk)[146](index=146&type=chunk) - Cash and cash equivalents were primarily denominated in RMB[142](index=142&type=chunk)[146](index=146&type=chunk) [Financial Risks](index=36&type=section&id=Financial%20Risks) The company manages interest rate and foreign exchange risks, considering overall interest rate risk not significant, without using derivatives. - The company faces interest rate risk related to cash and bank balances, bank borrowings, and fixed-rate receivables; management considers the overall interest rate risk not significant[143](index=143&type=chunk)[147](index=147&type=chunk) - The company holds foreign currency cash and is exposed to foreign exchange risk, but does not use derivative contracts for hedging, managing it by closely monitoring exchange rate movements[143](index=143&type=chunk)[147](index=147&type=chunk) [Use of Proceeds from Global Offering](index=36&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) HKD 236.6 million of global offering proceeds were used for IT upgrades, debt repayment, and working capital, with HKD 18.8 million remaining. - The company completed its global offering and listing in Q1 2023, raising net proceeds of approximately **HKD 474.0 million**[144](index=144&type=chunk)[148](index=148&type=chunk) Use of Net Proceeds from Global Offering (As of June 30, 2025) | Intended Use | Adjusted Allocation (HKD million) | % of Total | Utilized as of Dec 31, 2024 (HKD million) | Utilized as of June 30, 2025 (HKD million) | Unutilized as of June 30, 2025 (HKD million) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Improve and Enhance Operations and Supply Chain Systems | 23.3 | 4.9 | 11.4 | 11.9 | 0 | – | | Upgrade and Improve Core IT Systems and Infrastructure | 169.5 | 35.8 | 92.4 | 68.2 | 8.9 | Before Dec 31, 2026 | | Repay Part of Interest-Bearing Bank Borrowings | 91.5 | 19.3 | 91.5 | 0 | 0 | – | | Use as Working Capital and Other General Corporate Purposes | 189.7 | 40.0 | 23.3 | 156.5 | 9.9 | Before Dec 31, 2025 | | **Total** | **474.0** | **100.0** | **218.6** | **236.6** | **18.8** | | - As of June 30, 2025, the unutilized net proceeds were deposited in licensed banks in China as short-term interest-bearing deposits[151](index=151&type=chunk)[153](index=153&type=chunk) [Indebtedness](index=38&type=section&id=Indebtedness) Total bank borrowings were RMB 2,550.3 million, and the gearing ratio increased to 103.5% due to reduced equity from strategic transformation. - As of June 30, 2025, total non-current bank borrowings were **RMB 267.4 million**, and current bank borrowings were **RMB 2,282.9 million**[152](index=152&type=chunk)[154](index=154&type=chunk) - The gearing ratio increased from **89.3% as of December 31, 2024, to 103.5% as of June 30, 2025**, primarily due to a decrease in total equity[152](index=152&type=chunk)[155](index=155&type=chunk) - The decrease in total equity was mainly attributed to the phased impact of the company's proactive strategic transformation and operational efficiency upgrades since H2 2024, resulting in a loss attributable to the company[152](index=152&type=chunk)[155](index=155&type=chunk) - The Board believes the strategic transformation was completed in H1 2025, and the company will continue to enhance overall profitability through proactive measures such as enriching product categories, optimizing product structure, and expanding the store network[152](index=152&type=chunk)[155](index=155&type=chunk) [Pledged Assets](index=39&type=section&id=Pledged%20Assets) The company pledged RMB 45.5 million in right-of-use assets and RMB 21.4 million in property, plant and equipment for bank borrowings. - As of June 30, 2025, the company pledged right-of-use assets of **RMB 45.5 million** (December 31, 2024: RMB 47.7 million) and property, plant and equipment of **RMB 21.4 million** (December 31, 2024: RMB 22.0 million) as collateral for bank borrowings[157](index=157&type=chunk)[160](index=160&type=chunk) [Cash Flows](index=39&type=section&id=Cash%20Flows) H1 2025 saw net cash used in operations, net cash generated from investing, and net cash used in financing, impacting overall cash balances. - In H1 2025, net cash used in operating activities was **RMB 123.2 million**, compared to net cash generated from operating activities of **RMB 277.7 million in H1 2024**[158](index=158&type=chunk)[161](index=161&type=chunk) - The change in operating cash flow was mainly due to a **decrease in trade payables of RMB 61.6 million** and an **increase in deposits, prepayments, and other receivables of RMB 60.1 million**; the decrease in trade payables was primarily due to settling payments for closed stores during strategic transformation[158](index=158&type=chunk)[161](index=161&type=chunk) - Net cash generated from investing activities was **RMB 191.4 million**, compared to net cash used of **RMB 1,002.7 million in H1 2024**, mainly impacted by payments for a new office building (**RMB 27.1 million**) and net proceeds from financial assets measured at fair value through profit