（於百慕達註冊成立之有限公司） 股份代號 : 00661 2025 中期報告 礦產資源 湖北礦山 大冶市 湖北礦山 陽新縣 新疆礦山 烏恰縣 2 4 1 3 1 銅綠山礦 2 銅山口礦 3 豐山礦 4 薩熱克銅礦 劉芳 王岐虹 孔華 審核委員會╱薪酬委員會 劉芳 （主席） 王岐虹 孔華 提名委員會 公司資料 董事會 執行董事： 肖述欣 （主席） 張金鐘 （行政總裁） 張愛軍 獨立非執行董事： | 公司資料 | 2 | | --- | --- | | 管理層討論及分析 | 3 | | 企業管治及其他資料 | 26 | | 簡明綜合財務報表審閱報告 | 32 | | 簡明綜合損益及其他全面收益表 | 34 | | 簡明綜合財務狀況表 | 35 | | 簡明綜合權益變動表 | 37 | | 簡明綜合現金流量表 | 39 | | 簡明綜合財務報表附註 | 40 | | 釋義 | 64 | 肖述欣 （主席） 劉芳 王岐虹 孔華 公司秘書 黃日東 法律顧問 香港法律： 普衡律師事務所（香港）有限法律 責任合夥 百慕達法律： Conyers Dill & Pearman 核數師 天職香港會計師事務所有限公司 執業會計師 註 ...

Stock Option Plan - The company has fully utilized all stock options under the stock option plan as of January 1, 2024, and there are no stock options available for grant as of December 31, 2024[5] - The maximum number of shares that can be issued under the stock option plan is 82,500,000 shares, representing 10% of the total issued shares as of the announcement date[6] - The exercise price for the stock options is set at HKD 1.00, to be paid within 28 days from the grant date[7]

2025 中期報告 周旭洲先生 （聯席主席） 曾文濤博士 （聯席主席） 周文川女士 （副主席兼行政總裁） 非執行董事 毛振華博士 INTERIM REPORT 2025 中期報告 目錄 2 公司資料 3 管理層討論及分析 22 其他資料 34 董事及高級管理人員履歷 38 中期簡明綜合損益表 39 中期簡明綜合全面收益表 40 中期簡明綜合財務狀況表 42 中期簡明綜合權益變動表 43 中期簡明綜合現金流量表 44 中期簡明綜合財務報表附註 67 詞彙 公司資料 董事會 執行董事 獨立非執行董事 周志偉教授 陳實先生 吳鵬先生 授權代表 周旭洲先生 周文川女士 公司秘書 李書湃先生 審核委員會 周志偉教授 （主席） 毛振華博士 陳實先生 薪酬委員會 陳實先生 （主席） 周志偉教授 曾文濤博士 提名委員會 周旭洲先生 （主席） 周志偉教授 吳鵬先生 戰略委員會 毛振華博士 （主席） 周旭洲先生 曾文濤博士 註冊辦事處 Clarendon House 2 Church Street Hamilton HM 11 Bermuda 根據公司條例第XIV部登記之香港總辦事 處及主要營業地點 香港 金鐘 金鐘道89號 力 ...

Frontage Holdings Corporation 方達控股公司 * 股份代號 : 1521 （於開曼群島註冊成立的有限公司） 2025 中期報告 * 僅供識別 | 公司資料 | 2 | | --- | --- | | 財務摘要 | 3 | | 管理層討論及分析 | 5 | | 企業管治及其他資料 | 27 | | 簡明綜合財務報表審閱報告 | 49 | | 簡明綜合損益及其他全面收益表 | 51 | | 簡明綜合財務狀況表 | 52 | | 簡明綜合權益變動表 | 54 | | 簡明綜合現金流量表 | 56 | | 簡明綜合財務報表附註 | 57 | | 釋義 | 96 | 公司資料 董事會 執行董事 李松博士 （主席） Wentao Zhang博士（於2025年1月6日 獲委任為聯席行政總裁，並於2025年 5月28日獲委任為執行董事） Zhongping Lin博士（於2025年1月6日 獲委任為聯席行政總裁，並於2025年 5月28日獲委任為執行董事） 非執行董事 李志和博士（於2025年5月28日辭任） Zhuan Yin女士 吳灝先生 獨立非執行董事 李軼梵先生 劉二飛先生 王勁松博士 審 ...

[Company Information](index=2&type=section&id=Company%20Information) This section provides an overview of the company's board, corporate structure, contact details, and registration information [Board of Directors and Corporate Structure](index=3&type=section&id=Board%20of%20Directors%20and%20Corporate%20Structure) The company's board comprises executive, non-executive, and independent non-executive directors, with Mr. Ni Zhengdong serving as Chairman and Co-CEO - Board members include **Ni Zhengdong** (Chairman and Co-CEO), **Luo Xuan** (Co-CEO), **Li Zhu**, **Chen Yaochao**, **Jiang Jun** (Executive Directors); **Liu Weijie** (Non-executive Director); **ZHANG Min**, **Xue Linnan**, **Li Weifeng** (Independent Non-executive Directors)[4](index=4&type=chunk) - **Mr. Xue Linnan** chairs the Audit Committee, **Dr. Li Weifeng** chairs the Remuneration Committee, and **Mr. Ni Zhengdong** chairs the Nomination Committee[4](index=4&type=chunk) - Founders include **CITIC (Hong Kong) Capital Limited**, **Zero2IPO Management Consulting Group Limited**, **Zero2IPO Capital Limited**, **Mr. Ni Zhengdong**, **Mr. Li Zhu**, and **Mr. Liu Weijie**[4](index=4&type=chunk) [Company Contact and Registration Information](index=3&type=section&id=Company%20Contact%20and%20Registration%20Information) The company is registered in the Cayman Islands with a share registrar and principal place of business in Hong Kong, and its auditor is BDO Limited - The registered office is in the Cayman Islands, and the Hong Kong share registrar is **Tricor Investor Services Limited**[4](index=4&type=chunk)[5](index=5&type=chunk) - The auditor is **BDO Limited**[4](index=4&type=chunk) - The principal place of business in Hong Kong is **Unit 1506B, 15/F, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong**[6](index=6&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the company's business operations, financial performance, and future outlook, focusing on its SPAC merger activities [Business Review](index=5&type=section&id=Business%20Review) TechStar Acquisition Corporation, a SPAC, aims to list one or more businesses through a merger, reporting a **HK$59.5 million loss** due to share-based payment expenses related to B shares and founder warrants, and has entered a business combination agreement with Seyond Holdings Ltd. - The company is a special purpose acquisition company (SPAC) aiming to execute a business combination with one or more enterprises[7](index=7&type=chunk) - During the reporting period, the company recorded a **loss and total comprehensive loss of approximately HK$59.5 million**, primarily due to equity-settled share-based payment expenses for B shares and founder warrants[7](index=7&type=chunk) - On **December 20, 2024**, the company entered into a business combination agreement with **Seyond Holdings Ltd.**, a global leader in automotive-grade LiDAR solutions, which will be listed on the Stock Exchange as the successor company[8](index=8&type=chunk) - The successor company resubmitted a new listing application to the Stock Exchange on **August 25, 2025**, with the circular expected to be dispatched to shareholders around **September 2025**[8](index=8&type=chunk)[10](index=10&type=chunk) [Prospects](index=6&type=section&id=Prospects) The company will not generate operating revenue before the SPAC merger completion, incurring ongoing expenses for compliance and transaction execution, and plans to raise funds through offering proceeds, third-party investments, loan financing, and share issuance - The company will not generate any operating revenue before the completion of the SPAC business combination[11](index=11&type=chunk) - The company will continue to incur expenses related to mandatory compliance as a listed company and the execution of the SPAC business combination[11](index=11&type=chunk) - Funding sources for completing the SPAC business combination include proceeds from the offering, investments from independent third-party investors, loan financing, and issuance of shares to the merger target owners[11](index=11&type=chunk) [Financial Review](index=6&type=section&id=Financial%20Review) The company reported **HK$59.5 million loss** with no revenue, primarily due to share-based payment expenses, and as of **June 30, 2025**, had **HK$1,125.1 million** in current assets (mainly restricted bank deposits) and **HK$1,179.3 million** in current liabilities, with **HK$5.0 million** drawn from loan financing - During the reporting period, the company generated no revenue and recorded a **loss and total comprehensive loss of approximately HK$59.5 million**[12](index=12&type=chunk) - The loss was primarily attributable to **equity-settled share-based payment expenses of approximately HK$46.6 million** related to B shares and founder warrants, and a **fair value change in warrant liabilities of -HK$11.8 million**[12](index=12&type=chunk)[13](index=13&type=chunk) - In **2022**, the company received **gross proceeds of approximately HK$1,001.0 million** from the offering, deposited into an escrow account, almost entirely as restricted bank deposits[15](index=15&type=chunk) - As of **June 30, 2025**, **approximately HK$5.0 million** had been drawn from loan financing for working capital purposes[18](index=18&type=chunk) Overview of Financial Position as of June 30, 2025 | Metric | Amount (HK$ Million) | | :--- | :--- | | Current Assets | 1,125.1 | | Current Liabilities | 1,179.3 | | Net Current Liabilities | (54.2) | | Accrued Expenses and Other Payables | 159.1 | | Redeemable Class A Shares | 1,001.0 | | Warrant Liabilities | 14.3 | | Amounts Due to Promoters | 5.0 | | Loan Financing Drawn | 5.0 | [Material Investments, Acquisitions, and Disposals](index=8&type=section&id=Material%20Investments%2C%20Acquisitions%2C%20and%20Disposals) During the reporting period, the company made no material investments, acquisitions, or disposals, focusing primarily on the SPAC merger agreement with the target company - During the reporting period, the company held no material investments and made no material acquisitions or disposals of subsidiaries, associates, or joint ventures[19](index=19&type=chunk) - The company has entered into SPAC business combination agreements with the target company, including a business combination agreement and a PIPE investment agreement[20](index=20&type=chunk) [Pledge of Assets, Foreign Exchange Risk, and Contingent Liabilities](index=8&type=section&id=Pledge%20of%20Assets%2C%20Foreign%20Exchange%20Risk%2C%20and%20Contingent%20Liabilities) As of **June 30, 2025**, the company had not pledged any assets, faced no significant foreign exchange risk exposure, and had no