竣球控股有限公司 ( I n c o r p o r a t e d i n t h e C a y m a n I s l a n d s w i t h l i m i t e d l i a b i l i t y ) Stock Code: 1481 20 竣球控股有限公司 （於 開 曼 群 島 註 冊 成 立 的 有 限 公 司 ） 股份代號:1481 中期報告 目錄 | 企業資料 | 2 | | --- | --- | | 財務概要 | 3 | | 管理層討論與分析 | 4 | | 其他資料 | 13 | | 簡明綜合財務報表之審閱報告 | 17 | | 綜合損益及其他全面收益表 | 18 | | 綜合財務狀況表 | 19 | | 綜合權益變動表 | 20 | | 簡明綜合現金流量表 | 21 | | 簡明綜合財務報表附註 | 22 | 企業資料 25 INTERIM REPORT 20 25 董事會 執行董事 吳浩麟先生 （主席；於2025年5月22日辭任行政總裁） 朱樂峰先生 （於2025年5月22日獲委任為行政總裁） 陳坤先生 林德凌先生 獨立非執行董事 胡家慈博士 姚好智先生 羅瑩慧女士 ...

Financial Performance - The company reported a significant increase in revenue, achieving a total of RMB 500 million for the first half of 2025, representing a 20% growth compared to the same period last year[10]. - The company has set a future outlook with a revenue target of RMB 1 billion for the full year 2025, indicating a projected growth rate of 15%[10]. - The management highlighted a focus on improving operational efficiency, targeting a reduction in costs by 5% through process optimization[10]. - The company reported a net profit margin of 15% for the first half of 2025, an improvement from 12% in the same period last year[10]. - Net profit for the six months ended June 30, 2024, was RMB 36.6 million, increasing to RMB 43.1 million for the six months ended June 30, 2025[46]. - The net profit for the period was RMB 43,114,844, representing an increase of 17.5% compared to RMB 36,630,845 in the prior year[107]. - The pre-tax profit for the six months ended June 30, 2025, was RMB 57,182,342, an increase from RMB 46,719,170 in the same period of 2024, representing a growth of approximately 22.5%[111]. User Growth and Market Expansion - User data indicates a rise in active clients, with the number increasing to 150,000, up from 120,000 in the previous year, marking a 25% increase[10]. - The company plans to expand its market presence by entering two new provinces in China by the end of 2025, aiming for a 10% market share in these regions[10]. - A strategic acquisition of a local fintech firm is in progress, which is anticipated to boost the company's technological capabilities and customer base by 40%[10]. Loan and Credit Management - The total amount of loans granted to customers reached RMB 703.6 million for the six months ended June 30, 2025, generating interest income of RMB 51.5 million[12]. - The loan principal balance increased from RMB 727.7 million as of December 31, 2024, to RMB 980.7 million as of June 30, 2025, primarily due to increased funding needs from businesses[15]. - The overdue loan principal amount increased from RMB 190.1 million as of December 31, 2024, to RMB 193.2 million as of June 30, 2025, representing 26.0% and 19.7% of the total outstanding loan principal, respectively[19]. - The composition of loans by type as of June 30, 2025, included 72.4% revolving loans and 27.6% term loans[16]. - The company had 27 overdue loans totaling RMB 193.2 million as of June 30, 2025, with a provision for impairment losses of RMB 50.2 million[19]. - The company’s provision for impairment losses increased due to the downgrade of certain loans from "watch" to "substandard" status, with substandard loans rising from RMB 4.0 million to RMB 9.9 million[21]. - The non-performing loan ratio decreased from 3.7% as of December 31, 2024, to 3.2% as of June 30, 2025, attributed to the expansion of the loan portfolio[23]. Financial Position and Assets - The total assets as of June 30, 2025, amounted to RMB 1,322.6 million, while total liabilities were RMB 92.4 million, resulting in a net asset position of RMB 1,230.3 million[167]. - The company’s capital equity remained stable at RMB 680.0 million as of both June 30, 2025, and December 31, 2024[12]. - The total outstanding loans increased from RMB 729,008 thousand as of December 31, 2024, to RMB 982,748 thousand as of June 30, 2025[22]. - The company’s total liabilities rose to RMB 92,350,926, compared to RMB 17,929,706 at the end of 2024, indicating a substantial increase[108]. - The company’s cash and cash equivalents decreased from RMB 103.0 million as of December 31, 2024, to RMB 36.4 million as of June 30, 2025, mainly due to an increase in loan balances[55]. Investment and Income - Net investment income increased significantly from RMB 12.4 million in the six months ended June 30, 2024, to RMB 25.4 million in the six months ended June 30, 2025, mainly due to unrealized gains of RMB 23.2 million on financial assets held at fair value[40]. - The company reported a significant reduction in impairment losses on loans and receivables, decreasing from RMB 17,734,199 in 2024 to RMB 9,723,298 in 2025, a decline of 45.2%[107]. - The total income from other sources was RMB 2,326,402 for the six months ended June 30, 2025, down from RMB 4,543,054 in 2024, a decrease of about 49%[123]. Corporate Governance and Compliance - The company has fully complied with the corporate governance code during the reporting period[91]. - The audit committee reviewed the accounting principles and practices adopted by the group, with no disagreements noted by the auditors[100]. - The board confirmed no knowledge of any circumstances requiring disclosure under the listing rules[92]. - The company maintains a high level of corporate governance to protect shareholder interests[91]. Shareholder Information - As of June 30, 2025, Mr. Zhou Yongwei holds 203,932,000 shares, representing 40.79% of the controlled company's equity and 29.99% of the total issued share capital[82]. - The total issued share capital is 680,000,000 shares, which includes 180,000,000 H shares and 500,000,000 domestic shares[84]. - The company did not recommend any interim dividend for the six months ending June 30, 2025[98]. - The total equity ownership of major shareholders includes significant stakes from various entities, indicating a concentrated ownership structure[86].

[Company Information](index=3&type=section&id=公司資料) This section provides essential company details, including registration, stock information, and board/committee member changes [Company Details](index=3&type=section&id=公司信息) Jilin Province Chuncheng Heating Company Limited is a heating enterprise registered in Changchun, Jilin Province, China, with its Hong Kong office located in Hopewell Centre, Wan Chai, and its website at www.cc-tp.com.cn - The company's Chinese name is 吉林省春城熱力股份有限公司, and its English name is Jilin Province Chuncheng Heating Company Limited[7](index=7&type=chunk) - The company's registered address and China headquarters/principal place of business are located at Building 28, Area B, Nanhu Avenue Community, 998 Nanhu Avenue, Nanguan District, Changchun City, Jilin Province, China[7](index=7&type=chunk) - The company's Hong Kong office is located on the 46th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong[7](index=7&type=chunk) [Company Stock Profile](index=3&type=section&id=公司股票簡況) The company's stock short name is "Chuncheng Heating" and its stock code is "1853" - The company's stock short name is "**Chuncheng Heating**" and its stock code is "**1853**"[8](index=8&type=chunk) [Board of Directors and Committee Members](index=3&type=section&id=董事會及委員會成員) During the reporting period, there were changes in the company's board members, including appointments and resignations of executive, non-executive, independent non-executive, and employee directors, with adjustments also made to the chairpersons and members of the Audit, Remuneration, Nomination, and Strategy Committees - Mr. Zhang Liming was appointed as an Executive Director (Vice Chairman) effective **May 16, 2025**[9](index=9&type=chunk) - Mr. Song Chi serves as a Non-Executive Director (Chairman)[9](index=9&type=chunk) - Mr. Chen Shenghui was appointed as Chairman of the Audit Committee effective **May 16, 2025**, and Ms. Du Jie was appointed as Chairman of the Remuneration Committee effective **May 16, 2025**[9](index=9&type=chunk) - The Strategy Committee had only two members between **March 28, 2025**, and **May 16, 2025**, which did not comply with the minimum requirement of three members as stipulated in its terms of reference[82](index=82&type=chunk) [Other Important Information](index=4&type=section&id=其他重要信息) The company's Joint Company Secretaries are Mr. Wan Tao and Mr. Li Zhongcheng, the H Share Registrar is Hong Kong Registrars Limited, and the auditor is Lixin Certified Public Accountants (Special General Partnership) - The Joint Company Secretaries are Mr. Wan Tao and Mr. Li Zhongcheng[11](index=11&type=chunk) - The H Share Registrar is Hong Kong Registrars Limited[11](index=11&type=chunk) - The auditor is Lixin Certified Public Accountants (Special General Partnership)[11](index=11&type=chunk) [Interim Financial Summary](index=5&type=section&id=中期財務概要) This section provides a high-level overview of the company's consolidated income statement and balance sheet for the interim period [Consolidated Income Statement Summary for the Six Months Ended June 30, 2025](index=5&type=section&id=截至2025年6月30日止六個月的合併利潤表概要) For the six months ended June 30, 2025, the company's operating revenue increased by 3.14% year-on-year to RMB 93,513.43 10,000 yuan, but total profit and net profit both decreased to RMB 14,363.57 10,000 yuan and RMB 10,690.34 10,000 yuan, respectively Consolidated Income Statement Summary (January-June 2025 vs January-June 2024) | Consolidated Income Statement Item | January–June 2025 (RMB 10,000 yuan) | January–June 2024 (RMB 10,000 yuan) | | :--- | :--- | :--- | | Operating Revenue | 93,513.43 | 90,662.93 | | Total Profit | 14,363.57 | 20,061.72 | | Income Tax Expense | 3,673.23 | 5,247.52 | | Net Profit | 10,690.34 | 14,814.20 | [Consolidated Balance Sheet Summary as of June 30, 2025](index=5&type=section&id=截至2025年6月30日合併資產負債表概要) As of June 30, 2025, the company's total assets and total liabilities decreased compared to the end of 2024, while total shareholders' equity increased, indicating an improvement in capital structure Consolidated Balance Sheet Summary (June 30, 2025 vs December 31, 2024) | Consolidated Balance Sheet Item | June 30, 2025 (RMB 10,000 yuan) | December 31, 2024 (RMB 10,000 yuan) | | :--- | :--- | :--- | | Total Non-current Assets | 109,076.02 | 106,903.13 | | Total Current Assets | 137,735.49 | 267,680.47 | | Total Assets | 246,811.51 | 374,583.61 | | Total Non-current Liabilities | 11,511.63 | 12,370.21 | | Total Current Liabilities | 120,293.55 | 257,897.41 | | Total Liabilities | 131,805.19 | 270,267.63 | | Total Shareholders' Equity | 115,006.32 | 104,315.98 | [Management Discussion and Analysis](index=6&type=section&id=管理層討論與分析) This section reviews the company's business performance, financial position, and outlook for the second half of 2025 [I. Business Review](index=6&type=section&id=一、%20業務回顧) In the first half of 2025, the Group achieved growth in heating, construction, maintenance, design, and other businesses, while prioritizing safety and making progress in technology R&D, particularly in environmental facility upgrades and equipment management system optimization - The Group upheld an innovative development philosophy, optimized resource allocation, explored energy-saving potential, coordinated development with safety, promoted high-quality development of its heating production business, and successfully achieved its targets for the first half of the year[17](index=17&type=chunk) [1. Heating Business](index=6&type=section&id=（一）供熱業務) As of June 30, 2025, the Group's heating area and customer base both grew, with heating business revenue increasing by 2.89% year-on-year, while residential users continued to account for the vast majority, and total heat purchase volume slightly decreased but utilization remained stable Heating Business Key Data (June 30, 2025 vs Same Period in 2024) | Indicator | June 30, 2025 | Same Period in 2024 | Change | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Heating Area | 69.826 million sq m | 67.437 million sq m | 2.389 million sq m | 3.54% | | Number of Heating Customers | 572,273 households | 552,448 households | 19,825 households | 3.59% | | Heating Business Revenue | RMB 926.33 million | RMB 900.32 million | RMB 26.01 million | 2.89% | Customer Type and Revenue Contribution (June 30, 2025 vs June 30, 2024) | Customer Type | Number of Customers June 30, 2025 | Percentage June 30, 2025 | Number of Customers June 30, 2024 | Percentage June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Residential Users | 505,761 | 88.38% | 493,789 | 89.38% | | Non-residential Users | 66,512 | 11.62% | 58,659 | 10.62% | | Total | 572,273 | 100% | 552,448 | 100% | Purchased Heat Usage Data (January-June 2025 vs January-June 2024) | Indicator | January–June 2025 (GJ) | January–June 2024 (GJ) | | :--- | :--- | :--- | | Estimated Heat Purchase Quota | 13,670,000 | 13,900,000 | | Transferred Heat Purchase Quota | 1,128,955 | 1,152,499 | | Actual Consumption | 11,282,780 | 11,557,948 | | Total Heat Purchased | 12,411,736 | 12,710,447 | | Utilization Rate | 82.54% | 83.15% | - The Group resold approximately **1.13 million GJ** of heat purchase quota to four heating service providers, collecting **RMB 6.30 million** in heat transmission fees[22](index=22&type=chunk) [2. Construction, Maintenance, Design, and Other](index=7&type=section&id=（二）建設、維護、設計及其他) This business covers peripheral services in the heating industry chain, primarily in Northeast China, with revenue increasing by 39.60% year-on-year to RMB 8.80 million in the first half of 2025, undertaking several key engineering projects - Revenue from construction, maintenance, design, and other businesses was **RMB 8.80 million**, an increase of **RMB 2.49 million** or **39.60%** compared to **RMB 6.31 million** in the same period of 2024[23](index=23&type=chunk) - In the first half of the year, a total of **15 engineering construction projects**, **2 engineering maintenance projects**, and **9 design service projects** were undertaken, including key projects such as "Changchun Aviation Expo Park Pipeline Network Project" and "Design of Primary Heating Network Project Outside the Red Line of Erdao District Digital Economy Dual Innovation Industrial Park Infrastructure Construction Project"[26](index=26&type=chunk) [3. Safety Management](index=8&type=section&id=（三）安全管理) The Group places high importance on safety production, fully implements government directives, strictly fulfills safety management responsibilities, and reported no major safety accidents during the period - The Group fully implemented the decisions and deployments of government departments at all levels regarding safety production, strictly adhered to the "**three management, three must**" requirements, and promoted a stable and improving safety production situation[27](index=27&type=chunk) - During the reporting period, the Group experienced **no major safety accidents**[27](index=27&type=chunk) [4. Technology and Research & Development](index=8&type=section&id=（四）技術與研發) The Group deepened environmental facility upgrades, completed SCR ultra-low emission modification tests for boilers, and independently developed and deployed an "Equipment Ledger Management System," enhancing equipment management refinement and obtaining two utility model patents in the first half of the year - SCR ultra-low emission modification tests were conducted on **15 boilers** in **3 boiler rooms**, with all boilers reaching national super emission standards, expected to reduce particulate matter emissions by **60%** and sulfur dioxide and nitrogen oxide emissions by **65%** during the 2025-2026 heating season[28](index=28&type=chunk) - The independently developed "**Equipment Ledger Management System**" was fully optimized and officially put into use, attaching QR code nameplates containing basic information to over **20,000 pieces of equipment**, enabling scan-to-query technical files[28](index=28&type=chunk) - During the reporting period, the Group obtained **2 utility model patents** issued by the National Intellectual Property Administration[28](index=28&type=chunk) [II. Financial Position and Operating Results](index=9&type=section&id=二、%20財務狀況與經營業績) In the first half of 2025, the company's overall revenue grew, but increased costs, higher bad debt provisions, and a significant rise in finance costs led to a decrease in gross profit, total profit, and net profit; liquidity declined, capital expenditures significantly increased, and several major asset acquisitions were undertaken [1. Revenue](index=9&type=section&id=（一）收入) For the six months ended June 30, 2025, the Group's revenue was RMB 93,513.43 10,000 yuan, a year-on-year increase of 3.14%, primarily driven by increased heating business revenue Revenue by Segment (January-June 2025 vs January-June 2024) | Segment | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Change Rate | | :--- | :--- | :--- | :--- | | Heating Subtotal | 92,633.19 | 90,032.39 | 2.89% | | — Heat Fee Revenue | 88,492.36 | 85,999.63 | 2.90% | | — Pipeline Construction Fees | 3,510.82 | 3,362.49 | 4.41% | | — Pipeline Transmission Fees | 630.01 | 670.27 | –6.01% | | Construction, Maintenance & Design Services Subtotal | 880.24 | 630.54 | 39.60% | | — Engineering Construction | 571.05 | 189.54 | 201.28% | | — Engineering Maintenance | 0.69 | 254.14 | –99.73% | | — Design Services | 10.06 | 167.68 | –94.00% | | — Other | 298.44 | 19.18 | 1,456.00% | | Total | 93,513.43 | 90,662.93 | 3.14% | [2. Other Income and Net Other Gains](index=10&type=section&id=（二）其他收入和其他收益淨額) For the six months ended June 30, 2025, the Group's other income and net other gains amounted to RMB 1,553.79 10,000 yuan, a year-on-year increase of 34.00%, primarily due to increased government grants and bank deposit interest income Other Income and Net Other Gains (January-June 2025 vs January-June 2024) | Item | January–June 2025 (RMB 10,000 yuan) | January–June 2024 (RMB 10,000 yuan) | Increase | | :--- | :--- | :--- | :--- | | Other Income and Net Other Gains | 1,553.79 | 1,159.57 | 34.00% | | Other Gains | 412.78 | 280.42 | 47.20% | | Bank Deposit Interest Income | 1,138.38 | 876.34 | 29.90% | - Other gains increased primarily due to an increase in government grants, such as heating subsidies, received in January-June 2025 compared to the same period in 2024[33](index=33&type=chunk) - Bank deposit interest income increased primarily due to an increase in bank deposits in January-June 2025[33](index=33&type=chunk) [3. Operating Costs](index=10&type=section&id=（三）營業成本) For the six months ended June 30, 2025, the Group's operating costs were RMB 74,546.93 10,000 yuan, a year-on-year increase of 8.58%, mainly due to increased costs in heating business and construction, maintenance, and design services, with coal costs significantly rising by 122.10% due to new peak-shaving coal-fired boilers Operating Costs by Business Segment (January-June 2025 vs January-June 2024) | Business Segment | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Change Rate | | :--- | :--- | :--- | :--- | | Heating | 73,521.52 | 68,032.99 | 8.07% | | Construction, Maintenance & Design Services | 1,025.41 | 626.10 | 63.78% | | Total | 74,546.93 | 68,659.08 | 8.58% | Operating Costs Breakdown for Heating Business (January-June 2025 vs January-June 2024) | Heating Sales Cost Item | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Change Rate | | :--- | :--- | :--- | :--- | | Heat Purchase Cost | 43,695.97 | 41,977.82 | 4.09% | | Coal | 4,613.22 | 2,077.11 | 122.10% | | Maintenance and Repair | 689.60 | 686.36 | 0.47% | | Labor | 7,683.60 | 7,664.11 | 0.25% | | Depreciation and Amortization | 6,905.98 | 6,412.17 | 7.70% | | Utilities | 4,937.60 | 4,478.63 | 10.25% | | Input VAT Transfer Out | 2,974.63 | 2,879.11 | 3.32% | | Other | 2,020.91 | 1,857.67 | 8.79% | | Total | 73,521.52 | 68,032.99 | 8.07% | - Coal costs significantly increased by **122.10%** to **RMB 4,613.22 10,000 yuan**, primarily due to the addition of new peak-shaving coal-fired boilers and increased coal consumption during the period[40](index=40&type=chunk) - The operating cost increase for construction, maintenance, and design services was **63.78%**, largely consistent with the increase in revenue from this business[44](index=44&type=chunk) [4. Gross Profit and Gross Profit Margin](index=12&type=section&id=（四）毛利及毛利率) For the six months ended June 30, 2025, the Group's gross profit was RMB 18,966.50 10,000 yuan, a year-on-year decrease of 13.80%, mainly due to increased costs from a higher proportion of coal-fired heating due to new peak-shaving coal-fired boilers Gross Profit (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Decrease | | :--- | :--- | :--- | :--- | | Gross Profit | 18,966.50 | 22,003.84 | 13.80% | - The decrease in gross profit was primarily due to the addition of new peak-shaving coal-fired boilers during the period, which increased the proportion of coal-fired heating and led to higher costs[45](index=45&type=chunk) [5. Administrative Expenses](index=12&type=section&id=（五）行政開支) For the six months ended June 30, 2025, the Group's administrative expenses were RMB 4,270.31 10,000 yuan, a slight year-on-year decrease of 1.21%, remaining largely consistent with the prior period Administrative Expenses (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Decrease | | :--- | :--- | :--- | :--- | | Administrative Expenses | 4,270.31 | 4,322.72 | 1.21% | [6. Finance Costs](index=12&type=section&id=（六）財務成本) For the six months ended June 30, 2025, the Group's finance costs were RMB 939.79 10,000 yuan, a significant year-on-year increase of 446.07%, primarily due to increased interest expenses from higher bank loans Finance Costs (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Increase | | :--- | :--- | :--- | :--- | | Finance Costs | 939.79 | 172.10 | 446.07% | - The significant increase in finance costs was primarily due to an increase in bank loans during the period compared to the prior period, leading to higher interest expenses[47](index=47&type=chunk) [7. Income Tax Expense](index=12&type=section&id=（七）所得稅開支) For the six months ended June 30, 2025, the Group's income tax expense was RMB 3,673.23 10,000 yuan, a year-on-year decrease of 30.00%, primarily due to a decrease in total profit Income Tax Expense (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Decrease | | :--- | :--- | :--- | :--- | | Income Tax Expense | 3,673.23 | 5,247.52 | 30.00% | - The decrease in income tax expense was primarily due to a decrease in total profit during the period[48](index=48&type=chunk) [8. Profit for the Period](index=13&type=section&id=（八）期內利潤) For the six months ended June 30, 2025, the Group's profit for the period was RMB 10,690.34 10,000 yuan, a year-on-year decrease of 27.84%, mainly affected by lower gross profit and increased bad debt provisions Profit for the Period (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Decrease | | :--- | :--- | :--- | :--- | | Profit for the Period | 10,690.34 | 14,814.20 | 27.84% | - The decrease in profit for the period was primarily due to a **RMB 3,007.34 10,000 yuan** decrease in gross profit compared to the same period last year, and an additional **RMB 2,383.51 10,000 yuan** provision for bad debts this period compared to the prior year[50](index=50&type=chunk) [9. Profit Attributable to Owners of the Company](index=13&type=section&id=（九）本公司擁有人應佔利潤) For the six months ended June 30, 2025, profit attributable to owners of the company was RMB 10,690.34 10,000 yuan, a year-on-year decrease of 27.84%, consistent with the profit for the period Profit Attributable to Owners of the Company (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Decrease | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 10,690.34 | 14,814.20 | 27.84% | [10. Liquidity and Capital Resources](index=13&type=section&id=（十）流動性及資本來源) As of June 30, 2025, the Group's cash and cash equivalents were RMB 46,036.36 10,000 yuan, a decrease of 16.88% from the end of 2024, mainly due to increased cost expenditures from new peak-shaving coal-fired boilers Cash and Cash Equivalents (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB 10,000 yuan) | December 31, 2024 (RMB 10,000 yuan) | Decrease | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 46,036.36 | 55,382.60 | 16.88% | - The decrease in cash and cash equivalents was primarily due to the addition of new peak-shaving coal-fired boilers during the period, which increased the proportion of coal-fired heating and led to higher cost expenditures[52](index=52&type=chunk) [11. Capital Expenditures](index=13&type=section&id=（十一）資本開支) For the six months ended June 30, 2025, the Group's capital expenditures were RMB 12,402.99 10,000 yuan, a significant year-on-year increase of 106.17%, primarily due to the purchase of coal-fired boilers from the controlling shareholder Capital Expenditures (January-June 2025 vs January-June 2024) | Indicator | 2025 (RMB 10,000 yuan) | 2024 (RMB 10,000 yuan) | Increase | | :--- | :--- | :--- | :--- | | Capital Expenditures | 12,402.99 | 6,016.00 | 106.17% | - The increase in capital expenditures was primarily due to the Group's purchase of coal-fired boilers from the controlling shareholder during the period[53](index=53&type=chunk) [12. Capital Structure](index=13&type=section&id=（十二）資本結構) As of June 30, 2025, the Group's owners' equity was RMB 115,006.32 10,000 yuan, an increase of RMB 10,690.34 10,000 yuan from the end of 2024, mainly attributable to the increase in profit for the period, with total interest-bearing bank and other borrowings approximately RMB 54,800.00 10,000 yuan at a fixed annual interest rate of 3.2–3.9% Owners' Equity (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB 10,000 yuan) | December 31, 2024 (RMB 10,000 yuan) | Increase | | :--- | :--- | :--- | :--- | | Owners' Equity | 115,006.32 | 104,315.98 | 10,690.34 | - The increase in owners' equity was primarily due to an increase in profit for the period[54](index=54&type=chunk) - Total interest-bearing bank and other borrowings were approximately **RMB 54,800.00 10,000 yuan**, with a fixed annual interest rate of **3.2–3.9%**[54](index=54&type=chunk) - As of June 30, 2025, the Group's cash and cash equivalents exceeded its total interest-bearing liabilities[54](index=54&type=chunk) [13. Significant Acquisitions and Disposals](index=13&type=section&id=（十三）重大收購與出售) During the reporting period, the company completed the acquisition of certain buildings, coal-fired boilers, and ancillary equipment from Changre Group and entered into multiple heat production asset acquisition agreements with the controlling shareholder group, all constituting connected transactions and major transactions - On January 15, 2025, the company completed the acquisition of certain buildings, coal-fired boilers, and ancillary equipment from Changre Group for a consideration of **RMB 82,886,461.00 yuan**[55](index=55&type=chunk) - The company entered into an asset transfer agreement with Changre Group to conditionally agree to purchase land, pipelines, machinery, equipment, and vehicles for a consideration of **RMB 113,930,021.65 yuan** (Proposed Acquisition I)[57](index=57&type=chunk) - Yatai Heating entered into an asset transfer agreement with Changre Group to conditionally agree to purchase machinery and equipment for a consideration of **RMB 16,457,865.00 yuan** (Proposed Acquisition II)[58](index=58&type=chunk) - The company entered into an asset transfer agreement with Jilin Heating to conditionally agree to purchase machinery and equipment for a consideration of **RMB 475,980.76 yuan** (Proposed Acquisition III)[59](index=59&type=chunk) - Proposed Acquisitions I, II, and III all constitute connected transactions of the company and, together with the previous acquisition, constitute major transactions of the company, none of which were completed as of the reporting date[59](index=59&type=chunk) [14. Pledge of Assets](index=15&type=section&id=（十四）資產抵押) As of June 30, 2025, the Group had no pledged assets - As of June 30, 2025, the Group had no pledged assets[61](index=61&type=chunk) [15. Contingent Matters](index=15&type=section&id=（十五）或有事項) As of June 30, 2025, the Group had no significant contingent matters - As of June 30, 2025, the Group had no significant contingent matters[62](index=62&type=chunk) [III. Outlook for the Second Half of 2025](index=15&type=section&id=三、%202025年下半年工作展望) The Group will focus on improving heating quality and reducing energy consumption in the second half of the year, concentrating on its core heating business, strengthening energy management, and accelerating project progress to ensure stable heating, lower costs, and strict adherence to safety standards [1. Focus on Core Heating Business, Strengthen Service Foundation](index=15&type=section&id=（一）聚焦供熱主業，築牢服務根基) In the second half of the year, the company will continue to deepen its core heating business, ensure stable heating production operations, optimize user services, pre-stock coal for winter peak shaving, and improve its emergency response system - Continue to deepen the core heating business, comprehensively ensure stable heating production operations, and continuously optimize user service processes and quality based on user needs[63](index=63&type=chunk) - Plan ahead and scientifically deploy winter peak-shaving coal reserves to ensure sufficient and stable coal supply[63](index=63&type=chunk) - Further improve the heating emergency response system to enhance the ability to respond to sudden heating failures[63](index=63&type=chunk) [2. Strengthen Energy Management, Uncover Cost Reduction Potential](index=15&type=section&id=（二）强化能源管理，深挖降本潛力) The Group will reduce energy consumption through refined management and technological innovation, strengthen real-time analysis and dynamic control of key indicators such as "water, electricity, heat, and coal," and increase equipment maintenance and technological transformation efforts to achieve cost reduction - Energy management will be a key link in improving corporate efficiency, effectively reducing energy consumption through refined management and technological innovation[64](index=64&type=chunk) - Strengthen real-time analysis and dynamic control of key indicators such as "**water, electricity, heat, and coal**"[64](index=64&type=chunk) - Further increase efforts in equipment maintenance and technological transformation to improve boiler energy efficiency and achieve optimization and cost reduction goals in production and operations[64](index=64&type=chunk) [3. Accelerate Project Progress, Strictly Adhere to Safety Bottom Line](index=15&type=section&id=（三）加速工程推進，嚴守安全底綫) The Group will accelerate the progress of key engineering projects, optimize construction organization, strictly implement the safety production responsibility system, strengthen risk control and hidden danger investigation and rectification, and ensure the achievement of a zero-accident target - Accelerate the progress of key engineering projects, optimize construction organization, and ensure the smooth implementation of all projects as planned[65](index=65&type=chunk) - Strictly implement the safety production responsibility system, fully implement the "**one post, dual responsibility**" requirement[65](index=65&type=chunk) - Strengthen risk-based hierarchical control and hidden danger investigation and rectification, establish a normalized and institutionalized safety inspection mechanism, and ensure the achievement of a **zero-accident target**[65](index=65&type=chunk) [IV. Events After Reporting Period](index=15&type=section&id=四、%20報告期後事項) Except for the significant acquisition matters disclosed in this report, there were no other significant events after the reporting period - Except as disclosed in this report, there were no significant events after the reporting period[66](index=66&type=chunk) [Corporate Governance Report](index=16&type=section&id=企業管治報告) This section details the company's corporate governance framework, compliance with codes, and the responsibilities and activities of its board and committees [Corporate Governance Practices](index=16&type=section&id=企業管治常規) The company is committed to enhancing corporate governance, having established a modern corporate governance structure comprising the general meeting of shareholders, the Board of Directors, the Supervisory Committee (now abolished), and senior management, in reference to the Corporate Governance Code and Articles of Association - The company has established a modern corporate governance structure with effective checks and balances and independent operation, comprising the general meeting of shareholders, the Board of Directors, the Supervisory Committee (abolished on **May 16, 2025**), and senior management, in reference to Part 2 of the Corporate Governance Code and the requirements of the Articles of Association[68](index=68&type=chunk) [Compliance with Corporate Governance Code](index=16&type=section&id=遵守企業管治守則) The company's Board of Directors is committed to maintaining high corporate governance standards and has adopted the principles of the Corporate Governance Code, with the company having complied with the code provisions during the reporting period, except for a brief vacancy in the General Manager position - The Directors believe that, except for a brief vacancy in the General Manager position (a deviation from Code Provision C.2.1), the company has complied with the applicable code provisions of the Corporate Governance Code during the reporting period[69](index=69&type=chunk) - Since **April 16, 2025**, Mr. Zhang Liming has been appointed as the General Manager of the company, and the company has re-complied with Code Provision C.2.1 of the Corporate Governance Code[69](index=69&type=chunk) [Compliance with Model Code for Securities Transactions by Directors and Relevant Employees](index=16&type=section&id=遵守董事及有關僱員進行證券交易之標準守則) The company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all directors confirmed strict compliance with this Model Code during the reporting period, with no breaches identified by the company - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules as the standard code for securities transactions by its Directors and relevant employees[70](index=70&type=chunk) - All Directors have confirmed that, for the six months ended **June 30, 2025**, each Director has strictly complied with the standards set out in the Model Code[70](index=70&type=chunk) [Directors' Responsibilities for Financial Statements](index=16&type=section&id=董事就財務報表所承擔的責任) The Directors confirm their responsibility for preparing the company's financial statements and accounts, ensuring compliance with relevant regulations and accounting standards, and timely publication - The Directors confirm their responsibility for preparing the company's financial statements and accounts, ensuring that the company's financial statements are prepared in compliance with relevant regulations and applicable accounting standards, and ensuring the timely publication of the company's financial statements[71](index=71&type=chunk) [Independent Non-Executive Directors](index=16&type=section&id=獨立非執行董事) The company has appointed a sufficient number of independent non-executive directors with appropriate professional qualifications in accordance with the Listing Rules; during the reporting period, there were changes in the independent non-executive directors, and meetings were held to review profit distribution plans and the implementation of connected transactions - The company has appointed a sufficient number of independent non-executive directors with appropriate professional qualifications or relevant accounting or financial management expertise in accordance with the Listing Rules[72](index=72&type=chunk) - Effective **May 16, 2025**, the company's independent non-executive directors are Ms. Zhang Yan, Ms. Du Jie, and Mr. Chen Shenghui[72](index=72&type=chunk) - The first meeting of independent non-executive directors in 2025 was held on **March 28, 2025**, primarily reviewing the company's **2024 profit distribution plan** and the implementation of **2024 connected transactions**[74](index=74&type=chunk) [Audit Committee](index=17&type=section&id=審計委員會) The company established an Audit Committee in compliance with the Listing Rules, with its terms of reference defined in writing; during the reporting period, there were changes in committee members, and meetings were held to review important proposals such as financial monitoring, internal control, risk management, and annual financial reports - Effective **May 16, 2025**, the Audit Committee comprises Mr. Chen Shenghui (Chairman), Mr. Yang Zhongshi, and Ms. Zhang Yan[75](index=75&type=chunk) - For the six months ended **June 30, 2025**, the Audit Committee held **1 meeting**, reviewing and approving proposals regarding the effectiveness of financial monitoring, internal control, and risk management, the **2024 annual final accounts report**, and the **2024 audited consolidated financial statements**[76](index=76&type=chunk) [Remuneration Committee](index=17&type=section&id=薪酬委員會) The company established a Remuneration Committee in compliance with the Listing Rules, with its terms of reference defined in writing; during the reporting period, there were changes in committee members, and meetings were held to review the remuneration of directors, supervisors, and senior management, as well as remuneration policies - Effective **May 16, 2025**, the Remuneration Committee comprises Ms. Du Jie (Chairman), Mr. Xu Chungang, and Mr. Chen Shenghui[77](index=77&type=chunk) - For the six months ended **June 30, 2025**, the Remuneration Committee held **1 meeting**, reviewing proposals regarding the remuneration of directors, supervisors, and senior management, as well as remuneration policies and structure[78](index=78&type=chunk) [Nomination Committee](index=18&type=section&id=提名委員會) The company established a Nomination Committee in compliance with the Listing Rules, with its terms of reference defined in writing; during the reporting period, there were changes in committee members, and two meetings