or loss (**RMB 227.7 million**)[158](index=158&type=chunk)[162](index=162&type=chunk) - Net cash used in financing activities was **RMB 8.3 million**, compared to net cash generated of **RMB 905.8 million in H1 2024**, mainly impacted by repayments under supplier financing arrangements of **RMB 113.6 million** and net redemption of restricted deposits of **RMB 118.5 million**[159](index=159&type=chunk)[163](index=163&type=chunk) [Financial Assets, Capital and Investment Management](index=40&type=section&id=Financial%20Assets%2C%20Capital%20and%20Investment%20Management) The company manages cash through low-risk, short-term structured deposits and other financial assets, adhering to strict investment policies. - The company invests in structured deposits (principal-protected, short-term, low-risk) for cash management[164](index=164&type=chunk)[166](index=166&type=chunk) Financial Assets Held (As of June 30, 2025) | Financial Asset Type | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Structured Deposits (FVTPL) | 487.7 | 669.7 | | Other Financial Assets (FVTPL) | 50.0 | 83.7 | | Financial Assets (FVOCI) | 37.5 | 35.9 | - The company has implemented capital and investment policies to monitor and control investment risks, generally investing only in low-risk, highly liquid, and non-speculative products, following detailed review procedures[168](index=168&type=chunk) - The Directors believe that structured deposits are low-risk, fair, and reasonable, serving the overall interests of the company and its shareholders[169](index=169&type=chunk)[170](index=170&type=chunk) [Capital Expenditure](index=41&type=section&id=Capital%20Expenditure) Capital expenditure of RMB 27.1 million in H1 2025 was primarily for a new office building, funded by operations, borrowings, and global offering proceeds. - In H1 2025, capital expenditure was **RMB 27.1 million**, primarily for payments related to the construction of a new office building in Yantian District, Shenzhen, China[171](index=171&type=chunk)[174](index=174&type=chunk) - Capital expenditure was mainly funded by cash generated from operations, bank borrowings, and proceeds from the global offering[172](index=172&type=chunk)[174](index=174&type=chunk) [Contingent Liabilities and Guarantees](index=41&type=section&id=Contingent%20Liabilities%20and%20Guarantees) As of June 30, 2025, the company had no significant contingent liabilities, guarantees, or litigations. - As of June 30, 2025, the company had no contingent liabilities, guarantees, or any significant litigations against the Group[173](index=173&type=chunk)[175](index=175&type=chunk) [Significant Investments, Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=42&type=section&id=Significant%20Investments%2C%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) H1 2025 saw subscriptions to structured deposits for cash management, with no other significant investments, acquisitions, or disposals. [Subscription of Wealth Management Products](index=42&type=section&id=Subscription%20of%20Wealth%20Management%20Products) The company subscribed to short-term, principal-protected structured deposits from major banks to maximize returns on unutilized funds. - In H1 2025, the company subscribed to multiple structured deposit products from CITIC Bank and Bank of Beijing, with principal amounts ranging from **RMB 140 million to RMB 200 million**, and expected annualized returns between **1.05% and 2.20%**[178](index=178&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - These wealth management products were short-term, principal-protected, and relatively low-risk, issued by reputable commercial banks, aligning with the company's internal risk management, cash management, and investment policies, aiming to maximize returns on unutilized funds[183](index=183&type=chunk)[187](index=187&type=chunk) - As of June 30, 2025, all subscriptions except for two wealth management products had matured and been fully redeemed[183](index=183&type=chunk)[187](index=187&type=chunk) [Turnover Ratios](index=44&type=section&id=Turnover%20Ratios) Inventory and trade receivables turnover days slightly increased, while trade payables turnover days increased due to extended settlement policies. - Average inventory turnover days slightly increased from **10.9 days in H1 2024 to 12.3 days in H1 2025**[191](index=191&type=chunk)[193](index=193&type=chunk) - Average trade receivables turnover days slightly increased from **34.2 days in H1 2024 to 35.8 days in H1 2025**, mainly due to a **decrease in total revenue of approximately 21.8%**; the company maintained credit control through regular reviews and dedicated follow-ups[191](index=191&type=chunk)[194](index=194&type=chunk) - Average trade payables turnover days increased from **14.1 days in H1 2024 to 21.5 days in H1 2025**, mainly due to the company extending its settlement policy since Q4 2024[192](index=192&type=chunk)[195](index=195&type=chunk) [Employees and Employee Benefit