contingent liabilities - As of **June 30, 2025**, the company had not created any charges over its assets[21](index=21&type=chunk) - During the reporting period, the company had no material financial assets or liabilities denominated in currencies other than its functional currency, thus no significant foreign currency risk exposure[22](index=22&type=chunk) - As of **June 30, 2025**, the company had no contingent liabilities[23](index=23&type=chunk) [Other Information](index=9&type=section&id=Other%20Information) This section details directors' and major shareholders' interests, use of proceeds, employee policies, corporate governance, and post-reporting period events [Directors' and Chief Executive's Interests in Securities](index=9&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20in%20Securities) As of **June 30, 2025**, several directors and the chief executive held interests in the company's Class A and Class B shares, with Mr. Ni Zhengdong, Mr. Li Zhu, and Mr. Liu Weijie holding significant interests through controlled corporations - As of **June 30, 2025**, the total number of issued shares was **125,100,000**, comprising **100,100,000 Class A shares** and **25,000,000 Class B shares**[25](index=25&type=chunk) Interests of Directors and Chief Executive in the Company (as of June 30, 2025) | Name of Director/Chief Executive | Capacity/Nature of Interest | Number of Shares Held | Percentage of Interest in Relevant Class | Percentage of Shareholding in Total Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Ni Zhengdong | Interest in controlled corporation | 6,800,000 Class A shares (L) | 6.79% | 5.44% | | | | 10,000,000 Class B shares (L) | 40.00% | 8.00% | | Mr. Li Zhu | Interest in controlled corporation | 3,400,000 Class A shares (L) | 3.40% | 2.72% | | | | 5,000,000 Class B shares (L) | 20.00% | 3.99% | | Mr. Liu Weijie | Interest in controlled corporation | 850,000 Class A shares (L) | 0.85% | 0.68% | | | | 1,250,000 Class B shares (L) | 5.00% | 1.00% | [Substantial Shareholders' Interests in Securities](index=10&type=section&id=Substantial%20Shareholders'%20Interests%20in%20Securities) As of **June 30, 2025**, several entities were substantial shareholders, holding significant interests in Class A and Class B shares, with Fortune Opportunity Fund, Ningbao Limited, and CNCB AM TS holding larger proportions - Founder warrants are exercisable for a maximum of **17,000,000 Class A shares**, representing approximately **13.59%** of the total issued shares as of **June 30, 2025**[31](index=31&type=chunk) Substantial Shareholders' Interests in Class A Shares (as of June 30, 2025) | Name of Shareholder | Capacity/Nature of Interest | Number of Shares Held or in which an Interest is Owned | Approximate Percentage of Shares in Relevant Class | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Fortune Opportunity Fund | Beneficial interest | 37,478,375 (L) | 37.44% | 29.96% | | Wealth Strategy Holding Limited | Interest in controlled corporation | 37,478,375 (L) | 37.44% | 29.96% | | Ningbao Limited | Beneficial interest | 18,805,875 (L) | 18.79% | 15.03% | | ABC International Investment Management Limited | Interest in controlled corporation | 18,805,875 (L) | 18.79% | 15.03% | | Fountainhead Partners Fund VCC Sub-Fund CAPS Fund | Beneficial interest | 9,350,000 (L) | 9.34% | 7.47% | | CENTURY PRIVATE WEALTH MANAGEMENT PTE. LTD. | Beneficial interest | 9,336,250 (L) | 9.33% | 7.46% | | CNCB AM TS | Beneficial interest | 5,950,000 (L) | 5.94% | 4.76% | Substantial Shareholders' Interests in Class B Shares (as of June 30, 2025) | Name of Shareholder | Capacity/Nature of Interest | Number of Shares Held or in which an Interest is Owned | Approximate Percentage of Shares in Relevant Class | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | CNCB AM TS | Beneficial interest | 8,750,000 (L) | 35.00% | 6.99% | | ZCL TechStar | Beneficial interest | 3,750,000 (L) | 15.00% | 3.00% | | Zero2IPO Acquisition | Beneficial interest | 3,750,000 (L) | 15.00% | 3.00% | | INNO SPAC | Beneficial interest | 5,000,000 (L) | 20.00% | 3.99% | [Use of Proceeds from the Offering](index=16&type=section&id=Use%20of%20Proceeds%20from%20the%20Offering) The company's **HK$1,001.0 million** gross proceeds from the offering are in an escrow account for SPAC merger completion and Class A shareholder redemptions, while **HK$40.0 million** from founder warrant sales and **HK$2,500** from Class B share issuance cover underwriting commissions, offering expenses, and compliance costs - **Gross proceeds of approximately HK$1,001.0 million** from the offering have been fully deposited into an escrow account in Hong Kong, designated for completing the SPAC business combination and satisfying Class A shareholder redemption requests[34](index=34&type=chunk) - During the reporting period, the company had not utilized any of the gross proceeds from the offering, and there were no changes to the previously disclosed intended uses[35](index=35&type=chunk) - **Gross proceeds of approximately HK$40.0 million** from the sale of founder warrants and **HK$2,500** from the issuance of Class B shares are held outside the escrow account, primarily used to settle underwriting commissions (approximately **HK$20.0 million**), offering-related expenses (approximately **HK$13.5 million**), and mandatory compliance expenses for a listed company (approximately **HK$6.4 million**)[36](index=36&type=chunk) - As of **June 30, 2025**, **approximately HK$5.0 million** had been drawn from loan financing, with **approximately HK$4.8 million** used for mandatory compliance expenses for a listed company and the remaining **HK$0.2 million** for working capital[37](index=37&type=chunk) [Employees and Remuneration Policy](index=17&type=section&id=Employees%20and%20Remuneration%20Policy) The company has no full-time employees, thus no staff costs were recognized during the reporting period, and remuneration for independent non-executive directors and other corporate executives is benchmarked against similar market positions - The company has no full-time employees, and therefore no staff costs were recognized as company expenses during the reporting period[38](index=38&type=chunk) - Executive and non-executive directors are not entitled to any remuneration from the company, while remuneration for independent non-executive directors and other corporate executives and employees (if any) is determined by reference to market rates for similar positions[38](index=38&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=17&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the reporting period, the company did not engage in any purchase, sale, or redemption of its listed securities, nor did it hold any treasury shares - During the reporting period, the company did not purchase, sell, or redeem any of its listed securities[39](index=39&type=chunk) - At the end of the reporting period, the company held no treasury shares[39](index=39&type=chunk) [Sufficient Public Float](index=17&type=section&id=Sufficient%20Public%20Float) As of the date of this report, the company has consistently maintained the public float required by the Listing Rules - As of the date of this report, the company has consistently maintained the public float required by the Listing Rules[40](index=40&type=chunk) [Corporate Governance Practices](index=17&type=section&id=Corporate%20Governance%20Practices) The company is committed to high corporate governance standards, adopting the Corporate Governance Code in Appendix C1 of the Listing Rules, and complied with all provisions during the reporting period, except for Code Provision C.2.1 where Mr. Ni Zhengdong holds both Chairman and Co-CEO roles, deemed beneficial by the board for strategic execution and communication - The company has adopted the principles and code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[42](index=42&type=chunk) - The company complied with all applicable code provisions, except for Code Provision C.2.1 of the Corporate Governance Code, which requires the roles of chairman and chief executive to be performed by different individuals[42](index=42&type=chunk) - **Mr. Ni Zhengdong** currently serves as both the Chairman of the Board and Co-Chief Executive Officer, an arrangement the Board believes facilitates effective execution of strategic plans and improves communication between management and the Board[43](index=43&type=chunk) [Compliance with Model Code](index=18&type=section&id=Compliance%20with%20Model%20Code) The company has adopted the Model Code in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions, and all directors confirmed compliance during the reporting period - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions[44](index=44&type=chunk) - Following specific enquiries made to all directors, each director has confirmed that they have complied with the requirements of the Model Code throughout the reporting period[44](index=44&type=chunk) [Interim Dividend](index=18&type=section&id=Interim%20Dividend) The company has resolved not to recommend any interim dividend for the reporting period and will not pay any cash dividends before the completion of the SPAC business combination - The company will not pay any cash dividends before the completion of the SPAC business combination[45](index=45&type=chunk) - The Board has resolved not to recommend the payment of any interim dividend for the reporting period[45](index=45&type=chunk) [Audit Committee and Review of Interim Results](index=18&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Audit Committee, comprising three independent non-executive directors, has reviewed the company's interim results for the reporting period, deeming them compliant with applicable accounting standards, rules, and regulations, though the company's auditor has not yet reviewed or audited these results - The Audit Committee currently comprises three independent non-executive directors and has reviewed the company's interim results for the reporting period[46](index=46&type=chunk) - The Audit Committee is of the opinion that the company's interim results comply with applicable accounting standards, rules, and regulations, and that appropriate disclosures have been duly made[46](index=46&type=chunk) - The company's auditor has not yet reviewed or audited the company's interim results for the reporting period[47](index=47&type=chunk) [Changes in Information of Directors and Chief Executive of the Company](index=19&type=section&id=Changes%20in%20Information%20of%20Directors%20and%20Chief%20Executive%20of%20the%20Company) During the reporting period, Executive Director Ms. Jiang Jun and Independent Non-executive Director Mr. Xue Linnan were appointed as members of the Nomination Committee, effective **June 26, 2025** - In **June 2025**, Executive Director **Ms. Jiang Jun** was appointed as a member of the Nomination Committee, effective **June 26, 2025**[50](index=50&type=chunk) - In **June 2025**, Independent Non-executive Director **Mr. Xue Linnan** was appointed as a member of the Nomination Committee, effective **June 26, 2025**[50](index=50&type=chunk) [Events After Reporting Period](index=19&type=section&id=Events%20After%20Reporting%20Period) As of the date of this report, no significant events requiring disclosure have occurred since the end of the reporting period - As of the date of this report, no significant events requiring disclosure have occurred since the end of the reporting period[49](index=49&type=chunk) [Definitions](index=19&type=section&id=Definitions) This section provides definitions for key terms and abbreviations used in the report to ensure a clear understanding of its content [Statement of Profit or Loss and Other Comprehensive Income](index=27&type=section&id=Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended **June 30, 2025**, the company generated no revenue, reporting a **loss and total comprehensive loss of HK$59,535 thousand**, an increase from **HK$48,878 thousand** in the prior year, with basic and diluted loss per share at **HK$2.381** - The **loss and total comprehensive loss for the period increased from HK$48,878 thousand in 2024 to HK$59,535 thousand in 2025**, primarily due to losses from changes in the fair value of warrant liabilities[60](index=60&type=chunk) Summary of Statement of Profit or Loss and Other Comprehensive Income (for the six months ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | – | – | | Interest income | 1 | 2 | | Administrative expenses | (47,774) | (48,880) | | Fair value change in warrant liabilities | (11,762) | – | | Loss before income tax expense | (59,535) | (48,878) | | Loss and total comprehensive loss for the period | (59,535) | (48,878) | | Loss per share – basic and diluted | (2.381) | (1.955) | [Statement of Financial Position](index=28&type=section&id=Statement%20of%20Financial%20Position) As of **June 30, 2025**, the company's total current assets were **HK$1,125,112 thousand**, primarily restricted bank deposits, with total current liabilities of **HK$1,179,320 thousand**, resulting in **net current liabilities of HK$54,208 thousand**, and warrant liabilities significantly increased from **HK$2,503 thousand** to **HK$14,265 thousand** - **Net current liabilities expanded from HK$41,283 thousand as of December 31, 2024, to HK$54,208 thousand as of June 30, 2025**[61](index=61&type=chunk) - **Warrant liabilities significantly increased from HK$2,503 thousand as of December 31, 2024, to HK$14,265 thousand as of June 30, 2025**[61](index=61&type=chunk) Summary of Statement of Financial Position (as of June 30, 2025) | Metric | As of June 30, 2025 (HK$ Thousand) | As of December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Current Assets | 1,125,112 | 1,106,182 | | Restricted bank deposits | 1,124,869 | 1,104,112 | | Cash and cash equivalents | 243 | 2,070 | | Current Liabilities | 1,179,320 | 1,147,465 | | Accrued expenses and other payables | 159,055 | 141,212 | | Amounts due to promoters | 5,000 | 2,750 | | Redeemable Class A shares | 1,001,000 | 1,001,000 | | Warrant liabilities | 14,265 | 2,503 | | Net current liabilities | (54,208) | (41,283) | | Total deficit | (54,208) | (41,283) | [Statement of Changes in Equity](index=29&type=section&id=Statement%20of%20Changes%20in%20Equity) For the six months ended **June 30, 2025**, the company's accumulated losses increased from **HK$271,846 thousand** to **HK$331,381 thousand**, with total deficit rising from **HK$41,283 thousand** to **HK$54,208 thousand**, and share-based payment reserve increasing by **HK$46,610 thousand** - **Accumulated losses increased from HK$271,846 thousand as of January 1, 2025, to HK$331,381 thousand as of June 30, 2025**[62](index=62&type=chunk) - **Equity-settled share-based payment reserve increased by HK$46,610 thousand**[62](index=62&type=chunk) Summary of Statement of Changes in Equity (for the six months ended June 30) | Metric | As of January 1, 2025 (HK$ Thousand) | As of June 30, 2025 (HK$ Thousand) | | :--- | :--- | :--- | | Share capital | 3 | 3 | | Share-based payment reserve | 230,560 | 277,170 | | Accumulated losses | (271,846) | (331,381) | | Total deficit | (41,283) | (54,208) | | Loss and total comprehensive loss for the period | – | (59,535) | | Equity-settled share-based payments | – | 46,610 | [Statement of Cash Flows](index=30&type=section&id=Statement%20of%20Cash%20Flows) For the six months ended **June 30, 2025**, the company used **HK$4,078 thousand** in net cash from operating activities, generated **HK$1 thousand** from investing activities, and **HK$2,250 thousand** from financing activities, with cash and cash equivalents decreasing to **HK$243 thousand** from **HK$2,070 thousand** at the beginning of the period - **Net cash used in operating activities increased from HK$2,256 thousand in 2024 to HK$4,078 thousand in 2025**[63](index=63&type=chunk) - **Cash and cash equivalents at the end of the period decreased from HK$2,070 thousand at the beginning of the period to HK$243 thousand**[63](index=63&type=chunk) Summary of Statement of Cash Flows (for the six months ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net cash used in operating activities | (4,078) | (2,256) | | Net cash from investing activities | 1 | 2 | | Net cash from financing activities | 2,250 | – | | Net decrease in cash and cash equivalents | (1,827) | (2,254) | | Cash and cash equivalents at beginning of period | 2,070 | 2,804 | | Cash and cash equivalents at end of period | 243 | 550 | [Notes to the Interim Financial Statements](index=30&type=section&id=Notes%20to%20the%20Interim%20Financial%20Statements) This section provides detailed notes on the company's general information, basis of preparation, segment information, loss before tax, dividends, restricted bank deposits, payables, financial liabilities, share capital, share-based payments, related party transactions, and post-reporting date events [General Information and Business Operations](index=31&type=section&id=General%20Information%20and%20Business%20Operations) TechStar Acquisition Corporation, a SPAC, aims to acquire or merge with a target to list a successor company, having entered a business combination agreement with Seyond Holdings Ltd. and filed a new listing application, with proceeds from Class A shares and listed warrants held in escrow, and faces a **36-month** merger completion deadline to avoid liquidation - The company is a special purpose acquisition company (SPAC) established to acquire or merge with a SPAC target, leading to the listing of a successor company[65](index=65&type=chunk) - On **December 20, 2024**, the company announced the entry into a business combination agreement with **Seyond Holdings Ltd.