were held to review proposals such as board structure, director nominations, and independence assessments - Effective **May 16, 2025**, the Nomination Committee comprises Ms. Zhang Yan (Chairman), Mr. Shi Mingjun, and Ms. Du Jie[80](index=80&type=chunk) - For the six months ended **June 30, 2025**, the Nomination Committee held **2 meetings**, reviewing and approving proposals regarding the board structure, directors' leadership capabilities and contributions, assessment of independent non-executive directors' independence, and nominations for director candidates[81](index=81&type=chunk) [Strategy Committee](index=18&type=section&id=戰略委員會) The company established a Strategy Committee in compliance with the Listing Rules, with its terms of reference defined in writing; during the reporting period, there were changes in committee members, and it briefly did not meet the minimum requirement of three members; the committee held a meeting to review the 2024 Environmental, Social and Governance Report - Effective **May 16, 2024**, the Strategy Committee comprises Mr. Song Chi (Chairman), Mr. Zhang Liming, and Ms. Zhang Yan[82](index=82&type=chunk) - Between **March 28, 2025**, and **May 16, 2025**, the Strategy Committee had only two members, which did not comply with the provisions of the Strategy Committee's terms of reference[82](index=82&type=chunk) - The company held the first meeting of the Strategy Committee in 2025 on **March 28, 2025**, which approved the proposal regarding the **2024 Environmental, Social and Governance Report** (near final draft)[83](index=83&type=chunk) [Other Information](index=19&type=section&id=其他資料) This section covers various other corporate details, including share capital, dividends, securities transactions, and related party loan arrangements [Share Capital](index=19&type=section&id=股本) As of June 30, 2025, the company's total share capital was 466,700,000 shares, comprising 350,000,000 domestic shares and 116,700,000 H shares, each with a par value of RMB 1.00 yuan, and no new shares were issued during the reporting period - As of **June 30, 2025**, the company's total share capital was **466,700,000 shares**, divided into **350,000,000 domestic shares** and **116,700,000 H shares**, each with a par value of **RMB 1.00 yuan**[85](index=85&type=chunk) - No new shares were issued for cash by the company after the listing of H shares on the Main Board of the Hong Kong Stock Exchange[85](index=85&type=chunk) [Interim Dividend](index=19&type=section&id=中期股息) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended **June 30, 2025**[86](index=86&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities or Redeemable Securities](index=19&type=section&id=購買、出售或贖回本公司之上市證券或可贖回證券) 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 or redeemable securities, nor did they hold 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 or redeemable securities[87](index=87&type=chunk) - As of **June 30, 2025**, the company held no treasury shares[87](index=87&type=chunk) [Convertible Securities, Options, Warrants or Similar Rights](index=19&type=section&id=可轉換證券、期權、權證或類似權利) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries issued or granted any convertible securities, options, warrants, or other similar rights, nor were any related conversion or subscription rights exercised - For the six months ended **June 30, 2025**, neither the company nor any of its subsidiaries issued or granted any convertible securities, options, warrants, or other similar rights, nor were any conversion or subscription rights exercised under any convertible securities, options, warrants, or other similar rights issued or granted by the company or any of its subsidiaries at any time[88](index=88&type=chunk) [Issuance of Bonds](index=19&type=section&id=發行債券) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries issued bonds - For the six months ended **June 30, 2025**, neither the company nor any of its subsidiaries issued bonds[89](index=89&type=chunk) [Loan Arrangements to Entities](index=19&type=section&id=給予實體的貸款安排) The company provided a loan arrangement of up to RMB 300 million to its controlling shareholder, Changre Group, under a loan agreement at an annual interest rate of 4.5%, with a total of RMB 256 million provided as of the reporting date - The company agreed to provide a loan of up to **RMB 300 million** to Changre Group at an annual interest rate of **4.5%** from **December 24, 2024**, to **December 31, 2029**[90](index=90&type=chunk) - As of the date of this report, the total amount provided by the company to Changre Group under the loan agreement was **RMB 256 million**[90](index=90&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=19&type=section&id=董事及最高行政人員於股份、相關股份及債券的權益及淡倉) As of June 30, 2025, none of the company's directors or chief executive had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or any of its associated corporations - As of **June 30, 2025**, none of the company's directors or chief executive had any interests or short positions in the shares, underlying shares, or debentures of the company or any of its associated corporations that were required to be notified to the company and the Hong Kong Stock Exchange under Divisions 7 and 8 of Part XV of the Securities and Futures Ordinance[91](index=91&type=chunk) [Major Shareholders' Interests and Short Positions in Shares](index=20&type=section&id=主要股東於股份的權益及淡倉) As of June 30, 2025, Changchun Heating (Group) Co., Ltd. was the company's largest shareholder, holding 69.75% of the total share capital, with China Foreign Economy and Trade Trust Co., Ltd. and Northeast Asia Wanzhong Venture Capital Investment Management (Jilin) Co., Ltd. also holding significant proportions of H shares Major Shareholders' Interests and Short Positions in Shares (June 30, 2025) | Shareholder Name | Share Class | Capacity | Number of Shares Held (shares) | Percentage of Total Share Capital (%) | | :--- | :--- | :--- | :--- | :--- | | Changchun Heating (Group) Co., Ltd. | Domestic Shares | Beneficial Owner | 325,500,000(L) | 69.75 | | Changchun State-owned Capital Operation Group Co., Ltd. | Domestic Shares | Beneficial Owner | 24,500,000(L) | 5.25 | | China Foreign Economy and Trade Trust Co., Ltd. | H Shares | Trustee | 30,500,000(L) | 6.54 | | Northeast Asia Wanzhong Venture Capital Investment Management (Jilin) Co., Ltd. | H Shares | Beneficial Owner | 17,090,000(L) | 3.66 | [Changes in Directors' and Supervisors' Information](index=21&type=section&id=董事及監事資料變動) Mr. Yang Zhongshi and Mr. Shi Mingjun resigned from their directorships at Changchun Yatai Heating Co., Ltd., and at the general meeting of shareholders on May 16, 2025, the company approved the abolition and dissolution of the Supervisory Committee, with its powers to be exercised by the Audit Committee - Mr. Yang Zhongshi and Mr. Shi Mingjun resigned from their directorships at Changchun Yatai Heating Co., Ltd. on **May 28, 2025**[99](index=99&type=chunk) - At the general meeting of shareholders on **May 16, 2025**, the company approved the resolution to abolish and dissolve the Supervisory Committee; since then, the company no longer has a Supervisory Committee or supervisors, and the powers of the Supervisory Committee are exercised by the Audit Committee[99](index=99&type=chunk) [Employees and Remuneration Policy](index=21&type=section&id=員工及薪酬政策) As of June 30, 2025, the Group had 1,578 employees, with remuneration comprising basic salary and performance bonuses, the latter determined based on the Group's performance and appraisal results - As of **June 30, 2025**, the Group had **1,578 employees**[100](index=100&type=chunk) - The Group's employee remuneration consists of two parts: basic salary and performance bonus, with performance bonuses determined based on the Group's performance and performance appraisal results[100](index=100&type=chunk) [Review of Interim Results](index=21&type=section&id=中期業績的審閱) The company's Audit Committee, together with its independent auditor, reviewed the interim results for the six months ended June 30, 2025, and agreed with the accounting treatments adopted by the company - The company's Audit Committee and its independent auditor reviewed the Group's interim results for the six months ended **June 30, 2025**, and agreed with the accounting treatments adopted by the company[101](index=101&type=chunk) [Significant Legal Proceedings](index=21&type=section&id=重大法律訴訟) As of June 30, 2025, the company was not involved in any significant legal proceedings or arbitrations - As of **June 30, 2025**, the company was not involved in any significant legal proceedings or arbitrations[102](index=102&type=chunk) [Consolidated Balance Sheet](index=22&type=section&id=合併資產負債表) As of June 30, 2025, the Group's total assets were RMB 2,468,115,112.11 yuan, a decrease from RMB 3,745,836,079.66 yuan as of December 31, 2024, with a significant reduction in current assets, a slight increase in non-current assets, a corresponding decrease in total liabilities, and an increase in total shareholders' equity Consolidated Balance Sheet Key Items (June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB yuan) | December 31, 2024 (RMB yuan) | | :--- | :--- | :--- | | Cash and Bank Balances | 466,963,585.84 | 1,455,774,167.52 | | Accounts Receivable | 244,452,946.72 | 292,454,028.46 | | Prepayments | 181,596,601.93 | 696,052,863.29 | | Other Receivables | 400,997,081.49 | 143,150,344.45 | | Total Current Assets | 1,377,354,891.21 | 2,676,804,769.68 | | Fixed Assets | 855,582,330.61 | 850,266,318.15 | | Total Non-current Assets | 1,090,760,220.90 | 1,069,031,309.98 | | Total Assets | 2,468,115,112.11 | 3,745,836,079.66 | | Short-term Borrowings | 548,000,000.00 | 616,185,080.42 | | Accounts Payable | 92,403,741.86 | 288,333,372.32 | | Contract Liabilities | 500,029,011.51 | 1,436,470,122.36 | | Total Current Liabilities | 1,202,935,543.39 | 2,578,974,059.36 | | Total Liabilities | 1,318,051,863.21 | 2,702,676,267.57 | | Total Equity Attributable to Owners of the Parent Company | 1,150,063,248.90 | 1,043,159,812.09 | | Total Shareholders' Equity | 1,150,063,248.90 | 1,043,159,812.09 | [Consolidated Income Statement](index=25&type=section&id=合併利潤表) For the six months ended June 30, 2025, the Group's total operating revenue was RMB 935,134,299.91 yuan, and net profit was RMB 106,903,436.81 yuan, a decrease from the same period last year, with basic earnings per share at RMB 0.23 yuan Consolidated Income Statement Key Items (January-June 2025 vs January-June 2024) | Item | January–June 2025 (RMB yuan) | January–June 2024 (RMB yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 935,134,299.91 | 906,629,256.98 | | Operating Costs | 745,469,319.23 | 686,590,830.07 | | Total Profit | 143,635,744.05 | 200,617,153.89 | | Income Tax Expense | 36,732,307.24 | 52,475,162.44 | | Net Profit | 106,903,436.81 | 148,141,991.45 | | Net Profit Attributable to Owners of the Parent Company | 106,903,436.81 | 148,141,991.45 | | Basic Earnings Per Share | 0.23 | 0.32 | | Diluted Earnings Per Share | 0.23 | 0.32 | [Consolidated Cash Flow Statement](index=27&type=section&id=合併現金流量表) For the six months ended June 30, 2025, the Group's net cash flow from operating activities was negative RMB 532,929,124.31 yuan, net cash flow from investing activities was negative RMB 378,122,771.99 yuan, and net cash flow from financing activities was negative RMB 77,758,685.38 yuan, resulting in a net decrease in cash and cash equivalents of negative RMB 988,810,581.68 yuan Consolidated Cash Flow Statement Key Items (January-June 2025 vs January-June 2024) | Item | January–June 2025 (RMB yuan) | January–June 2024 (RMB yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | –532,929,124.31 | –495,519,463.70 | | Net Cash Flow from Investing Activities | –378,122,771.99 | –60,160,031.26 | | Net Cash Flow from Financing Activities | –77,758,685.38 | –1,536,081.67 | | Net Increase in Cash and Cash Equivalents | –988,810,581.68 | –557,215,576.63 | | Cash and Cash Equivalents at End of Period | 460,363,585.84 | 553,826,033.28 | [Consolidated Statement of Changes in Equity](index=29&type=section&id=合併股東權益變動表) As of June 30, 2025, total equity attributable to owners of the parent company was RMB 1,150,063,248.90 yuan, an increase of RMB 106,903,436.81 yuan from the beginning of the year, primarily due to the comprehensive income for the period Changes in Equity Attributable to Owners of the Parent Company (January-June 2025) | Item | Share Capital (RMB yuan) | Other Comprehensive Income (RMB yuan) | Special Reserves (RMB yuan) | Surplus Reserve (RMB yuan) | Retained Earnings (RMB yuan) | Total Shareholders' Equity (RMB yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at End of Previous Year | 466,700,000.00 | –7,364,142.82 | 25,630,609.10 | 45,131,170.29 | 513,062,175.52 | 1,043,159,812.09 | | Balance at Beginning of Current Year | 466,700,000.00 | –7,364,142.82 | 25,630,609.10 | 45,131,170.29 | 513,062,175.52 | 1,043,159,812.09 | | Changes for the Current Year | — | — | — | — | 106,903,436.81 | 106,903,436.81 | | (I) Total Comprehensive Income | — | — | — | — | 106,903,436.81 | 106,903,436.81 | | Balance at End of Current Period | 466,700,000.00 | –7,364,142.82 | 25,630,609.10 | 45,131,170.29 | 619,965,612.33 | 1,150,063,248.90 | [Notes to Financial Statements](index=31&type=section&id=財務報表附註) This section provides detailed explanations of the company's fundamental information, basis of financial statement preparation, significant accounting policies, and specific financial statement items [I. Company Overview](index=31&type=section&id=一、%20公司基本情況) Jilin Province Chuncheng Heating Company Limited, formerly Jilin Province Changre New Energy Co., Ltd., was listed on the Hong Kong Stock Exchange in October 2019, with a share capital of 466.70 million shares, primarily engaged in the heating industry, and its ultimate controlling party is the Changchun Municipal People's Government State-owned Assets Supervision and Administration Commission - Jilin Province Chuncheng Heating Company Limited, formerly Jilin Province Changre New Energy Co., Ltd., was registered on **October 23, 2017**, and restructured into a joint-stock company in **April 2018**[127](index=127&type=chunk) - The company was listed on the Hong Kong Stock Exchange in **October 2019**, with an initial public offering of **116.7 million H shares** to overseas investors[127](index=127&type=chunk) - As of **December 31, 2024**, the company's share capital was **466.70 million shares**, with a registered capital of **RMB 466.70 million yuan**, and its ultimate controlling party is the Changchun Municipal People's Government State-owned Assets Supervision and Administration Commission[128](index=128&type=chunk) - The company operates in the heating industry, with its main products and services including new energy technology development; heating production and supply; heating engineering design, installation services; contract energy management; and sales of cables, electrical equipment, household appliances, flooring, tiles, thermostats, and heating ancillary products[128](index=128&type=chunk) [II. Basis of Preparation of Financial Statements](index=32&type=section&id=二、%20財務報表的編製基礎) These financial statements are prepared in accordance with the Enterprise Accounting Standards issued by the Ministry of Finance, applicable disclosure provisions of the Hong Kong Stock Exchange Listing Rules and the Hong Kong Companies Ordinance, and on a going concern basis - These financial statements are prepared in accordance with the Enterprise Accounting Standards issued by the Ministry of Finance and the applicable disclosure provisions of the Hong Kong Stock Exchange Listing Rules, and also comply with the applicable disclosure requirements of the Hong Kong Companies Ordinance[131](index=131&type=chunk) - These financial statements are prepared on a going concern basis, and the company has evaluated its ability to continue as a going concern for **12 months** from the end of the reporting period, finding no significant doubts[132](index=132&type=chunk) [III. Significant Accounting Policies and Accounting Estimates](index=32&type=section&id=三、%20重要會計政策及會計估計) This section details the significant accounting policies and estimates followed in preparing the financial statements, including financial instruments, inventories, fixed assets, revenue recognition, employee benefits, government grants, and deferred income tax, also disclosing the impact of accounting policy changes on financial position and operating results [1. Statement of Compliance with Enterprise Accounting Standards](index=32&type=section&id=（一）遵循企業會計準則的聲明) These financial statements comply with the requirements of the Enterprise Accounting Standards issued by the Ministry of Finance, truly and completely reflecting the company's financial position as of June 30, 2025, and its operating results and cash flows for January-June 2025 - These financial statements comply with the requirements of the Enterprise Accounting Standards issued by the Ministry of Finance, truly and completely reflecting the company's financial position as of **June 30, 2025**, and its operating results and cash flows for **January-June 2025**[133](index=133&type=chunk) [2. Accounting Period](index=32&type=section&id=（二）會計期間) The company's accounting year runs from January 1 to December 31 of the Gregorian calendar - An accounting year runs from **January 1** to **December 31** of the Gregorian calendar[134](index=134&type=chunk) [3. Operating Cycle](index=32&type=section&id=（三）營業周期) The company's operating cycle is 12 months - The company's operating cycle is **12 months**[135](index=135&type=chunk) [4. Functional Currency](index=32&type=section&id=（四）記賬本位幣) The company uses Renminbi as its functional currency - The company uses **Renminbi** as its functional currency[136](index=136&type=chunk) [5. Accounting Methods for Business Combinations Under Common Control and Not Under Common Control](index=33&type=section&id=（五）同一控制下和非同一控制下企業合併的會計處理方法) For business combinations under common control, the company measures the acquired assets and liabilities at their carrying amounts in the ultimate controlling party's consolidated financial statements, with the difference adjusted to capital reserve or retained earnings; for business combinations not under common control, they are measured at fair value on the acquisition date, with the difference recognized as goodwill or included in current profit or loss - For business combinations under common control, the assets and liabilities acquired by the combining party are measured at their carrying amounts in the ultimate controlling party's consolidated financial statements, with the difference adjusted to capital reserve or retained earnings[138](index=138&type=chunk) - For business combinations not under common control, the combination cost is measured at fair value on the acquisition date; if it exceeds the fair value share of identifiable net assets, the difference is recognized as goodwill, and if it is less, it is included in current profit or loss[138](index=138&type=chunk) [6. Criteria for Determining Control and Preparation Methods for Consolidated Financial Statements](index=33&type=section&id=（六）控制的判斷標準和合併財務報表的編製方法) The company determines the scope of consolidation based on control, prepares consolidated financial statements by treating the entire enterprise group as a single accounting entity, and eliminates the effects of internal transactions, with detailed provisions for accounting treatments of increasing or disposing of subsidiaries, purchasing minority interests, and partially disposing of equity - The scope of consolidation for consolidated financial statements is determined based on **control**, including the company and all its subsidiaries[139](index=139&type=chunk) - The company treats the entire enterprise group as a single accounting entity, prepares consolidated financial statements according to uniform accounting policies, and eliminates the effects of internal transactions[140](index=140&type=chunk) - Detailed provisions are made for the accounting treatment of increasing subsidiaries (under common control and not under common control), disposing of subsidiaries (general treatment and step-by-step disposal), purchasing minority interests in subsidiaries, and partially disposing of equity without losing control[143](index=143&type=chunk)[145](index=145&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) [7. Classification of Joint Arrangements and Accounting Methods for Joint Operations](index=37&type=section&id=（七）合營安排分類及共同經營會計處理方法) Joint arrangements are classified into joint operations and joint ventures; the company recognizes its separately held and proportionally shared assets, liabilities, revenues, and expenses for joint operations, and accounts for investments in joint ventures using the equity method - Joint arrangements are classified into **joint operations** and **joint ventures**[152](index=152&type=chunk) - The company recognizes its separately held and proportionally shared assets, liabilities, revenues from selling its share of output, revenues from joint operations' sales of output, and expenses incurred separately and proportionally in joint operations[157](index=157&type=chunk) - The company accounts for investments in joint ventures using the **equity method**[154](index=154&type=chunk) [8. Criteria for Determining Cash and Cash Equivalents](index=37&type=section&id=（八）現金及現金等價物的確定標準) Cash refers to the company's cash on hand and deposits readily available for payment, while cash equivalents are short-term, highly liquid investments readily convertible to known amounts of cash with insignificant risk of changes in value - Cash refers to the company's cash on hand and deposits readily available for payment[155](index=155&type=chunk) - Cash equivalents refer to the company's held investments that are short-term, highly liquid, readily convertible to known amounts of cash, and subject to an insignificant risk of changes in value[155](index=155&type=chunk) [9. Foreign Currency Transactions and Translation of Foreign Currency Financial Statements](index=37&type=section&id=（九）外幣業務和外幣報表折算) Foreign currency transactions are translated using the spot exchange rate on the transaction date; foreign currency monetary items at the balance sheet date are translated at the spot exchange rate, with exchange differences recognized in current profit or loss; for foreign currency financial statements, balance sheet items are translated at the spot exchange rate on the balance sheet date, and income statement items at the spot exchange rate on the transaction date - Foreign currency transactions are translated using the **spot exchange rate** on the transaction date[156](index=156&type=chunk) - At the balance sheet date, foreign currency monetary items are translated at the spot exchange rate on the balance sheet date, with exchange differences recognized in current profit or loss (except for those related to the acquisition or construction of qualifying assets)[156](index=156&type=chunk) - When translating foreign currency financial statements, assets and liabilities in the balance sheet are translated using the spot exchange rate at the balance sheet date, owners' equity items (except "undistributed profits") are translated using the spot exchange rate at the time of occurrence, and income and expense items in the income statement are translated using the spot exchange rate on the transaction date[159](index=159&type=chunk) [10. Financial Instruments](index=38&type=section&id=（十）金融工具) The company classifies financial assets based on its business model and contractual cash flow characteristics into those measured at amortized cost, at fair value through other comprehensive income, or at fair value through profit or loss; financial liabilities are classified as measured at fair value through profit or loss or at amortized cost, with detailed provisions for recognition, measurement, derecognition, and impairment testing of various financial instruments - Financial assets are classified as measured at **amortized cost**, at **fair value through other comprehensive income** (debt instruments or equity instruments), and at **fair value through profit or loss**[161](index=161&type=chunk)[163](index=163&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - Financial liabilities are classified as measured at **fair value through profit or loss** and at **amortized cost**[163](index=163&type=chunk)[171](index=171&type=chunk)[174](index=174&type=chunk) - The company applies impairment accounting based on **expected credit losses** for financial assets measured at amortized cost, financial assets measured at fair value through other comprehensive income (debt instruments), and financial guarantee contracts[188](index=188&type=chunk) - For accounts receivable and contract assets, regardless of whether they contain a significant financing component, the company always measures their loss allowance at an amount equal to the expected credit losses over the **entire lifetime**[190](index=190&type=chunk) [11. Inventories](index=45&type=section&id=（十一）存貨) Inventories are classified as raw materials, revolving materials, and merchandise, initially measured at cost, valued using the first-in, first-out method when issued, and accounted for using the perpetual inventory system; at the balance sheet date, inventories are measured at the lower of cost and net realizable value, with provision for inventory write-downs - Inventories are classified as raw materials, revolving materials, and merchandise, initially measured at **cost**, and valued using the **first-in, first-out method** when issued[194](index=194&type=chunk)[195](index=195&type=chunk) - The **perpetual inventory system** is adopted[196](index=196&type=chunk) - At the balance sheet date, inventories are measured at the **lower of cost and net realizable value**, and a provision for inventory write-downs is made when cost exceeds net realizable value[198](index=198&type=chunk) [12. Contract Assets](index=46&type=section&id=（十二）合同資產) The company presents as contract assets its right to consideration in exchange for goods or services that it has transferred to a customer (if that right is conditioned on something other than the passage of time), and always measures their loss allowance at an amount equal to the expected credit losses over the entire lifetime - The company presents as contract assets its right to consideration in exchange for goods or services that it has transferred to a customer (and that right is conditioned on something other than the passage of time)[199](index=199&type=chunk) - The expected credit losses for contract assets are always measured at an amount equal to the expected credit losses over the **entire lifetime**[200](index=200&type=chunk) [13. Assets Held for Sale and Discontinued Operations](index=47&type=section&id=（十三）持有待售和終止經營) The company classifies non-current assets or disposal groups whose carrying amount will be recovered principally through a sale transaction rather than through continuing use as held for sale, and recognizes impairment provisions; discontinued operations refer to a component of an entity that has been disposed of or is classified as held for sale and represents a separate major line of business or geographical area of operations, with its profit or loss separately presented in the income statement - Non-current assets or disposal groups whose carrying amount will be recovered principally through a sale transaction rather than through continuing use are classified as **held for sale**, and an impairment provision is recognized when the carrying amount exceeds the fair value less costs to sell[203](index=203&type=chunk)[204](index=204&type=chunk) - Discontinued operations are separately distinguishable components that meet specific conditions and have been disposed of or classified as held for sale, with their continuing and discontinued operations' profit or loss presented separately in the income statement[205](index=205&type=chunk) [14. Long-term Equity Investments](index=48&type=section&id=（十四）長期股權投資) The company accounts for long-term equity investments in subsidiaries using the cost method and in associates and joint ventures using the equity method, with detailed provisions for determining common control and significant influence, initial investment cost, subsequent measurement, and profit or loss recognition, including accounting treatment for disposal of long-term equity investments - The company accounts for long-term equity investments in subsidiaries using the **cost method** and in associates and joint ventures using the **equity method**[213](index=213&type=chunk)[214](index=214&type=chunk) - **Common control** refers to shared control over an arrangement, and **significant influence** refers to the power to participate in the financial and operating policy decisions of the investee[209](index=209&type=chunk) - Initial investment cost is determined differently for those formed through business combinations (under common control and not under common control) and those acquired by other means[210](index=210&type=chunk)[211](index=211&type=chunk) - Upon disposal of long-term equity investments, the difference between their carrying amount and the actual consideration received is recognized in current profit o

[Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) The Group deepened its global intelligent sports and entertainment strategy in H1 2025, showing resilience and growth, despite increased loss attributable to equity holders due to rising expenses and associate losses, and tightening liquidity [Business Review](index=3&type=section&id=BUSINESS%20REVIEW) In H1 2025, the Group maintained its strategic focus on intelligent sports and entertainment, demonstrating strong resilience and growth through AI integration, game upgrades, and expansion into intellectual sports events and sports parks - The Group deepened its global intelligent sports and entertainment strategic positioning, with core businesses demonstrating resilience and growth momentum[5](index=5&type=chunk)[9](index=9&type=chunk) - Traditional PC business 'OurGame Lobby' enhanced user activity and experience through community building, new category introduction, and AI and anti-cheating system upgrades; mobile board and casual games performed well[6](index=6&type=chunk)[9](index=9&type=chunk) - Actively promoted deep integration of AI technology with business, comprehensively upgraded cloud architecture, introduced large AI models like DeepSeek and ChatGPT, significantly improving art development and operational efficiency, and explored AI empowerment for traditional board and card games[7](index=7&type=chunk)[10](index=10&type=chunk) - In innovative businesses, subsidiary Huayang Intellectual Sports Technology focuses on intellectual sports events and content production, with its Mahjong event IP 'Sichuan Mahjong Star League' setting a new record of over **110,000 concurrent online viewers**[11](index=11&type=chunk)[14](index=14&type=chunk) - Signed a cooperation agreement with Youku to introduce event content to the platform; collaborated with the Danzhou government in Hainan to host the 'Intellectual Masters Tournament' in Huanxinying Bay, promoting regional development through an 'event + industry + culture and tourism' model[12](index=12&type=chunk)[15](index=15&type=chunk) - Wholly-owned subsidiary OurGame Sports (Beijing) Co., Ltd. is advancing the construction and operation of OurGame Sports Park, aiming to create a comprehensive sports platform integrating sports venues, event hosting, youth training, and sports social interaction to expand diversified revenue streams[13](index=13&type=chunk)[15](index=15&type=chunk) - Ecosystem construction balances international vision with localized operations, introducing the 'AGAE Overseas Esports League' to the Youku platform[16](index=16&type=chunk)[20](index=20&type=chunk) - Looking ahead, the Group will continue to cultivate its core advantages in board and card games, accelerate innovative business development, and strive to become a unique 'leader in the intellectual sports ecosystem' within China's sports industry[17](index=17&type=chunk)[20](index=20&type=chunk) [Financial Review](index=5&type=section&id=FINANCIAL%20REVIEW) The Group's loss attributable to equity holders increased to **RMB 38.2 million** in H1 2025, primarily due to a **13.8% revenue decrease**, **108.3% surge in selling and marketing expenses**, **13.7% rise in administrative expenses**, and a **62.1% increase in share of associate losses**, leading to a deteriorated liquidity ratio from 1.68 to 1.0 - For the six months ended June 30, 2025, the **loss attributable to equity holders of the Company** was **RMB 38.2 million**, an increase from **RMB 19.8 million** in the same period of 2024[18](index=18&type=chunk)[21](index=21&type=chunk) - The increased loss was primarily due to higher selling expenses, new product R&D expenses, significant professional fees related to resumption of trading, and increased share of losses from associate AGAE due to litigation costs[18](index=18&type=chunk)[21](index=21&type=chunk) [1. Overview](index=5&type=section&id=1.%20Overview) In H1 2025, the Group's loss attributable to equity holders increased to **RMB 38.2 million** from **RMB 19.8 million** in H1 2024, driven by higher sales, R&D, and professional fees, alongside increased associate losses from litigation Loss Attributable to Equity Holders H1 2025 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Loss attributable to equity holders | 38.2 | 19.8 | 18.4 | 92.9% | - The increased loss was primarily due to higher selling expenses, new product R&D expenses, significant professional fees related to resumption of trading, and increased share of losses from associate AGAE due to litigation costs[18](index=18&type=chunk)[21](index=21&type=chunk) [2. Revenue](index=5&type=section&id=2.%20Revenue) In H1 2025, the Group's revenue decreased by **13.8%** to **RMB 43.2 million** from **RMB 50.2 million** in H1 2024, mainly due to lower ARPU from OurGame Lobby and MCN business not fully reflecting in revenue Group Revenue Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 43.2 | 50.2 | (7.0) | (13.8%) | - The revenue decline was primarily due to lower **ARPU** from OurGame Lobby, leading to an overall revenue reduction, and the MCN business activity not yet fully translating into revenue[19](index=19&type=chunk)[22](index=22&type=chunk) [3. Cost of Revenue and Gross Profit Margin](index=6&type=section&id=3.%20Cost%20of%20Revenue%20and%20Gross%20Profit%20Margin) In H1 2025, the Group's cost of revenue decreased by **9.8%** to **RMB 20.9 million**, while gross profit margin declined from **53.8%** to **51.7%**, mainly due to reduced revenue from the higher-margin OurGame Lobby Cost of Revenue and Gross Profit Margin Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cost of revenue | 20.9 | 23.2 | (2.3) | (9.8%) | | Gross profit margin | 51.7% | 53.8% | (2.1) percentage points | (3.9%) | - The decline in gross profit margin was primarily due to reduced revenue from the higher-margin OurGame Lobby[23](index=23&type=chunk)[28](index=28&type=chunk) [4a. Other Income](index=6&type=section&id=4a.%20Other%20Income) In H1 2025, the Group's other income decreased by **25.7%** to **RMB 2.1 million** from **RMB 2.8 million** in H1 2024, mainly due to lower bank interest income and revenue from providing board and card game venues Other Income Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other income | 2.1 | 2.8 | (0.7) | (25.7%) | - The decrease was primarily due to lower bank interest income and reduced revenue from providing board and card game venues[24](index=24&type=chunk)[29](index=29&type=chunk) [4b. Other Gains and Losses](index=6&type=section&id=4b.%20Other%20Gains%20and%20Losses) In H1 2025, the Group's other losses were **RMB 0.1 million**, a slight fluctuation from **RMB 0.2 million** in H1 2024 Other Gains and Losses Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other losses | 0.1 | 0.2 | (0.1) | (50.0%) | [5. Selling and Marketing Expenses](index=6&type=section&id=5.%20Selling%20and%20Marketing%20Expenses) In H1 2025, the Group's selling and marketing expenses increased by **108.3%** to **RMB 12.5 million** from **RMB 6.0 million** in H1 2024, primarily due to increased promotional and marketing activities Selling and Marketing Expenses Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Selling and marketing expenses | 12.5 | 6.0 | 6.5 | 108.3% | - The increase in expenses was primarily due to increased promotional and marketing activities during the period[26](index=26&type=chunk)[31](index=31&type=chunk) [6. Administrative Expenses](index=6&type=section&id=6.%20Administrative%20Expenses) In H1 2025, the Group's administrative expenses increased by **13.7%** to **RMB 17.4 million** from **RMB 15.3 million** in H1 2024, mainly due to increased expenses related to the resumption of trading since July 2024 Administrative Expenses Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Administrative expenses | 17.4 | 15.3 | 2.1 | 13.7% | - The increase in expenses was primarily due to increased costs related to the resumption of trading incurred since July 2024[27](index=27&type=chunk)[32](index=32&type=chunk) [7. Research and Development Expenses](index=7&type=section&id=7.%20Research%20and%20Development%20Expenses) In H1 2025, the Group's R&D expenses increased by **49.0%** to **RMB 5.5 million** from **RMB 3.7 million** in H1 2024, driven by intensified efforts to update and develop new versions of online games Research and Development Expenses Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development expenses | 5.5 | 3.7 | 1.8 | 49.0% | - The increase in expenses was due to the Group's intensified efforts to update existing online game versions and increase R&D investment in new versions[33](index=33&type=chunk)[38](index=38&type=chunk) [8. Share of Losses of Associates, Net](index=7&type=section&id=8.