Expenses](index=45&type=section&id=Employees%20and%20Employee%20Benefit%20Expenses) As of June 30, 2025, the company had 2,156 employees, with H1 2025 employee benefit expenses totaling RMB 338.2 million. - As of June 30, 2025, the company had **2,156 employees**, with marketing department accounting for approximately **16.7%**, operations and store management for **15.2%**, production and logistics for **16.9%**, and IT department for **13.4%**[196](index=196&type=chunk)[198](index=198&type=chunk) - The company highly values talent development and retention, having established comprehensive talent cultivation and performance evaluation systems to determine compensation, bonuses, and promotions[196](index=196&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) - Total employee benefit expenses in H1 2025 were **RMB 338.2 million**, accounting for approximately **7.7% of total revenue** for the same period[197](index=197&type=chunk)[201](index=201&type=chunk) - The company adopted a share award scheme on September 28, 2023, to incentivize eligible personnel who have contributed to the Group[197](index=197&type=chunk)[202](index=202&type=chunk) [Major Suppliers and Major Customers](index=46&type=section&id=Major%20Suppliers%20and%20Major%20Customers) The largest supplier accounted for 5.3% of procurement, and the largest customer (a franchisor) contributed 1.5% of revenue. - In H1 2025, purchases from the largest supplier accounted for approximately **5.3% of total procurement costs**, and the top five suppliers collectively accounted for **20.4%**[203](index=203&type=chunk)[204](index=204&type=chunk) - Revenue from the largest customer accounted for approximately **1.5% of total revenue**, and the top five customers collectively contributed **6.6%**, all of whom were franchisors[203](index=203&type=chunk)[205](index=205&type=chunk) [Reserves](index=46&type=section&id=Reserves) As of June 30, 2025, distributable reserves to shareholders were approximately RMB 94.5 million. - As of June 30, 2025, the company's distributable reserves to shareholders were approximately **RMB 94.5 million**[206](index=206&type=chunk)[207](index=207&type=chunk) [Corporate Governance and Other Information](index=46&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Corporate Governance Practices](index=47&type=section&id=Corporate%20Governance%20Practices) The company maintains high corporate governance standards, complying with the Listing Rules' Corporate Governance Code since listing. - The company is committed to maintaining high standards of corporate governance to safeguard shareholder interests and enhance corporate value and accountability[208](index=208&type=chunk)[209](index=209&type=chunk) - For the six months ended June 30, 2025, the company has complied with all applicable code provisions under the Corporate Governance Code and adopted most of its best practices[208](index=208&type=chunk)[210](index=210&type=chunk) [Model Code for Securities Transactions](index=47&type=section&id=Model%20Code%20for%20Securities%20Transactions) The company adopted the Model Code for securities transactions, with all directors and supervisors complying in H1 2025. - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules since its listing date as a code of conduct for securities transactions by directors, supervisors, and relevant employees[211](index=211&type=chunk)[212](index=212&type=chunk) - For the six months ended June 30, 2025, each Director and Supervisor has complied with the Model Code, and no breaches by relevant employees were found[211](index=211&type=chunk)[213](index=213&type=chunk) [Directors', Supervisors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=48&type=section&id=Directors%27%2C%20Supervisors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) Directors, supervisors, and the chief executive held interests in company shares, including significant non-listed and H shares, as of June 30, 2025. Directors'/Supervisors' Interests in the Company (As of June 30, 2025) | Director/Supervisor Name | Class of Shares | Nature of Interest | Number of Shares | Approximate % of Relevant Class of Shares | | :--- | :--- | :--- | :--- | :--- | | Mr. Yu Huiyong | Unlisted Shares | Beneficial Owner | 83,957,019 | 98.25% | | | H Shares | Spouse Interest and Controlled Corporation Interest | 652,293,740 | 44.87% | | Ms. Xu Yanlin | Unlisted Shares | Spouse Interest | 83,957,019 | 98.25% | | | H Shares | Spouse Interest and Controlled Corporation Interest | 652,293,740 | 44.87% | | Mr. Jiao Yue | H Shares | Controlled Corporation Interest | 49,853,264 | 3.43% | | Mr. Tian Xiqiu | H Shares | Controlled Corporation Interest | 2,913,398 | 0.20% | | Mr. Zhu Qidong | H Shares | Beneficial Owner and Spouse Interest | 6,957,500 | 0.48% | | Mr. Yang Xiaohu | H Shares | Beneficial Owner | 82,500 | 0.01% | | Mr. Su Yan | H Shares | Beneficial Owner | 360,000 | 0.02% | - Mr. Yu Huiyong is the general partner of Hongyuan Shanguo, Hengyili Investment, and Huihe Zhixiang, and owns 51% equity in Shenzhen Huilin, thus