** (the successor company) for the SPAC business combination[65](index=65&type=chunk) - As of **June 30, 2025**, the company had **100,100,000 Class A shares** and **50,050,000 listed warrants** issued and outstanding, as well as **25,000,000 Class B shares** and **40,000,000 founder warrants**[66](index=66&type=chunk) - **Gross proceeds of HK$1,001,000,000** from the listing were deposited into a segregated escrow account in Hong Kong, to be released only for specific purposes, including completion of the business combination or redemption by Class A shareholders[68](index=68&type=chunk) - The company has only **36 months** from the listing date to complete the SPAC business combination, failing which it will face liquidation and dissolution[69](index=69&type=chunk)[70](index=70&type=chunk) [Basis of Preparation](index=33&type=section&id=Basis%20of%20Preparation) The interim financial statements are prepared under IAS 34 and Listing Rules, using the historical cost convention, except for warrant liabilities measured at fair value, with significant uncertainty regarding the company's going concern dependent on co-promoter support and merger completion - The interim financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Listing Rules[72](index=72&type=chunk) - The interim financial statements have been prepared on a historical cost basis, except for warrant liabilities which are measured at fair value[73](index=73&type=chunk) - As of **June 30, 2025**, the company had **net current liabilities of HK$54,208,000** and incurred a **loss of HK$59,535,000**, indicating significant uncertainty regarding its ability to continue as a going concern[74](index=74&type=chunk) [Segment Information and Revenue](index=34&type=section&id=Segment%20Information%20and%20Revenue) The company has no separately reportable segments and generated no revenue for the six months ended **June 30, 2025** - The company has no separately reportable segments, as it was incorporated to facilitate the effectiveness of the SPAC business combination[76](index=76&type=chunk) - For the six months ended **June 30, 2025**, the company generated no revenue[77](index=77&type=chunk) [Loss Before Income Tax Expense and Income Tax Expense](index=35&type=section&id=Loss%20Before%20Income%20Tax%20Expense%20and%20Income%20Tax%20Expense) For the six months ended **June 30, 2025**, the loss before income tax expense was **HK$59,535 thousand**, primarily comprising auditor's remuneration, directors' remuneration, and share-based payment expenses, with no income tax expense recognized as the company is not subject to income tax in the Cayman Islands - The company is currently not subject to income tax in the Cayman Islands, and the directors believe that the company has no assessable profits in any other jurisdiction, thus no income tax expense has been recognized[80](index=80&type=chunk) Components of Loss Before Income Tax Expense (for the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Auditor's remuneration | 120 | 120 | | Staff costs (including directors' remuneration) | 180 | 180 | | Share-based payment expenses | 46,610 | 46,867 | | Total | 46,790 | 47,047 | [Dividends and Loss Per Share](index=35&type=section&id=Dividends%20and%20Loss%20Per%20Share) For the six months ended **June 30, 2025**, no dividends were paid or proposed, and both basic and diluted loss per share were **HK$2.381**, as potential dilutive ordinary shares had an anti-dilutive effect - No dividends were paid or proposed for the six months ended **June 30, 2025**[81](index=81&type=chunk) - Basic loss per share was calculated as **HK$2.381**, based on the loss for the period of **HK$59,535,000** divided by the weighted average number of **25,000,000 ordinary shares** outstanding during the period[82](index=82&type=chunk) - Diluted loss per share for the period was the same as basic loss per share because the inclusion of outstanding redeemable Class A shares, listed warrants, and founder warrants would have an anti-dilutive effect[82](index=82&type=chunk) [Restricted Bank Deposits](index=35&type=section&id=Restricted%20Bank%20Deposits) Restricted bank deposits primarily consist of **HK$1,001,000,000** gross proceeds from Class A share issuance at listing, held in an escrow account and classified as current assets due to the company's requirement to complete the SPAC business combination by **December 23, 2025** - Restricted bank deposits include **gross proceeds of HK$1,001,000,000** from the issuance of Class A shares at listing, which are deposited into an escrow account[83](index=83&type=chunk) - The company is required to complete the SPAC business combination by **December 23, 2025**, hence the funds deposited in the escrow account are classified as current assets[83](index=83&type=chunk) [Accrued Expenses and Other Payables](index=36&type=section&id=Accrued%20Expenses%20and%20Other%20Payables) As of **June 30, 2025**, total accrued expenses and other payables amounted to **HK$159,055 thousand**, primarily comprising **HK$35,035 thousand** in deferred underwriting commissions and **HK$123,868 thousand** in interest payable - Accrued expenses primarily include **deferred underwriting commissions of HK$35,035,000** payable to the company's promoters upon completion of the SPAC business combination[89](index=89&type=chunk) - Interest payable will be paid in accordance with the terms of the escrow account[89](index=89&type=chunk) Components of Accrued Expenses and Other Payables (as of June 30, 2025) | Item | As of June 30, 2025 (HK$ Thousand) | As of December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Accrued expenses | 35,187 | 38,100 | | Interest payable | 123,868 | 103,112 | | Total | 159,055 | 141,212 | [Amounts Due to Promoters](index=36&type=section&id=Amounts%20Due%20to%20Promoters) Amounts due to promoters are unsecured, interest-free, and repayable on the completion date of the SPAC business combination or under specific conditions - Amounts due to promoters are unsecured, interest-free, and repayable on the date of completion of the company's SPAC business combination or under specific conditions[85](index=85&type=chunk) [Financial Liabilities](index=36&type=section&id=Financial%20Liabilities) The company has issued redeemable Class A shares and listed warrants, with each listed warrant granting the holder the right to subscribe for one Class A share at an exercise price of **HK$11.50**, exercisable **30 days** after the merger completion, and as of **June 30, 2025**, the fair value of listed warrants was **approximately HK$14,265 thousand**, a significant increase from **December 31, 2024** - The company has issued **100,100,000 Class A shares** and **50,050,000 listed warrants**[86](index=86&type=chunk) - Each listed warrant entitles its holder to subscribe for one Class A share at an exercise price of **HK$11.50**, exercisable **30 days** after the completion of the SPAC business combination[88](index=88&type=chunk)[90](index=90&type=chunk) - The fair value of listed warrants is classified as Level 2 in the fair value hierarchy, with no transfers between levels during the six months ended **June 30, 2025**[90](index=90&type=chunk) Fair Value Movement of Listed Warrants (as of June 30, 2025) | Metric | Amount (HK$ Thousand) | | :--- | :--- | | Balance as of December 31, 2024 | 2,503 | | Fair value change | 11,762 | | Balance as of June 30, 2025 | 14,265 | [Share Capital](index=37&type=section&id=Share%20Capital) As of **June 30, 2025**, the company's authorized share capital was **HK$110,000 thousand**, comprising **1,000,000,000 Class A shares** and **100,000,000 Class B shares**, with issued and fully paid share capital of **HK$3 thousand** consisting of **25,000,000 Class B shares** Composition of Share Capital (as of June 30, 2025) | Class | Number of Shares | Nominal Amount (HK$ Thousand) | | :--- | :--- | :--- | | Authorized Class A shares | 1,000,000,000 | 100 | | Authorized Class B shares | 100,000,000 | 10 | | Issued and fully paid Class B shares | 25,000,000 | 3 | [Share-based Payments](index=37&type=section&id=Share-based%20Payments) The company has issued B share conversion rights and founder warrants, classified as share-based payments, recognizing **approximately HK$46,610 thousand** in equity-settled share-based payment expenses for