%20Share%20of%20Losses%20of%20Associates%2C%20Net) In H1 2025, the Group's share of losses of associates, net, increased by **62.1%** to **RMB 23.5 million** from **RMB 14.5 million** in H1 2024, primarily due to increased litigation costs incurred by associate AGAE Share of Losses of Associates, Net Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Share of losses of associates, net | 23.5 | 14.5 | 9.0 | 62.1% | - The increase in losses was primarily due to associate AGAE incurring higher litigation costs during the period[34](index=34&type=chunk)[39](index=39&type=chunk) [9. Fair Value Changes of Financial Assets at Fair Value through Profit or Loss](index=7&type=section&id=9.%20Fair%20Value%20Changes%20of%20Financial%20Assets%20at%20Fair%20Value%20through%20Profit%20or%20Loss) In H1 2025, the Group had no fair value changes of financial assets at fair value through profit or loss, compared to a **RMB 10.2 million** loss in H1 2024 Fair Value Changes of Financial Assets at Fair Value through Profit or Loss Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Fair value changes | 0 | (10.2) | 10.2 | [10. Loss Attributable to Equity Holders of the Company](index=7&type=section&id=10.%20Loss%20Attributable%20to%20Equity%20Holders%20of%20the%20Company) In H1 2025, the loss attributable to equity holders of the Company increased to **RMB 38.2 million** from **RMB 19.8 million** in H1 2024 Loss Attributable to Equity Holders of the Company Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Loss attributable to equity holders | 38.2 | 19.8 | 18.4 | 92.9% | [11. Income Tax Expense](index=7&type=section&id=11.%20Income%20Tax%20Expense) The Group incurred no income tax expense for the six months ended June 30, 2025, consistent with the prior year period - For the six months ended June 30, 2025, the Group incurred **no income tax expense**[37](index=37&type=chunk)[42](index=42&type=chunk) [12. Liquidity and Source of Funding and Borrowing](index=8&type=section&id=12.%20Liquidity%20and%20Source%20of%20Funding%20and%20Borrowing) As of June 30, 2025, the Group's total bank balances and cash decreased by **6.7%** to **RMB 12.7 million**, with the current ratio falling from 1.68 to 1.0 and the gearing ratio increasing from zero to **21.2%**, indicating tightening liquidity Liquidity Metrics Comparison | Metric | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Bank balances and cash | 12.7 | 13.6 | (0.9) | (6.7%) | | Current assets | 30.3 | 47.7 | (17.4) | (36.5%) | | Current liabilities | 30.4 | 28.3 | 2.1 | 7.4% | | Current ratio | 1.0 | 1.68 | (0.68) | (40.5%) | | Gearing ratio | 21.2% | 0% | 21.2 percentage points | N/A | - The Group intends to primarily fund future expansion, investments, and operations through internal resources, but may explore other financing sources when appropriate[43](index=43&type=chunk)[46](index=46&type=chunk) [13. Material Investments](index=8&type=section&id=13.%20Material%20Investments) In H1 2025, the Group acquired a property in China with a fair value of **RMB 5.63 million**, which was pledged for outstanding loans and interest and served as partial settlement - The Group acquired a property in China with a fair value of **RMB 5.63 million**, which was pledged for outstanding loans and interest and served as partial settlement[44](index=44&type=chunk)[47](index=47&type=chunk) [14. Material Acquisitions](index=8&type=section&id=14.%20Material%20Acquisitions) The Group had no material acquisitions for the six months ended June 30, 2025, other than those disclosed in this interim report - Other than as disclosed in this interim report, the Group had **no material acquisitions** for the six months ended June 30, 2025[45](index=45&type=chunk)[48](index=48&type=chunk) [15. Financial Assets at Fair Value through Profit or Loss](index=9&type=section&id=15.%20Financial%20Assets%20at%20Fair%20Value%20through%20Profit%20or%20Loss) As of June 30, 2025, the Group's financial assets at fair value through profit or loss remained at **RMB 14.2 million**, primarily comprising direct equity investments in game/intellectual sports tech startups and private equity funds, with no dividends paid during the period Financial Assets at Fair Value through Profit or Loss | Metric | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Financial assets (FVTPL) | 14.2 | 14.2 | 0 | - Investments aim to complement the game portfolio, explore new business opportunities, generate strategic operational synergies, and gain expertise and scale through external financial resources[49](index=49&type=chunk)[51](index=51&type=chunk) - These primarily include direct equity investments in startups focused on game or intellectual sports-related technology R&D, and direct subscriptions to private equity funds for early-stage financing in the intellectual sports sector[50](index=50&type=chunk)[51](index=51&type=chunk) - No dividends were paid by the aforementioned investee companies for the six months ended June 30, 2025[53](index=53&type=chunk)[55](index=55&type=chunk) [16. Material Disposals](index=10&type=section&id=16.%20Material%20Disposals) The Group had no material disposals for the six months ended June 30, 2025, other than those disclosed in this interim report - Other than as disclosed in this interim report, the Group had **no material disposals** for the six months ended June 30, 2025[57](index=57&type=chunk)[58](index=58&type=chunk) [17. Pledge of Assets](index=11&type=section&id=17.%20Pledge%20of%20Assets) As of June 30, 2025, the Group had no pledge of assets, consistent with the situation on December 31, 2024 - As of June 30, 2025, the Group had **no pledge of assets**[59](index=59&type=chunk)[65](index=65&type=chunk) [18. Contingent Liabilities](index=11&type=section&id=18.%20Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities, consistent with the situation on December 31, 2024 - As of June 30, 2025, the Group had **no material contingent liabilities**[60](index=60&type=chunk)[66](index=66&type=chunk) [19. Foreign Exchange Exposure](index=11&type=section&id=19.%20Foreign%20Exchange%20Exposure) The Group primarily operates in China with most transactions settled in RMB, thus incurring no significant foreign exchange exposure as of June 30, 2025 - The Group primarily operates in China, with most transactions settled in RMB, and thus had **no significant foreign exchange exposure** as of June 30, 2025[61](index=61&type=chunk)[67](index=67&type=chunk) [20. Employees' Remuneration and Policy](index=11&type=section&id=20.%20Employees%27%20Remuneration%20and%20Policy) As of June 30, 2025, the Group had **76 employees**, with total remuneration expenses for H1 2025 decreasing by **27.5%** to **RMB 9.5 million** compared to H1 2024 Employee Information and Remuneration Comparison | Metric | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Number of Employees | 76 | N/A | N/A | | Total Remuneration Expenses (RMB million) | 9.5 | 13.1 | (27.5%) | [21. Events Occurred Since the End of the Six Months Ended 30 June 2025](index=11&type=section&id=21.%20Events%20Occurred%20Since%20the%20End%20of%20the%20Six%20Months%20Ended%2030%20June%202025) Other than as disclosed in this interim report, the Group had no significant events occurring since the end of the six months ended June 30, 2025 - Other than as disclosed in this interim report, the Group had **no significant events** occurring since the end of the six months ended June 30, 2025[63](index=63&type=chunk)[69](index=69&type=chunk) [22. Future Plans for Material Investment or Capital Assets](index=11&type=section&id=22.%20Future%20Plans%20for%20Material%20Investment%20or%20Capital%20Assets) Other than as disclosed in this interim report, the Group has no other future plans for material investments or capital assets - Other than as disclosed in this interim report, the Group has **no other future plans** for material investments or capital assets[64](index=64&type=chunk)[70](index=70&type=chunk) [Other Information](index=12&type=section&id=Other%20Information) This section covers corporate governance, share incentive schemes, and material legal proceedings, including loan disputes, arbitration enforcement, and two lawsuits against associate AGAE, all ongoing [Interim Dividend](index=12&type=section&id=INTERIM%20DIVIDEND) The Board did not declare any interim dividend for the six months ended June 30, 2025, consistent with the prior year period - The Board did **not declare any interim dividend** for the six months ended June 30, 2025[71](index=71&type=chunk)[73](index=73&type=chunk) [Directors' and Chief Executives' Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company](index=12&type=section&id=DIRECTORS%27%20AND%20CHIEF%20EXECUTIVES%27%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20THE%20SHARES%2C%20UNDERLYING%20SHARES%20AND%20DEBENTURES%20OF%20THE%20COMPANY) As of June 30, 2025, Mr. Lu Jingsheng held **2.04%** of the Company's shares, and Ms. Xu Jin held **0.10%** (including share options and awarded shares), with Ms. Xu appointed Executive Director and CEO on March 1, 2025 Directors' and Chief Executives' Shareholdings (June 30, 2025) | Director Name | Capacity/Nature of Interest | Number of Shares Held (L) | Approximate Percentage of the Company's Interest | | :--- | :--- | :--- | :--- | | Mr. Lu Jingsheng | Beneficial Owner | 22,000,000 | 2.04% | | Ms. Xu Jin | Beneficial Owner | 1,100,000 | 0.10% | - Ms. Xu Jin was appointed Executive Director and Chief Executive Officer effective March 1, 2025[75](index=75&type=chunk) [Substantial Shareholders' Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company](index=13&type=section&id=SUBSTANTIAL%20SHAREHOLDERS%27%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20THE%20SHARES%2C%20UNDERLYING%20SHARES%20AND%20DEBENTURES%20OF%20THE%20COMPANY) As of June 30, 2025, Bright Wisdom Holdings Limited was the largest beneficial owner with **27.08%** of shares, while Caixin Investment Co., Ltd. held **17.27%** beneficial interest and **3.36%** other voting rights, and Jianying OurGame High Growth Investment Fund held **18.60%** Substantial Shareholders' Shareholdings (June 30, 2025) | Shareholder Name/Entity | Capacity/Nature of Interest | Number of Shares Held (L) | Approximate Percentage of the Company's Interest | | :--- | :--- | :--- | :--- | | Caixin Investment Co., Ltd. | Beneficial Owner | 186,088,706 | 17.27% | | Caixin Investment Co., Ltd. | Other (Voting Rights) | 36,235,351 | 3.36% | | Mr. Li Yangyang | Beneficial Owner | 21,290,000 | 1.98% | | Mr. Li Yangyang | Interest in Controlled Corporation | 222,324,057 | 20.63% | | Mr. Li Yangyang | Other (Voting Rights) | 75,688,536 | 7.02% | | Bright Wisdom Holdings Limited | Beneficial Owner | 291,919,848 | 27.08% | | Mr. Yang Qing | Beneficial Owner | 36,531,064 | 3.39% | | Mr. Yang Qing | Interest in Controlled Corporation | 221,653,555 | 20.57% | | Mr. Ng Kwok Leung | Beneficial Owner | 36,531,064 | 3.39% | | Mr. Ng Kwok Leung | Interest in Controlled Corporation | 221,653,555 | 20.57% | | Mr. Zhang Peng | Beneficial Owner | 12,884,425 | 1.20% | | Mr. Zhang Peng | Interest in Controlled Corporation | 221,653,555 | 20.57% | | Jianying OurGame High Growth Investment Fund | Beneficial Owner | 200,502,555 | 18.60% | - The **291,919,848 shares** held by Bright Wisdom Holdings Limited refer to the same batch of shares held by a series of owners including Bright Wisdom Holdings Limited[86](index=86&type=chunk) [Share Option Schemes](index=16&type=section&id=SHARE%20OPTION%20SCHEMES) The Company has three share option schemes, with the pre-IPO employee and management schemes expiring on March 6, 2024; the 2014 scheme aims to incentivize key employees and directors, with **41,743,839 options lapsing** and **20,370,000 remaining unexercised** in H1 2025 [2014 Share Option Scheme](index=16&type=section&id=2014%20Share%20Option%20Scheme) The 2014 Share Option Scheme aims to provide eligible persons with an opportunity to acquire ownership interests in the Company; as of June 30, 2025, **20,370,000 options remained unexercised**, with **41,743,839 options lapsing** during the period, primarily from former directors and employees - The 2014 Share Option Scheme aims to provide key employees, directors, or senior officers of the Group with an opportunity to acquire ownership interests in the Company and encourage them to strive to enhance the value of the Company and its shares for the overall benefit of the Company and its shareholders[88](index=88&type=chunk)[90](index=90&type=chunk) 2014 Share Option Scheme Movements (H1 2025) | Category of Grantees | Outstanding as at Jan 1, 2025 | Granted during the period | Exercised during the period | Cancelled during the period | Lapsed during the period | Outstanding as at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Directors | 31,360,000 | — | — | — | (23,520,000) | 7,840,000 | | Employees | 30,753,839 | — | — | — | (18,223,839) | 12,530,000 | | **Total** | **62,113,839** | **—** | **—** | **—** | **(41,743,839)** | **20,370,000** | - As of June 30, 2025, the total number of share options available for grant under the 2014 Share Option Scheme was **zero**[94](index=94&type=chunk)[98](index=98&type=chunk) [Share Award Scheme](index=18&type=section&id=Share%20Award%20Scheme) The Company's 2017 Share Award Scheme aligns eligible persons' interests with long-term Group growth; as of June 30, 2025, **17,071,153 awards were authorized**, with **725,000 awarded shares unexercised** and **37,288,483 shares vested**, with no new awards granted, vested, cancelled, or lapsed in H1 2025 - The Share Award Scheme aims to align the interests of eligible persons with those of the Group through share ownership, dividends, and other distributions made in respect of shares and/or enhancement of share value, to encourage and retain eligible participants to contribute to the long-term development and profitability of the Group[95](index=95&type=chunk)[99](index=99&type=chunk) Number of Awards Available for Grant under Share Award Scheme | Metric | Jan 1, 2025 | June 30, 2025 | | :--- | :--- | :--- | | Number of Awards Available for Grant | 17,071,153 | 17,071,153 | Share Award Scheme Movements (H1 2025) | Category of Grantees | Outstanding as at Jan 1, 2025 | Granted during the period | Vested during the period | Cancelled during the period | Lapsed during the period | Outstanding as at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Directors/Former Directors | 250,000 | — | — | — | — | 250,000 | | Employees | 475,000 | — | — | — | — | 475,000 | | **Total** | **725,000** | **—** | **—** | **—** | **—** | **725,000** | - As of June 30, 2025, **37,288,483 shares** were vested[230](index=230&type=chunk)[234](index=234&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=20&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For H1 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and the Company held no treasury shares as of June 30, 2025 - 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[103](index=103&type=chunk)[109](index=109&type=chunk) - As of June 30, 2025, the Company held **no treasury shares**[104](index=104&type=chunk)[109](index=109&type=chunk) [Corporate Governance](index=20&type=section&id=Corporate%20Governance) The Company complied with the Corporate Governance Code in H1 2025, correcting a deviation from C.2.1 (separation of Chairman and CEO roles) on March 1, 2025, with Ms. Xu Jin appointed CEO and Mr. Lu Jingsheng transitioning to CFO while retaining the Chairman role - The Company has complied with the applicable code provisions of the Corporate Governance Code, except for a deviation from code provision C.2.1 (the roles of chairman and chief executive should be separate and should not be performed by the same individual)[106](index=106&type=chunk)[110](index=110&type=chunk) - Effective March 1, 2025, Ms. Xu was appointed Executive Director and Chief Executive Officer, and Mr. Lu Jingsheng transitioned from Chief Executive Officer to Chief Financial Officer while continuing as Executive Director and Chairman of the Board, thus separating the roles of Chairman and Chief Executive Officer[107](index=107&type=chunk)[110](index=110&type=chunk) [Model Code](index=21&type=section&id=Model%20Code) All Directors confirmed strict compliance with the Model Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025 - Following specific inquiries made to all Directors, all Directors confirmed their strict compliance with the required standards set out in the Model Code for the six months ended June 30, 2025[112](index=112&type=chunk)[116](index=116&type=chunk) [Audit Committee](index=21&type=section&id=Audit%20Committee) The Company's Audit Committee, comprising three independent non-executive directors (Mr. Zhang Li as Chairman), reviewed the Group's unaudited condensed consolidated interim results and report for H1 2025, with external auditors UHY Certified Public Accountants also conducting a review under ISRE 2410 - The Audit Committee comprises Mr. Zhang Li (Chairman), Mr. Ma Shaohua, and Mr. Dai Bing (all independent non-executive Directors)[113](index=113&type=chunk)[117](index=117&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim results and interim report for the six months ended June 30, 2025[115](index=115&type=chunk)[117](index=117&type=chunk) - External auditors UHY Certified Public Accountants have reviewed the condensed consolidated financial statements in accordance with International Standard on Review Engagements 2410[114](index=114&type=chunk)[117](index=117&type=chunk) [Material Litigation](index=22&type=section&id=Material%20Litigation) The Group is involved in several material legal proceedings, including arbitration against Merit Horizon for loan default, enforcement of an arbitration award against Spoville for convertible bonds, and two lawsuits by Knighted Pastures against associate AGAE concerning corporate governance and strategic investments, all of which are ongoing [Loan to Fast Express Trading Limited ("Fast Express")](index=22&type=section&id=Loan%20to%20Fast%20Express%20Trading%20Limited%20%28%22Fast%20Express%22%29) The Company provided a **HKD 62.48 million** loan to Fast Express in 2018, which Merit Horizon agreed to repay with Ms. Fu Qiang's guarantee, but both defaulted; the Company initiated arbitration against Merit Horizon for **HKD 97.9 million** and civil lawsuits in Hong Kong, with arbitration hearings completed in early June 2025, awaiting a ruling - The Company provided a loan totaling **HKD 62,484,799** to Fast Express in 2018, which Fast Express failed to repay on schedule[118](index=118&type=chunk)[119](index=119&type=chunk) - Merit Horizon agreed to repay the loan, and Ms. Fu Qiang provided a joint and several guarantee, but both failed to fulfill their contractual obligations[118](index=118&type=chunk)[119](index=119&type=chunk) - The Company initiated arbitration proceedings against Merit Horizon in the Hong Kong Arbitration Tribunal, claiming a total of **not less than HKD 97,948,090.47**[120](index=120&type=chunk)[122](index=122&type=chunk) - The Company filed civil lawsuits in the Hong Kong High Court against Bright Wisdom, Ms. Fu, and Mr. Gao, seeking repayment of loan principal and interest, and claiming damages for breach of fiduciary duties[121](index=121&type=chunk)[123](index=123&type=chunk) - Arbitration proceedings are ongoing, with significant hearings completed in early June 2025, but no ruling has been issued yet[120](index=120&type=chunk)[122](index=122&type=chunk) [Arbitration Proceedings against Spoville Co., Ltd. ("Spoville")](index=24&type=section&id=Arbitration%20Proceedings%20against%20Spoville%20Co.%2C%20Ltd.%20%28%22Spoville%22%29) The Company initiated ICC arbitration against Spoville and its major shareholder regarding a convertible bond subscription agreement, resulting in a March 2023 award for **KRW 2,184,541,667** principal and interest, **RMB 727,468** legal fees, and **USD 85,000** arbitration costs; the Company is actively enforcing this award in South Korean courts, which recognized and ordered enforcement in May 2024 - The Company initiated arbitration proceedings against Spoville and its major shareholder with the ICC International Court of Arbitration regarding a convertible bond subscription agreement and obtained a final award on March 20, 2023[125](index=125&type=chunk)[128](index=128&type=chunk) Key Contents of ICC Arbitration Award | Award Content | Amount | | :--- | :--- | | Convertible Bond Principal and Interest (as of Aug 18, 2019) | 2,184,541,667 KRW | | Corresponding Interest (Aug 19, 2019 to Mar 18, 2023, 1% p.a.) | Approximately 78 million KRW | | Legal and Translation Fees | 727,468 RMB | | Arbitration Costs | 85,000 USD | | Additional Interest (from Mar 20, 2023 until full payment) | At rate stipulated by Hong Kong Arbitration Ordinance | - The South Korean court ruled to recognize and enforce the arbitration award in May 2024, and further asset inquiries are underway to apply for compulsory enforcement[131](index=131&type=chunk)[137](index=137&type=chunk) [Litigation from Knighted Pastures, LLC ("Knighted")](index=55&type=section&id=Litigation%20from%20Knighted%20Pastures%2C%20LLC%20%28%22Knighted%22%29) Knighted, AGAE's second-largest shareholder, filed two lawsuits: the first (March 2024) alleging breach of fiduciary duties by AGAE directors was mostly dismissed, but Knighted was awarded **USD 3 million** in legal fees; the second (November 2024) alleging breach of fiduciary duties in a strategic investment was stayed in April 2025 pending AGAE's AGM results, with no voting on board composition changes allowed - Knighted filed the first lawsuit against AGAE and its directors in March 2024, alleging breach of fiduciary duties related to a share purchase agreement and amendments to the company's articles of association[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk) - The court dismissed most of the lawsuit in June 2024, but Knighted was awarded **USD 3 million** in legal fees in August 2024, which has been paid by AGAE[261](index=261&type=chunk)[262](index=262&type=chunk)[264](index=264&type=chunk) - Knighted filed a second lawsuit in November 2024, alleging breach of fiduciary duties by AGAE directors in approving a strategic investment with Yellow River Capital Group and related securities purchase agreements[263](index=263&type=chunk)[265](index=265&type=chunk) - In April 2025, the court approved a stay of the second lawsuit proceedings until the results of AGAE's joint shareholders' meeting are announced; in August 2025, the U.S. court ordered that the AGAE shareholders' meeting not be postponed and that no votes be cast on changes to the board composition[266](index=266&type=chunk)[267](index=267&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk) - AGAE cannot reasonably estimate the amount or range of potential losses from the second Knighted lawsuit and has therefore made no provision[268](index=268&type=chunk)[270](index=270&type=chunk) [Qualification Requirement](index=25&type=section&id=Qualification%20Requirement) As of June 30, 2025, the Company had no updated disclosure information regarding qualification requirements - As of June 30, 2025, the Company had **no updated disclosure information** regarding qualification requirements[134](index=134&type=chunk)[138](index=138&type=chunk) [Continuing Disclosure Pursuant to Rules 13.18 and 13.21 of the Listing Rules](index=25&type=section&id=Continuing%20Disclosure%20Pursuant%20to%20Rules%2013.18%20and%2013.21%20of%20the%20Listing%20Rules) The Company has no other disclosure obligations under Rules 13.18 and 13.21 of the Listing Rules - The Company has **no other disclosure obligations** under Rules 13.18 and 13.21 of the Listing Rules[135](index=135&type=chunk)[139](index=139&type=chunk) [Appreciation](index=25&type=section&id=Appreciation) The Board, on behalf of all members, extends gratitude to the management team and employees for their tireless efforts, dedication, and support during the period - The Board expresses its gratitude to the management team and employees for their tireless efforts, dedication, and support during the period[136](index=136&type=chunk)[140](index=140&type=chunk) [Report on Review of Condensed Consolidated Financial Statements](index=26&type=section&id=Report%20on%20Review%20of%20Condensed%20Consolidated%20Financial%20Statements) UHY Certified Public Accountants reviewed OurGame International Holdings Limited's condensed consolidated financial statements for H1 2025 under ISRE 2410, concluding no material non-compliance with IAS 34 [Introduction](index=26&type=section&id=Introduction) UHY Certified Public Accountants reviewed OurGame International Holdings Limited's condensed consolidated financial statements for H1 2025, prepared under IAS 34 and HKEX Listing Rules, with directors responsible for preparation and auditors for review conclusion - UHY Certified Public Accountants has reviewed the condensed consolidated financial statements of OurGame International Holdings Limited and its subsidiaries for the six months ended June 30, 2025[142](index=142&type=chunk)[143](index=143&type=chunk) - The financial statements are prepared in accordance with International Accounting Standard 34 and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[142](index=142&type=chunk)[143](index=143&type=chunk) [Scope of Review](index=27&type=section&id=Scope%20of%20Review) The review, conducted under ISRE 2410, involves inquiries and analytical procedures, but its scope is substantially narrower than an audit, thus providing no audit opinion - The review was conducted in accordance with International Standard on Review Engagements 2410, with a scope substantially narrower than an audit, thus no audit opinion is expressed[145](index=145&type=chunk)[147](index=147&type=chunk) [Conclusion](index=27&type=section&id=Conclusion) Based on the review, the auditors found no matters suggesting the condensed consolidated financial statements were not prepared in all material respects in accordance with IAS 34 - The review found no matters leading the auditors to believe that the condensed consolidated financial statements were not prepared in all material respects in accordance with International Accounting Standard 34[146](index=146&type=chunk)[148](index=148&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=28&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For H1 2025, the Group's loss expanded to **RMB 35.086 million** from **RMB 20.782 million** in H1 2024, driven by a **13.8% revenue decrease**, **17.18% gross profit decline**, doubled selling and marketing expenses, and significantly increased share of associate losses, resulting in a **RMB 38.161 million** loss attributable to equity holders and **RMB 3.56 cents** basic loss per share Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 43,236 | 50,155 | (6,919) | (13.8%) | | Cost of revenue | (20,878) | (23,158) | 2,280 | (9.8%) | | Gross profit | 22,358 | 26,997 | (4,639) | (17.2%) | | Other income | 2,111 | 2,842 | (731) | (25.7%) | | Selling and marketing expenses | (12,535) | (5,952) | (6,583) | 110.6% | | Administrative expenses | (17,392) | (15,349) | (2,043) | 13.3% | | Research and development expenses | (5,543) | (3,719) | (1,824) | 49.0% | | Share of losses of associates, net | (23,471) | (14,517) | (8,954) | 61.7% | | Loss before income tax | (35,086) | (20,782) | (14,304) | 68.8% | | Loss for the period | (35,086) | (20,782) | (14,304) | 68.8% | | Loss for the period attributable to owners of the Company | (38,161) | (19,770) | (18,391) | 93.0% | | Basic loss per share (RMB cents) | (3.56) | (1.84) | (1.72) | 93.5% | [Condensed Consolidated Statement of Financial Position](index=30&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets decreased from **RMB 100.479 million** to **RMB 66.469 million**, with significant reductions in non-current and current assets, a slight increase in current liabilities, resulting in a net current liability of **RMB 0.027 million** (previously net current asset of **RMB 19.368 million**), and total equity sharply declining to **RMB 32.164 million** Summary of Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current assets | 36,101 | 52,778 | (16,677) | (31.6%) | | Current assets | 30,368 | 47,701 | (17,333) | (36.3%) | | **Total assets** | **66,469** | **100,479** | **(34,010)** | **(33.8%)** | | Current liabilities | 30,395 | 28,333 | 2,062 | 7.3% | | Non-current liabilities | 3,910 | 5,253 | (1,343) | (25.6%) | | **Total liabilities** | **34,305** | **33,586** | **719** | **2.1%** | | Net assets | 32,164 | 66,893 | (34,729) | (51.9%) | | Equity attributable to owners of the Company | 35,454 | 73,258 | (37,804) | (51.6%) | | Non-controlling interests | (3,290) | (6,365) | 3,075 | (48.3%) | | **Total equity** | **32,164** | **66,893** | **(34,729)** | **(51.9%)** | - The current ratio decreased from **1.68** as of December 31, 2024, to **1.0** as of June 30, 2025[43](index=43&type=chunk)[46](index=46&type=chunk) - Interest in associates significantly decreased, primarily due to the share of losses from AGAE accounted for using the equity method[197](index=197&type=chunk)[201](index=201&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=32&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For H1 2025, the Group's total equity significantly decreased from **RMB 66.893 million** on January 1, 2025, to **RMB 32.164 million**, primarily due to a **RMB 38.161 million** loss attributable to equity holders and a **RMB 34.047 million** transfer from share option reserve to accumulated losses upon option expiry Summary of Condensed Consolidated Statement of Changes in Equity | Metric | Jan 1, 2025 (RMB thousand) | June 30, 2025 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Share capital | 335 | 335 | 0 | | Share premium | 1,023,563 | 1,023,563 | 0 | | Statutory reserve | 38,441 | 38,441 | 0 | | Translation reserve | 4,231 | 4,554 | 323 | | Share option reserve | 52,381 | 18,334 | (34,047) | | Other reserve | (5,689) | (5,689) | 0 | | Share award reserve | 202 | 236 | 34 | | Accumulated losses | (1,035,075) | (1,039,189) | (4,114) | | **Subtotal equity attributable to owners of the Company** | **73,258** | **35,454** | **(37,804)** | | Non-controlling interests | (6,365) | (3,290) | 3,075 | | **Total equity** | **66,893** | **32,164** | **(34,729)** | - A loss of **RMB 38.161 million** for the period and a transfer of **RMB 34.047 million** from share option reserve upon expiry significantly reduced equity[157](index=157&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=34&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For H1 2025, the Group's cash and cash equivalents saw a net decrease of **RMB 0.913 million**, contrasting with a net increase of **RMB 4.714 million** in H1 2024, with cash used in operating activities increasing to **RMB 8.895 million**, cash generated from investing activities at **RMB 4.701 million** (mainly from loan repayments), and cash from financing activities at **RMB 3.281 million** (primarily from bank loans) Summary of Condensed Consolidated Statement of Cash Flows | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (8,895) | (4,580) | (4,315) | | Net cash generated from investing activities | 4,701 | 1,359 | 3,342 | | Net cash generated from financing activities | 3,281 | 7,935 | (4,654) | | **Net (decrease)/increase in cash and cash equivalents** | **(913)** | **4,714** | **(5,627)** | | Cash and cash equivalents at end of period | 12,727 | 40,176 | (27,449) | - Cash outflow from operating activities increased, cash inflow from investing activities primarily came from loan repayments, and cash inflow from financing activities mainly originated from bank loans[162](index=162&type=chunk)[163](index=163&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=36&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details the basis of preparation, accounting policies, revenue breakdown, expense specifics, liquidity, investments, and material litigation, highlighting IAS 34 application, declining online game revenue, increased R&D and administrative expenses, and the impact of associate litigation costs on losses [1. Basis of Preparation](index=36&type=section&id=1.%20BASIS%20OF%20PREPARATION) The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" issued by the IASB and the applicable disclosure requirements of the HKEX Listing Rules - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[165](index=165&type=chunk)[169](index=169&type=chunk) [2. Accounting Policies](index=36&type=section&id=2.%20ACCOUNTING%20POLICIES) The condensed consolidated financial statements are prepared on a historical cost basis, with certain properties and financial instruments measured at revalued amounts or fair value, using the same accounting policies as the 2024 annual financial statements, and the application of IFRS amendments had no material impact - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain properties and financial instruments measured at revalued amounts or fair value[166](index=166&type=chunk)[170](index=170&type=chunk) - The accounting policies and methods of computation used for the six months ended June 30, 2025, are the same as those presented in the Group's consolidated financial statements for the year ended December 31, 2024[167](index=167&type=chunk)[170](index=170&type=chunk) - The application of amendments to International Financial Reporting Standards (IAS 21 (Amendment) Lack of Exchangeability) had **no material impact** on the Group's financial position and performance[168](index=168&type=chunk)[171](index=171&type=chunk) [3. Revenue and Segment Information](index=37&type=section&id=3.%20REVENUE%20AND%20SEGMENT%20INFORMATION) In H1 2025, the Group's revenue was **RMB 43.236 million**, primarily from online games (**RMB 36.843 million**) and online advertising services (**RMB 6.393 million**), mostly recognized at a point in time, with all revenue from operations within China and no single customer exceeding **10%** of total revenue [Revenue Disaggregation](index=37&type=section&id=Revenue%20Disaggregation) In H1 2025, online game revenue decreased to **RMB 36.843 million**, while online advertising service revenue slightly increased to **RMB 6.393 million**, with most revenue (**RMB 38.540 million**) recognized at a point in time Revenue Disaggregated by Major Product or Service Line | Revenue Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Online game revenue | 36,843 | 44,302 | (7,459) | (16.8%) | | Online advertising service revenue | 6,393 | 5,853 | 540 | 9.2% | | **Total revenue** | **43,236** | **50,155** | **(6,919)** | **(13.8%)** | - Revenue recognition timing: **RMB 38.540 million** recognized at a point in time, **RMB 4.696 million** recognized over time[173](index=173&type=chunk) [Segment Information](index=37&type=section&id=Segment%20Information) The Chief Operating Decision Maker (CODM) allocates resources and assesses performance based on categories of goods or services delivered; due to a lack of other independent financial information, only entity-wide disclosures, major customer, and geographical information are presented - Information reported to the Chief Operating Decision Maker for resource allocation and segment performance assessment focuses on the categories of goods or services delivered or provided[174](index=174&type=chunk)[176](index=176&type=chunk) - As no other separate financial information is provided apart from the Group's overall performance and financial position within its continuing operations, only entity-wide disclosures, major customer, and geographical information are presented[175](index=175&type=chunk)[176](index=176&type=chunk) [Geographical Information](index=38&type=section&id=Geographical%20Information) All of the Group's revenue from external customers for H1 2025 and H1 2024 was derived from operations within mainland China Revenue by Geographical Region | Region | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | China | 43,236 | 50,155 | [Information about Major Customers](index=38&type=section&id=Information%20about%20Major%20Customers) The Group has a large number of game players, with no single player or customer accounting for **10%** or more of the Group's total revenue for the six months ended June 30, 2025 and 2024 - For the six months ended June 30, 2025 and 2024, no revenue from any individual game player or customer accounted for **10% or more** of the Group's total revenue[180](index=180&type=chunk)[181](index=181&type=chunk) [4. Other Income](index=39&type=section&id=4.%20OTHER%20INCOME) In H1 2025, the Group's other income decreased by **25.7%** to **RMB 2.111 million** from H1 2024, primarily due to reduced bank interest income and revenue from providing board and card game venues Other Income Details | Revenue Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Franchise fee income | 74 | 127 | (53) | (41.7%) | | Loan interest income | 207 | 165 | 42 | 25.5% | | Bank interest income | 12 | 318 | (306) | (96.2%) | | Income from providing board and card game venues | 1,789 | 2,212 | (423) | (19.1%) | | **Total** | **2,111** | **2,842** | **(731)** | **(25.7%)** | [5. Other Gains and Losses](index=39&type=section&id=5.%20OTHER%20GAINS%20AND%20LOSSES) In H1 2025, the Group's other losses were **RMB 0.132 million**, a slight decrease from **RMB 0.192 million** in H1 2024, primarily due to net foreign exchange losses partially offset by the absence of impairment losses on prepayments from the prior year Other Gains and Losses Details | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Net foreign exchange (losses)/gains | (132) | 110 | (242) | | Impairment loss on prepayments | — | (302) | 302 | | **Total** | **(132)** | **(192)** | **60** | [6. Income Tax Expense](index=40&type=section&id=6.%20INCOME%20TAX%20EXPENSE) The Group incurred no income tax expense for the six months ended June 30, 2025, consistent with the prior year period - For the six months ended June 30, 2025, the Group incurred **no income tax expense**[187](index=187&type=chunk) [7. Loss for the Period](index=40&type=section&id=7.