deemed to have an interest in the shares held by them[217](index=217&type=chunk) - Ms. Xu Yanlin is the spouse of Mr. Yu Huiyong and owns 49% equity in Shenzhen Huilin and has invested over one-third of the capital in Hengyili Investment, thus deemed to have an interest in the shares held by them[217](index=217&type=chunk) - Ms. Shu Xiaoqin (spouse of Mr. Zhu Qidong), Mr. Yang Xiaohu, and Mr. Su Yan were granted awards under the 2023 Share Award Scheme, all of which remained unvested as of June 30, 2025[217](index=217&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=51&type=section&id=Substantial%20Shareholders%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) Major shareholders, including Hongyuan Shanguo, Hengyili Investment, and CICC, held significant interests in the company's H shares. Substantial Shareholders' Interests in the Company (As of June 30, 2025) | Shareholder Name | Class of Shares | Nature of Interest | Number of Shares | Approximate % of Relevant Class of Shares | | :--- | :--- | :--- | :--- | :--- | | Hongyuan Shanguo | H Shares | Beneficial Owner | 129,749,246 | 8.92% | | Hengyili Investment | H Shares | Beneficial Owner | 120,663,036 | 8.30% | | China International Capital Corporation Limited (CICC) | H Shares | Controlled Corporation Interest | 153,727,838 | 10.57% | | CICC Capital Operation Limited (CICC Capital) | H Shares | Controlled Corporation Interest | 108,260,338 | 7.45% | | CICC Qianhai (Shenzhen) Private Equity Fund Management Co., Ltd. | H Shares | Controlled Corporation Interest | 76,409,758 | 5.26% | - CICC Capital and CICC are deemed to have an interest in the **10.23% of the total issued share capital** of the company held by Bole No. 1, Baima No. 4, Henan Zhanxin, CICC Haoze, and Xinyu Unicorn collectively[225](index=225&type=chunk)[229](index=229&type=chunk) [Interim Dividend](index=52&type=section&id=Interim%20Dividend) The Board 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[227](index=227&type=chunk)[230](index=230&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=53&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the company nor its subsidiaries purchased, redeemed, or sold any listed securities in H1 2024. - For the six months ended June 30, 2024, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[232](index=232&type=chunk)[235](index=235&type=chunk) [Changes in Information of Directors, Supervisors and Chief Executive](index=53&type=section&id=Changes%20in%20Information%20of%20Directors%2C%20Supervisors%20and%20Chief%20Executive) Mr. Zhu Qidong's role changed from Deputy General Manager to Executive Deputy General Manager in April 2025. - Mr. Zhu Qidong ceased to be the Deputy General Manager of the company and was appointed as Executive Deputy General Manager since April 2025[233](index=233&type=chunk)[236](index=236&type=chunk) - Other than the aforementioned change, there were no other changes in information of directors, supervisors, and chief executive requiring disclosure[233](index=233&type=chunk)[236](index=236&type=chunk) [Application for H Share Full Circulation](index=53&type=section&id=Application%20for%20H%20Share%20Full%20Circulation) The Board approved an H Share Full Circulation plan to convert 85.4 million non-listed shares, pending regulatory approval. - The Board approved the implementation of the H Share Full Circulation plan on May 20, 2025, proposing to convert a total of **85,448,554 non-listed shares** (i.e., all existing non-listed shares) into H shares on a one-to-one basis[234](index=234&type=chunk)[237](index=237&type=chunk) - The company submitted the application to the China Securities Regulatory Commission on May 29, 2025, but has not yet received approval as of the reporting date, and the plan details are not yet finalized[234](index=234&type=chunk)[237](index=237&type=chunk) - The completion of the H Share Full Circulation plan is subject to the fulfillment of other relevant procedural requirements by the CSRC, HKEX, and other relevant regulatory authorities[234](index=234&type=chunk)[23

[Supplemental Announcement Overview](index=1&type=section&id=Supplemental%20Announcement%20Overview) This announcement supplements New Dragon International Group Limited's 2024 annual report, providing additional details on the share option scheme and financial instruments at fair value through profit or loss to ensure complete disclosure - This announcement supplements the annual report of New Dragon International Group Limited for the year ended December 31, 2024, published on April 28, 2025[3](index=3&type=chunk) [Share Option Scheme](index=1&type=section&id=Share%20Option%20Scheme) This section provides supplementary information on the company's share option scheme adopted on May 26, 2017, including grantee categories, number of options available for grant, total shares available for issue, and remaining validity period [Categories of Grantees](index=1&type=section&id=Categories%20of%20Grantees) Defines the scope of eligible participants for