the six months ended **June 30, 2025**, with founder warrant fair value estimated using a Monte Carlo simulation model considering expected merger date, exercise price, redemption threshold, and expected volatility - The company has issued **25,000,000 Class B shares** and **40,000,000 founder warrants**, which are classified as share-based payments[92](index=92&type=chunk) - For the six months ended **June 30, 2025**, equity-settled share-based payment expenses of **approximately HK$41,286 thousand** and **HK$5,324 thousand** were recognized from B share conversion rights and founder warrants, respectively, totaling **approximately HK$46,610 thousand**[93](index=93&type=chunk) - The fair value of each B share conversion right is estimated at **HK$10.0**, determined based on the unit issue price of Class A shares[95](index=95&type=chunk) - The fair value of each founder warrant is **HK$1.8059**, estimated using a Monte Carlo simulation model that considers key inputs such as the expected SPAC business combination date, exercise price, redemption threshold, and expected volatility[97](index=97&type=chunk)[98](index=98&type=chunk) [Related Party Transactions](index=39&type=section&id=Related%20Party%20Transactions) During the period, the company's related party transactions primarily included share-based payment expenses related to B share conversion rights and founder warrants, and legal and professional fees paid to a promoter Summary of Related Party Transactions (for the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Share-based payment expenses – B share conversion rights | 41,286 | 41,514 | | Share-based payment expenses – Founder warrants | 5,324 | 5,353 | | Legal and professional fees paid to a promoter | – | 160 | [Events After Reporting Date](index=39&type=section&id=Events%20After%20Reporting%20Date) The company had no significant events after the end of the period - The company had no significant events after the end of the period[100](index=100&type=chunk)

Corporate Information This section details the company's board of directors, auditor, registered office, headquarters, and stock code - Board members include Executive Directors Mr. Cai Rongxing (Chairman), Mr. Lin Minqiang, Mr. Larry Stuart Torchin, Ms. Cai Linqi, and Independent Non-executive Directors Mr. Zhou Jieting (Chairman of Audit Committee), Dr. Zhao Guoxiong, Mr. Mai Minghai (Chairman of Remuneration Committee)[4](index=4&type=chunk)[5](index=5&type=chunk) - The Company's auditor is Furuimaze Certified Public Accountants Limited[5](index=5&type=chunk) - The Company's registered office is in the Cayman Islands, with its headquarters and principal place of business in Hanjiang District, Putian City, Fujian Province, China[6](index=6&type=chunk) - The Company's stock code is **1440**[8](index=8&type=chunk) Key Financial Highlights The group's revenue increased by 5.6% to RMB 288.6 million, but net loss significantly widened to RMB 22.5 million Key Financial Highlights for the Six Months Ended June 30, 2025 | Indicator | For the Six Months Ended June 30, 2025 (RMB'000) | For the Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Revenue | 288,606 | 273,397 | | Gross profit | 28,001 | 28,158 | | Loss before income tax | (22,456) | (631) | | Loss for the period attributable to owners of the Company | (22,511) | (948) | | Basic and diluted loss per share (RMB cents) | (1.79) | (0.08) | - The Group's revenue increased by approximately **5.6% to RMB 288.6 million**, but net loss significantly widened from approximately **RMB 0.1 million to approximately RMB 22.5 million**[11](index=11&type=chunk) Management Discussion and Analysis This section provides an overview of the Group's business performance, future strategies, and detailed financial review for the period [BUSINESS REVIEW](index=7&type=section&id=BUSINESS%20REVIEW) The Group's revenue grew by 5.6% to RMB 288.6 million, driven by the footwear business, but net loss expanded significantly to RMB 22.5 million - The Group primarily engages in the lace and dyeing & finishing segment (including manufacturing lace and providing dyeing & finishing services) and the footwear segment[12](index=12&type=chunk) - The Group's revenue increased by approximately **5.6% to RMB 288.6 million** from approximately RMB 273.4 million in the corresponding period of 2024[13](index=13&type=chunk) - The footwear business segment accounted for approximately **86.2% of total revenue**, with its growth primarily attributed to new customer orders[13](index=13&type=chunk) - The Group recorded a net loss that increased from approximately **RMB 0.1 million to approximately RMB 22.5 million**[13](index=13&type=chunk) [OUTLOOK AND BUSINESS STRATEGY](index=8&type=section&id=OUTLOOK%20AND%20BUSINESS%20STRATEGY) The Group is shifting resources from lace and dyeing to footwear, establishing Southeast Asian partnerships, developing IP merchandise, and investing in sports tourism to mitigate environmental and trade challenges - In the medium to long term, increased environmental awareness and "dual carbon" goals are driving stricter regulatory measures, posing challenges to the lace manufacturing and dyeing & finishing businesses[15](index=15&type=chunk) - The Group has strategically reallocated resources, gradually reducing further investment in the lace manufacturing and dyeing & finishing businesses, shifting towards the footwear segment[16](index=16&type=chunk) - To mitigate the impact of tariff fluctuations and reduce geographical concentration risk, the Group is actively establishing manufacturing partnerships in Southeast Asia[19](index=19&type=chunk) - The Group is seizing opportunities to expand into the domestic consumer market by developing its intellectual property (IP) merchandise business, engaging in in-depth discussions with several well-known IP holders[20](index=20&type=chunk) - As the sole financial investor in the K11 MUSEA CR7® LIFE Hong Kong Museum, the museum opened on July 7, 2025, and was personally visited by Cristiano Ronaldo in August 2025[23](index=23&type=chunk) - Future operational priorities include continuously improving production efficiency, strictly controlling costs, fully complying with environmental regulations, and strengthening R&D capabilities and quality control systems[24](index=24&type=chunk) [FINANCIAL REVIEW](index=11&type=section&id=FINANCIAL%20REVIEW) Revenue growth was driven by footwear, but gross profit slightly declined, while increased administrative expenses, finance costs, impairment losses, and joint venture losses led to a significant net loss [Revenue](index=11&type=section&id=Revenue) Total revenue increased by 5.6% to RMB 288.6 million, primarily driven by the footwear business, while dyeing revenue grew and lace revenue declined due to intense competition - The Group's revenue increased by approximately **5.6% to RMB 288.6 million** from approximately RMB 273.4 million for the six months ended June 30, 2024[13](index=13&type=chunk) Revenue by Product Category | Product Type | 2025 (RMB'000) | 2025 % of Revenue | 2024 (RMB'000) | 2024 % of Revenue | | :--- | :--- | :--- | :--- | :--- | | Dyeing and finishing | 34,489 | 12.0% | 31,656 | 11.6% | | Lace (subtotal) | 5,244 | 1.8% | 7,342 | 2.7% | | Footwear | 248,873 | 86.2% | 234,399 | 85.7% | | **Total** | **288,606** | **100.0%** | **273,397** | **100.0%** | - By geographical location of operations, **100% of the Group's revenue** was derived from Mainland China and Hong Kong[31](index=31&type=chunk) - Dyeing and finishing revenue increased by approximately **8.8% to RMB 34.5 million**, mainly due to orders shifting to the Group from poorly managed or bankrupt surrounding factories[32](index=32&type=chunk) - Lace revenue decreased by approximately **28.8% to RMB 5.2 million**, primarily attributed to intense competition leading to reduced customer orders[33](index=33&type=chunk) - Footwear business revenue increased to approximately **RMB 248.9 million**, mainly due to increased orders prior to tariff implementation[36](index=36&type=chunk) [Gross profit](index=13&type=section&id=Gross%20profit) Gross profit slightly decreased by 0.7% to RMB 28.0 million, mainly due to deteriorating performance in lace and dyeing and increased costs - Gross profit slightly decreased by approximately **0.7% to RMB 28.0 million** from approximately RMB 28.2 million in the corresponding period of 2024[37](index=37&type=chunk) - This was primarily due to deteriorating performance in the lace and dyeing & finishing businesses and increased costs, such as a temporary rise in fuel prices[37](index=37&type=chunk) [Other income](index=13&type=section&id=Other%20income) Other income slightly