%20LOSS%20FOR%20THE%20PERIOD) In H1 2025, the Group's loss for the period was **RMB 35.086 million**; after deducting expenses including total staff costs of **RMB 9.546 million** (down **27.2%** YoY) and total depreciation of **RMB 0.290 million** (down **38.8%** YoY) Key Expense Details for Loss for the Period | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Lease expenses related to short-term leases | 148 | 124 | 24 | 19.4% | | Total depreciation | 290 | 474 | (184) | (38.8%) | | Total staff costs | 9,546 | 13,109 | (3,563) | (27.2%) | [8. Dividends](index=41&type=section&id=8.%20DIVIDENDS) The Directors did not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year period - The Directors did **not recommend the payment of an interim dividend** for the six months ended June 30, 2025[190](index=190&type=chunk)[191](index=191&type=chunk) [9. Loss Per Share](index=41&type=section&id=9.%20LOSS%20PER%20SHARE) In H1 2025, basic loss per share attributable to owners of the Company increased to **RMB 3.56 cents** from **RMB 1.84 cents** in H1 2024, with diluted loss per share also **RMB 3.56 cents** as share options were anti-dilutive Loss Per Share Comparison | Metric | H1 2025 (RMB cents) | H1 2024 (RMB cents) | Change (RMB cents) | | :--- | :--- | :--- | :--- | | Basic loss per share | (3.56) | (1.84) | (1.72) | | Diluted loss per share | (3.56) | (1.84) | (1.72) | - The exercise of share options was not assumed in calculating diluted loss per share as their exercise price was higher than the average market price of the shares[194](index=194&type=chunk) [10. Property, Plant and Equipment](index=42&type=section&id=10.%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) In H1 2025, the Group's cost of acquiring property, plant, and equipment significantly increased to **RMB 0.991 million** from **RMB 0.285 million** in H1 2024 Cost of Property, Plant and Equipment Acquisitions | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Acquisition cost | 991 | 285 | 706 | 247.7% | [11. Investment Properties](index=42&type=section&id=11.%20INVESTMENT%20PROPERTIES) In June 2025, the Group acquired a property in China with a fair value of **RMB 5.630 million**, which was pledged for outstanding receivables and interest, and agreed upon as partial settlement with the borrower - In June 2025, the Group acquired a property in China with a fair value of **RMB 5,630,000**, which was pledged for outstanding receivables and interest, and agreed upon as partial settlement with the borrower[196](index=196&type=chunk)[200](index=200&type=chunk) [12. Interest in Associates](index=42&type=section&id=12.%20INTEREST%20IN%20ASSOCIATES) As of June 30, 2025, the Group's interest in associates, primarily a **32.6%** ownership in NASDAQ-listed AGAE, significantly decreased to **RMB 7.035 million** from **RMB 29.723 million** on December 31, 2024, mainly due to the share of losses from AGAE accounted for using the equity method Interest in Associates Comparison | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest in associates | 7,035 | 29,723 | (22,688) | (76.3%) | - The decrease in interest was due to the share of losses from AGAE accounted for using the equity method[197](index=197&type=chunk)[201](index=201&type=chunk) - As of June 30, 2025, the fair value of AGAE was approximately **RMB 222.494 million**[198](index=198&type=chunk)[201](index=201&type=chunk) [13. Trade and Other Receivables](index=43&type=section&id=13.%20TRADE%20AND%20OTHER%20RECEIVABLES) As of June 30, 2025, trade and other receivables decreased to **RMB 17.157 million** from **RMB 33.581 million** on December 31, 2024, primarily due to significant reductions in loans and interest receivables (from **RMB 19.271 million** to **RMB 7.838 million**) and prepaid advertising expenses (from **RMB 4.0 million** to zero), alongside a decline in trade receivables Trade and Other Receivables Details | Item | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade receivables (net) | 827 | 1,597 | (770) | (48.2%) | | Prepayments (net) | 1,149 | 6,171 | (5,022) | (81.4%) | | Other receivables and deposits (net) | 7,343 | 6,542 | 801 | 12.2% | | Loans and interest receivables (net) | 7,838 | 19,271 | (11,433) | (59.3%) | | **Total** | **17,157** | **33,581** | **(16,424)** | **(48.9%)** | - The credit period for trade receivables is typically **30 to 90 days**[205](index=205&type=chunk)[207](index=207&type=chunk) Impairment Losses Recognized/(Reversed) | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | (6) | (6) | | Other receivables and deposits | — | 83 | | Loans and interest receivables | 178 | 165 | | **Total** | **172** | **242** | [14. Trade and Other Payables](index=45&type=section&id=14.%20TRADE%20AND%20OTHER%20PAYABLES) As of June 30, 2025, trade and other payables decreased to **RMB 17.690 million** from **RMB 21.766 million** on December 31, 2024, primarily due to significant reductions in accrued R&D expenses (from **RMB 3.256 million** to **RMB 0.410 million**) and VAT and other taxes payable (from **RMB 1.347 million** to **RMB 0.115 million**) Trade and Other Payables Details | Item | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade payables | 3,682 | 4,313 | (631) | (14.6%) | | Other payables and accrued expenses | 5,345 | 5,047 | 298 | 5.9% | | Staff costs and accrued benefits | 3,240 | 4,027 | (787) | (19.5%) | | Accrued R&D expenses | 410 | 3,256 | (2,846) | (87.4%) | | Accrued legal and professional fees | 4,192 | 3,038 | 1,154 | 38.0% | | VAT and other taxes payable | 115 | 1,347 | (1,232) | (91.5%) | | **Total** | **17,690** | **21,766** | **(4,076)** | **(18.7%)** | Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 30 days | 953 | 573 | | 31 to 60 days | 16 | 11 | | 61 to 90 days | 17 | 19 | | 91 to 180 days | 25 | 21 | | 181 to 365 days | — | 22 | | Over 1 year | 2,671 | 3,667 | | **Total** | **3,682** | **4,313** | [15. Bank Loans](index=46&type=section&id=15.%20BANK%20LOANS) As of June 30, 2025, current bank loans increased to **RMB 7.500 million** from **RMB 2.600 million** on December 31, 2024; these unsecured, unguaranteed loans bear fixed annual interest rates of **3.05% to 3.50%** and are repayable within one year Bank Loans Comparison | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Bank loans (current portion) | 7,500 | 2,600 | 4,900 | 188.5% | - Bank loans are unsecured, unguaranteed, bear fixed annual interest rates ranging from **3.05% to 3.50%**, and are repayable within one year[217](index=217&type=chunk)[218](index=218&type=chunk) [16. Share-Based Compensation Transactions](index=47&type=section&id=16.%20SHARE-BASED%20COMPENSATION%20TRANSACTIONS) The Group operates a 2014 Share Option Scheme and a 2017 Share Award Scheme; in H1 2025, **41,743,839 options lapsed** under the 2014 scheme, leaving **20,370,000 unexercised**, while the Share Award Scheme had **17,071,153 awards authorized** and **725,000 awarded shares unexercised** (**37,288,483 vested**), with total share-based compensation expense of **RMB 34,000** recognized [Share Option Scheme adopted by the Company in November 2014](index=47&type=section&id=Share%20Option%20Scheme%20adopted%20by%20the%20Company%20in%20November%202014) The 2014 Share Option Scheme aims to provide eligible persons with an opportunity to acquire ownership interests in the Company; as of June 30, 2025, **20,370,000 options remained unexercised**, with **41,743,839 options lapsing** during the period, primarily from former directors and employees 2014 Share Option Scheme Movements (H1 2025) | Category of Grantees | Outstanding as at Jan 1, 2025 | Lapsed during the period | Outstanding as at June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors | 31,360,000 | (23,520,000) | 7,840,000 | | Employees | 30,753,839 | (18,223,839) | 12,530,000 | | **Total** | **62,113,839** | **(41,743,839)** | **20,370,000** | [Share Award Scheme adopted by the Company in May 2017](index=49&type=section&id=Share%20Award%20Scheme%20adopted%20by%20the%20Company%20in%20May%202017) The 2017 Share Award Scheme aligns eligible persons' interests with long-term Group growth; as of June 30, 2025, **17,071,153 awards were authorized**, with **725,000 awarded shares unexercised** and **37,288,483 shares vested**, with no new awards granted, vested, cancelled, or lapsed in H1 2025 Number of Awards Available for Grant under Share Award Scheme | Metric | Jan 1, 2025 | June 30, 2025 | | :--- | :--- | :--- | | Number of Awards Available for Grant | 17,071,153 | 17,071,153 | Share Award Scheme Movements (H1 2025) | Category of Grantees | Outstanding as at Jan 1, 2025 | Granted during the period | Vested during the period | Cancelled during the period | Lapsed during the period | Outstanding as at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Directors/Former Directors | 250,000 | — | — | — | — | 250,000 | | Employees | 475,000 | — | — | — | — | 475,000 | | **Total** | **725,000** | **—** | **—** | **—** | **—** | **725,000** | - As of June 30, 2025, **37,288,483 shares** were vested[230](index=230&type=chunk)[234](index=234&type=chunk) - For the six months ended June 30, 2025, the Group recognized total share-based compensation expenses of **RMB 34,000**[234](index=234&type=chunk) [17. Significant Related Party Transactions](index=50&type=section&id=17.%20SIGNIFICANT%20RELATED%20PARTY%20TRANSACTIONS) In H1 2025, the Group had no employee benefit expense transactions with former acting CEO and non-executive director (compared to **RMB 0.5 million** in H1 2024), and total key management personnel remuneration decreased from **RMB 4.537 million** to **RMB 1.375 million** Significant Related Party Transactions (Employee Benefit Expenses) | Related Party Name | Relationship | Nature of Transaction | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Former Acting CEO and Former Non-Executive Director of the Company | Major Shareholder of the Company | Employee benefit expenses | — | 500 | Key Management Personnel Remuneration | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Directors' fees | 376 | 492 | (116) | (23.6%) | | Basic salaries and allowances | 802 | 3,519 | (2,717) | (77.2%) | | Retirement benefit scheme contributions | 163 | 448 | (285) | (63.6%) | | Share-based compensation | 34 | 78 | (44) | (56.4%) | | **Total** | **1,375** | **4,537** | **(3,162)** | **(69.7%)** | [18. Fair Value Measurements of Financial Instruments](index=51&type=section&id=18.%20FAIR%20VALUE%20MEASUREMENTS%20OF%20FINANCIAL%20INSTRUMENTS) The Group measures certain financial instruments at fair value, primarily unlisted equity investments classified within Level 3 of the fair value hierarchy, which remained at **RMB 14.215 million** as of June 30, 2025, with no transfers between fair value hierarchy levels during the period, and fair value determined using the asset approach considering significant unobservable inputs like marketability discount (**15.6%**) and minority interest discount (**0% to 11.8%**) - Certain financial instruments of the Group are measured at fair value, primarily unlisted equity investments classified within Level 3 of the fair value hierarchy[237](index=237&type=chunk)[239](index=239&type=chunk)[241](index=241&type=chunk) Financial Assets at Fair Value through Profit or Loss (FVTPL) | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Unlisted equity investments | 14,215 | 14,215 | - For the six months ended June 30, 2025, there were **no transfers** between Level 1 and Level 2, nor any transfers into or out of Level 3[245](index=245&type=chunk)[247](index=247&type=chunk) - Fair value is determined using the asset approach, with significant unobservable inputs including marketability discount (**15.6%**) and minority interest discount (**0% to 11.8%**)[246](index=246&type=chunk)[247](index=247&type=chunk) [19. Other Litigations/Arbitrations](index=54&type=section&id=19.%20OTHER%20LITIGATIONS%2FARBITRATIONS) This section details three ongoing material legal disputes: arbitration and related litigation concerning the Fast Express/Merit Horizon loan, enforcement proceedings for the Spoville convertible bond arbitration, and two lawsuits by Knighted Pastures against associate AGAE, all of which are in progress without final rulings [Arbitration from Mr. Ng Kwok Leung Frank ("Mr. Ng") against AGAE](index=54&type=section&id=Arbitration%20from%20Mr.%20Ng%20Kwok%20Leung%20Frank%20%28%22Mr.%20Ng%22%29%20against%20AGAE) Former director Mr. Ng initiated arbitration against AGAE with the American Arbitration Association for **USD 1 million** in severance pay and alleged fraud in a prior settlement; **USD 645,000** previously received by the Company to offset Mr. Ng's loan has been transferred to an escrow account, with discovery ongoing and hearings scheduled for early November 2025 - Mr. Ng (former Executive Director and former CEO of the Company) owed the Company a total of **RMB 6,905,000** in loans and interest[251](index=251&type=chunk)[255](index=255&type=chunk) - In October 2023, Mr. Ng filed an arbitration case with the American Arbitration Association, claiming **USD 1,000,000** owed by AGAE and alleging fraud in settlement-related documents[254](index=254&type=chunk)[256](index=256&type=chunk) - Approximately **USD 645,000** previously received by the Company has been transferred to an escrow accoun

(於中華人民共和國註冊成立的股份有限公 司) (股份代號 : 814) 中 期 報 告 2025 目錄 | | 頁碼 | | --- | --- | | 公司資料 | 2 | | 財務摘要 | 4 | | 管理層討論及分析 | 5 | | 其他資料 | 16 | | 審閱報告 | 20 | | 合併資產負債表 | 21 | | 公司資產負債表 | 23 | | 合併利潤表 | 25 | | 公司利潤表 | 27 | | 合併現金流量表 | 29 | | 公司現金流量表 | 31 | | 合併股東權益變動表 | 33 | | 公司股東權益變動表 | 35 | | 二○二五年半年度財務報表附註 | 37 | 公司資料 董事會 執行董事 張立偉先生 （董事長） 王虹女士 張紅波先生 楊文生先生 非執行董事 張彥女士 李穎女士 （自2025年5月16日起，獲委任為非 執行董事） 李建文先生 （自2025年5月16日起，辭任非執 行董事） 陳立平先生 （自2025年5月16日起，辭任獨立 非執行董事） 審核委員會 葛文達先生 （主席） 王利平先生 何明珂先生 （自2025年5月16日起，獲委任為 審核委員會成員） 陳立 ...

[Company Information](index=3&type=section&id=Company%20Information) [Company Basic Information](index=3&type=section&id=Company%20Basic%20Information) Tuhu Car Inc. is a limited company incorporated in the Cayman Islands, primarily offering automotive products and services in China via its app, website, and WeChat mini-program - Tuhu Car Inc. was incorporated in the Cayman Islands on July 8, 2019, primarily providing automotive products and services in China through its online platforms[3](index=3&type=chunk)[192](index=192&type=chunk) - Mr. Chen Min serves as the Chairman of the Board and Chief Executive Officer, with Ernst & Young as the auditor[6](index=6&type=chunk) [Dual-Class Share Structure](index=4&type=section&id=Dual-Class%20Share%20Structure) The company employs a dual-class share structure, granting Class B shares ten votes per share compared to one vote per Class A share, ensuring voting control for the Differentiated Voting Rights Beneficiary (Mr. Chen Min) to pursue long-term strategies without majority economic interest - The company adopts a dual-class share structure, with Class A shares having one vote per share and Class B shares having ten votes per share (except for specific resolutions), aiming to ensure the continuous leadership of the Differentiated Voting Rights Beneficiary (Mr. Chen Min)[9](index=9&type=chunk) - As of the Latest Practicable Date, Mr. Chen Min owned and controlled approximately **48.27%** of the company's issued share voting rights[11](index=11&type=chunk) - Class B shares are convertible into Class A shares on a one-to-one basis, and differentiated voting rights will terminate under specific circumstances, such as the beneficiary's death or cessation of board membership[11](index=11&type=chunk) [Financial Summary and Key Operating Metrics](index=6&type=section&id=Financial%20Summary%20and%20Key%20Operating%20Metrics) [Financial Summary](index=6&type=section&id=Financial%20Summary) In the first half of 2025, the company's revenue grew by **10.5%** year-on-year to **RMB 7.877 billion**, with gross profit increasing by **7.4%** to **RMB 1.982 billion**, demonstrating robust profitability amidst market adjustments 2025 H1 Financial Summary (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Period Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 7,876,938 | 7,126,161 | 10.5 | | Gross Profit | 1,982,131 | 1,845,765 | 7.4 | | Operating Profit | 221,929 | 211,884 | 4.7 | | Profit for the Period | 306,535 | 284,332 | 7.8 | | Adjusted EBITDA | 483,349 | 449,619 | 7.5 | | Adjusted Net Profit | 410,460 | 358,164 | 14.6 | [Key Operating Metrics](index=6&type=section&id=Key%20Operating%20Metrics) As of June 30, 2025, the number of Tuhu workshops reached **7,205**, a **14.2%** year-on-year increase, while transacting and registered users also grew significantly by **23.8%** and **18.8%** respectively, indicating continuous user base expansion 2025 H1 Key Operating Metrics | Indicator | June 30, 2025 | June 30, 2024 | Period Change (%) | | :--- | :--- | :--- | :--- | | Tuhu Workshop Stores | 7,205 | 6,311 | 14.2 | | - Self-operated Stores | 160 | 149 | 7.4 | | - Franchise Stores | 7,045 | 6,162 | 14.3 | | Transacting Users (millions) | 26.5 | 21.4 | 23.8 | | Registered Users (millions) | 150.3 | 126.4 | 18.8 | [Chairman's Report](index=7&type=section&id=Chairman's%20Report) [Business Review](index=7&type=section&id=Business%20Review) In the first half of 2025, China's automotive service industry faced significant adjustments with contracting market demand and increased consumer focus on value, while Tuhu Car achieved high-quality growth through standardized service networks, digital efficiency, and government policy collaboration - China's automotive service industry experienced a period of deep adjustment in the first half of 2025, with a temporary contraction in market demand, increased consumer focus on value, and growing demand for car wash, detailing, and quick repair services for new energy vehicles and existing car models[15](index=15&type=chunk) - Tuhu Car achieved high-quality development through its standardized service network, digital efficiency, and active response to government "trade-in" policies, expanding its store count to over **7,000**, with transaction user satisfaction exceeding **95%** and a repurchase rate of **64%**[16](index=16&type=chunk) [Financial Summary](index=7&type=section&id=Financial%20Summary_Chairman's%20Report) In the first half of 2025, Tuhu Car's total revenue reached **RMB 7.9 billion**, a **10.5%** year-on-year increase, maintaining its leading position in China's independent automotive service market, while adjusted net profit grew by **14.6%** to **RMB 410 million** and free cash flow increased by **32.2%** to **RMB 347 million** - Total revenue in the first half of 2025 reached **RMB 7.9 billion**, a **10.5%** year-on-year increase, maintaining its position as the largest independent automotive service market player in China[17](index=17&type=chunk) - Adjusted net profit **RMB 410 million**, a **14.6%** year-on-year increase; free cash flow **RMB 347 million**, a **32.2%** year-on-year increase[20](index=20&type=chunk) - As of the end of the reporting period, the company held approximately **RMB 7.5 billion** in total cash reserves, indicating ample funding[20](index=20&type=chunk) [Platform Operations](index=8&type=section&id=Platform%20Operations) As of the end of the first half of 2025, Tuhu Car's cumulative twelve-month transacting users reached **26.5 million** and average monthly active users reached **13.5 million**, with the company enhancing user experience through AI-powered smart customer service, leading to improved conversion rates and reduced labor costs - As of the end of the first half of 2025, cumulative twelve-month transacting users reached **26.5 million**, and average monthly active users reached **13.5 million**, representing year-on-year increases of **23.8%** and **17.5%** respectively[21](index=21&type=chunk) - Han Han was invited as the first "Professional Brand Ambassador" to reinforce the brand image of "Professional Tuhu, Reliable Car Maintenance"[21](index=21&type=chunk) - Continuous collaboration with authoritative institutions for product testing and establishment of the first professional film product testing laboratory among domestic automotive service platforms[22](index=22&type=chunk) - Deep renovation of the smart customer service system based on the DeepSeek large model resulted in a **2 percentage point** increase in pre-sales conversion rate, a **7 percentage point** increase in smart customer service satisfaction, and an **18%** reduction in customer service labor costs[25](index=25&type=chunk) [Store Expansion and Operations](index=9&type=section&id=Store%20Expansion%20and%20Operations) As of June 30, 2025, Tuhu workshop stores expanded to **7,205** across **320** prefecture-level and **1,855** county-level administrative divisions, with the company supporting franchisees through various programs, leading to improved profitability and increased same-store fulfillment user numbers - As of June 30, 2025, the number of Tuhu workshop stores reached **7,205**, covering **320** prefecture-level administrative divisions and **1,855** county-level administrative divisions nationwide, with county-level coverage increasing to **70%**[27](index=27&type=chunk) - Launched the "Youth Automotive Service Talent Entrepreneurship Support Program" and the "Ten Billion Subsidy, Ten Thousand Stores Together" program to support franchisee development[28](index=28&type=chunk) - In the first half of the year, the profitability ratio of new franchised workshop stores increased by over **5 percentage points** year-on-year, same-store fulfillment user numbers grew by over **7%** year-on-year, and approximately **90%** of franchised stores operating for more than six months remained profitable[31](index=31&type=chunk) - Innovatively launched the "Smart Quotation" function, strengthened store capability building, and ensured service quality through the "New Store Improvement Program" and refined management[30](index=30&type=chunk)[31](index=31&type=chunk) [Products and Services](index=11&type=section&id=Products%20and%20Services) [Tires](index=11&type=section&id=Tires) Facing sluggish growth in the replacement tire industry, Tuhu Car strengthened its market position by deepening cooperation with international brands and leveraging domestic brands, achieving double the year-on-year sales growth in lower-tier markets compared to higher-tier cities - The tire business consolidated its market-leading position by deepening cooperation with international brands like Michelin and Continental, and by capitalizing on the growth dividends of domestic brands[33](index=33&type=chunk) - In lower-tier markets, the year-on-year growth rate of tire sales volume was twice that of higher-tier cities, demonstrating the effectiveness of refined recommendation strategies[33](index=33&type=chunk) [Car Maintenance](index=11&type=section&id=Car%20Maintenance) In car maintenance, Tuhu Car collaborated with international brands to offer high-quality, low-price engine oil products and upgraded its private label entry-level products, resulting in over **60%** year-on-year growth in low-price segment engine oil sales and user volume, while battery services expanded with doubled coverage for "28-minute guaranteed delivery or compensation" service - In the engine oil category, Tuhu collaborated with international brands to launch high-quality, low-price products and upgraded its private label offerings, leading to a significant year-on-year increase of over **60%** in low-price segment engine oil sales volume and user numbers in the first half of the year[34](index=34&type=chunk) - Battery services optimized rapid on-site installation service network coverage, doubling the number of car owners covered by the "28-minute guaranteed delivery or compensation" service year-on-year[37](index=37&type=chunk) - Brake disc and pad sales increased by over **40%** year-on-year, and air filter sales year-on-year increased by approximately **30%**[37](index=37&type=chunk) [Other Products and Services](index=12&type=section&id=Other%20Products%20and%20Services) Quick repair service revenue surged by over **60%** year-on-year, maintaining over **10%** penetration among Tuhu transacting users, while deep detailing services saw private label product revenue exceed **70%**, with approximately **60%** of sales coming from new car owners - Quick repair service revenue increased by over **60%** year-on-year, maintaining a penetration rate of over **10%** among Tuhu transacting users[38](index=38&type=chunk) - Private label product revenue for deep detailing services exceeded **70%**, with approximately **60%** of sales generated from new car owners with vehicles less than one year old[39](index=39&type=chunk) [New Energy Vehicle Business](index=13&type=section&id=New%20Energy%20Vehicle%20Business) Tuhu Car actively expanded its new energy vehicle business by introducing specialized tires and hybrid engine oils, and offering power battery inspection and out-of-warranty "three-electric" repair services, leading to a **83.5%** year-on-year increase in new energy vehicle transacting users to **3.4 million** - Launched new energy vehicle-specific tires, accounting for over **15%** of private label product sales, and offered "lifetime warranty" services[41](index=41&type=chunk) - New energy vehicle hybrid engine oil paying user volume increased by over **120%** year-on-year[41](index=41&type=chunk) - Initiated power battery inspection and out-of-warranty "three-electric" (battery, motor, electronic control) repair services for new energy vehicles[42](index=42&type=chunk) - For the twelve months ended June 30, 2025, the number of new energy vehicle transacting users reached **3.4 million**, an **83.5%** year-on-year increase, accounting for over **12%** of the platform's total transacting users[42](index=42&type=chunk) [Supply Chain and Logistics](index=14&type=section&id=Supply%20Chain%20and%20Logistics) As of June 30, 2025, Tuhu Car operated **258** self-operated delivery routes, covering **32** regional warehouses, **662** front-end warehouses, and **7,205** workshop stores, achieving an **83%** same-day/next-day delivery rate and a **0.5 percentage point** reduction in overall fulfillment cost ratio, while exploring smart logistics with automated warehouses and unmanned delivery vehicles - As of June 30, 2025, the company operated **258** self-operated delivery routes, covering **32** regional warehouses, **662** front-end warehouses, and **7,205** workshop stores[44](index=44&type=chunk) - In the first half of the year, the same-day/next-day delivery rate increased by approximately **6 percentage points** to **83%**, and the overall fulfillment cost ratio decreased by **0.5 percentage points** year-on-year[44](index=44&type=chunk) - The Guangzhou automated benchmark warehouse commenced trial operations, expected to reduce labor costs by **60%** and increase efficiency by **2.5 times**[44](index=44&type=chunk) - Exploring smart logistics and unmanned delivery, with unmanned delivery vehicles deployed in cities like Nanjing and Chengdu[45](index=45&type=chunk) [Environmental, Social and Governance](index=14&type=section&id=Environmental,%20Social%20and%20Governance) In the first half of 2025, Tuhu Car actively fulfilled its corporate social responsibility by joining the "Caihua Convention" to support people with disabilities, launching public service initiatives, and collaborating with the Central Committee of the Communist Youth League to foster young talent in the automotive service industry - Joined the "Caihua Convention" to promote services for people with disabilities and launched public service projects such as "Open During Spring Festival" and "Gaokao Assistance"[46](index=46&type=chunk) - Collaborated with a direct affiliate of the Central Committee of the Communist Youth League to launch the "Youth Automotive Service Talent Entrepreneurship Support Program," nurturing young talent in the automotive service industry[46](index=46&type=chunk) - Awarded "Top 100 Chain Enterprises in Life Service Industry" (first place in automotive aftermarket) and "Minhang District Corporate Social Responsibility Award"[48](index=48&type=chunk) [Concluding Remarks](index=15&type=section&id=Concluding%20Remarks) Founder, Chairman of the Board, and CEO Mr. Chen Min reaffirmed the company's commitment to long-termism, leading industry development with professionalism and resilience, and expressed gratitude to all supporters - Founder Mr. Chen Min emphasized the company's continued commitment to long-termism, leading industry development with professionalism and resilience[49](index=49&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) [Selected Consolidated Statement of Profit or Loss Items](index=16&type=section&id=Selected%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20Items) In the first half of 2025, the company's revenue increased by **10.5%** to **RMB 7.877 billion**, gross profit grew by **7.4%** to **RMB 1.982 billion**, profit for the period was **RMB 307 million**, and adjusted net profit was **RMB 410 million**, up **14.6%** year-on-year 2025 H1 Selected Consolidated Statement of Profit or Loss Items (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 7,876,938 | 7,126,161 | | Cost of Sales | (5,894,807) | (5,280,396) | | Gross Profit | 1,982,131 | 1,845,765 | | Operating Profit | 221,929 | 211,884 | | Profit for the Period | 306,535 | 284,332 | | Adjusted EBITDA | 483,349 | 449,619 | | Adjusted Net Profit | 410,460 | 358,164 | [Revenue Analysis](index=17&type=section&id=Revenue%20Analysis) Total revenue for the first half of 2025 increased by **10.5%** to **RMB 7.9 billion**, driven by a **10.8%** growth in automotive products and services revenue due to network expansion and customer base growth, and a **6.6%** increase in advertising, franchise, and other services revenue - For the six months ended June 30, 2025, total revenue was **RMB 7.9 billion**, an increase of **10.5%** compared to the same period in 2024[54](index=54&type=chunk) 2025 H1 Revenue Breakdown (RMB thousands) | Revenue Category | 2025 (RMB thousands) | Share (%) | 2024 (RMB thousands) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Automotive Products and Services | 7,362,402 | 93.5 | 6,643,280 | 93.2 | | - Individual End Customers | 6,632,821 | 84.2 | 5,970,096 | 83.8 | | -- Tires and Chassis Parts | 3,285,204 | 41.7 | 2,972,618 | 41.7 | | -- Car Maintenance | 2,906,881 | 36.9 | 2,617,725 | 36.7 | | -- Others | 440,736 | 5.6 | 379,753 | 5.4 | | - Qipeilong | 729,581 | 9.3 | 673,184 | 9.4 | | Advertising, Franchise and Other Services | 514,536 | 6.5 | 482,881 | 6.8 | | - Franchise Services | 424,177 | 5.4 | 378,265 | 5.3 | | - Advertising Services | 63,211 | 0.8 | 48,045 | 0.7 | | - Others | 27,148 | 0.3 | 56,571 | 0.8 | | **Total** | **7,876,938** | **100.0** | **7,126,161** | **100.0** | - Automotive products and services revenue increased by **10.8%**, primarily due to the expansion of the Tuhu workshop store network and a growing customer base, though average transaction value decreased as customers favored value-for-money products[59](index=59&type=chunk) - Advertising, franchise, and other services revenue increased by **6.6%**, mainly driven by the expansion of the franchised Tuhu workshop store network and enhanced brand influence, which boosted advertising service revenue[60](index=60&type=chunk) [Cost of Sales](index=19&type=section&id=Cost%20of%20Sales) In the first half of 2025, cost of sales increased by **11.6%** to **RMB 5.9 billion**, primarily due to a **12.0%** increase in automotive products and services costs and a **14.7%** increase in self-operated Tuhu workshop store and other sales costs, aligning with revenue growth and business expansion - Cost of sales for the six months ended June 30, 2025, was **RMB 5.9 billion**, an **11.6%** increase from the same period in 2024[63](index=63&type=chunk) 2025 H1 Cost of Sales Breakdown (RMB thousands) | Cost Category | 2025 (RMB thousands) | Share (%) | 2024 (RMB thousands) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Automotive Products and Services Cost | 5,681,323 | 72.1 | 5,070,842 | 71.1 | | - Individual End Customers | 5,108,569 | 64.8 | 4,517,023 | 63.3 | | -- Tires and Chassis Parts | 2,764,735 | 35.1 | 2,451,589 | 34.4 | | -- Car Maintenance | 1,997,853 | 25.3 | 1,756,918 | 24.7 | | -- Others | 345,981 | 4.4 | 308,516 | 4.2 | | - Qipeilong | 572,754 | 7.3 | 553,819 | 7.8 | | Advertising, Franchise and Other Services Cost | 51,501 | 0.6 | 68,294 | 1.0 | | Self-operated Tuhu Workshop Store and Other Costs | 161,983 | 2.1 | 141,260 | 2.0 | | **Total** | **5,894,807** | **74.8** | **5,280,396** | **74.1** | - The increase in cost of sales was primarily due to a **12.0%** increase in automotive products and services costs and a **14.7%** increase in self-operated Tuhu workshop store and other sales costs, consistent with business growth and network expansion[66](index=66&type=chunk) [Gross Profit and Gross Margin](index=20&type=section&id=Gross%20Profit%20and%20Gross%20Margin) In the first half of 2025, gross profit increased to **RMB 2 billion**, but gross margin slightly decreased from **25.9%** to **25.2%**, mainly due to lower gross margins in automotive products and services (especially tires and chassis parts and car maintenance) as consumers favored value-for-money products, partially offset by improved gross margins in car wash and detailing services and Qipeilong's automotive parts sales - In the first half of 2025, gross profit was **RMB 2 billion**, with gross margin slightly decreasing from **25.9%** in the same period of 2024 to **25.2%**[67](index=67&type=chunk) - The decline in gross margin was primarily attributed to lower gross margins in automotive products and services (especially tires and chassis parts and car maintenance) as consumers favored value-for-money products, and increased cost of sales for self-operated Tuhu workshop stores and other items[67](index=67&type=chunk) - The decrease in gross margin was partially offset by increased gross margin in car wash and detailing services and improved gross margin from Qipeilong's sales of automotive parts[67](index=67&type=chunk) [Other Income and Gains, Net](index=20&type=section&id=Other%20Income%20and%20Gains,%20Net) In the first half of 2025, other income and gains, net, significantly increased by **326.1%** to **RMB 89.7 million**, primarily driven by higher government grants, partially offset by foreign exchange losses due to currency fluctuations - Other income and gains, net, amounted to **RMB 89.7 million**, an increase of **326.1%** compared to **RMB 21.0 million** in the same period of 2024[68](index=68&type=chunk) - The increase was mainly due to higher government grants received in the first half of 2025, partially offset by foreign exchange losses[68](index=68&type=chunk) [Operating and Support Expenses](index=20&type=section&id=Operating%20and%20Support%20Expenses) In the first half of 2025, operating and support expenses increased by **9.4%** to **RMB 309.7 million**, mainly due to higher employee benefit expenses and share-based payments resulting from adjustments to remuneration schemes and share incentive grants - Operating and support expenses were **RMB 309.7 million**, an increase of **9.4%** compared to the same period in 2024[69](index=69&type=chunk) - The increase was primarily due to higher employee benefit expenses and share-based payments, resulting from adjustments to remuneration schemes and the granting of share incentives[69](index=69&type=chunk) [Research and Development Expenses](index=20&type=section&id=Research%20and%20Development%20Expenses) In the first half of 2025, research and development expenses increased by **13.8%** to **RMB 343.6 million**, mainly due to increased investment in R&D talent and higher cloud service procurement to support business expansion and AI technology deployment - Research and development expenses were **RMB 343.6 million**, an increase of **13.8%** compared to the same period in 2024[70](index=70&type=chunk) - The increase was primarily due to greater investment in R&D talent and increased cloud service procurement to support business scale expansion and artificial intelligence technology deployment[70](index=70&type=chunk) [Selling and Marketing Expenses](index=21&type=section&id=Selling%20and%20Marketing%20Expenses) In the first half of 2025, selling and marketing expenses increased by **12.5%** to **RMB 1.022 billion**, mainly due to higher advertising and promotion-related expenses (especially for online traffic acquisition and Tuhu workshop store promotional activities) and increased logistics fulfillment costs driven by higher order volumes - Selling and marketing expenses were **RMB 1.022 billion**, an increase of **12.5%** compared to the same period in 2024[73](index=73&type=chunk) - The increase was primarily due to higher advertising and promotion-related expenses (especially for online traffic acquisition and Tuhu workshop store promotional activities) and increased logistics fulfillment costs driven by higher order volumes[73](index=73&type=chunk) [General and Administrative Expenses](index=21&type=section&id=General%20and%20Administrative%20Expenses) In the first half of 2025, general and administrative expenses slightly increased to **RMB 194.2 million**, mainly due to higher transaction fees resulting from an overall increase in transaction volume - General and administrative expenses were **RMB 194.2 million**, a slight increase compared to the same period in 2024[74](index=74&type=chunk) - The increase was primarily due to higher transaction fees resulting from an overall increase in transaction volume[74](index=74&type=chunk) [Finance Income](index=21&type=section&id=Finance%20Income) In the first half of 2025, finance income remained relatively stable at **RMB 87.1 million** - Finance income remained relatively stable, amounting to **RMB 87.1 million** in