the company's share option scheme - The "Employees and Other Persons" category refers to: (i) employees of the Company and its subsidiaries; (ii) non-executive directors (including independent non-executive directors) of subsidiaries; and (iii) consultants of the Company[5](index=5&type=chunk) [Number of Share Options Available for Grant](index=1&type=section&id=Number%20of%20Share%20Options%20Available%20for%20Grant) Discloses the total number of share options available for grant as of year-end 2024 and limits for individual grantees - The total number of share options available for grant under the new scheme was **25,546,666** at the beginning and end of the year ended December 31, 2024[6](index=6&type=chunk) - The number of shares involved in share options granted to any one person (including service providers) in any one year shall not exceed **1%** of the company's then-issued shares[6](index=6&type=chunk) [Total Number of Shares Available for Issue](index=1&type=section&id=Total%20Number%20of%20Shares%20Available%20for%20Issue) States the total number of shares issuable upon exercise of all granted and to be granted options under the scheme and its proportion of issued shares - As of the date of the 2024 annual report, the total number of shares available for issue upon exercise of all granted and to be granted share options under the New Dragon International Share Option Scheme was **27,796,666** shares[7](index=7&type=chunk) - This total number of shares represents **10%** of the total issued shares (excluding treasury shares)[7](index=7&type=chunk) [Remaining Validity Period of Share Option Scheme](index=2&type=section&id=Remaining%20Validity%20Period%20of%20Share%20Option%20Scheme) Provides the effective date of the new scheme and its remaining validity period as of year-end 2024 - The new scheme became effective on May 26, 2017, for a period of ten years[9](index=9&type=chunk) - As of the year ended December 31, 2024, the remaining validity period of the new scheme is approximately **2.5 years**[9](index=9&type=chunk) [Financial Instruments at Fair Value Through Profit or Loss](index=2&type=section&id=Financial%20Instruments%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) This section supplements the disclosure of the Group's financial instruments at fair value through profit or loss, including their proportion of total assets, investment objectives, diversification, and stringent management and risk control measures [Overview of Financial Instruments](index=2&type=section&id=Overview%20of%20Financial%20Instruments) Outlines the proportion of financial instruments at fair value through profit or loss within the Group's assets as of year-end 2024 and their primary investment objectives - As of December 31, 2024, financial instruments classified as at fair value through profit or loss accounted for approximately **5.5%** of the Group's total assets[10](index=10&type=chunk) - These investments are primarily held for long-term strategic purposes and capital appreciation, aligning with the Group's overall business strategy[10](index=10&type=chunk) [Investment Strategy and Risk Management](index=2&type=section&id=Investment%20Strategy%20and%20Risk%20Management) Describes the Group's strategy for managing FVTPL investment portfolios, emphasizing diversification, professional evaluation, strict processes, and continuous monitoring to maximize shareholder returns and control risks - The investment portfolio is appropriately diversified, with no single investment or financial asset exceeding **5%** of the Group's total assets as of December 31, 2024, to mitigate concentration risk[10](index=10&type=chunk) - The Group's management team leverages extensive experience in the IT and hospitality industries to identify and evaluate promising investment opportunities[10](index=10&type=chunk) - Each investment undergoes a rigorous process, including detailed analysis and regulatory compliance assessment, with regular close monitoring and review of investment performance reported to the Board[10](index=10&type=chunk) [Other Information](index=2&type=section&id=Other%20Information) This section includes the announcement's signing information, publication date, and board member list, confirming that all other information in the 2024 annual report remains unchanged except for the supplementary content [Board of Directors and Company Secretary](index=2&type=section&id=Board%20of%20Directors%20and%20Company%20Secretary) Lists the announcement's issuer, signatory, date, and the latest composition of the company's board of directors - This announcement is made by order of the Board and signed by Company Secretary Zhao Lizhen in Hong Kong on September 22, 2025[11](index=11&type=chunk) - Executive Directors include: Mr. Lam Ka Ming, Mr. Lam Wai Hoi, Ms. Lam Wai Lin, Mr. Lam Yuk Lui, and Mr. Lam Yick[11](index=11&type=chunk) - Independent Non-Executive Directors include: Ms. Ng Sze Wai, Ms. To Chu Luen, and Ms. Chu Chung Yee[11](index=11&type=chunk)