decreased to RMB 0.8 million - Other income slightly decreased from approximately **RMB 0.9 million to approximately RMB 0.8 million**[38](index=38&type=chunk) [Other (losses)/gains, net](index=13&type=section&id=Other%20(losses)%2Fgains%2C%20net) The Group recorded other losses of RMB 1.2 million, contrasting with other gains of RMB 2.8 million in the prior year, mainly due to losses from selling obsolete high-energy-consuming machinery and RMB appreciation - The Group recorded other losses of approximately **RMB 1.2 million** during the interim period, compared to other gains of approximately **RMB 2.8 million** in the corresponding period of 2024[39](index=39&type=chunk) - This was primarily due to (i) losses from the strategic disposal of certain obsolete high-energy-consuming machinery that did not meet environmental standards, and (ii) RMB appreciation during the period[39](index=39&type=chunk) [Selling and distribution expenses](index=14&type=section&id=Selling%20and%20distribution%20expenses) Selling and distribution expenses decreased by 10.5% to RMB 14.5 million, primarily due to successful negotiation of reduced commission rates - Selling and distribution expenses decreased by approximately **10.5% to RMB 14.5 million** from approximately RMB 16.2 million in the corresponding period of 2024[44](index=44&type=chunk) - This was due to successful negotiation of reduced commission rates[44](index=44&type=chunk) [Administrative expenses](index=14&type=section&id=Administrative%20expenses) Administrative expenses increased to RMB 21.1 million, mainly due to an increase in senior staff and initial legal consulting fees for potential new projects - Administrative expenses increased from approximately **RMB 16.1 million to approximately RMB 21.1 million**[45](index=45&type=chunk) - This was due to (i) an increase in the number of senior and high-level staff and (ii) initial legal consulting and fees for various potential new projects[45](index=45&type=chunk) [Finance costs, net](index=14&type=section&id=Finance%20costs%2C%20net) Net finance costs significantly increased to RMB 1.2 million, primarily due to higher interest expenses on loans from the ultimate holding company - Net finance costs increased from approximately **RMB 0.1 million to approximately RMB 1.2 million**[46](index=46&type=chunk) - This was primarily due to increased interest expenses on loans from the ultimate holding company[46](index=46&type=chunk) [Impairment loss on property, plant and equipment](index=14&type=section&id=Impairment%20loss%20on%20property%2C%20plant%20and%20equipment) The Group recorded an impairment loss of RMB 4.4 million on property, plant and equipment, mainly due to deteriorating performance in the lace and dyeing & finishing businesses affected by external factors - The Group recorded an impairment loss of approximately **RMB 4.4 million** on property, plant and equipment during the interim period (2024: nil)[47](index=47&type=chunk) - This primarily resulted from an impairment assessment due to deteriorating performance in the lace and dyeing & finishing businesses, influenced by multiple special external factors such as temporary fuel price increases, regional tariff disruptions to end-demand, and intense domestic market competition[47](index=47&type=chunk) [Share of results of a joint venture](index=15&type=section&id=Share%20of%20results%20of%20a%20joint%20venture) The Group's share of loss from a joint venture was RMB 8.1 million, mainly due to one-off installation costs for the CR7® LIFE Hong Kong Museum - The Group's share of loss from a joint venture was approximately **RMB 8.1 million** (2024: nil)[52](index=52&type=chunk) - This was due to one-off installation costs for establishing the museum brand of Portuguese renowned footballer Mr. Cristiano Ronaldo dos Santos Aveiro in Hong Kong, with these initial expenses not expected to recur in future periods[52](index=52&type=chunk) [Income tax expenses](index=15&type=section&id=Income%20tax%20expenses) Income tax expenses decreased by 66.7% to RMB 0.1 million, consistent with the loss-making status - Income tax expenses decreased by approximately **66.7% to RMB 0.1 million** from approximately RMB 0.3 million in the corresponding period of 2024[53](index=53&type=chunk) - This is consistent with the loss-making status[53](index=53&type=chunk) [Net loss for the period](index=15&type=section&id=Net%20loss%20for%20the%20period) The Group recorded a net loss of RMB 22.5 million for the period due to the combined impact of various factors - The Group recorded a net loss of approximately **RMB 22.5 million** during the interim period[54](index=54&type=chunk) [Dividends](index=15&type=section&id=Dividends) The Board does not recommend the payment of any dividend for the interim period - The Board does not recommend the payment of any dividend for the interim period (2024: nil)[55](index=55&type=chunk) [LIQUIDITY, CAPITAL RESOURCES AND GEARING RATIO](index=16&type=section&id=LIQUIDITY%2C%20CAPITAL%20RESOURCES%20AND%20GEARING%20RATIO) The Group experienced a decrease in net current assets and current ratio, an increase in borrowings and gearing ratio, while cash and cash equivalents remained stable, with increased capital expenditure and no foreign exchange hedging - As of June 30, 2025, the Group's net current assets were approximately **RMB 145.1 million** (December 31, 2024: approximately RMB 158.3 million)[60](index=60&type=chunk) - The Group's current ratio decreased from approximately **1.9 times as of December 31, 2024, to approximately 1.7 times** as of June 30, 2025[60](index=60&type=chunk) - As of June 30, 2025, the Group's cash and cash equivalents were approximately **RMB 236.9 million** (December 31, 2024: approximately RMB 231.9 million)[61](index=61&type=chunk) - As of June 30, 2025, the Group's borrowings were approximately **RMB 73.9 million** (December 31, 2024: approximately RMB 52.3 million)[62](index=62&type=chunk) - As of June 30, 2025, the Group's gearing ratio was **0.3** (December 31, 2024: 0.2)[65](index=65&type=chunk) - During the interim period, the Group incurred cash outflow for capital expenditure of approximately **RMB 4.8 million** for the acquisition of equipment and intangible assets (2024: approximately RMB 1.4 million)[67](index=67&type=chunk) - The Group's majority of assets and liabilities are denominated in RMB, USD, and HKD, and it did not hedge its foreign currency exposure during the interim period[68](index=68&type=chunk) [CAPITAL COMMITMENTS](index=18&type=section&id=CAPITAL%20COMMITMENTS) The Group's capital commitments primarily involve financial support for a joint venture and the purchase of property, plant and equipment - As of June 30, 2025, the Group's capital commitments primarily related to financial support for a joint venture of approximately **RMB 26.9 million** (December 31, 2024: RMB 32.4 million)[73](index=73&type=chunk) - Capital commitments for the purchase of property, plant and equipment were approximately **RMB 0.4 million** (December 31, 2024: RMB 0.1 million)[73](index=73&type=chunk) [CONTINGENT LIABILITIES](index=18&type=section&id=CONTINGENT%20LIABILITIES) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[74](index=74&type=chunk) [EMPLOYEES AND REMUNERATION POLICY](index=18&type=section&id=EMPLOYEES%20AND%20REMUNERATION%20POLICY) The Group's employee count slightly increased, leading to higher total employee benefit expenses, with a remuneration policy encompassing fixed salaries, benefits, performance bonuses, and share options - As of June 30, 2025, the Group had a total of **517 employees** (December 31, 2024: 512 employees)[76](index=76&type=chunk) - The Group's total employee benefit expenses (including directors' emoluments) for the interim period were approximately **RMB 28.8 million** (2024: approximately RMB 26.1 million)[76](index=76&type=chunk) - Employee remuneration includes fixed salaries, allowances based on job nature, performance bonuses, paid leave, and share options, with mandatory social security fund contributions made for employees[75](index=75&type=chunk) [SIGNIFICANT INVESTMENTS, MATERIAL ACQUISITIONS AND DISPOSALS](index=19&type=section&id=SIGNIFICANT%20INVESTMENTS%2C%20MATERIAL%20ACQUISITIONS%20AND%20DISPOSALS) Except as disclosed, the Group had no significant investments, material acquisitions, or disposals during the interim period - Except as disclosed in this report, the Group had no significant investments, material acquisitions, or disposals during the interim period[80](index=80&type=chunk) [FUTURE PLAN FOR MATERIAL INVESTMENTS](index=19&type=section&id=FUTURE%20PLAN%20FOR%20MATERIAL%20INVESTMENTS) The Group has