the first half of 2025[75](index=75&type=chunk) [Income Tax Expense](index=21&type=section&id=Income%20Tax%20Expense) In the first half of 2025, income tax expense was **RMB 5.1 million**, an increase of **6.4%** compared to the same period in 2024, primarily due to higher taxable income - Income tax expense was **RMB 5.1 million**, an increase of **6.4%** compared to the same period in 2024[76](index=76&type=chunk) - The increase was primarily due to higher taxable income generated in the first half of 2025[76](index=76&type=chunk) [Profit for the Period](index=21&type=section&id=Profit%20for%20the%20Period) In the first half of 2025, profit for the period was **RMB 306.5 million**, an increase of **7.8%** compared to the same period in 2024 - Profit for the period in the first half of 2025 was **RMB 306.5 million**, an increase of **7.8%** compared to the same period in 2024[77](index=77&type=chunk) [Non-IFRS Measures](index=22&type=section&id=Non-IFRS%20Measures) The company uses adjusted EBITDA and adjusted net profit as non-IFRS measures to better assess operating performance, with adjusted EBITDA reaching **RMB 483 million** (up **7.5%**) and adjusted net profit reaching **RMB 410 million** (up **14.6%**) in the first half of 2025 - Adjusted EBITDA and adjusted net profit are used as non-IFRS measures to evaluate operating performance by excluding the impact of income tax expense, finance income, finance costs, depreciation and amortization, and share-based payment expenses[78](index=78&type=chunk)[82](index=82&type=chunk) 2025 H1 Non-IFRS Measures (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 306,535 | 284,332 | | Adjusted EBITDA | 483,349 | 449,619 | | Adjusted Net Profit | 410,460 | 358,164 | [Selected Consolidated Statement of Financial Position Data](index=24&type=section&id=Selected%20Consolidated%20Statement%20of%20Financial%20Position%20Data) As of June 30, 2025, the company's total assets were **RMB 12.612 billion**, total liabilities were **RMB 7.584 billion**, and net assets were **RMB 5.028 billion**, with net current assets increasing to **RMB 1.318 billion** June 30, 2025 Selected Consolidated Statement of Financial Position Data (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 4,376,303 | 4,431,963 | | Total Current Assets | 8,235,483 | 8,365,276 | | Total Current Liabilities | 6,917,819 | 7,198,929 | | Total Non-current Liabilities | 666,414 | 738,932 | | **Net Assets** | **5,027,553** | **4,859,378** | | Net Current Assets | 1,317,664 | 1,166,347 | [Trade Receivables](index=26&type=section&id=Trade%20Receivables) As of June 30, 2025, trade receivables amounted to **RMB 203.9 million**, a **9.8%** decrease from December 31, 2024, primarily due to enhanced monitoring and management of receivables collection, which effectively accelerated recovery - As of June 30, 2025, trade receivables were **RMB 203.9 million**, a **9.8%** decrease from December 31, 2024[89](index=89&type=chunk) - The decrease was primarily attributed to enhanced monitoring and management measures for receivables follow-up, effectively accelerating the collection of trade receivables[89](index=89&type=chunk) [Wealth Management Investments](index=27&type=section&id=Wealth%20Management%20Investments) As of June 30, 2025, total wealth management investments were **RMB 4.7 billion**, a **4.7%** decrease from December 31, 2024, mainly due to the redemption of some wealth management products upon maturity during the reporting period - As of June 30, 2025, total wealth management investments were **RMB 4.7 billion**, a **4.7%** decrease from December 31, 2024[94](index=94&type=chunk) - The decrease was primarily due to the redemption of some wealth management products upon maturity during the reporting period[94](index=94&type=chunk) [Restricted Cash](index=27&type=section&id=Restricted%20Cash) As of June 30, 2025, total restricted cash was **RMB 1.231 billion**, primarily comprising margin deposits held in designated bank accounts for the issuance of bills payable and letters of guarantee - As of June 30, 2025, total restricted cash was **RMB 1.231 billion**, a slight increase from December 31, 2024[97](index=97&type=chunk) - It primarily comprises margin deposits held in designated bank accounts for the issuance of bills payable and letters of guarantee[95](index=95&type=chunk) [Cash and Cash Equivalents](index=28&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, cash and cash equivalents amounted to **RMB 1.511 billion**, an increase from December 31, 2024, primarily including cash at bank and in hand, and time deposits with original maturities within three months - As of June 30, 2025, cash and cash equivalents were **RMB 1.511 billion**, an increase from December 31, 2024[100](index=100&type=chunk) - This primarily includes cash at bank and in hand (**RMB 1.356 billion**) and time deposits with original maturities within three months (**RMB 155 million**)[100](index=100&type=chunk) [Trade Payables and Bills Payable](index=28&type=section&id=Trade%20Payables%20and%20Bills%20Payable) As of June 30, 2025, total trade payables and bills payable were **RMB 4.3 billion**, a **4.1%** decrease from December 31, 2024, mainly due to the settlement of outstanding balances with certain suppliers in the first half of the year - As of June 30, 2025, total trade payables and bills payable were **RMB 4.3 billion**, a **4.1%** decrease from December 31, 2024[103](index=103&type=chunk) - The decrease was primarily attributed to the settlement of outstanding balances with certain suppliers in the first half of 2025[103](index=103&type=chunk) [Financial Ratios](index=29&type=section&id=Financial%20Ratios) In the first half of 2025, the company's debt-to-asset ratio decreased to **60.1%**, total revenue growth rate was **10.5%**, and gross margin was **25.2%**, with adjusted EBITDA margin and adjusted net profit margin at **6.1%** and **5.2%** respectively 2025 H1 Key Financial Ratios | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Debt-to-Asset Ratio | 60.1% | 62.0% | | Total Revenue Growth Rate | 10.5% | 9.3% | | Gross Margin | 25.2% | 25.9% | | Adjusted EBITDA Margin | 6.1% | 6.3% | | Adjusted Net Profit Margin | 5.2% | 5.0% | [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company's cash position, including cash and cash equivalents, wealth management investments, and restricted cash, remained stable at **RMB 7.5 billion**, with cash needs funded by operating cash flows and net proceeds from global offerings, maintaining a healthy liquidity profile - As of June 30, 2025, the company's cash position (including cash and cash equivalents, wealth management investments, and restricted cash) remained stable at **RMB 7.5 billion**[106](index=106&type=chunk) - The company primarily funds its cash needs through cash generated from business operations and net proceeds from the global offering, maintaining a prudent funding policy and a healthy liquidity position[106](index=106&type=chunk)[107](index=107&type=chunk) [Selected Consolidated Statement of Cash Flows Data](index=30&type=section&id=Selected%20Consolidated%20Statement%20of%20Cash%20Flows%20Data) In the first half of 2025, net cash flows from operating activities were **RMB 258 million**, net cash flows from investing activities were **RMB 305 million**, and net cash flows used in financing activities were **RMB 422 million**, with cash and cash equivalents at period-end totaling **RMB 1.511 billion** 2025 H1 Selected Consolidated Statement of Cash Flows Data (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 257,729 | 718,700 | | Net Cash Flows from Investing Activities | 304,691 | (1,981,416) | | Net Cash Flows Used in Financing Activities | (422,456) | (105,540) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 139,964 | (1,368,256) | | Cash and Cash Equivalents at End of Period | 1,511,139 | 1,355,581 | [Net Cash Flows from Operating Activities](index=30&type=section&id=Net%20Cash%20Flows%20from%20Operating%20Activities) In the first half of 2025, net cash flows from operating activities amounted to **RMB 258 million**, influenced by profit before tax, adjustments for non-cash and non-operating items (such as share-based payments and depreciation), and changes in working capital (including a decrease in trade payables and contract liabilities) - Net cash flows from operating activities for the first half of 2025 were **RMB 258 million**[110](index=110&type=chunk) - Primarily influenced by profit before tax, adjustments for non-cash items like share-based payment expenses and depreciation, and working capital changes such as decreases in trade payables and bills payable, and contract liabilities[110](index=110&type=chunk) [Net Cash Flows from Investing Activities](index=31&type=section&id=Net%20Cash%20Flows%20from%20Investing%20Activities) In the first half of 2025, net cash flows from investing activities were **RMB 305 million**, primarily due to proceeds from wealth management investments and interest received, partially offset by purchases of wealth management investments and property, plant, and equipment - Net cash flows from investing activities for the first half of 2025 were **RMB 305 million**[113](index=113&type=chunk) - Primarily due to proceeds from wealth management investments of **RMB 6.1 billion** and interest received of **RMB 79.8 million**, partially offset by purchases of wealth management investments of **RMB 5.8 billion** and purchases of property, plant, and equipment of **RMB 133.0 million**[113](index=113&type=chunk) [Net Cash Flows Used in Financing Activities](index=31&type=section&id=Net%20Cash%20Flows%20Used%20in%20Financing%20Activities) In the first half of 2025, net cash flows used in financing activities amounted to **RMB 422 million**, mainly due to the repurchase of ordinary shares totaling **RMB 347 million** and the principal portion of lease payments of **RMB 64.1 million** - Net cash flows used in financing activities for the first half of 2025 were **RMB 422 million**[114](index=114&type=chunk) - Primarily due to the repurchase of ordinary shares totaling **RMB 347 million** and the principal portion of lease payments of **RMB 64.1 million**[114](index=114&type=chunk) [Borrowings](index=31&type=section&id=Borrowings) As of June 30, 2025, the company's bank borrowings totaled **RMB 2.0 million**, all bearing floating interest rates with an average annual rate of **2.7%** - As of June 30, 2025, the company's bank borrowings totaled **RMB 2.0 million**[115](index=115&type=chunk) - All borrowings bear floating interest rates, with an average annual interest rate of **2.7%**[115](index=115&type=chunk) [Contingent Liabilities and Guarantees](index=31&type=section&id=Contingent%20Liabilities%20and%20Guarantees) As of June 30, 2025, the company had no material contingent liabilities or guarantees - As of June 30, 2025, the Group had no material contingent liabilities or guarantees[116](index=116&type=chunk) [Capital Expenditures](index=31&type=section&id=Capital%20Expenditures) In the first half of 2025, capital expenditures amounted to **RMB 135.9 million**, a **27.2%** decrease from the same period in 2024, with the company planning to fund future capital expenditures through internal resources - Capital expenditures for the first half of 2025 were **RMB 135.9 million**, a **27.2%** decrease compared to the same period in 2024[117](index=117&type=chunk) - The company plans to fund future capital expenditures through internal resources, including cash and cash equivalents and net proceeds from the global offering[117](index=117&type=chunk) [Capital Commitments](index=31&type=section&id=Capital%20Commitments) As of June 30, 2025, the company's capital commitments were **RMB 43.6 million**, a **35.8%** decrease from December 31, 2024, primarily related to the construction of new automated warehouses - As of June 30, 2025, the company's capital commitments were **RMB 43.6 million**, a **35.8%** decrease from December 31, 2024[118](index=118&type=chunk) - Capital commitments are primarily related to the construction of new automated warehouses and are planned to be paid within one to two years[118](index=118&type=chunk) [Pledge of Assets](index=32&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had no pledge of assets - As of June 30, 2025, the Group had no pledge of assets[119](index=119&type=chunk) [Future Material Investment Plans and Capital Assets](index=32&type=section&id=Future%20Material%20Investment%20Plans%20and%20Capital%20Assets) As of the date of this interim report, the Group has no definite plans for material investments and capital assets to disclose, other than those outlined in the prospectus under "Future Plans and Use of Proceeds" - As of the date of this interim report, other than those disclosed in the prospectus under "Future Plans and Use of Proceeds," the Group has no definite plans for material investments and capital assets to disclose[120](index=120&type=chunk) [Foreign Exchange Risk and Hedging](index=32&type=section&id=Foreign%20Exchange%20Risk%20and%20Hedging) The company primarily operates in China with most transactions in RMB, and foreign currency risk mainly arises from USD-denominated bank balances; currently, there is no foreign currency hedging policy, but the company monitors exposure and considers hedging when necessary - The company primarily operates in China, with almost all operating transactions conducted in RMB, and foreign currency risk mainly arises from USD-denominated bank balances[121](index=121&type=chunk) - The company currently has no foreign currency hedging policy but closely monitors foreign exchange risk exposure and considers hedging when necessary[121](index=121&type=chunk) [Material Acquisitions, Significant Investments and Disposals](index=32&type=section&id=Material%20Acquisitions,%20Significant%20Investments%20and%20Disposals) For the six months ended June 30, 2025, the company did not undertake any material acquisitions, significant investments, or disposals of subsidiaries, associates, and joint ventures requiring disclosure under the Listing Rules - For the six months ended June 30, 2025, the company did not undertake any material acquisitions, significant investments, or disposals requiring disclosure under the Listing Rules[122](index=122&type=chunk) [No Material Changes](index=32&type=section&id=No%20Material%20Changes) Except as disclosed in this interim report, no material changes affecting the Group's performance occurred during the reporting period that require disclosure under paragraphs 40(2) and 46 of Appendix D2 to the Listing Rules - Except as disclosed in this interim report, no material changes affecting the Group's performance occurred during the reporting period that require disclosure under the Listing Rules[123](index=123&type=chunk) [Employees and Remuneration](index=32&type=section&id=Employees%20and%20Remuneration) As of June 30, 2025, the company had **4,461** employees, with total remuneration costs of **RMB 924 million**, and determines compensation based on qualifications, experience, position, and performance, while providing regular professional training - As of June 30, 2025, the company had **4,461** employees (compared to **4,506** in the same period of 2024)[124](index=124&type=chunk) - Total remuneration costs for the first half of 2025 were **RMB 924 million** (compared to **RMB 807 million** in the same period of 2024)[124](index=124&type=chunk) - The company determines remuneration based on employee qualifications, industry experience, job level, and performance, and provides regular professional training[124](index=124&type=chunk) [Other Information](index=33&type=section&id=Other%20Information) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=33&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, the company's directors and chief executive held interests in the company's shares, with Mr. Chen Min controlling approximately **48.27%** of the total voting rights through beneficial ownership and controlled corporations, and Mr. Hu Xiaodong also holding Class A shares Directors' and Chief Executive's Interests in Shares (as of June 30, 2025) | Director Name | Nature of Interest | Share Class | Number of Shares | Percentage of Interest in Each Class of Shares | | :--- | :--- | :--- | :--- | :--- | | Mr. Chen Min | Beneficial Owner | Class A Shares | 850,000 (L) | 0.1% | | | Interest in Controlled Corporation | Class A Shares | 13,518,284 (L) | 1.8% | | | Interest in Controlled Corporation | Class A Shares | 5,000,000 (S) | 0.7% | | | Interest in Controlled Corporation | Class B Shares | 67,918,860 (L) | 100.0% | | Mr. Hu Xiaodong | Beneficial Owner | Class A Shares | 300,000 (L) | 0.0(*)% | | | Interest in Controlled Corporation | Class A Shares | 25,223,685 (L) | 3.4% | | | Interest in Controlled Corporation | Class A Shares | 2,996,703 (S) | 0.4% | - Mr. Chen Min exercises voting control over the company through the dual-class share structure, where his Class B shares grant ten votes per share[127](index=127&type=chunk)[130](index=130&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=35&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, key shareholders, excluding directors, include Tencent, Image Architecture Investment (Hong Kong) Limited, Pandanus Associates Inc., Joy Capital GP, Ltd, Ubiquity Holdings Ltd., and Ju Xi Limited, holding significant interests in the company's Class A shares, with Tencent holding **21.1%** through its controlled entities Substantial Shareholders' Interests in Shares (as of June 30, 2025) | Shareholder Name | Nature of Interest | Share Class | Number of Shares | Percentage of Interest in Each Class of Shares | | :--- | :--- | :--- | :--- | :--- | | Tencent | Interest in Controlled Corporation | Class A Shares | 158,895,235 (L) | 21.1% | | Image Architecture Investment (Hong Kong) Limited | Beneficial Owner | Class A Shares | 151,792,350 (L) | 20.2% | | Pandanus Associates Inc. | Beneficial Owner | Class A Shares | 44,058,965 (L) | 5.9% | | Joy Capital GP, Ltd | Interest in Controlled Corporation | Class A Shares | 44,007,640 (L) | 5.8% | | Ubiquity Holdings Ltd. | Interest in Controlled Corporation | Class A Shares | 42,707,045 (L) | 5.7% | | Ju Xi Limited | Beneficial Owner | Class A Shares | 39,167,585 (L) | 5.2% | | | Interest in Controlled Corporation | Class A Shares | 453,132 (L) | 0.1% | - Tencent, through its controlled entities, holds **21.1%** of the company's Class A shares, making it one of the company's significant shareholders[132](index=132&type=chunk)[137](index=137&type=chunk) [Share Incentive Schemes](index=37&type=section&id=Share%20Incentive%20Schemes) The company has adopted three share incentive schemes—the 2019 Share Incentive Scheme, the Post-IPO Share Scheme, and the Second Post-IPO Share Scheme (Existing Shares)—to incentivize directors, employees, and consultants through the grant of share options and restricted share units - The company has adopted three share incentive schemes: the 2019 Share Incentive Scheme, the Post-IPO Share Scheme, and the Second Post-IPO Share Scheme (Existing Shares)[139](index=139&type=chunk) [2019 Share Incentive Scheme](index=37&type=section&id=2019%20Share%20Incentive%20Scheme) The 2019 Share Incentive Scheme was adopted on October 31, 2019, under which Mr. Chen Min and other employees/consultants exercised share options for **637,500** and **1,328,468** Class A shares respectively during the reporting period, with **27,138,884** Class A share options remaining unexercised as of June 30, 2025 2019 Share Incentive Scheme Share Option Movements (as of June 30, 2025) | Grantee Category | Unexercised as of Jan 1, 2025 (shares) | Exercised During Period (shares) | Unexercised as of June 30, 2025 (shares) | | :--- | :--- | :--- | :--- | | Directors (Mr. Chen Min) | 850,000 | 637,500 | 212,500 | | Other Grantees (Employees and Consultants) | 28,270,500 | 1,328,468 | 26,626,384 | | **Total** | **29,420,500** | **1,965,968** | **27,138,884** | [Post-IPO Share Scheme](index=38&type=section&id=Post-IPO%20Share%20Scheme) The Post-IPO Share Scheme, adopted on September 7, 2023, had **40,197,516** restricted shares/units and **8,143,714** share options available for grant as of June 30, 2025, with **30,268** restricted share units vested and **214,487** forfeited during the reporting period - As of June 30, 2025, the total number of restricted shares, restricted share units, and share options available for grant under the Post-IPO Scheme was **40,197,516** shares and **8,143,714** shares respectively[144](index=144&type=chunk) Post-IPO Share Scheme Restricted Share Unit Movements (as of June 30, 2025) | Grantee Category | Unvested as of Jan 1, 2025 (shares) | Vested During Period (shares) | Forfeited During Period (shares) | Unvested as of June 30, 2025 (shares) | | :--- | :--- | :--- | :--- | :--- | | Employees | 2,799,145 | 30,268 | 214,487 | 2,554,390 | Post-IPO Share Scheme Share Option Movements (as of June 30, 2025) | Grantee Category | Unexercised as of Jan 1, 2025 (shares) | Forfeited During Period (shares) | Unexercised as of June 30, 2025 (shares) | | :--- | :--- | :--- | :--- | | Employees | 1,018,094 | 49,582 | 968,512 | [Second Post-IPO Share Scheme (Existing Shares)](index=39&type=section&id=Second%20Post-IPO%20Share%20Scheme%20(Existing%20Shares)) The Second Post-IPO Share Scheme (Existing Shares), announced on June 25, 2024, allows for the grant of **33,000,000** Class A shares, with **132,220** new share options and **6,615,522** restricted share units granted during the reporting period, of which **547,091** vested and **426,694** forfeited - The Second Post-IPO Scheme allows for the grant of a total of **33,000,000** Class A shares, comprising only existing Class A shares[148](index=148&type=chunk) Second Post-IPO Share Scheme Share Option Movements (as of June 30, 2025) | Grantee Category | Unexercised as of Jan 1, 2025 (shares) | Granted During Period (shares) | Unexercised as of June 30, 2025 (shares) | | :--- | :--- | :--- | :--- | | Employees | 60,000 | 132,220 | 192,220 | Second Post-IPO Share Scheme Restricted Share Unit Movements (as of June 30, 2025) | Grantee Category | Unvested as of Jan 1, 2025 (shares) | Granted During Period (shares) | Vested During Period (shares) | Forfeited During Period (shares) | Unvested as of June 30, 2025 (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | | Employees | 12,411,101 | 6,615,522 | 547,091 | 426,694 | 18,052,838 | [Changes in Directors' Information](index=42&type=section&id=Changes%20in%20Directors'%20Information) Mr. Feng Wei resigned as an independent non-executive director and from related committee positions on June 29, 2025, with Ms. Zhou Lingfei appointed on the same day to fill the vacancy, serving as an independent non-executive director and chair of the Corporate Governance Committee - Mr. Feng Wei resigned as an independent non-executive director, Chairman of the Corporate Governance Committee, and a member of the Review Committee and Nomination Committee on June 29, 2025[155](index=155&type=chunk) - Ms. Zhou Lingfei was appointed on the same day as an independent non-executive director, Chairman of the Corporate Governance Committee, and a member of the Review Committee and Nomination Committee[155](index=155&type=chunk) [Interim Dividend](index=42&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[156](index=156&type=chunk) [Use of Net Proceeds](index=42&type=section&id=Use%20of%20Net%20Proceeds) The net proceeds from the global offering were approximately **HKD 1.2733 billion**, of which **HKD 179.4 million** had been utilized as of June 30, 2025, primarily for R&D, supply chain enhancement, and new energy vehicle service investments, with the remaining **HKD 275.8 million** expected to be utilized by December 31, 2025 - The net proceeds from the global offering were approximately **HKD 1.2733 billion**[157](index=157&type=chunk) Use of Net Proceeds from Global Offering (as of June 30, 2025) | Description | Percentage of Net Proceeds | Allocated Net Proceeds (HKD millions) | Amount Utilized as of June 30, 2025 (HKD millions) | Unutilized Amount as of June 30, 2025 (HKD millions) | Expected Timeline for Utilization of Unutilized Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Enhancing supply chain capabilities | 35.0% | 445.6 | 38.4 | 37.1 | December 31, 2025 | | R&D to enhance data analytics technology and improve operational efficiency | 20.0% | 254.7 | 101.1 | 45.8 | December 31, 2025 | | Expanding store network and franchisee base | 15.0% | 191.0 | 6.2 | – | – | | Investments in new energy vehicle services and tools/equipment | 20.0% | 254.7 | 10.5 | 154.5 | December 31, 2025 | | Working capital and general corporate purposes | 10.0% | 127.3 | 23.2 | 38.4 | December 31, 2025 | | **Total** | **100.0%** | **1,273.3** | **179.4** | **275.8** | | [Compliance with Corporate Governance Code](index=44&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company is committed to maintaining stringent corporate governance standards and has adopted the Corporate Governance Code, complying with all applicable code provisions during the reporting period, except for the combined roles of Chairman and CEO, which the Board believes ensures consistent leadership and efficient strategic planning - The company has adopted the Corporate Governance Code and regularly reviews its compliance since the listing date[160](index=160&type=chunk) - The roles of Chairman of the Board and Chief Executive Officer are combined and held by Mr. Chen Min, which deviates from code provision C.2.1, but the Board believes this arrangement ensures consistent leadership and efficient strategic planning[160](index=160&type=chunk) [Compliance with Model Code](index=44&type=section&id=Compliance%20with%20Model%20Code) The company has adopted the Model Code and confirmed that all directors complied with its required standards during the reporting period, with no instances of non-compliance found among senior management and employees - The company has adopted the Model Code and confirmed that all directors complied with it during the reporting period[161](index=161&type=chunk) - No instances of non-compliance with the Model Code were found among senior management and employees[161](index=161&type=chunk) [Purchase, Sale, Redemption or Issue of Listed Securities](index=44&type=section&id=Purchase,%20Sale,%20Redemption%20or%20Issue%20of%20Listed%20Securities) Between January 1, 2025, and August 20, 2025, the company's trustee purchased **19,400,100** Class A shares under the Second Post-IPO Scheme, with no other purchases, sales, redemptions, or issues of listed securities by the company or its subsidiaries during the reporting period - Between January 1, 2025, and August 20, 2025, the trustee appointed by the company purchased **19,400,100** Class A shares under the Second Post-IPO Scheme[162](index=162&type=chunk) - Other than the above disclosure, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, nor issued equity securities or sold treasury shares during the reporting period[162](index=162&type=chunk) [Corporate Governance Committee](index=45&type=section&id=Corporate%20Governance%20Committee) The company has established a Corporate Governance Committee, composed of three independent non-executive directors, responsible for ensuring operations align with shareholder interests, complying with Listing Rules, and maintaining the dual-class share structure, while reviewing and monitoring director training, conflict of interest management, and compliance advisor remuneration - The company has established a Corporate Governance Committee, comprising three independent non-executive directors, responsible for ensuring the company's operations and management align with the interests of all shareholders, comply with the Listing Rules, and maintain the dual-class share structure[165](index=165&type=chunk) - The committee reviewed and monitored matters such as director and senior management training, confirmation of Differentiated Voting Rights Beneficiaries, conflict of interest management, risks associated with the dual-class share structure, and remuneration of compliance advisors[166](index=166&type=chunk) [Independent Review Report](index=47&type=section&id=Independent%20Review%20Report) [Scope of Review](index=47&type=section&id=Scope%20of%20Review) Ernst & Young, the auditor, conducted a review of the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410, primarily involving inquiries with financial and accounting personnel and applying analytical and other review procedures, with a scope less than an audit - Ernst & Young, the auditor, conducted a review of the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[174](index=174&type=chunk) - The scope of review primarily included inquiries with personnel responsible for financial and accounting matters, and applying analytical and other review procedures, but was less extensive than an audit, thus no audit opinion is expressed[174](index=174&type=chunk) [Conclusion](index=47&type=section&id=Conclusion) Based on the review, the auditor found no matters that would lead them to believe the interim financial information was not prepared in all material respects in accordance with International Accounting Standard 34 - The auditor found no matters that would lead them to believe the interim financial information was not prepared in all material respects in accordance with International Accounting Standard 34[175](index=175&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=48&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company reported revenue of **RMB 7.877 billion**, gross profit of **RMB 1.982 billion**, and profit for the period of **RMB 307 million**, with basic and diluted earnings per share both at **RMB 0.4** Interim Condensed Consolidated Statement of Profit or Loss Summary (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 7,876,938 | 7,126,161 | | Cost of Sales | (5,894,807) | (5,280,396) | | Gross Profit | 1,982,131 | 1,845,765 | | Operating Profit | 221,929 | 211,884 | | Profit for the Period | 306,535 | 284,332 | | Basic Earnings Per Share Attributable to Owners of the Parent (RMB) | 0.4 | 0.4 | | Diluted Earnings Per Share Attributable to Owners of the Parent (RMB) | 0.4 | 0.3 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=49&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, profit for the period was **RMB 307 million**, with other comprehensive income, net, of **RMB 90.07 million**, resulting in a total comprehensive income for the period of **RMB 397 million** Interim Condensed Consolidated Statement of Comprehensive Income Summary (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 306,535 | 284,332 | | Other Comprehensive Income/(Loss) | 90,066 | (14,910) | | **Total Comprehensive Income for the Period** | **396,601** | **269,422** | [Interim Condensed Consolidated Statement of Financial Position](index=50&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets were **RMB 12.612 billion**, including **RMB 8.235 billion** in current assets, total liabilities were **RMB 7.584 billion**, including **RMB 6.918 billion** in current liabilities, and net assets amounted to **RMB 5.028 billion** Interim Condensed Consolidated Statement of Financial Position Summary (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 4,376,303 | 4,431,963 | | Total Current Assets | 8,235,483 | 8,365,276 | | Total Current Liabilities | 6,917,819 | 7,198,929 | | Total Non-current Liabilities | 666,414 | 738,932 | | **Net Assets** | **5,027,553** | **4,859,378** | [Interim Condensed Consolidated Statement of Changes in Equity](index=52&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, total equity attributable to owners of the parent was **RMB 5.030 billion**, with total comprehensive income for the period at **RMB 397 million**, and key changes including share-based payments, share repurchases, and exercise of share-based payments - As of June 30, 2025, total equity attributable to owners of the parent was **RMB 5.030 billion**[184](index=184&type=chunk) - Total comprehensive income for the period was **RMB 397 million**[184](index=184&type=chunk) - Key changes in equity included share-based payments (**RMB 104 million**), share repurchases (**RMB 332 million**), and the exercise of share-based payments[184](index=184&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=54&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash flows from operating activities were **RMB 258 million**, net cash flows from investing activities were **RMB 305 million**, and net cash flows used in financing activities were **RMB 422 million**, with cash and cash equivalents at period-end totaling **RMB 1.511 billion** Interim Condensed Consolidated Statement of Cash Flows Summary (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 257,729 | 718,700 | | Net Cash Flows from Investing Activities | 304,691 | (1,981,416) | | Net Cash Flows Used in Financing Activities | (422,456) | (105,540) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 139,964 | (1,368,256) | | **Cash and Cash Equivalents at End of Period** | **1,511,139** | **1,355,581** | [Notes to the Interim Condensed Consolidated Financial Information](index=57&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [Company Information](index=57&type=section&id=Company%20Information_Notes) Tuhu Car Inc. was incorporated in the Cayman Islands on July 8, 2019, operating as an investment holding company that primarily provides automotive products and services in China through its online platforms - Tuhu Car Inc. was incorporated in the Cayman Islands on July 8, 2019, primarily providing automotive products and services to consumers in China through its online interfaces, including its application, website, and WeChat mini-program[192](index=192&type=chunk) [Basis of Preparation](index=57&type=section&id=Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and should be read in conjunction with the annual consolidated financial statements as of December 31, 2024 - The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 Interim Financial Reporting[193](index=193&type=chunk) [Changes in Accounting Policies](index=57&type=section&id=Changes%20in%20Accounting%20Policies) The accounting policies used for the interim condensed consolidated financial information are consistent with the 2024 annual consolidated financial statements, with the initial adoption of amended IAS 21 "Lack of Exchangeability" having no material impact as the Group's transaction currencies are convertible - The amended International Accounting Standard 21 "Lack of Exchangeability" was adopted for the first time, with no impact on the interim condensed consolidated financial information[194](index=194&type=chunk)[195](index=195&type=chunk) [Operating Segment Information](index=58&type=section&id=Operating%20Segment%20Information) No operating segment or further geographical segment information is presented as the Group's revenue, reported results, and total assets are derived from a single operating segment in China, with no single customer accounting for over **10%** of total revenue - The Group's revenue, reported results, and total assets are all derived from a single operating segment (China), thus no operating segment and further geographical segment information is presented[197](index=197&type=chunk)[198](index=198&type=chunk) - No single customer accounted for more than **10%** of the Group's total revenue during the period[199](index=199&type=chunk) [Revenue](index=58&type=section&id=Revenue_Notes) In the first half of 2025, revenue from customer contracts totaled **RMB 7.877 billion**, comprising **RMB 7.362 billion** from automotive products and services and **RMB 515 million** from advertising, franchise, and other services, with most revenue from automotive products and services recognized at a point in time, while other services are recognized over time 2025 H1 Revenue Analysis (RMB thousands) | Revenue Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Automotive Products and Services | 7,362,402 | 6,643,280 | | Advertising, Franchise and Other Services | 514,536 | 482,881 | | **Total** | **7,876,938** | **7,126,161** | - Revenue from automotive products and services is recognized at a point in time, while revenue from advertising, franchise, and some other services is recognized over time[201](index=201&type=chunk) - Total recognized revenue included in contract liabilities at the beginning of the reporting period was **RMB 661 million**[202](index=202&type=chunk) [Finance Income / (Finance Costs)](index=60&type=section&id=Finance%20Income%20/%20(Finance%20Costs)_Notes) In the first half of 2025, finance income was **RMB 87.10 million**, primarily from interest income, while finance costs were **RMB 6.20 million**, mainly comprising interest on lease liabilities 2025 H1 Finance Income/(Finance Costs) (RMB thousands) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Finance Income (Interest Income) | 87,099 | 90,443 | | Finance Costs (Interest on Bank Loans and Lease Liabilities) | (6,204) | (8,635) | [Profit Before Tax](index=61&type=section&id=Profit%20Before%20Tax) The Group's profit before tax is derived after deducting various expenses, including cost of sales, depreciation and amortization, employee benefit expenses (including share-based payments), advertising and promotion expenses, and transportation expenses - Profit before tax is derived after deducting various expenses, including cost of sales (**RMB 5.742 billion**), depreciation of property, plant and equipment (**RMB 83.32 million**), depreciation of right-of-use assets (**RMB 62.86 million**), and employee benefit expenses (**RMB 924 million**, including share-based payments of **RMB 104 million**)[205](index=205&type=chunk) [Income Tax Expense](index=62&type=section&id=Income%20Tax%20Expense_Notes) The Group's income tax expense for the first half of 2025 was **RMB 5.08 million**, primarily calculated based on applicable corporate income

[Definitions](index=3&type=section&id=Definitions) This section provides definitions of key terms used throughout the report [Corporate Information](index=7&type=section&id=Corporate%20Information) This section outlines the company's board of directors, auditors, and stock listing details - Board Chairman and Non-executive Director: Ms. Shu Ping[9](index=9&type=chunk) - Executive Directors include Ms. Yang Lijuan, Mr. Li Yu, and Ms. Liu Li[9](index=9&type=chunk) - Independent Non-executive Directors include Mr. Chan Hong Wai, Mr. Teo Sze Leong, and Mr. Liew Chong Chee[9](index=9&type=chunk) - The company's auditor is Deloitte & Touche LLP[14](index=14&type=chunk) - Hong Kong Stock Exchange stock code is 9658, and Nasdaq stock ticker is HDL[15](index=15&type=chunk) [Key Financial Highlights](index=10&type=section&id=Key%20Financial%20Highlights) This section presents a summary of the company's key financial performance indicators for the first half of 2025 2025 H1 Key Financial Data (in $ thousands) | Indicator | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 396,733 | 370,930 | +7.0% | | Profit Before Tax | 34,673 | 628 | Significant growth | | Profit (Loss) for the Period | 28,271 | (4,649) | Turned loss into profit | | Earnings (Loss) Per Share (Basic and Diluted) | 0.05 | (0.01) | Turned loss into profit | | Operating Profit Margin (%) | 3.0% | 5.6% | -2.6 percentage points | Haidilao Restaurant Business Summary (as of June 30) | Indicator | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Number of Restaurants | 126 | 122 | +4 restaurants | | Total Customer Visits (millions) | 15.5 | 14.5 | +1.0 million | | Average Table Turnover Rate (times/day) | 3.9 | 3.8 | +0.1 | | Average Customer Spending (US$) | 24.2 | 24.6 | -0.4 | | Average Daily Revenue per Restaurant (in $ thousands) | 17.7 | 17.2 | +0.5 | | Restaurant-level Operating Profit Margin (%) | 6.4 | 8.7 | -2.3 percentage points | [2025 Interim Performance Review](index=11&type=section&id=2025%20Interim%20Performance%20Review) This section reviews the company's overall performance, business strategies, financial results, and future outlook for the first half of 2025 [Overall Performance](index=11&type=section&id=Overall%20Performance) In H1 2025, total revenue grew 7.0% to $396.7 million, average table turnover rate increased to 3.9 times/day, and same-store sales grew 3.0%, but restaurant-level operating profit margin decreased 2.3 percentage points to 6.4% due to concessionary pricing policies - Total revenue reached **$396.7 million**, a **7.0% year-on-year increase**[22](index=22&type=chunk) - Haidilao restaurant average table turnover rate was **3.9 times/day**, a **0.1 times/day year-on-year increase**; same-store sales grew **3.0% year-on-year**[22](index=22&type=chunk) - Restaurant-level operating profit margin was **6.4%**, a **2.3 percentage point year-on-year decrease**, primarily due to competitive pricing policies[22](index=22&type=chunk) - In H1, **8 new Haidilao restaurants** opened, and **4 underperforming stores** closed, operating a total of **126 international Haidilao restaurants** as of June 30[23](index=23&type=chunk)[25](index=25&type=chunk) - Under the "Pomegranate Project," other sales revenue increased **25.0% to $11.5 million**, with hotpot, barbecue, and fast-food prototype stores launched, and Chinese, other Asian, and Western fast-food concepts in preparation[24](index=24&type=chunk)[26](index=26&type=chunk) [Business Review](index=12&type=section&id=Business%20Review) The company focused on enhancing value for money and creating unique Haidilao experiences through menu adjustments, environment upgrades, and fresh-cut meat offerings, while also developing diverse products and investing in employee welfare [Restaurant Operations](index=12&type=section&id=Restaurant%20Operations) The company adjusted pricing and portion sizes to enhance value for money, upgraded restaurant ambiance for a more immersive experience, and introduced fresh-cut meat products with live workshops to improve customer perception - Adjusted dish pricing and portion sizes to enhance **"value for money"** and offer concessions to customers, based on customer characteristics and operational metrics in various countries[28](index=28&type=chunk)[31](index=31&type=chunk) - Progressively implemented **"creating a different Haidilao"** by upgrading decor, lighting, and sound effects to provide a more immersive and interactive experience, especially during late-night hours[28](index=28&type=chunk)[31](index=31&type=chunk) - Introduced **fresh-cut meat products** in multiple countries, complemented by **"live fresh-cut workshops,"** allowing customers to directly observe product upgrades[28](index=28&type=chunk)[31](index=31&type=chunk) [Product Development](index=12&type=section&id=Product%20Development) In H1 2025, the company completed over 700 product optimizations and new launches globally, forming a differentiated product matrix that combines classic Haidilao dishes with local flavors to boost customer repurchase rates and satisfaction - Over **700 product optimizations and new launches** were completed globally in the first half of 2025[29](index=29&type=chunk)[31](index=31&type=chunk) - Each market gradually formed a differentiated product matrix, combining classic Haidilao dishes with local flavors, effectively increasing customer repurchase rates and satisfaction[29](index=29&type=chunk)[31](index=31&type=chunk) [Employee Development and Team Building](index=12&type=section&id=Employee%20Development%20and%20Team%20Building) The company implemented employee concession strategies led by regional managers, optimizing compensation, benefits, training, and team-building activities to enhance employee unity and work environment - Implemented employee concession strategies, led by regional managers in each country, optimizing compensation, welfare policies, employee training, and team-building standards[30](index=30&type=chunk)[32](index=32&type=chunk) - Strengthened diverse team-building activities, including recreational events and outings, aimed at enhancing employee unity and the working environment[30](index=30&type=chunk)[32](index=32&type=chunk) [Financial Performance Summary](index=13&type=section&id=Financial%20Performance%20Summary) H1 2025 operating profit was $11.8 million with a 3.0% operating profit margin, pressured by concessions to customers and employees; the company achieved a profit before tax of $34.7 million and a net profit of $28.3 million, reversing H1 2024's net loss, primarily due to a $23.8 million non-cash exchange gain - H1 2025 operating profit was **$11.8 million**, with an operating profit margin of **3.0%**, significantly pressured compared to **$20.9 million** in H1 2024, mainly due to concessions to customers and employees[33](index=33&type=chunk)[35](index=35&type=chunk) - As of June 30, 2025, profit before tax was **$34.7 million**, and net profit was **$28.3 million**, reversing the net loss of **$4.6 million** in H1 2024[34](index=34&type=chunk)[36](index=36&type=chunk) - Profit improvement was primarily due to exchange rate fluctuations, recording a non-cash exchange gain of approximately **$23.8 million**, compared to an exchange loss of **$19.5 million** in H1 2024[34](index=34&type=chunk)[36](index=36&type=chunk) [Future Prospect](index=13&type=section&id=Future%20Prospect) The company will continue its localization strategy, focusing on customer satisfaction and employee effort, aiming to become a multi-brand restaurant group by enhancing the Haidilao experience, optimizing its restaurant network, strengthening internal management, embracing technology, and implementing the "Pomegranate Project" - Future strategy will adhere to localization, with **"customer satisfaction"** and **"employee effort"** as core missions, striving to develop into a multi-brand chain restaurant group[35](index=35&type=chunk)[37](index=37&type=chunk) - Continuously enhance the Haidilao dining experience, including refining service capabilities, refreshing products, and improving dining environment quality[37](index=37&type=chunk) - Expand and optimize the restaurant network, adhering to a **"bottom-up"** model to identify quality locations, strategically entering new markets, and continuously applying the **"Woodpecker Project"** to close underperforming stores[37](index=37&type=chunk) - Strengthen internal management by improving services and products, reasonably adjusting dish prices, conducting marketing activities, and optimizing cost structure through prudent cost control, increased personnel efficiency, and external collaborations[39](index=39&type=chunk) - Embrace technological advancements by more broadly and deeply applying AI in restaurant operations and functional management, enhancing data integration and analysis capabilities[39](index=39&type=chunk) - Implement the **"Pomegranate Project"** by incubating, exploring, and strategically acquiring second-tier businesses to enrich the business portfolio[39](index=39&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed analysis of the company's financial performance, including revenue, expenses, and financial position, along with key operational metrics and future outlook [Revenue](index=15&type=section&id=Revenue) Total revenue in H1 2025 reached $396.7 million, a 7.0% year-on-year increase, primarily driven by Haidilao restaurant operations, with other sources including delivery business and sales of hotpot seasonings and sub-brand foods [Haidilao Restaurant Operation](index=15&type=section&id=Haidilao%20Restaurant%20Operation) This section details the performance of Haidilao's restaurant network, including restaurant count, revenue by region, key operational metrics, and same-store sales [Haidilao Restaurant Network](index=16&type=section&id=Haidilao%20Restaurant%20Network) As of June 30, 2025, the company expanded its restaurant network to 126 restaurants across 14 countries in Asia, North America, Europe, and Oceania - As of June 30, 2025, the company expanded its restaurant network to **126 restaurants** located in **14 countries** across Asia, North America, Europe, and Oceania[46](index=46&type=chunk) Haidilao Restaurant Count and Revenue by Geographical Region (as of June 30) | Region | 2025 Restaurant Count | 2025 Revenue (in $ thousands) | 2025 Average Revenue per Restaurant (in $ thousands) | 2024 Restaurant Count | 2024 Revenue (in $ thousands) | 2024 Average Revenue per Restaurant (in $ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Southeast Asia | 74 | 190,921 | 2,580 | 74 | 195,874 | 2,647 | | East Asia | 20 | 61,110 | 3,056 | 18 | 43,237 | 2,402 | | North America | 20 | 77,171 | 3,859 | 20 | 73,888 | 3,694 | | Others | 12 | 48,266 | 4,022 | 10 | 43,489 | 4,349 | | **Total** | **126** | **377,468** | **2,996** | **122** | **356,488** | **2,922** | [Haidilao Restaurant Performance](index=17&type=section&id=Haidilao%20Restaurant%20Performance) Total customer visits increased to 15.5 million, average table turnover rate improved to 3.9 times/day, while average customer spending slightly decreased to $24.2 in H1 2025 - Total customer visits increased from **14.5 million** in H1 2024 to **15.5 million** in H1 2025[50](index=50&type=chunk) - Average table turnover rate improved from **3.8 times/day** in H1 2024 to **3.9 times/day** in H1 2025[50](index=50&type=chunk) - Average customer spending slightly decreased from **$24.6** in H1 2024 to **$24.2** in H1 2025[50](index=50&type=chunk) Key Performance Indicators of Haidilao Restaurants by Geographical Region (as of June 30) | Indicator | Region | 2025 | 2024 | | :--- | :--- | :--- | :--- | | **Total Customer Visits (millions)** | Overall | 15.5 | 14.5 | | | Southeast Asia | 10.2 | 10.2 | | | East Asia | 2.1 | 1.6 | | | North America | 2.0 | 1.7 | | | Others | 1.2 | 1.0 | | **Average Table Turnover Rate (times/day)** | Overall | 3.9 | 3.8 | | | Southeast Asia | 3.7 | 3.7 | | | East Asia | 4.9 | 4.1 | | | North America | 4.0 | 4.1 | | | Others | 3.9 | 3.9 | | **Average Customer Spending (US$)** | Overall | 24.2 | 24.6 | | | Southeast Asia | 18.6 | 19.3 | | | East Asia | 28.8 | 27.8 | | | North America | 39.4 | 42.6 | | | Others | 39.0 | 42.3 | | **Average Daily Revenue per Restaurant (in $ thousands)** | Overall | 17.7 | 17.2 | | | Southeast Asia | 15.1 | 15.4 | | | East Asia | 19.6 | 15.7 | | | North America | 22.1 | 21.1 | | | Others | 24.0 | 24.5 | | **Restaurant-level Operating Profit Margin (%)** | Overall | 6.4 | 8.7 | [Same Store Sales](index=19&type=section&id=Same%20Store%20Sales) Overall same-store sales increased to $331.3 million, with average daily sales per same-store rising to $18.2 thousand, while the average table turnover rate remained stable at 3.9 times/day in H1 2025 - Overall same-store sales increased from **$321.7 million** in H1 2024 to **$331.3 million** in H1 2025[54](index=54&type=chunk) - Average daily sales per same-store increased from **$17.6 thousand** in H1 2024 to **$18.2 thousand** in H1 2025[54](index=54&type=chunk) - Average table turnover rate for same-stores remained stable at **3.9 times/day**, consistent with H1 2024[54](index=54&type=chunk) Same Store Sales Details by Geographical Region (as of June 30) | Indicator | Region | 2025 | 2024 | | :--- | :--- | :--- | :--- | | **Number of Same Stores** | Overall | 101 | N/A | | | Southeast Asia | 61 | N/A | | | East Asia | 14 | N/A | | | North America | 17 | N/A | | | Others | 9 | N/A | | **Same Store Sales (in $ thousands)** | Overall | 331,340 | 321,677 | | | Southeast Asia | 172,158 | 174,158 | | | East Asia | 48,706 | 39,840 | | | North America | 68,331 | 66,060 | | | Others | 42,145 | 41,619 | | **Average Daily Sales per Same Store (in $ thousands)** | Overall | 18.2 | 17.6 | | | Southeast Asia | 15.6 | 15.8 | | | East Asia | 19.3 | 15.8 | | | North America | 22.2 | 21.4 | | | Others | 25.9 | 25.6 | | **Average Customer Spending (US$)** | Overall | 24.3 | 24.3 | | | Southeast Asia | 18.7 | 18.8 | | | East Asia | 28.8 | 28.0 | | | North America | 40.5 | 42.8 | | | Others | 39.3 | 42.7 | | **Average Table Turnover Rate for Same Stores (times/day)** | Overall | 3.9 | 3.9 | | | Southeast Asia | 3.7 | 3.8 | | | East Asia | 4.8 | 4.2 | | | North America | 4.0 | 4.1 | | | Others | 4.2 | 4.0 | [Delivery Business](index=20&type=section&id=Delivery%20Business) Delivery business revenue increased 48.1% to $7.7 million, driven by continuous optimization of products and services, and strategic marketing collaborations with local delivery platforms - Delivery business revenue was **$7.7 million**, an increase of **48.1%** from **$5.2 million** in H1 2024[55](index=55&type=chunk)[58](index=58&type=chunk) - Growth was primarily due to continuous optimization of delivery products and services, and strategic marketing collaborations with local delivery platforms[55](index=55&type=chunk)[58](index=58&type=chunk) [Others](index=20&type=section&id=Others) Other revenue, primarily from hotpot seasonings and sub-brand food sales, increased 25.0% to $11.5 million, reflecting growing popularity and the incubation of second-tier brands under the "Pomegranate Project" - Other revenue (primarily including sales of hotpot seasonings and sub-brand foods) was **$11.5 million**, an increase of **25.0%** from **$9.2 million** in H1 2024[57](index=57&type=chunk)[59](index=59&type=chunk) - The increase reflects the growing popularity of hotpot seasonings among local customers and retailers, as well as the incubation of second-tier brand restaurants under the **"Pomegranate Project"**[57](index=57&type=chunk)[59](index=59&type=chunk) [Other Income](index=21&type=section&id=Other%20Income) Other income increased 45.5% to $4.8 million, mainly due to higher interest income from bank deposits, partially offset by a decrease in government grants - Other income was **$4.8 million**, an increase of **45.5%** from **$3.3 million** in H1 2024[62](index=62&type=chunk)[65](index=65&type=chunk) - The increase was primarily due to higher interest income from bank deposits, partially offset by a decrease in government grants received[62](index=62&type=chunk)[65](index=65&type=chunk) [Raw Materials and Consumables Used](index=21&type=section&id=Raw%20Materials%20and%20Consumables%20Used) Cost of raw materials and consumables increased 8.1% to $134.7 million, and as a percentage of revenue, it rose from 33.6% to 34.0%, mainly due to business expansion and increased revenue leading to higher food ingredient costs - Cost of raw materials and consumables was **$134.7 million**, an increase of **8.1%** from **$124.6 million** in H1 2024[64](index=64&type=chunk)[66](index=66&type=chunk) - As a percentage of revenue, it increased from **33.6%** in H1 2024 to **34.0%** in H1 2025[64](index=64&type=chunk)[66](index=66&type=chunk) - The increase was primarily due to higher food ingredient costs resulting from business expansion and increased revenue[64](index=64&type=chunk)[66](index=66&type=chunk) [Staff Costs](index=22&type=section&id=Staff%20Costs) Staff costs increased 11.0% to $140.2 million, and as a percentage of revenue, it rose from 34.1% to 35.3%, mainly due to restaurant network expansion, increased customer traffic, and higher investment in employee welfare and development - Staff costs were **$140.2 million**, an increase of **11.0%** from **$126.3 million** in H1 2024[69](index=69&type=chunk)[72](index=72&type=chunk) - As a percentage of revenue, it increased from **34.1%** in H1 2024 to **35.3%** in H1 2025[69](index=69&type=chunk)[72](index=72&type=chunk) - The increase was primarily due to a larger workforce resulting from restaurant network expansion and increased investment in employee welfare and development[69](index=69&type=chunk)[72](index=72&type=chunk) [Rentals and Related Expenses](index=22&type=section&id=Rentals%20and%20Related%20Expenses) Rentals and related expenses increased 27.5% to $11.6 million, mainly due to increased short-term lease expenses from warehouse expansion and higher property management fees from new restaurant openings - Property rentals and related expenses were **$11.6 million**, an increase of **27.5%** from **$9.1 million** in H1 2024[71](index=71&type=chunk)[73](index=73&type=chunk) - The increase was primarily due to higher short-term lease expenses from warehouse expansion and increased property management fees from new restaurant openings[71](index=71&type=chunk)[73](index=73&type=chunk) [Utilities Expenses](index=23&type=section&id=Utilities%20Expenses) Utilities expenses remained relatively stable at $14.1 million, with its percentage of revenue slightly decreasing from 3.7% to 3.6% - Utilities expenses remained relatively stable, at **$14.1 million** in H1 2025 and **$13.7 million** in H1 2024[74](index=74&type=chunk)[77](index=77&type=chunk) - As a percentage of revenue, it remained relatively stable, at **3.6%** in H1 2025 and **3.7%** in H1 2024[74](index=74&type=chunk)[77](index=77&type=chunk) [Depreciation and Amortization](index=23&type=section&id=Depreciation%20and%20Amortization) Depreciation and amortization expenses slightly increased 1.8% to $39.7 million, while its percentage of revenue remained stable, decreasing from 10.5% to 10.0% - Depreciation and amortization was **$39.7 million**, a slight increase of **1.8%** from **$39.0 million** in H1 2024[76](index=76&type=chunk)[78](index=78&type=chunk) - As a percentage of revenue, it remained stable, at **10.0%** in H1 2025 and **10.5%** in H1 2024[76](index=76&type=chunk)[78](index=78&type=chunk) [Traveling and Communication Expenses](index=24&type=section&id=Traveling%20and%20Communication%20Expenses) Traveling and communication expenses increased 15.6% to $3.7 million, remaining at 0.9% of revenue, primarily due to increased business travel from business expansion - Traveling and communication expenses were **$3.7 million**, an increase of **15.6%** from **$3.2 million** in H1 2024[80](index=80&type=chunk)[83](index=83&type=chunk) - As a percentage of revenue, it remained relatively stable, at **0.9%** in both H1 2025 and H1 2024[80](index=80&type=chunk)[83](index=83&type=chunk) - The increase was primarily due to increased business travel as the business expanded[80](index=80&type=chunk)[83](index=83&type=chunk) [Other Expenses](index=24&type=section&id=Other%20Expenses) Other expenses increased 23.0% to $40.7 million, and as a percentage of revenue, it rose from 8.9% to 10.3%, mainly due to increased outsourcing service fees, consulting fees for second-tier brand research, and business development expenses from intensified marketing efforts - Other expenses were **$40.7 million**, an increase of **23.0%** from **$33.1 million** in H1 2024[82](index=82&type=chunk)[84](index=84&type=chunk) - As a percentage of revenue, it increased from **8.9%** in H1 2024 to **10.3%** in H1 2025[82](index=82&type=chunk)[84](index=84&type=chunk) - The increase was primarily attributable to a **$3.1 million** increase in outsourcing service fees, a **$1.5 million** increase in consulting service expenses (for second-tier brand research), and a **$1.2 million** increase in business development expenses (due to intensified marketing efforts)[82](index=82&type=chunk)[84](index=84&type=chunk) [Other Gains (Losses) – Net](index=25&type=section&id=Other%20Gains%20(Losses)%20%E2%80%93%20Net) The company recorded net other gains of $23.4 million, compared to net losses of $18.1 million in H1 2024, primarily due to a $23.8 million non-cash exchange gain from currency fluctuations - Net other gains of **$23.4 million** were recorded, compared to net losses of **$18.1 million** in H1 2024[86](index=86&type=chunk)[89](index=89&type=chunk) - The change was primarily attributable to the recognition of a **$23.8 million** non-cash exchange gain in H1 2025, compared to an exchange loss of **$19.5 million** in H1 2024[86](index=86&type=chunk)[89](index=89&type=chunk) [Finance Costs](index=25&type=section&id=Finance%20Costs) Finance costs increased 41.0% to $5.5 million, directly attributable to the corresponding increase in lease liabilities and restaurant reclamation provisions driven by restaurant network expansion - Finance costs were **$5.5 million**, an increase of **41.0%** from **$3.9 million** in H1 2024[88](index=88&type=chunk)[90](index=90&type=chunk) - The increase was directly attributable to restaurant network expansion, which drove a corresponding increase in lease liabilities and restaurant reclamation provisions[88](index=88&type=chunk)[90](index=90&type=chunk) [Income Tax Expense](index=26&type=section&id=Income%20Tax%20Expense) Income tax expense increased to $6.4 million from $5.3 million in H1 2024, calculated at tax rates ranging from 9% to 33% in relevant jurisdictions - Income tax expense was **$6.4 million**, compared to **$5.3 million** in H1 2024[92](index=92&type=chunk)[97](index=97&type=chunk) - Taxes are calculated at prevailing tax rates ranging from **9% to 33%** in the relevant jurisdictions[92](index=92&type=chunk)[97](index=97&type=chunk) [Profit (Loss) for the Period](index=26&type=section&id=Profit%20(Loss)%20for%20the%20Period) The company achieved a net profit of $28.3 million, reversing the net loss of $4.6 million in H1 2024, primarily due to a $23.8 million unrealized exchange gain from currency fluctuations - Net profit of **$28.3 million** was recorded, compared to a net loss of **$4.6 million** in H1 2024[93](index=93&type=chunk)[98](index=98&type=chunk) - Profit improvement was primarily due to the recognition of a net exchange gain of **$23.8 million**, mainly from unrealized exchange gains arising from the revaluation of non-USD denominated monetary items[93](index=93&type=chunk)[98](index=98&type=chunk) [Inventories](index=26&type=section&id=Inventories) Inventories increased 11.4% to $35.1 million, mainly to support new store openings and anticipated seasonal demand, with inventory turnover days rising from 42.8 to 44.5 days - Inventories were **$35.1 million**, an increase of **11.4%** from **$31.5 million** as of December 31, 2024[95](index=95&type=chunk)[99](index=99&type=chunk) - The increase was primarily attributable to maintaining higher inventory levels to support new store openings and anticipated seasonal demand during peak business periods[95](index=95&type=chunk)[99](index=99&type=chunk) - Inventory turnover days increased from **42.8 days** for the year ended December 31, 2024, to **44.5 days** for the six months ended June 30, 2025[96](index=96&type=chunk)[99](index=99&type=chunk) [Trade and Other Receivables and Prepayments](index=27&type=section&id=Trade%20and%20Other%20Receivables%20and%20Prepayments) The current portion of trade and other receivables and prepayments decreased 13.6% to $26.6 million, reflecting the company's enhanced control over prepayments to improve working capital efficiency, with trade receivables turnover days decreasing from 7.7 to 6.4 days - The current portion of trade and other receivables and prepayments was **$26.6 million**, a decrease of **13.6%** from **$30.8 million** as of December 31, 2024[101](index=101&type=chunk)[104](index=104&type=chunk) - The decrease primarily reflects the company's enhanced control over prepayments as part of its ongoing efforts to optimize working capital efficiency[101](index=101&type=chunk)[104](index=104&type=chunk) - Trade receivables turnover days decreased from **7.7 days** for the year ended December 31, 2024, to **6.4 days** for the six months ended June 30, 2025[103](index=103&type=chunk)[104](index=104&type=chunk) [Trade Payables](index=28&type=section&id=Trade%20Payables) Trade payables increased 5.2% to $32.3 million, consistent with inventory growth, reflecting raw material purchases to support restaurant operations, while trade payables turnover days decreased from 45.5 to 42.1 days due to enhanced payment cycle management - Trade payables were **$32.3 million**, an increase of **5.2%** from **$30.7 million** as of December 31, 2024[106](index=106&type=chunk)[109](index=109&type=chunk) - The increase reflects the company's procurement of raw materials to support enhanced restaurant operations, consistent with the inventory growth trend[106](index=106&type=chunk)[109](index=109&type=chunk) - Trade payables turnover days decreased from **45.5 days** for the year ended December 31, 2024, to **42.1 days** for the six months ended June 30, 2025, primarily due to enhanced control over payment cycle management[107](index=107&type=chunk)[109](index=109&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a robust liquidity position during the reporting period, primarily funding working capital through cash generated from operations, with no bank borrowings or committed credit facilities as of June 30, 2025 - The company primarily funds its working capital through cash generated from operations[108](index=108&type=chunk)[110](index=110&type=chunk) - As of June 30, 2025, the company had no bank borrowings or committed credit facilities[108](index=108&type=chunk)[110](index=110&type=chunk) - The company adopts prudent financial policies, closely monitors liquidity and capital resources regularly, and maintains a robust liquidity position[111](index=111&type=chunk)[115](index=115&type=chunk) [Capital Structure](index=29&type=section&id=Capital%20Structure) As of June 30, 2025, the company's capital structure consisted of issued share capital and reserves, with no changes since December 31, 2024, and no debt securities or other capital instruments - As of June 30, 2025, the company's capital structure consisted of issued share capital and reserves[113](index=113&type=chunk)[116](index=116&type=chunk) - The capital structure remained unchanged since December 31, 2024, with no debt securities or other capital instruments[113](index=113&type=chunk)[116](index=116&type=chunk) - The company regularly reviews and manages its capital structure, making timely adjustments in response to changes in economic conditions[113](index=113&type=chunk)[116](index=116&type=chunk) [Cash and Cash Equivalents](index=29&type=section&id=Cash%20and%20Cash%20Equivalents) Cash and cash equivalents increased 1.5% to $258.5 million, primarily utilized for new restaurant openings, network expansion, ingredient procurement, supply chain management, R&D, and restaurant renovations - Cash and cash equivalents were **$258.5 million**, an increase of **1.5%** from **$254.7 million** as of December 31, 2024[114](index=114&type=chunk)[117](index=117&type=chunk) - Cash is primarily used for working capital to open new restaurants and expand the store network, procure ingredients and consumables and equipment, enhance supply chain management capabilities, conduct R&D to strengthen digital store management and other technology applications, and renovate and decorate restaurants[114](index=114&type=chunk)[117](index=117&type=chunk) [Capital Expenditure](index=30&type=section&id=Capital%20Expenditure) Capital expenditure amounted to $22.1 million, mainly for new and renovating restaurants, with future plans to fund through cash from operations, unutilized IPO proceeds, and cash equivalents - Capital expenditure was **$22.1 million**, primarily for newly opened restaurants and those under renovation and preparation[119](index=119&type=chunk)[120](index=120&type=chunk) - Future plans include funding capital expenditure through cash generated from operations, unutilized proceeds from the Nasdaq IPO, and cash and cash equivalents[120](index=120&type=chunk)[122](index=122&type=chunk) [Charge on Assets](index=30&type=section&id=Charge%20on%20Assets) As of June 30, 2025, the company pledged $3.0 million in bank deposits to several banks as security for rental payments to landlords - As of June 30, 2025, the company pledged **$3.0 million** in bank deposits to several banks as security for rental payments to landlords[121](index=121&type=chunk)[123](index=123&type=chunk) [Future Plans for Material Investments or Capital Assets](index=31&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of the report date, the company has no specific committed plans for material investments or capital assets to disclose but will continue to seek potential strategic investment opportunities and quality target businesses - As of the date of this interim report, the company has no specific committed plans for material investments or capital assets that require disclosure[124](index=124&type=chunk)[125](index=125&type=chunk) - The company will continue to broadly seek potential strategic investment opportunities and acquire potential quality target businesses and assets that can bring synergistic effects to the Group[124](index=124&type=chunk)[125](index=125&type=chunk) [Financial Ratios](index=31&type=section&id=Financial%20Ratios) As of June 30, 2025, the company's current ratio was 2.5 and its debt-to-asset ratio was 0.3, remaining stable compared to December 31, 2024 Company Financial Ratios (as of) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio | 2.5 | 2.5 | | Debt-to-Asset Ratio | 0.3 | 0.3 | [Foreign Exchange Risk and Hedging](index=31&type=section&id=Foreign%20Exchange%20Risk%20and%20Hedging) The company faces foreign exchange risk from foreign currency-denominated transactions and currently has no hedging policy, but management closely monitors exchange rate movements and considers hedging significant risks when necessary - The company conducts certain transactions denominated in foreign currencies, exposing it to foreign currency risk[127](index=127&type=chunk)[129](index=129&type=chunk) - The company currently has no foreign exchange risk hedging policy, but management closely monitors foreign exchange risk and considers hedging significant foreign exchange risks when necessary[128](index=128&type=chunk)[129](index=129&type=chunk) [Contingent Liabilities](index=32&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the company had no material contingent liabilities, guarantees, or pending litigations that could significantly adversely affect its business, financial condition, or operating results - As of June 30, 2025, the company had no material contingent liabilities, guarantees, or any material pending or threatened litigations or claims against any member of the Group that could significantly adversely affect its business, financial condition, or operating results[131](index=131&type=chunk)[137](index=137&type=chunk) [Material Acquisitions and Disposals](index=32&type=section&id=Material%20Acquisitions%20and%20Disposals) In H1 2025, the company had no material acquisitions or disposals of subsidiaries, associates, and joint ventures to disclose - For the six months ended June 30, 2025, the company had no material acquisitions or disposals of any subsidiaries, associates, and joint ventures that require disclosure[132](index=132&type=chunk)[138](index=138&type=chunk) [Significant Investment Under Hong Kong Listing Rules](index=32&type=section&id=Significant%20Investment%20Under%20Hong%20Kong%20Listing%20Rules) During the reporting period, the company did not hold any significant investments as defined by the Hong Kong Listing Rules - The company did not hold any significant investments as defined by the Hong Kong Listing Rules during the reporting period[133](index=133&type=chunk)[139](index=139&type=chunk) [No Material Changes](index=32&type=section&id=No%20Material%20Changes) Except as disclosed in this interim report, there were no material changes affecting the company's performance during the reporting period that require disclosure - Except as disclosed in this interim report, there were no material changes affecting the Group's performance during the reporting period that require disclosure in accordance with paragraphs 40(2) and 46 of Appendix D2 to the Hong Kong Listing Rules[134](index=134&type=chunk)[140](index=140&type=chunk) [Employees and Remuneration Policy](index=32&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the company had 13,651 full-time and part-time employees, with staff costs of $140.2 million; remuneration policy is based on regional salary levels, employee rank, performance, and market conditions, offering benefits like medical, pension, and share awards, along with regular training - As of June 30, 2025, the company had **13,651 full-time and part-time employees**[135](index=135&type=chunk)[141](index=141&type=chunk) - During the reporting period, the company incurred staff costs of **$140.2 million**[135](index=135&type=chunk)[141](index=141&type=chunk) - Remuneration policy is determined based on salary levels in different regions, employee rank, performance, and market conditions, offering benefits such as medical plans, pension contribution schemes, and share award schemes[136](index=136&type=chunk)[141](index=141&type=chunk) - The company provides regular professional training and workshops to maintain employee quality, knowledge, and skill levels[136](index=136&type=chunk)[141](index=141&type=chunk) [Non-IFRS Financial Measure](index=33&type=section&id=Non-IFRS%20Financial%20Measure) The company uses the non-IFRS financial measure "restaurant-level operating profit margin" to assess restaurant performance and profitability, calculated by dividing restaurant-level operating profit by restaurant-level revenue, and provides a reconciliation to IFRS operating profit - The company uses the non-IFRS measure **"restaurant-level operating profit margin"** as a supplementary metric to review and assess its operating performance[142](index=142&type=chunk)[147](index=147&type=chunk) - Restaurant-level operating profit margin is calculated by dividing restaurant-level operating profit by restaurant-level revenue[142](index=142&type=chunk)[147](index=147&type=chunk) - The company believes that restaurant-level operating profit margin is an important metric for evaluating the performance and profitability of individual restaurants and for benchmarking against competitors[146](index=146&type=chunk)[148](index=148&type=chunk) Restaurant-level Operating Profit Margin Calculation (in $ thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Restaurant-level Revenue | 385,206 | 361,682 | | Less: Restaurant-level Costs and Expenses | (360,390) | (330,319) | | Restaurant-level Operating Profit | 24,816 | 31,363 | | Restaurant-level Operating Profit Margin* | 6.4% | 8.7% | Reconciliation of Operating Profit to Restaurant-level Operating Profit (in $ thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Operating Profit | 11,811 | 20,869 | | Less: Revenue (Others) | (11,527) | (9,248) | | Less: Other Income | (1,084) | (1,853) | | Add: Non-restaurant-level Costs and Expenses | 25,616 | 16,695 | | **Restaurant-level Operating Profit** | **24,816** | **31,363** | [Corporate Governance and Other Information](index=36&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the company's corporate governance practices, directors' and substantial shareholders' interests, share award schemes, and other relevant disclosures [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=37&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, the company's directors and chief executive held interests in the company's shares, with Ms. Shu Ping holding 51.92% and Ms. Yang Lijuan holding 2.73% Interests of Directors and Chief Executive in the Company (as of June 30, 2025) | Name | Nature of Interest | Number of Shares | Approximate Percentage of Total Issued Share Capital | | :--- | :--- | :--- | :--- | | Ms. Shu Ping | Founder of discretionary trust, interest in controlled corporation, beneficiary of trust, spouse's interest | 337,667,125(L) | 51.92% | | Ms. Yang Lijuan | Beneficial owner, beneficiary of trust | 17,757,122(L) | 2.73% | | Mr. Li Yu | Beneficial owner | 39,750(L) | 0.006% | | Ms. Liu Li | Beneficial owner | 3,096,650(L) | 0.48% | - As of June 30, 2025, the company had a total of **650,299,000 issued shares**[164](index=164&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=39&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, UBS Trustees (B.V.I.) Limited, Mr. Zhang Yong, and Ms. Shu Ping were substantial shareholders, holding 59.40% and 51.92% of the company's