no specific plans for material investments or acquisitions of capital assets or other businesses but will continue to explore new development opportunities - The Group has no specific plans for material investments or acquisitions of major capital assets or other businesses during the interim period[81](index=81&type=chunk) - The Group will continue to identify new business development opportunities[81](index=81&type=chunk) [CHANGE IN BOARD LOT SIZE](index=19&type=section&id=CHANGE%20IN%20BOARD%20LOT%20SIZE) The board lot size for the Company's ordinary shares traded on the Stock Exchange changed from 5,000 shares to 2,500 shares, effective April 23, 2025 - The board lot size for the Company's ordinary shares traded on The Stock Exchange of Hong Kong Limited changed from **5,000 shares to 2,500 shares**, effective April 23, 2025[82](index=82&type=chunk) [EVENT AFTER THE INTERIM PERIOD](index=19&type=section&id=EVENT%20AFTER%20THE%20INTERIM%20PERIOD) Except as disclosed, the Group had no significant events after the interim period and up to the date of this report - Except as disclosed in this report, the Group had no significant events after the interim period and up to the date of this report[83](index=83&type=chunk) Corporate Governance and Other Information This section covers directors' and substantial shareholders' interests, share option schemes, changes in directors' information, and compliance with corporate governance standards [DIRECTORS' AND CHIEF EXECUTIVE'S INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY OR ANY ASSOCIATED CORPORATIONS](index=20&type=section&id=DIRECTORS'%20AND%20CHIEF%20EXECUTIVE'S%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20SHARES%2C%20UNDERLYING%20SHARES%20AND%20DEBENTURES%20OF%20THE%20COMPANY%20OR%20ANY%20ASSOCIATED%20CORPORATIONS) As of June 30, 2025, directors and the chief executive held interests in the Company's shares, with Mr. Cai Rongxing holding 30.83%, Mr. Lin Minqiang 4.00%, and Ms. Cai Linqi 0.22% Directors' Interests in Ordinary Shares of the Company | Name of Director | Capacity/Nature of Interest | Number of Shares Held (L) | Approximate % of Shareholding in the Company | | :--- | :--- | :--- | :--- | | Mr. Cai Rongxing | Interest of controlled corporation and beneficial owner | 388,500,000 | 30.83% | | Mr. Lin Minqiang | Interest of controlled corporation/jointly held with other persons | 50,400,000 | 4.00% | | Ms. Cai Linqi | Beneficial owner | 2,735,000 | 0.22% | - Mr. Cai Rongxing beneficially owns **100% of the issued shares of Rongwei Investment Limited**, which holds **28.85% of the Company's shares**, thus Mr. Cai Rongxing is deemed to have an interest in the Company's shares held by Rongwei[90](index=90&type=chunk) [ARRANGEMENT FOR DIRECTORS TO PURCHASE SHARES OR DEBENTURES](index=22&type=section&id=ARRANGEMENT%20FOR%20DIRECTORS%20TO%20PURCHASE%20SHARES%20OR%20DEBENTURES) No rights to acquire benefits by acquiring shares or debentures were granted to or exercised by any director, their spouses, or minor children during the interim period - During the interim period and up to the date of this report, no rights to acquire benefits by acquiring shares or debentures of the Company were granted to or exercised by any director or their respective spouses or minor children[92](index=92&type=chunk) [SUBSTANTIAL SHAREHOLDERS' AND OTHERS' INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES OF THE COMPANY](index=23&type=section&id=SUBSTANTIAL%20SHAREHOLDERS'%20AND%20OTHERS'%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20SHARES%20AND%20UNDERLYING%20SHARES%20OF%20THE%20COMPANY) As of June 30, 2025, substantial shareholders included Rongwei Investment Limited (28.85% interest) and Ms. Hu Qiuxia, spouse of Mr. Cai Rongxing (deemed to hold 30.83% interest) Substantial Shareholders' Interests in Shares of the Company | Name/Company Name | Capacity/Nature of Interest | Number of Shares Held (L) | Approximate % of Shareholding in the Company | | :--- | :--- | :--- | :--- | | Rongwei Investment Limited | Beneficial owner | 363,500,000 | 28.85% | | Ms. Hu Qiuxia | Interest of spouse | 388,500,000 | 30.83% | - Rongwei Investment Limited is wholly owned by Mr. Cai Rongxing[97](index=97&type=chunk) - Ms. Hu Qiuxia is the spouse of Mr. Cai Rongxing and is therefore deemed to have an interest in the Company's shares in which Mr. Cai Rongxing has an interest[98](index=98&type=chunk)[99](index=99&type=chunk) [DIRECTORS' INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR CONTRACTS](index=24&type=section&id=DIRECTORS'%20INTERESTS%20IN%20TRANSACTIONS%2C%20ARRANGEMENTS%20OR%20CONTRACTS) Except as disclosed in note 26 to the condensed consolidated interim financial information, no director or their associated entities had any material interest in significant transactions, arrangements, or contracts during the interim period - Except as disclosed in note 26 to the condensed consolidated interim financial information, no director or their associated entities had any material interest, whether direct or indirect, in any significant transactions, arrangements, or contracts entered into by the Company or its subsidiaries, fellow subsidiaries, or parent company, and subsisting during the interim period[101](index=101&type=chunk) [CONTROLLING SHAREHOLDERS' INTEREST](index=24&type=section&id=CONTROLLING%20SHAREHOLDERS'%20INTEREST) Except as disclosed in note 26 to the condensed consolidated interim financial information, no material contracts were entered into with controlling shareholders or their subsidiaries, nor were any significant service contracts provided by them - Except as disclosed in note 26 to the condensed consolidated interim financial information, during the interim period, neither the Company nor any of its subsidiaries entered into any material contracts with any controlling shareholder or any of its subsidiaries, nor were there any material contracts for services provided by any controlling shareholder or any of its subsidiaries to the Company or any of its subsidiaries[102](index=102&type=chunk) [DIRECTORS' AND CONTROLLING SHAREHOLDERS' INTEREST IN COMPETING BUSINESS](index=25&type=section&id=DIRECTORS'%20AND%20CONTROLLING%20SHAREHOLDERS'%20INTEREST%20IN%20COMPETING%20BUSINESS) Except for the Group's business, no director, controlling shareholder, or their close associates engaged in or held interests in any competing business or had other conflicts of interest during the interim period - Except for the Group's business, during the interim period, no director, controlling shareholder, or any of their respective close associates engaged in any business that competes or may compete with the Group's principal business, or held any interest in such businesses, as required to be disclosed under Rule 8.10 of the Listing Rules, nor had any other conflicts of interest with the Group[106](index=106&type=chunk) [SHARE OPTION SCHEME](index=25&type=section&id=SHARE%20OPTION%20SCHEME) The Company adopted a share option scheme on December 16, 2020, with 126,000,000 shares available for grant as of June 30, 2025, but no options were granted during the period - The Company conditionally adopted a share option scheme on **December 16, 2020**, which became effective on January 13, 2021[107](index=107&type=chunk) - As of January 1, 2025, and June 30, 2025, the total number of share options available for grant under the share option scheme was **126,000,000 shares**, representing approximately **10% of the Company's issued share capital** on the respective dates[108](index=108&type=chunk) - No share options were granted or agreed to be granted under the share option scheme from its adoption date up to June 30, 2025[109](index=109&type=chunk) [CHANGES IN DIRECTORS' INFORMATION DISCLOSED UNDER RULE 13.51B(1) OF THE HONG KONG LISTING RULES](index=26&type=section&id=CHANGES%20IN%20DIRECTORS'%20INFORMATION%20DISCLOSED%20UNDER%20RULE%2013.51B(1)%20OF%20THE%20HONG%20KONG%20LISTING%20RULES) There were no changes in directors' information requiring disclosure under Rule 13.51B(1) of the Listing Rules since the date of the Company's 2024 annual report - There were no changes in directors' information requiring disclosure under Rule 13.51B(1) of the Listing Rules since the date of the Company's 2024 annual report[112](index=112&type=chunk) [PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES](index=26&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20THE%20COMPANY'S%20LISTED%20SECURITIES) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, nor held any treasury shares during the interim period - During the interim period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities (including sales of treasury