shares, respectively Interests and Short Positions of Substantial Shareholders in Shares and Underlying Shares (as of June 30, 2025) | Name of Shareholder/Entity | Nature of Interest | Number of Shares | Approximate Percentage of Total Issued Share Capital | | :--- | :--- | :--- | :--- | | UBS Trustees (B.V.I.) Limited | Trustee | 386,245,826(L) | 59.40% | | Mr. Zhang Yong | Founder of discretionary trust, interest in controlled corporation, beneficiary of trust, spouse's interest | 337,667,125(L) | 51.92% | | Ms. Shu Ping | Founder of discretionary trust, interest in controlled corporation, beneficiary of trust, spouse's interest | 337,667,125(L) | 51.92% | | ZY NP LTD | Beneficial owner, interest in controlled corporation | 295,070,923(L) | 45.37% | | NP UNITED HOLDING LTD | Beneficial owner | 180,197,011(L) | 27.71% | | Ms. Li Haiyan | Founder of discretionary trust, interest in controlled corporation, spouse's interest, beneficial owner | 53,828,702(L) | 8.28% | | Mr. Shi Yonghong | Founder of discretionary trust, interest in controlled corporation, spouse's interest | 53,828,702(L) | 8.28% | | SP NP LTD | Beneficial owner | 42,596,202(L) | 6.55% | | LHY NP LTD | Beneficial owner | 33,115,501(L) | 5.09% | | Futu Trustee Limited | Trustee | 61,933,000(L) | 9.52% | | ESOP Platform I | Beneficial owner | 43,353,100(L) | 6.67% | - NP United will distribute all its shares to its shareholders in specie according to their shareholding proportion on September 2, 2025, after which NP United will no longer be a shareholder of the company[172](index=172&type=chunk) [Share Award Scheme](index=43&type=section&id=Share%20Award%20Scheme) The company adopted a share award scheme on June 24, 2022, with 61,933,000 awards granted before listing, mostly to employee participants, and no new awards available for grant during the reporting period [Unvested Awards Granted Under the Share Award Scheme](index=43&type=section&id=Unvested%20Awards%20Granted%20Under%20the%20Share%20Award%20Scheme) As of June 30, 2025, a total of 61,933,000 shares were granted and unvested under the share award scheme, with no new awards granted during the reporting period - As of June 30, 2025, the total number of shares for awards granted and unvested under the share award scheme was **61,933,000 shares**[176](index=176&type=chunk)[181](index=181&type=chunk) - During the reporting period, no awards were available for grant under the share award scheme, and no new shares could be issued for granted awards[175](index=175&type=chunk)[179](index=179&type=chunk) - The maximum vesting period for unvested awards is **ten years** from the date the company and the grantee agree on the vesting conditions[188](index=188&type=chunk) - Whether awards vest depends on the performance indicators set by the Board or the Award Assessment Committee and whether the relevant grantees meet these indicators from time to time[188](index=188&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=45&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) During the reporting period, neither the company nor its subsidiaries participated in any arrangements enabling directors to acquire benefits through company shares or debentures, nor were any directors, their spouses, or children granted or exercised rights to subscribe for company equity or debt securities - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries was a party to any arrangement enabling directors to receive benefits through acquiring company shares or debentures[183](index=183&type=chunk)[186](index=186&type=chunk) - No director or any of their spouses or children under 18 years of age was granted any right to subscribe for equity or debt securities of the company or any other body corporate, nor had they exercised any such rights[183](index=183&type=chunk)[186](index=186&type=chunk) [Changes in the Information of the Directors](index=45&type=section&id=Changes%20in%20the%20Information%20of%20the%20Directors) Independent Non-executive Director Mr. Teo Sze Leong was appointed as an independent director of MindChamps Preschool Limited on August 14, 2025; otherwise, the company is unaware of any other changes in directors' information - Independent Non-executive Director Mr. Teo Sze Leong was appointed as an independent director of MindChamps Preschool Limited on **August 14, 2025**[184](index=184&type=chunk)[187](index=187&type=chunk) - Except as disclosed herein, the company is unaware of any changes in directors' information that require disclosure under Rule 13.51B(1) of the Hong Kong Listing Rules[185](index=185&type=chunk)[187](index=187&type=chunk) [Compliance with the Corporate Governance Code](index=46&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The company adopted the Corporate Governance Code in Appendix C1 of the Hong Kong Listing Rules and regularly reviews compliance; the Board approved changes to the Nomination Committee's terms of reference to align with revisions effective July 1, 2025 - The company adopted the code provisions of the Corporate Governance Code set out in Appendix C1 to the Hong Kong Listing Rules[190](index=190&type=chunk)[194](index=194&type=chunk) - The Board approved changes to the terms of reference of the Nomination Committee to align with the revisions to the Corporate Governance Code effective **July 1, 2025**[190](index=190&type=chunk)[194](index=194&type=chunk) - The company has complied with all applicable principles and code provisions of the Corporate Governance Code for the six months ended June 30, 2025, and up to the date of this interim report[191](index=191&type=chunk)[194](index=194&type=chunk) [Compliance with the Model Code](index=46&type=section&id=Compliance%20with%20the%20Model%20Code) The company adopted the Model Code in Appendix C3 of the Hong Kong Listing Rules as its code of conduct for directors' securities transactions and confirmed that directors and employees with inside information complied with it during the reporting period - The company adopted the Model Code set out in Appendix C3 to the Hong Kong Listing Rules as its own code of conduct for directors' dealings in the company's securities[192](index=192&type=chunk)[195](index=195&type=chunk) - The directors confirmed that they have complied with the Model Code for the six months ended June 30, 2025, and up to the date of this interim report[192](index=192&type=chunk)[195](index=195&type=chunk) - The company found no instances of employees violating the Model Code[193](index=193&type=chunk)[195](index=195&type=chunk) [Purchase, Sale, Redemption or Issue of Listed Securities](index=47&type=section&id=Purchase,%20Sale,%20Redemption%20or%20Issue%20of%20Listed%20Securities) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, nor did the company issue any equity securities or sell treasury shares for cash - For the six months ended June 30, 2025, and up to the date of this interim report, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's securities listed on the Stock Exchange or other securities exchanges[196](index=196&type=chunk)[198](index=198&type=chunk) - As of June 30, 2025, the company held no treasury shares[196](index=196&type=chunk)[198](index=198&type=chunk) - For the six months ended June 30, 2025, the company did not issue any equity securities or sell any treasury shares for cash[197](index=197&type=chunk)[198](index=198&type=chunk) [Audit Committee](index=48&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, reviewed the company's H1 2025 interim results, accounting principles, and internal controls, concluding that the financial results complied with relevant accounting standards and disclosure requirements - The Audit Committee comprises three independent non-executive directors: Mr. Teo Sze Leong (Chairman), Mr. Chan Hong Wai, and Mr. Liew Chong Chee[200](index=200&type=chunk)[206](index=206&type=chunk) - The Audit Committee reviewed the company's interim results for the six months ended June 30, 2025, accounting principles and practices, and discussed internal controls and financial reporting matters[201](index=201&type=chunk)[206](index=206&type=chunk) - The Audit Committee believes that the interim financial results comply with relevant accounting standards, rules, and regulations, and appropriate disclosures have been duly made[202](index=202&type=chunk)[206](index=206&type=chunk) [Interim Dividend](index=48&type=section&id=Interim%20Dividend) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025[203](index=203&type=chunk)[207](index=207&type=chunk) [Offering of ADS in the United States and Use of Proceeds](index=48&type=section&id=Offering%20of%20ADS%20in%20the%20United%20States%20and%20Use%20of%20Proceeds) The company completed an ADS offering in May 2024, raising $51.91 million net to access US investors; as of June 30, 2025, proceeds were used as planned for brand strengthening, network expansion, supply chain investment, R&D, and working capital - The company completed an offering of American Depositary Shares (ADS) in **May 2024**, issuing **3,096,600 ADS** and raising **$51.91 million** net[204](index=204&type=chunk)[208](index=208&type=chunk) - This offering aimed to reach untapped investor groups and establish a presence in the US securities market[205](index=205&type=chunk)[208](index=208&type=chunk) Net Proceeds Utilization (as of June 30, 2025) | Description | Percentage of Net Proceeds | Allocation (in $ millions) | Amount Utilized During Reporting Period (in $ millions) | Amount Unutilized at End of Reporting Period (in $ millions) | Expected Timeline for Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | | Strengthening brand and expanding global store network | 70% | 36.34 | 18.97 | 17.37 | Before end of 2025 | | Investing in supply chain management capabilities | 10% | 5.19 | 1.33 | 3.86 | Before end of 2026 | | R&D to strengthen digital store management and other technology applications | 10% | 5.19 | 1.19 | 4.00 | Before end of 2026 | | Working capital and other general corporate purposes | 10% | 5.19 | 2.53 | 2.66 | Before end of 2025 | | **Total** | **100%** | **51.91** | **24.02** | **27.89** | | [Continuing Disclosure Obligation Pursuant to the Hong Kong Listing Rules](index=50&type=section&id=Continuing%20Disclosure%20Obligation%20Pursuant%20to%20the%20Hong%20Kong%20Listing%20Rules) As of June 30, 2025, the directors were unaware of any circumstances triggering disclosure obligations under Rules 13.20, 13.21, and 13.22 of the Hong Kong Listing Rules - As of June 30, 2025, the directors were unaware of any circumstances that would give rise to disclosure obligations under Rules 13.20, 13.21, and 13.22 of the Hong Kong Listing Rules[214](index=214&type=chunk)[216](index=216&type=chunk) [Events After the Six Months Ended June 30, 2025](index=50&type=section&id=Events%20After%20the%20Six%20Months%20Ended%20June%2030,%202025) Except for disclosed matters, the company had no material disclosable events after June 30, 2025, up to the date of this interim report - Except as disclosed above, the company had no material disclosable events after June 30, 2025, and up to the date of this interim report[215](index=215&type=chunk)[217](index=217&type=chunk) [Independent Auditor's Review Report on the Unaudited Interim Condensed Consolidated Financial Statements](index=51&type=section&id=Independent%20Auditor's%20Review%20Report%20on%20the%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the independent auditor's review report on the company's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025 [Introduction](index=51&type=section&id=Introduction) Deloitte Touche Tohmatsu was engaged to review Haidilao International Holding Ltd.'s unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, prepared in accordance with Hong Kong Listing Rules and IAS 34 - Deloitte Touche Tohmatsu has reviewed the unaudited interim condensed consolidated financial statements of Haidilao International Holding Ltd. and its subsidiaries for the six months ended June 30, 2025[219](index=219&type=chunk)[224](index=224&type=chunk) - The report was prepared in compliance with the relevant requirements of the Hong Kong Listing Rules and International Accounting Standard 34 "Interim Financial Reporting"[219](index=219&type=chunk) [Scope of Review](index=51&type=section&id=Scope%20of%20Review) The review was conducted in accordance with International Standard on Review Engagements 2410, primarily involving inquiries and analytical procedures, with a scope narrower than an audit, thus no audit opinion is expressed - The review was conducted in accordance with International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity"[220](index=220&type=chunk)[222](index=222&type=chunk) - The review primarily involved inquiries of persons responsible for financial and accounting matters and applying analytical and other review procedures[220](index=220&type=chunk)[222](index=222&type=chunk) - As the scope of a review is substantially less than that of an audit, no audit opinion is expressed[220](index=220&type=chunk)[222](index=222&type=chunk) [Conclusion](index=52&type=section&id=Conclusion) Based on the review, the auditor found no matters leading them to believe that the unaudited interim condensed consolidated financial statements were not prepared, in all material respects, in accordance with IAS 34 - Based on the review, the auditor found no matters that caused them to believe that the unaudited interim condensed consolidated financial statements were not prepared, in all material respects, in accordance with International Accounting Standard 34[223](index=223&type=chunk) [Condensed Consolidated Financial Statements](index=53&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=53&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company achieved revenue of $396.7 million and a profit for the period of $28.3 million, reversing the loss from H1 2024 Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (in $ thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 396,733 | 370,930 | | Profit (Loss) for the Period | 28,271 | (4,649) | | Profit (Loss) for the Period Attributable to Owners of the Company | 28,352 | (4,583) | | Earnings (Loss) Per Share (Basic and Diluted) | 0.05 | (0.01) | [Condensed Consolidated Statement of Financial Position](index=54&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company reported non-current assets of $374.9 million, current assets of $327.5 million, current liabilities of $129.5 million, and net assets of $374.9 million Summary of Condensed Consolidated Statement of Financial Position (in $ thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current Assets | 374,928 | 361,198 | | Current Assets | 327,511 | 323,227 | | Current Liabilities | 129,495 | 128,568 | | Net Assets | 374,907 | 361,661 | | Equity Attributable to Owners of the Company | 373,355 | 360,028 | [Condensed Consolidated Statement of Changes In Equity](index=56&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20In%20Equity) As of June 30, 2025, equity attributable to owners of the company was $373.4 million, with total comprehensive income for the period amounting to $13.2 million Summary of Condensed Consolidated Statement of Changes In Equity (in $ thousands) | Indicator | June 30, 2025 | January 1, 2025 | | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 373,355 | 360,028 | | Total Comprehensive Income for the Period | 13,246 | N/A | [Condensed Consolidated Statement of Cash Flows](index=58&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities was $46.3 million, net cash used in investing activities was $18.1 million, net cash used in financing activities was $26.5 million, and cash and cash equivalents at period-end were $258.5 million Summary of Condensed Consolidated Statement of Cash Flows (in $ thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 46,292 | 48,002 | | Net Cash Used in Investing Activities | (18,092) | (92,274) | | Net Cash Used in Financing Activities | (26,535) | 32,830 | | Cash and Cash Equivalents at End of Period | 258,471 | 140,659 | [Notes to the Condensed Consolidated Financial Statements](index=60&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes and explanations supporting the condensed consolidated financial statements [General Information](index=60&type=section&id=General%20Information) Haidilao International Holding Ltd. was incorporated in the Cayman Islands on May 6, 2022, primarily operating restaurants, delivery services, and seasoning sales in overseas markets outside mainland China, Hong Kong, Macau, and Taiwan, with shares listed on HKEX in 2022 and Nasdaq in 2024 - The company was incorporated in the Cayman Islands on **May 6, 2022**[239](index=239&type=chunk) - It primarily engages in restaurant operations, delivery services, and sales of seasonings and food ingredients in overseas markets outside mainland China, Hong Kong, Macau, and Taiwan[240](index=240&type=chunk) - The company's shares were listed on the Hong Kong Stock Exchange on **December 30, 2022**, and on Nasdaq on **May 16, 2024** (Eastern Standard Time)[240](index=240&type=chunk) - The company's functional and presentation currency is the **US dollar**[241](index=241&type=chunk) [Basis of Preparation and Material Accounting Policy Information](index=60&type=section&id=Basis%20of%20Preparation%20and%20Material%20Accounting%20Policy%20Information) The financial statements are prepared in accordance with IAS 34, using a historical cost basis, consistent with the 2024 annual consolidated financial statements, and the company's business is subject to seasonal fluctuations - The unaudited interim condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" issued by the International Accounting Standards Board and the applicable disclosure requirements of the Hong Kong Listing Rules[242](index=242&type=chunk)[245](index=245&type=chunk) - The financial statements are prepared on a historical cost basis, except for certain financial instruments which are measured at revalued amounts or fair value[246](index=246&type=chunk)[250](index=250&type=chunk) - The company's business and financial performance are affected by seasonal fluctuations such as local holidays, school holidays, weather conditions, and food price volatility[248](index=248&type=chunk)[250](index=250&type=chunk) [Adoption of New and Revised Standards](index=61&type=section&id=Adoption%20of%20New%20and%20Revised%20Standards) The company adopted IFRS accounting standards effective for accounting periods beginning on or after January 1, 2025, but these adoptions had no material impact on accounting policies, disclosures, or reported amounts - The company has consistently applied accounting policies that comply with IFRS accounting standards effective for accounting periods beginning on or after **January 1, 2025**[251](index=251&type=chunk)[254](index=254&type=chunk) - The adoption of these revised IFRS accounting standards did not result in changes to the company's accounting policies, nor did it have a material impact on disclosures or reported amounts for the current or prior years[252](index=252&type=chunk)[254](index=254&type=chunk) - The company has not yet applied IFRS amendments that have been issued but are not yet effective, including "Amendments to IFRS 10 and IAS 28" and "IFRS 18," among others[253](index=253&type=chunk)[254](index=254&type=chunk) [Key Sources of Estimation Uncertainty](index=63&type=section&id=Key%20Sources%20of%20Estimation%20Uncertainty) The key judgments and sources of estimation uncertainty made by management remain consistent with the company's annual financial statements for the year ended December 31, 2024 - The key judgments made by management and the primary sources of estimation uncertainty remain consistent with the company's annual financial statements for the year ended December 31, 2024[256](index=256&type=chunk)[258](index=258&type=chunk) [Revenue](index=63&type=section&id=Revenue) Revenue primarily derives from Haidilao restaurant operations, delivery business, and other sources (hotpot seasonings and sub-brand food sales), all recognized at a point in time - The company's revenue is derived from Haidilao restaurant operations, delivery business, and others (primarily including sales of hotpot seasonings and sub-brand foods to local customers and retailers)[257](index=257&type=chunk)[258](index=258&type=chunk) Revenue by Type of Service or Goods (in $ thousands) | Type of Service or Goods | 2025 | 2024 | | :--- | :--- | :--- | | Haidilao Restaurant Operations | 377,468 | 356,488 | | Delivery Business | 7,738 | 5,194 | | Others | 11,527 | 9,248 | | **Total** | **396,733** | **370,930** | - Revenue recognition for all types is at a point in time[260](index=260&type=chunk) [Other Income](index=64&type=section&id=Other%20Income) Other income primarily includes interest income from bank deposits and lease deposits, as well as government grants Composition of Other Income (in $ thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest income from bank deposits | 3,395 | 1,108 | | Interest income from lease deposits | 304 | 314 | | Government grants | 732 | 1,259 | | Others | 352 | 594 | | **Total** | **4,783** | **3,275** | [Other Expenses](index=64&type=section&id=Other%20Expenses) Other expenses include administrative expenses, consulting service expenses, bank service fees, routine maintenance expenses, outsourcing service fees, business development expenses, and warehousing expenses Composition of Other Expenses (in $ thousands) | Type of Expense | 2025 | 2024 | | :--- | :--- | :--- | | Administrative expenses | 9,132 | 8,372 | | Consulting service expenses | 4,641 | 3,096 | | Bank service fees | 6,560 | 5,991 | | Routine maintenance expenses | 3,924 | 3,522 | | Outsourcing service fees | 12,243 | 9,113 | | Business development expenses | 2,938 | 1,654 | | Warehousing expenses | 1,291 | 1,381 | | **Total** | **40,729** | **33,129** | [Other Gain (Loss) – Net](index=65&type=section&id=Other%20Gain%20(Loss)%20%E2%80%93%20Net) Net other gains (losses) were primarily affected by net exchange gains (losses), with a net exchange gain of $23.8 million recorded in H1 2025, compared to a net exchange loss of $19.5 million in H1 2024 Composition of Other Gains (Losses) – Net (in $ thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net reversal (loss) of impairment | (382) | 584 | | Loss on disposal of property and termination of leases | (59) | (586) | | Net gain on financial assets at fair value through profit or loss | 927 | 1,788 | | Net exchange gain (loss) | 23,761 | (19,525) | | Others | (845) | (380) | | **Total** | **23,402** | **(18,119)** | [Finance Costs](index=65&type=section&id=Finance%20Costs) Finance costs primarily include interest on lease liabilities and interest expenses on derecognition provisions Composition of Finance Costs (in $ thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest on lease liabilities | 5,179 | 3,754 | | Interest expenses on derecognition provisions | 346 | 172 | | **Total** | **5,525** | **3,926** | [Income Tax Expense](index=66&type=section&id=Income%20Tax%20Expense) Income tax expense comprises current tax and deferred tax, calculated at tax rates ranging from 9% to 33% in relevant jurisdictions Composition of Income Tax Expense (in $ thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current tax (current period) | 5,815 | 4,966 | | Current tax (under-provision in prior years) | 267 | 34 | | Deferred tax | 320 | 277 | | **Total** | **6,402** | **5,277** | - The company's taxes are calculated at prevailing tax rates ranging from **9% to 33%** in the relevant jurisdictions[272](index=272&type=chunk) [Profit (Loss) for the Period](index=67&type=section&id=Profit%20(Loss)%20for%20the%20Period) Profit (loss) for the period is calculated after deducting depreciation and amortization, rentals and related expenses, directors' remuneration, and other staff costs Key Deductions for Profit (Loss) for the Period (in $ thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Total depre

(Incorporated in Bermuda with limited liability) （於百慕達註冊成立之有限公司） Stock code 股份代號 : 116 INTERIM REPORT 2025 2025 中期報告 The Board announces the unaudited interim results of the Group for the six months ended 30 June 2025. The interim report has been reviewed by the Audit Committee of the Board. 董事會宣布本集團截至2025年6月30日止 六個月之未經審核中期業績。中期報告已 由董事會之審核委員會審閱。 | | FINANCIAL HIGHLIGHTS | | | | | --- | --- | --- | --- | --- | | | 財務摘要 | | | | | | | Unaudited | | | | | | 未經審核 | | | | | | Six months ended 30 June | | | | | | ...

[Company Information](index=2&type=section&id=Company%20Information) [Board of Directors and Company Secretary](index=3&type=section&id=Board%20of%20Directors%20and%20Company%20Secretary) This section lists the board members of First Shanghai Investments Limited, including the Chairman, Executive Directors, Non-executive Directors, and Independent Non-executive Directors, as well as the Company Secretary's name - The Chairman of the Board is Mr. Lo Yuen Yi, with Executive Directors including Mr. Sun Shu Lin, Mr. Yeung Wai Kin, and Ms. Lo Yuen Yuen[4](index=4&type=chunk) - The Company Secretary is Mr. Yeung Wai Kin[4](index=4&type=chunk) [Auditor and Principal Bankers](index=3&type=section&id=Auditor%20and%20Principal%20Bankers) This section provides the Company's auditor information and a list of principal bankers, showing the financial institutions the Company collaborates with - The auditor is PricewaterhouseCoopers[4](index=4&type=chunk) - Principal bankers include Bank of China (Hong Kong) Limited, Bank of Communications Co., Ltd. Hong Kong Branch, and CITIC Bank International Limited[4](index=4&type=chunk) [Registered Office and Share Registrar](index=3&type=section&id=Registered%20Office%20and%20Share%20Registrar) This section details the Company's registered office address, contact information, and share registrar and transfer office, including the stock code on the Hong Kong Stock Exchange - The registered office is located at Room 1903, Wing On House, 71 Des Voeux Road Central, Hong Kong[4](index=4&type=chunk) - The share registrar and transfer office is Hong Kong Central Share Registry Limited[4](index=4&type=chunk) - The Company's stock code is 227[4](index=4&type=chunk) [Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) [Market Review](index=4&type=section&id=Market%20Review) In the first half of 2025, the global economy showed mixed growth amidst geopolitical uncertainties and economic challenges, with major markets like the US and Asian stock markets rebounding, but the overall outlook remains unclear; China's economy grew moderately, while Hong Kong's local consumption continued to decline, and the property market remained sluggish - The global economy was affected by geopolitical uncertainties and new US tariff measures, but major European markets recorded gains due to easing inflation and accommodative monetary policies[6](index=6&type=chunk) - China's economy experienced moderate growth driven by domestic demand and government stimulus measures, but faced trade tensions and property market instability[6](index=6&type=chunk) - Hong Kong's local consumption continued to decline, the job market tightened, the stock market rebounded after volatility, and the property market remained sluggish[7](index=7&type=chunk) [Business Review](index=5&type=section&id=Business%20Review) In the first half of 2025, the Group's Financial Services segment benefited from increased market turnover and brokerage commission income growth, but margin loan interest income declined; the Property and Hotel segment faced challenges due to inventory overhang, weak buyer confidence, and fair value losses; the Group's overall net profit attributable to shareholders and basic earnings per share significantly decreased by 95% compared to the same period last year - The Financial Services segment benefited from a **20% increase** in the Hang Seng Index and a **118% surge** in average daily market turnover, leading to growth in brokerage commission income[8](index=8&type=chunk) - Margin loan interest income decreased due to persistently high interest rates and intense competition[8](index=8&type=chunk) - The Property and Hotel segment faced inventory overhang and weak buyer confidence, resulting in price declines in major cities and fair value losses on certain property projects[9](index=9&type=chunk) - For the six months ended June 30, 2025, the Group's net profit attributable to shareholders was approximately **HK$3 million**, with basic earnings per share of **0.15 HK cents**, representing a **95% decrease** compared to the same period in 2024[9](index=9&type=chunk) [Outlook](index=6&type=section&id=Outlook) Looking ahead, financial markets are expected to remain highly volatile, influenced by domestic property policies, US Federal Reserve interest rate policies, and geopolitical tensions; the Hong Kong stock market is cautiously optimistic, benefiting from accommodative monetary policies and China's economic recovery; China's property market continues to face pressure, with recovery dependent on government support; the Group will implement risk mitigation strategies, actively promote digitalization of financial services, and optimize its business model to address challenges and seize opportunities - Financial markets are expected to remain highly volatile due to relaxed property policies, US Federal Reserve interest rate policies, and geopolitical tensions[10](index=10&type=chunk) - The outlook for the Hong Kong stock market in the second half is cautiously optimistic, benefiting from accommodative monetary policies and China's economic recovery[10](index=10&type=chunk) - China's property market continues to face pressure, with recovery dependent on further government support and economic stability[11](index=11&type=chunk) - The Group will actively implement digitalization and automation strategies for financial services to enhance customer experience and operational efficiency[10](index=10&type=chunk) [Financial Review](index=7&type=section&id=Financial%20Review) For the six months ended June 30, 2025, the Group's net profit attributable to shareholders and basic earnings per share significantly decreased by 95% compared to the same period last year, primarily due to a gain on disposal of a subsidiary in the prior period, lower property sales, fair value losses on investment properties, and reduced margin loan interest income; revenue decreased by 8%, while total net assets increased by 2% - Net profit attributable to shareholders and basic earnings per share **decreased by 95%** to approximately **HK$3 million** and **0.15 HK cents**, respectively[12](index=12&type=chunk) - Key reasons for the decrease include: a gain on disposal of a subsidiary of approximately **HK$66 million** in 2024, which was absent in the current period; lower property sales from the Huangshan project; fair value losses on investment properties and impairment provisions for properties held for sale; and reduced margin loan interest income[12](index=12&type=chunk) - Revenue was approximately **HK$192 million**, representing an **8% decrease** compared to the same period last year[12](index=12&type=chunk) - Total net assets were approximately **HK$2.614 billion**, representing a **2% increase** compared to December 31, 2024[12](index=12&type=chunk) [Financial Services](index=7&type=section&id=Financial%20Services) The Financial Services segment's operating profit approximately **doubled** to approximately **HK$21 million** in the first half of 2025, primarily driven by a significant increase in brokerage commission income due to a **118% surge** in average daily market turnover in the Hong Kong stock market and an increase in initial public offerings; however, margin loan interest income **decreased by 25%** due to persistently high interest rates and intense competition, and corporate finance advisory service income also **decreased by 24%** - Financial Services segment operating profit was approximately **HK$21 million**, approximately **doubled** compared to the same period in 2024[13](index=13&type=chunk) - Brokerage commission income **doubled**, driven by an approximately **118% increase** in average daily market turnover in the Hong Kong stock market and an increase in initial public offerings[14](index=14&type=chunk) - Margin loan interest income **decreased by 25%** compared to the same period in 2024, due to persistently high interest rates and intense competition[14](index=14&type=chunk) - Advisory service income **decreased by 24%** compared to the same period in 2024, affected by intensified market competition[14](index=14&type=chunk) [Property and Hotel](index=8&type=section&id=Property%20and%20Hotel) The Property and Hotel segment recorded an operating loss of approximately **HK$27 million** in the first half of 2025, representing a **10% increase** compared to the same period last year, primarily due to reduced property sales from the Huangshan project, fair value losses on investment properties, and impairment provisions for properties held for sale; property development business revenue **decreased by 78%**, property investment and management business revenue **decreased by 8%**, and hotel and golf course business revenue **decreased by 2%** - The Property and Hotel segment recorded an operating loss of approximately **HK$27 million**, representing a **10% increase** compared to the same period in 2024[15](index=15&type=chunk) - Property development business revenue **decreased by 78%** compared to the same period in 2024, mainly because most sales from the Huangshan project were recognized in early 2024[15](index=15&type=chunk) - Impairment provisions for properties held for sale of approximately **HK$3 million** and fair value losses on investment properties of approximately **HK$3 million** were recorded[15](index=15&type=chunk) - Hotel and golf course business revenue **decreased by 2%** compared to the same period in 2024, affected by weak consumer sentiment[16](index=16&type=chunk) [Other Businesses](index=9&type=section&id=Other%20Businesses) The Other Businesses segment recorded an operating loss of approximately **HK$2 million** during the reporting period, a significant decrease compared to an operating profit of approximately **HK$68 million** in the same period of 2024, primarily due to a gain on disposal of a subsidiary of approximately **HK$66 million** recognized in 2024, with no new direct investment projects in the current period - The Other Businesses segment recorded an operating loss of approximately **HK$2 million**[17](index=17&type=chunk) - Operating profit in the same period of 2024 was approximately **HK$68 million**, mainly due to a gain on disposal of a subsidiary of approximately **HK$66 million**[17](index=17&type=chunk) - No new direct investment projects were undertaken in 2025, as internal resources were focused on the financial services business[17](index=17&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=9&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group primarily relies on internal financial resources, supplemented by bank and other loans; as of June 30, 2025, secured bank loans decreased to approximately **HK$93 million**, cash reserves increased to approximately **HK$473 million**, and the debt-to-equity ratio decreased to **3.6%**; there were no changes in the capital structure, and all licensed subsidiaries complied with statutory capital requirements - Secured bank loans were approximately **HK$93 million** (December 31, 2024: approximately HK$107 million)[18](index=18&type=chunk) - Cash reserves increased to approximately **HK$473 million** (December 31, 2024: approximately HK$290 million)[18](index=18&type=chunk) - The debt-to-equity ratio (total borrowings to shareholders' funds) decreased to **3.6%** as of June 30, 2025 (December 31, 2024: 4.2%)[18](index=18&type=chunk) - The Group was not exposed to other significant foreign exchange fluctuation risks and did not use derivative instruments for hedging[19](index=19&type=chunk) [Pledge of Group Assets](index=10&type=section&id=Pledge%20of%20Group%20Assets) The Group pledged properties, investment properties, leasehold land and land use rights, and properties held for sale with a total net book value of approximately **HK$559 million**, along with time deposits of approximately **HK$15 million**, as collateral for bank loans and general banking facilities - The total net book value of pledged properties, investment properties, leasehold land and land use rights, and properties held for sale was approximately **HK$559 million**[20](index=20&type=chunk) - Pledged time deposits were approximately **HK$15 million**[20](index=20&type=chunk) - No bank borrowings were secured by listed securities pledged by clients to the Group as collateral for margin loans and IPO loans[20](index=20&type=chunk) [Contingent Liabilities](index=10&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group provided guarantees for mortgage loans to property purchasers in China, with total contingent liabilities of approximately **HK$6 million**, a decrease from approximately **HK$14 million** as of December 31, 2024 - Total contingent liabilities were approximately **HK$6 million** (December 31, 2024: approximately HK$14 million)[21](index=21&type=chunk)[73](index=73&type=chunk) - Guarantee terms stipulate that if purchasers fail to fulfill mortgage payments, the Group is responsible for repaying outstanding principal, interest, and penalties, and has the right to take over the relevant properties[21](index=21&type=chunk)[75](index=75&type=chunk) [Significant Acquisitions and Disposals](index=10&type=section&id=Significant%20Acquisitions%20and%20Disposals) During the reporting period, the Group did not undertake any significant acquisitions, disposals, or major investments - No significant acquisitions, disposals, or major investments were made during the period[22](index=22&type=chunk) [Human Resources](index=10&type=section&id=Human%20Resources) The Group's human resource management aims to reward and develop employees through competitive compensation and benefits and a comprehensive performance appraisal system; as of June 30, 2025, the Group employed 537 staff, with staff costs of approximately **HK$110 million**, an increase from the same period last year - As of June 30, 2025, the Group employed 537 staff (June 30, 2024: 543 staff)[23](index=23&type=chunk) - Staff costs for the six months ended June 30, 2025, were approximately **HK$110 million** (June 30, 2024: approximately HK$97 million)[23](index=23&type=chunk) - Employee compensation is performance-based, reviewed annually, and benefits include bonuses, medical plans, provident funds, and share option schemes[23](index=23&type=chunk) [Condensed Consolidated Income Statement](index=11&type=section&id=Condensed%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the Group's revenue was HK$191,595 thousand, profit for the period was HK$3,674 thousand, and basic earnings per share attributable to shareholders of the Company was 0.15 HK cents Condensed Consolidated Income Statement (For the six months ended June 30) | Metric | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Revenue | 191,595 | 208,743 | | Cost of sales | (84,143) | (103,588) | | Gross profit | 107,452 | 105,155 | | Other net (losses)/gains | (509) | 53,719 | | Selling, general and administrative expenses | (134,548) | (124,389) | | Operating (loss)/profit | (27,605) | 34,485 | | Net finance income | 33,402 | 31,784 | | Profit before tax | 5,797 | 66,269 | | Taxation | (2,123) | (161) | | Profit for the period | 3,674 | 66,108 | | Attributable to shareholders of the Company | 3,344 | 66,261 | | Basic earnings per share | 0.15 HK cents | 3.02 HK cents | [Condensed Consolidated Statement of Comprehensive Income](index=12&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's profit for the period was HK$3,674 thousand, and other comprehensive income was HK$54,278 thousand, resulting in a total comprehensive income for the period of HK$57,952 thousand Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Profit for the period | 3,674 | 66,108 | | Other comprehensive income/(loss) | | | | — Exchange reserve recognised on disposal of a subsidiary | – | (20,589) | | — Exchange differences | 45,024 | (14,218) | | — Fair value gains/(losses) on financial assets at fair value through other comprehensive income | 8,331 | (2,717) | | — Exchange differences (items that will not be reclassified to profit or loss) | 923 | (490) | | Other comprehensive income/(loss) for the period, net of tax | 54,278 | (38,014) | | Total comprehensive income for the period | 57,952 | 28,094 | | Attributable to shareholders of the Company | 56,699 | 28,737 | [Condensed Consolidated Statement of Financial Position](index=13&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were HK$5,804,334 thousand, and net assets were HK$2,613,668 thousand; net current assets were HK$1,504,409 thousand, an increase from December 31, 2024 Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | **Non-current assets** | | | | Intangible assets | 1,726 | 1,726 | | Property, plant and equipment | 432,931 | 404,590 | | Investment properties | 581,090 | 577,806 | | Total non-current assets | 1,197,048 | 1,289,382 | | **Current assets** | | | | Inventories | 333,771 | 344,623 | | Loans and advances | 977,361 | 1,082,226 | | Trade and other receivables | 197,576 | 253,993 | | Client trust bank balances | 2,421,359 | 1,726,732 | | Cash and bank balances | 423,950 | 284,650 | | Total current assets | 4,607,286 | 3,759,120 | | **Current liabilities** | | | | Trade and other payables | 2,972,668 | 2,264,679 | | Borrowings (current) | 77,510 | 77,278 | | Total current liabilities | 3,102,877 | 2,391,328 | | Net current assets | 1,504,409 | 1,367,792 | | **Total assets less current liabilities** | 2,701,457 | 2,657,174 | | **Non-current liabilities** | | | | Borrowings (non-current) | 15,748 | 30,009 | | Total non-current liabilities | 87,789 | 101,146 | | **Net assets** | 2,613,668 | 2,556,028 | | **Total equity** | 2,613,668 | 2,556,028 | [Condensed Consolidated Statement of Cash Flows](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group generated net cash of HK$167,219 thousand from operating activities, used net cash of HK$3,389 thousand in investing activities, and used net cash of HK$25,615 thousand in financing activities, with cash and cash equivalents at period-end of HK$423,950 thousand Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 167,219 | (143,757) | | Cash flows from investing activities | | | | Interest received | 39,397 | 49,662 | | Proceeds from disposal of a subsidiary | – | 49,951 | | Net cash (used in)/generated from investing activities | (3,389) | 93,121 | | Cash flows from financing activities | | | | Repayment of borrowings | (74,227) | (142,244) | | Net cash used in financing activities | (25,615) | (42,548) | | Net increase/(decrease) in cash and cash equivalents | 138,215 | (93,184) | | Cash and cash equivalents at June 30 | 423,950 | 246,648 | [Condensed Consolidated Statement of Changes in Equity](index=17&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, the total share capital and reserves attributable to shareholders of the Company were HK$2,544,584 thousand, non-controlling interests were HK$69,084 thousand, and total equity was HK$2,613,668 thousand; total comprehensive income for the period was HK$57,952 thousand Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Metric | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Total equity at January 1 | 2,556,028 | 2,431,686 | | Profit for the period (attributable to shareholders of the Company) | 3,344 | 66,261 | | Other comprehensive income/(loss) | 54,278 | (38,014) | | Total comprehensive income for the period | 57,952 | 28,094 | | Dividends paid to non-controlling interests | (312) | (450) | | Total equity at end of period | 2,613,668 | 2,463,641 | [Notes to the Condensed Consolidated Financial Information](index=17&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Information) [General Information](index=18&type=section&id=General%20Information) This section outlines the principal business activities of First Shanghai Investments Limited and its subsidiaries, including securities investment, corporate finance, property development, and confirms the preparation and approval of this interim report - The Group is principally engaged in securities investment, corporate finance, stockbroking, property development, property investment, hotel operation, direct investment, investment holding, and management[39](index=39&type=chunk) - The Company is a limited liability company incorporated in Hong Kong and listed on The Stock Exchange of Hong Kong Limited[39](index=39&type=chunk) - These unaudited condensed consolidated financial information were approved for issue by the Board on August 22, 2025[40](index=40&type=chunk) [Basis of Preparation](index=19&type=section&id=Basis%20of%20Preparation) This section explains that the unaudited condensed consolidated financial information for the six months ended June 30, 2025, has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the annual financial statements - The unaudited condensed consolidated financial information has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[42](index=42&type=chunk) - This information should be read in conjunction with the annual financial statements for the year ended December 31, 2024[42](index=42&type=chunk) [Accounting Policies](index=19&type=section&id=Accounting%20Policies) This section states that the accounting policies adopted during this interim period are consistent with those in the annual financial statements for the year ended December 31, 2024, and notes that newly adopted revised standards have no significant impact on the financial position - The accounting policies adopted are consistent with those described in the annual financial statements for the year ended December 31, 2024[43](index=43&type=chunk) - The adoption of the revised Hong Kong Accounting Standard 21 (Revised), Lack of Exchangeability, will not have a significant impact on the Group's results and financial position for the current and prior accounting periods[44](index=44&type=chunk) - Income tax for the interim period is calculated based on the applicable tax rate for the expected total annual profit[45](index=45&type=chunk) [Estimates](index=20&type=section&id=Estimates) This section explains that the preparation of the unaudited condensed consolidated financial information requires management to make judgments, estimates, and assumptions, and notes that actual results may differ from these estimates; the significant judgments and key sources of estimation uncertainty made by management in preparing this information are consistent with those in the annual consolidated financial statements - The preparation of the unaudited condensed consolidated financial information requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses[46](index=46&type=chunk) - Actual results may differ from these estimates[46](index=46&type=chunk) [Segment Information](index=20&type=section&id=Segment%20Information) The Group's operating segments are classified into financial services, property development, property investment and hotel, and other businesses; in the first half of 2025, the financial services segment recorded significant growth in operating profit, while property development, property investment and hotel, and other businesses all recorded operating losses - The Group's operating segments include Financial Services, Property Development, Property Investment and Hotel, and Other Businesses[49](index=49&type=chunk) - In the first half of 2025, the Financial Services segment's revenue was HK$110,132 thousand, with segment results of HK$21,152 thousand[50](index=50&type=chunk) - Property Development revenue was HK$11,700 thousand, with a segment loss of HK$12,758 thousand[50](index=50&type=chunk) - As of June 30, 2025, Financial Services segment assets were HK$3,999,869 thousand, and Property Development segment assets were HK$519,201 thousand[52](index=52&type=chunk) [Segment Results for the Six Months Ended June 30, 2025](index=21&type=section&id=Segment%20Results%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025) In the first half of 2025, the Financial Services segment achieved an operating profit of HK$21,152 thousand, while Property Development, Property Investment and Hotel, and Other Businesses all recorded operating losses, leading to an overall Group operating loss of HK$27,605 thousand 2025 First Half Segment Results (HK$'000) | Segment | Revenue | Segment results | | :--- | :--- | :--- | | Financial Services | 110,132 | 21,152 | | Property Development | 11,700 | (12,758) | | Property Investment and Hotel | 69,763 | (14,054) | | Other Businesses | – | (2,322) | | **Total** | **191,595** | **(7,982)** | | Net unallocated operating expenses | | (19,623) | | **Operating loss** | | **(27,605)** | [Segment Results for the Six Months Ended June 30, 2024](index=22&type=section&id=Segment%20Results%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202024) In the first half of 2024, the Financial Services segment achieved an operating profit of HK$9,568 thousand, and Other Businesses achieved an operating profit of HK$67,668 thousand, while Property Development and Property Investment and Hotel recorded operating losses, resulting in an overall Group operating profit of HK$34,485 thousand 2024 First Half Segment Results (HK$'000) | Segment | Revenue | Segment results | | :--- | :--- | :--- | | Financial Services | 78,650 | 9,568 | | Property Development | 54,940 | (4,725) | | Property Investment and Hotel | 72,344 | (19,846) | | Other Businesses | 2,809 | 67,668 | | **Total** | **208,743** | **52,665** | | Net unallocated operating expenses | | (18,180) | | **Operating profit** | | **34,485** | [Segment Assets](index=23&type=section&id=Segment%20Assets) As of June 30, 2025, the Group's total segment assets were HK$5,727,808 thousand, with the Financial Services segment accounting for the largest share at HK$3,999,869 thousand Segment Assets (HK$'000) | Segment | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Financial Services | 3,999,869 | 3,264,355 | | Property Development | 519,201 | 533,038 | | Property Investment and Hotel | 1,076,389 | 1,048,578 | | Other Businesses | 132,349 | 175,338 | | **Total segment assets** | **5,727,808** | **5,021,309** | | Total assets (including recoverable tax, deferred tax assets, corporate assets) | 5,804,334 | 5,048,502 | [Other Net (Losses)/Gains](index=24&type=section&id=Other%20Net%20(Losses)%2FGains) For the six months ended June 30, 2025, the Group recorded other net losses of HK$509 thousand, primarily due to fair value losses on investment properties and financial assets at fair value through profit or loss, whereas the same period last year recorded net gains of HK$53,719 thousand from the disposal of a subsidiary Other Net (Losses)/Gains (HK$'000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Gain on disposal of a subsidiary | – | 65,946 | | Loss on disposal of investment properties | (3) | (7) | | Fair value loss on investment properties | (2,989) | (11,353) | | Fair value loss on financial assets at fair value through profit or loss | (2,156) | – | | Net gain on disposal of property, plant and equipment | 18 | 82 | | Net foreign exchange gains/(losses) | 4,621 | (949) | | **Total** | **(509)** | **53,719** | [Operating (Loss)/Profit](index=24&type=section&id=Operating%20(Loss)%2FProfit) For the six months ended June 30, 2025, the Group's operating loss was HK$27,605 thousand, primarily affected by increased depreciation, impairment provisions for properties held for sale, and staff costs Operating (Loss)/Profit after deducting/(crediting) items (HK$'000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Depreciation | 17,637 | 19,303 | | Amortisation of leasehold land and land use rights | 740 | 755 | | Impairment loss on financial assets, net/(reversal) | 888 | (347) | | Impairment provision for properties held for sale | 2,957 | – | | Staff costs | 109,904 | 97,427 | [Net Finance Income](index=25&type=section&id=Net%20Finance%20Income) For the six months ended June 30, 2025, the Group's net finance income was HK$33,402 thousand, an increase from HK$31,784 thousand in the same period last year, primarily due to a significant decrease in finance costs Net Finance Income (HK$'000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Finance income | 38,864 | 48,688 | | Total finance costs | (5,462) | (16,904) | | **Net finance income** | **33,402** | **31,784** | [Staff Costs](index=25&type=section&id=Staff%20Costs) For the six months ended June 30, 2025, the Group's total staff costs were HK$109,904 thousand, an increase from HK$97,427 thousand in the same period last year, primarily driven by growth in wages, salaries, and allowances Staff Costs (HK$'000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Wages, salaries and allowances | 98,991 | 85,815 | | Retirement benefit costs | 5,200 | 5,394 | | Other employee benefits | 5,713 | 6,218 | | **Total** | **109,904** | **97,427** | [Taxation](index=26&type=section&id=Taxation) For the six months ended June 30, 2025, the Group's taxation expense was HK$2,123 thousand, a significant increase from HK$161 thousand in the same period last year, primarily due to increased Hong Kong profits tax and land appreciation tax, partially offset by a decrease in deferred tax Taxation Expense (HK$'000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Hong Kong profits tax (current) | 2,342 | 1,806 | | Overseas income tax (current) | 418 | 458 | | Land appreciation tax | 883 | 2,926 | | Deferred tax | (1,521) | (5,029) | | **Taxation** | **2,123** | **161** | [Earnings Per Share](index=26&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, the Group's basic and diluted earnings per share were both **0.15 HK cents**, a significant decrease from 3.02 HK cents in the same period last year - Profit attributable to shareholders of the Company was approximately **HK$3.344 million** (2024: approximately HK$66.261 million)[60](index=60&type=chunk) - Basic earnings per share was **0.15 HK cents** (2024: 3.02 HK cents)[60](index=60&type=chunk) - The weighted average number of ordinary shares in issue was 2,190,679,905 shares[60](index=60&type=chunk) - Diluted earnings per share was the same as basic earnings per share as there were no potentially dilutive ordinary shares in issue during the period[60](index=60&type=chunk) [Interim Dividend](index=26&type=section&id=Interim%20Dividend) The Board recommends not to declare an interim dividend for the six months ended June 30, 2025 - The Board recommends not to declare an interim dividend for the first half of 2025 (2024: HK$nil)[61](index=61&type=chunk) [Capital Expenditure](index=27&type=section&id=Capital%20Expenditure) As of June 30, 2025, the Group's net book value of property, plant and equipment increased to HK$432,931 thousand, and investment properties increased to HK$581,090 thousand; additions to property, plant and equipment were HK$811 thousand, and right-of-use assets were HK$6,843 thousand during the period Capital Expenditure Net Book Value Movement (HK$'000) | Item | January 1, 2025 | Additions | Fair value loss | Depreciation and amortisation | Exchange differences | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Intangible assets | 1,726 | – | – | – | – | 1,726 | | Property, plant and equipment | 404,590 | 811 | – | (11,946) | 39,641 | 432,931 | | Right-of-use assets | 13,038 | 6,843 | – | (5,691) | 469 | 14,659 | | Investment properties | 577,806 | – | (2,989) | – | 5,842 | 581,090 | | Leasehold land and land use rights | 32,853 | – | – | (740) | 136 | 32,249 | [Inventories](index=28&type=section&id=Inventories) As of June 30, 2025, the Group's total inventories were HK$333,771 thousand, primarily comprising properties held for sale, with properties under development (within normal operating cycle) amounting to HK$20,222 thousand Inventory Composition (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Properties under development (within normal operating cycle) | 20,222 | 19,953 | | Properties held for sale | 311,809 | 323,266 | | Other inventories | 1,740 | 1,404 | | **Total** | **333,771** | **344,623** | | Properties under development (outside normal operating cycle) | 132,595 | 130,833 | [Trade and Other Receivables](index=28&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, the Group's total trade and other receivables were HK$197,576 thousand, a decrease from HK$253,993 thousand as of December 31, 2024, primarily due to a decrease in amounts due from securities brokers and clearing houses Trade and Other Receivables Composition (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Amounts due from securities brokers and clearing houses | 74,206 | 156,763 | | Amounts due from securities clients | 119,386 | 93,129 | | Trade and other receivables | 5,060 | 5,200 | | Loss allowance | (1,076) | (1,099) | | **Total** | **197,576** | **253,993** | - All trade and other receivables are repayable within one year or on demand, and their fair value approximates their carrying amount[64](index=64&type=chunk) - Trade and other receivables aged 0 to 30 days by invoice date accounted for the largest portion, at HK$196,507 thousand[65](index=65&type=chunk) [Trade and Other Payables](index=29&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables were HK$2,972,668 thousand, an increase from HK$2,264,679 thousand as of December 31, 2024, primarily driven by a significant increase in amounts due to securities clients and clearing houses Trade and Other Payables Composition (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Amounts due to securities brokers and dealers | 36,484 | 45,008 | | Amounts due to securities clients and clearing houses | 2,593,274 | 1,873,279 | | Trade payables | 158,957 | 163,743 | | Contract liabilities | 19,495 | 13,717 | | Accruals and other payables | 164,458 | 168,932 | | **Total** | **2,972,668** | **2,264,679** | - Amounts due to securities clients and clearing houses include payables of HK$2,421,359,000 deposited in segregated trust accounts with authorized institutions[67](index=67&type=chunk) - Most trade and other payables are repayable within one year or on demand, and their fair value approximates their carrying amount[67](index=67&type=chunk) [Borrowings](index=31&type=section&id=Borrowings) As of June 30, 2025, the Group's total borrowings were HK$93,258 thousand, a decrease from HK$107,287 thousand as of December 31, 2024; the weighted average effective annual interest rate decreased to **3.10% p.a.** Borrowings Composition (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Non-current secured bank loans | 15,748 | 30,009 | | Current secured bank loans | 77,510 | 77,278 | | **Total** | **93,258** | **107,287** | - The Group has pledged properties with a total net book value of approximately **HK$559 million** and time deposits of approximately **HK$15 million** as collateral for bank borrowings[68](index=68&type=chunk) - The weighted average effective annual interest rate was **3.10% p.a.** (December 31, 2024: 6.32% p.a.)[69](index=69&type=chunk) [Share Capital](index=31&type=section&id=Share%20Capital) As of June 30, 2025, the Company's total issued and fully paid share capital was 2,190,679,905 ordinary shares, with a share capital amount of HK$1,265,591 thousand, remaining unchanged from December 31, 2024 Share Capital (HK$'000) | Item | June 30, 2025 (Number of shares in thousands) | June 30, 2025 (HK$'000) | December 31, 2024 (Number of shares in thousands) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | Ordinary shares, issued and fully paid: at beginning and end of period | 2,190,680 | 1,265,591 | 2,190,680 | 1,265,591 | [Commitments](index=32&type=section&id=Commitments) The Group's commitments primarily include capital commitments contracted but not provided for, and total minimum lease receivables under irrevocable operating leases for investment properties [Capital Commitments for Property, Plant and Equipment, Leasehold Land and Land Use Rights and Properties Under Development](index=32&type=section&id=Capital%20Commitments%20for%20Property%2C%20Plant%20and%20Equipment%2C%20Leasehold%20Land%20and%20Land%20Use%20Rights%20and%20Properties%20Under%20Development) As of June 30, 2025, the Group's capital commitments for property, plant and equipment, leasehold land and land use rights, and properties under development, contracted but not provided for, amounted to HK$308,217 thousand Capital Commitments (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Contracted but not provided for | 308,217 | 304,122 | [Operating Lease Commitments](index=32&type=section&id=Operating%20Lease%20Commitments) As of June 30, 2025, the Group's total minimum lease receivables under irrevocable operating leases for investment properties amounted to HK$31,975 thousand, of which HK$15,636 thousand are due not later than one year Operating Lease Receivables (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Not later than one year | 15,636 | 16,252 | | Later than one year but not later than five years | 14,000 | 14,711 | | Later than five years | 2,339 | 3,050 | | **Total** | **31,975** | **34,013** | [Contingent Liabilities](index=32&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group provided guarantees for mortgage loans to property purchasers in China, with total contingent liabilities of approximately **HK$6 million**, a decrease from approximately **HK$14 million** as of December 31, 2024; additionally, the Group is involved in a lawsuit, with a provision of approximately **HK$50 million** recognized Contingent Liabilities (HK$'000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Guarantees given for mortgage facilities granted to certain purchasers of the Group's properties | 6,001 | 14,384 | - The Group is involved in a lawsuit, with a provision of approximately **HK$50 million** recognized in 'Other payables' as of June 30, 2025 (December 31, 2024: approximately HK$47 million)[75](index=75&type=chunk) [Related Party Transactions](index=33&type=section&id=Related%20Party%20Transactions) For the six months ended June 30, 2025, total key management compensation was **HK$7.106 million**; in the same period of 2024, the Group completed the disposal of all equity interest in an indirect non-wholly owned subsidiary to a related party for a cash consideration of approximately **HK$3.5 million** Key Management Compensation (HK$'000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Fees | 876 | 960 | | Salaries and other employee benefits | 5,725 | 5,657 | | Retirement benefit costs | 505 | 497 | | **Total** | **7,106** | **7,114** | - For the six months ended June 30, 2024, the Group completed the disposal of all equity interest in an indirect non-wholly owned subsidiary to a related party for a cash consideration of approximately **HK$3.5 million**[74](index=74&type=chunk) [Financial Risk Management](index=34&type=section&id=Financial%20Risk%20Management) The Group's operations are exposed to credit risk, liquidity risk, and market risk (including foreign exchange risk, interest rate risk, and price risk); this section details fair value estimation methods and confirms no changes in risk management policies since year-end - The Group's operations are exposed to various financial risks: credit risk, liquidity risk, and market risk (including foreign exchange risk, interest rate risk, and price risk)[76](index=76&type=chunk) - There have been no changes in the department responsible for risk management or any risk management policies since year-end[77](index=77&type=chunk) [Financial Risk Factors](index=34&type=section&id=Financial%20Risk%20Factors) The Group's operations are exposed to credit risk, liquidity risk, and market risk (including foreign exchange risk, interest rate risk, and price risk); this interim report does not include all financial risk management information required by annual financial statements, and there have been no changes in risk management policies since year-end - The Group's operations are exposed to various financial risks: credit risk, liquidity risk, and market risk (including foreign exchange risk, interest rate risk, and price risk)[76](index=76&type=chunk) - These unaudited condensed consolidated financial information do not include all financial risk management information and disclosures required by the annual financial statements[76](index=76&type=chunk) - There have been no changes in the department responsible for risk management or any risk management policies since year-end[77](index=77&type=chunk) [Fair Value Estimation](index=34&type=section&id=Fair%20Value%20Estimation) As of June 30, 2025, the Group's total financial assets at fair value through profit or loss amounted to HK$140,807 thousand, of which listed securities were HK$132,349 thousand (Level 1) and unlisted wealth management products were HK$8,458 thousand (Level 2) Financial Assets Measured at Fair Value (June 30, 2025, HK$'000) | Item | Level 1 | Level 2 | Total | | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss – listed securities | 132,349 | – | 132,349 | | Financial assets at fair value through profit or loss – unlisted wealth management products | – | 8,458 | 8,458 | | **Total** | **132,349** | **8,458** | **140,807** | Financial Assets Measured at Fair Value (December 31, 2024, HK$'000) | Item | Level 1 | Level 2 | Total | | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss – listed securities | 1 | – | 1 | | Financial assets at fair value through profit or loss – unlisted wealth management products | – | 8,197 | 8,197 | | Financial assets at fair value through other comprehensive income – unlisted securities | – | 126,391 | 126,391 | | **Total** | **1** | **134,588** | **134,589** | - There were no transfers between fair value hierarchy levels (Level 1 and Level 2) for financial assets during the first half of 2025[80](index=80&type=chunk) [The Group's Valuation Process](index=35&type=section&id=The%20Group%27s%20Valuation%20Process) The Group's finance department performs valuations of financial assets in accordance with financial reporting requirements and regularly reports on the reasons for fair value changes to the Chief Financial Officer; the fair values of several financial assets and liabilities approximate their carrying amounts - The Group's finance department performs valuations of financial assets in accordance with financial reporting requirements: reporting, discussing, and explaining the reasons for fair value changes to the Chief Financial Officer at least once at each reporting date[81](index=81&type=chunk) - The fair values of the following financial assets and liabilities approximate their carrying amounts: loans and advances; trade and other receivables; other receivables and deposits; bank deposits, client trust bank balances, and cash and bank balances; trade and other payables; and borrowings[82](index=82&type=chunk) [Disclosure of Interests](index=35&type=section&id=Disclosure%20of%20Interests) [Directors' and Chief Executive's Interests in Shares and Underlying Shares](index=36&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, Mr. Lo Yuen Yi held a total of 1,176,083,847 shares and underlying shares in the Company, representing **53.69%** of the issued share capital, making him the largest interest holder; Mr. Yeung Wai Kin and Mr. Chow Siu Hok also held a small number of shares Directors' Interests in the Company (As of June 30, 2025) | Director | Personal Interests (Long Position) | Corporate Interests (Long Position) | Total (Long Position) | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Lo Yuen Yi | 167,848,105 | 1,008,235,742 | 1,176,083,847 | 53.69% | | Mr. Yeung Wai Kin | 21,758,693 | – | 21,758,693 | 0.99% | | Mr. Chow Siu Hok | 160,000 | – | 160,000 | 0.01% | - Mr. Lo Yuen Yi indirectly owns shares through Kinmoss Enterprises Limited, China Capital (Holdings) Limited, and Zhan Hui Investment Limited[83](index=83&type=chunk) - No Directors or Chief Executive held any short position interests in the Company's shares or underlying shares[83](index=83&type=chunk) [Share Options](index=37&type=section&id=Share%20Options) The Company's share option scheme was approved on May 24, 2024, aiming to recruit, retain, and incentivize key employees; for the six months ended June 30, 2025, no share options were granted, exercised, lapsed, or remained outstanding under the scheme - The Company's shareholders approved a share option scheme on May 24, 2024, effective for ten years from the adoption date[84](index=84&type=chunk) - The scheme aims to assist in the recruitment, retention, and motivation of key employees[84](index=84&type=chunk) - For the six months ended June 30, 2025, no share options were granted, exercised, lapsed, or remained outstanding under the scheme[84](index=84&type=chunk) [Substantial Shareholders' Interests](index=37&type=section&id=Substantial%20Shareholders%27%20Interests) As of June 30, 2025, Ms. Chan Chiu and Mr. Wan Kin each held a **6.28%** interest in the Company's issued share capital, totaling 137,648,000 shares, primarily held through The Golden Bridge Settlement trust Substantial Shareholders' Interests (As of June 30, 2025) | Shareholder | Personal Interests (Long Position) | Family Interests (Long Position) | Other Interests (Long Position) | Total (Long Position) | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | | Ms. Chan Chiu | 61,576,000 | 12,432,000 | 63,640,000 | 137,648,000 | 6.28% | | Mr. Wan Kin | 12,432,000 | 61,576,000 | 63,640,000 | 137,648,000 | 6.28% | - 63,640,000 shares are held by The Golden Bridge Settlement trust, of which Ms. Chan and Mr. Wan are beneficiaries[87](index=87&type=chunk) [Purchase, Sale or Redemption of the Company's Shares](index=37&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Shares) During the reporting period, the Company did not redeem any of its securities, nor did the Company or any of its subsidiaries purchase or sell any of the Company's securities listed on The Stock Exchange of Hong Kong Limited - During the period, the Company did not redeem any of its securities[88](index=88&type=chunk) - Neither the Company nor any of its subsidiaries purchased or sold any of the Company's securities listed on The Stock Exchange of Hong Kong Limited[88](index=88&type=chunk) [Interim Dividend](index=37&type=section&id=Interim%20Dividend) The Board recommends not to declare an interim dividend for the six months ended June 30, 2025 - The Board recommends not to declare an interim dividend for the six months ended June 30, 2025 (2024: HK$nil)[89](index=89&type=chunk) [Corporate Governance and Other Information](index=38&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Compliance with Corporate Governance Code](index=38&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company has complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules during the period, except for the Chairman and Chief Executive roles being combined by Mr. Lo Yuen Yi, which deviates from Code Provision C.2.1; the Board believes this arrangement provides strong leadership and facilitates strategy execution for the Group - The Company complied with the Corporate Governance Code, except for a deviation from Code Provision C.2.1 (which states that the roles of Chairman and Chief Executive should be separate)[90](index=90&type=chunk) - Mr. Lo Yuen Yi serves as both Chairman and Chief Executive, an arrangement the Board believes provides strong and consistent leadership and facilitates strategic planning and execution[90](index=90&type=chunk) - The Board believes this structure does not impair the balance of power, given its composition includes strong and independent Non-executive Directors[90](index=90&type=chunk) [Nomination Committee](index=38&type=section&id=Nomination%20Committee) The Nomination Committee was established on March 1, 2012, comprising two Independent Non-executive Directors and one Executive Director, Mr. Lo Yuen Yi; its responsibilities include reviewing the Board's structure, identifying director candidates, making recommendations on director appointments or re-appointments, and assessing the independence of Independent Non-executive Directors - The Nomination Committee members include Mr. Yu Kai Ho (Chairman), Mr. Lo Yuen Yi, and Mr. Chow Siu Hok[4](index=4&type=chunk)[91](index=91&type=chunk) - Responsibilities include reviewing the Board's structure, size, composition, and diversity[91](index=91&type=chunk) - Identifying director candidates and making recommendations on director appointments or re-appointments and succession planning for directors[91](index=91&type=chunk) [Remuneration Committee](index=38&type=section&id=Remuneration%20Committee) The Remuneration Committee was established on June 30, 2005, comprising two Independent Non-executive Directors and one Executive Director, Mr. Lo Yuen Yi; its responsibilities include assisting the Board in formulating remuneration policies and reviewing and approving the remuneration packages of Directors and senior management - The Remuneration Committee members include Mr. Chow Siu Hok (Chairman), Mr. Lo Yuen Yi, and Mr. Yu Kai Ho[4](index=4&type=chunk)[92](index=92&type=chunk) - Responsibilities include assisting the Board in formulating a coherent remuneration policy[92](index=92&type=chunk) - Reviewing and approving the remuneration packages of Directors and senior management, including terms for salaries, bonus schemes, and other long-term incentive plans[92](index=92&type=chunk) [Audit Committee](index=39&type=section&id=Audit%20Committee) The Audit Committee was established on December 27, 1998, comprising one Non-executive Director and four Independent Non-executive Directors; its responsibilities include ensuring the Company adopts and follows appropriate financial reporting, risk management, and internal control systems, and it has reviewed these interim results - The Audit Committee members include Mr. Yu Kai Ho (Chairman), Mr. Kwok Lam Kwong, Mr. Liu Ji, Mr. Chow Siu Hok, and Mr. Li Zhiyun[4](index=4&type=chunk)[93](index=93&type=chunk) - Responsibilities include ensuring the Company adopts and follows appropriate financial reporting, risk management, and internal control systems[93](index=93&type=chunk) - The Committee has reviewed the accounting principles and methods adopted by the Group with management and discussed matters related to risk management, internal control, and financial reporting, including the unaudited condensed interim results for the six months ended June 30, 2025[93](index=93&type=chunk) [Compliance with Model Code](index=39&type=section&id=Compliance%20with%20Model%20Code) The Company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all Board members confirmed their compliance with the code for the six months ended June 30, 2025 - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules[94](index=94&type=chunk) - All Board members confirmed their compliance with the required standards set out in the Model Code for the six months ended June 30, 2025[94](index=94&type=chunk) [By Order of the Board](index=39&type=section&id=By%20Order%20of%20the%20Board) This interim report is issued by the Chairman of the Board, Mr. Lo Yuen Yi, on behalf of the Board on August 22, 2025 - This interim report is issued by Mr. Lo Yuen Yi, Chairman of the Board, in Hong Kong, on August 22, 2025[95](index=95&type=chunk)

東方興業控股有限公司 中 期 報 告 2025 東方興業控股有限公司 INTERIM REPORT 2025 中期報告2025 目錄 | 公司資料 | 2 | | --- | --- | | 簡明綜合損益表 | 3 | | 簡明綜合損益及其他全面收益表 | 4 | | 簡明綜合財務狀況報表 | 5 | | 簡明綜合權益變動表 | 6 | | 簡明綜合現金流量表 | 7 | | 未經審核簡明綜合財務報表之附註 | 8 | | 管理層之討論及分析 | 19 | | 其他資料 | 22 | 1 頁次 中期報告2025 公司資料 董事會 執行董事 劉志勇先生 （主席） 劉志奇先生 （副主席兼董事總經理） 梁慧生女士 獨立非執行董事 徐家華先生 勞錦祥先生 盧敏霖先生 伍成業先生 審核委員會 勞錦祥先生 （主席） 盧敏霖先生 徐家華先生 伍成業先生 薪酬委員會 徐家華先生 （主席） 劉志勇先生 劉志奇先生 梁慧生女士 勞錦祥先生 盧敏霖先生 伍成業先生 提名委員會 劉志勇先生 （主席） 劉志奇先生 梁慧生女士 徐家華先生 勞錦祥先生 盧敏霖先生 伍成業先生 公司秘書 黃家俊先生 （於二零二五年八月八日獲委任） 鄧張啟女 ...