shares)[113](index=113&type=chunk) - As of June 30, 2025, and the date of this report, the Company held no treasury shares[113](index=113&type=chunk) [ISSUE OF EQUITY SECURITIES](index=26&type=section&id=ISSUE%20OF%20EQUITY%20SECURITIES) The Company did not allot and issue any equity securities, including those convertible into equity securities, during the interim period - During the interim period, the Company did not allot and issue any equity securities (including securities convertible into equity securities)[114](index=114&type=chunk) [REVIEW OF INTERIM FINANCIAL STATEMENTS](index=26&type=section&id=REVIEW%20OF%20INTERIM%20FINANCIAL%20STATEMENTS) The unaudited interim results for the six months ended June 30, 2025, were reviewed by the Company's auditor, Furuimaze Certified Public Accountants Limited, and the Audit Committee - The unaudited interim results for the six months ended June 30, 2025, have been reviewed by the Company's auditor, Furuimaze Certified Public Accountants Limited, in accordance with Hong Kong Standard on Review Engagements 2410[115](index=115&type=chunk) - The Company's interim results for the interim period have also been reviewed by the Company's Audit Committee[115](index=115&type=chunk) [CORPORATE GOVERNANCE](index=27&type=section&id=CORPORATE%20GOVERNANCE) The Company has adopted corporate governance practices and complied with the code provisions of the Corporate Governance Code during the interim period - The Company has adopted a set of corporate governance practices that comply with the code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[120](index=120&type=chunk) - The Company complied with the code provisions of the Corporate Governance Code during the interim period[120](index=120&type=chunk) [MODEL CODE FOR DIRECTORS' SECURITIES TRANSACTIONS](index=27&type=section&id=MODEL%20CODE%20FOR%20DIRECTORS'%20SECURITIES%20TRANSACTIONS) The Company adopted a code of conduct for directors' securities transactions, no less exacting than the Model Code, and all directors confirmed compliance during the interim period - The Company has adopted a code of conduct for directors and relevant employees' securities transactions, the terms of which are no less exacting than the required standard set out in the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules[121](index=121&type=chunk) - Following specific enquiries by the Company, all directors confirmed their compliance with the required standard set out in the Model Code and the Company's code of conduct for directors' securities transactions during the interim period[122](index=122&type=chunk) [Report on Review of Interim Financial Information](index=28&type=section&id=Report%20on%20Review%20of%20Interim%20Financial%20Information) The auditor, Furuimaze Certified Public Accountants Limited, conducted a review of the interim financial information in accordance with HKSRS 2410, finding no material misstatements - The auditor (Furuimaze Certified Public Accountants Limited) conducted a review in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants[126](index=126&type=chunk)[130](index=130&type=chunk)[134](index=134&type=chunk) - The scope of a review is substantially less than an audit conducted in accordance with Hong Kong Standards on Auditing, and therefore no audit opinion is expressed[130](index=130&type=chunk) - Based on the review, nothing has come to the auditor's attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[131](index=131&type=chunk) [Condensed Consolidated Income Statement](index=30&type=section&id=Condensed%20Consolidated%20Income%20Statement) This statement presents the Group's revenue, gross profit, operating loss, finance costs, and net loss for the period, showing a significant increase in loss per share Condensed Consolidated Income Statement Summary | Indicator | For the Six Months Ended June 30, 2025 (RMB'000) | For the Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Revenue | 288,606 | 273,397 | | Gross profit | 28,001 | 28,158 | | Operating loss | (21,292) | (574) | | Finance costs, net | (1,164) | (57) | | Loss before income tax | (22,456) | (631) | | Income tax expenses | (55) | (317) | | Loss for the period attributable to owners of the Company | (22,511) | (948) | | Basic and diluted loss per share (RMB cents) | (1.79) | (0.08) | [Condensed Consolidated Statement of Comprehensive Income](index=31&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This statement details the Group's loss for the period and other comprehensive losses, primarily from exchange differences on translating overseas operations Condensed Consolidated Statement of Comprehensive Income Summary | Indicator | For the Six Months Ended June 30, 2025 (RMB'000) | For the Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Loss for the period | (22,511) | (948) | | Other comprehensive loss: Exchange differences on translating overseas operations | (1,496) | (170) | | Total comprehensive loss for the period attributable to owners of the Company | (24,007) | (1,118) | [Condensed Consolidated Statement of Financial Position](index=32&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the Group's assets, liabilities, and total equity, showing changes in non-current assets, current assets, and total liabilities Condensed Consolidated Statement of Financial Position Summary | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Non-current assets | 139,858 | 151,790 | | Current assets | 367,886 | 341,050 | | **Total assets** | **507,744** | **492,840** | | Total equity | 279,671 | 303,678 | | Non-current liabilities | 5,273 | 6,396 | | Current liabilities | 222,800 | 182,766 | | **Total liabilities** | **228,073** | **189,162** | [Condensed Consolidated Statement of Changes in Equity](index=34&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement outlines the changes in the Group's equity components, including share capital, reserves, retained earnings, and total comprehensive loss for the period Condensed Consolidated Statement of Changes in Equity Summary | Indicator | Share Capital (RMB'000) | Share Premium (RMB'000) | Other Reserves (RMB'000) | Statutory Reserve (RMB'000) | Exchange Reserve (RMB'000) | Retained Earnings (RMB'000) | Total Equity (RMB'000) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at January 1, 2025 | 10,511 | 80,081 | 104,466 | 19,022 | 736 | 88,862 | 303,678 | | Loss for the period | – | – | – | – | – | (22,511) | (22,511) | | Other comprehensive loss | – | – | – | – | (1,496) | – | (1,496) | | Total comprehensive loss | – | – | – | – | (1,496) | (22,511) | (24,007) | | Balance at June 30, 2025 | 10,511 | 80,081 | 104,466 | 19,022 | (760) | 66,351 | 279,671 | [Condensed Consolidated Statement of Cash Flows](index=37&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes the Group's cash flows from operating, investing, and financing activities, showing a net increase in cash and cash equivalents for the period Condensed Consolidated Statement of Cash Flows Summary | Indicator | For the Six Months Ended June 30, 2025 (RMB'000) | For the Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 1,748 | (53,061) | | Net cash used in investing activities | (14,774) | (1,430) | | Net cash generated from/(used in) financing activities | 20,022 | (2,122) | | Net increase/(decrease) in cash and cash equivalents | 6,996 | (56,613) | | Cash and cash equivalents at end of reporting period | 236,948 | 212,359 | [Notes to the Condensed Consolidated Financial Statements](index=39&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining the accounting policies, estimates, segment information, and specific financial items within the condensed consolidated financial statements [1. GENERAL INFORMATION](index=39&type=section&id=1.%20GENERAL%20INFORMATION) The Company, incorporated in the Cayman Islands and listed on the Stock Exchange, primarily engages in lace manufacturing, dyeing & finishing, and footwear businesses, with Mr. Cai Rongxing as the ultimate controlling shareholder - The Company was incorporated in the Cayman Islands on **January 4, 2019**, as an exempted company with limited liability, and its shares are listed on The Stock Exchange of Hong Kong Limited[146](index=146&type=chunk) - The Group primarily engages in (i) manufacturing lace and providing dyeing & finishing services and (ii) the footwear business[147](index=147&type=chunk) - The Company's ultimate holding company is Rongwei Investment Limited, and the ultimate controlling shareholder is Mr. Cai Rongxing[147](index=147&type=chunk) [2. BASIS OF PREPARATION](index=40&type=section&id=2.%20BASIS%20OF%20PREPARATION) The interim financial information is prepared in accordance with HKAS 34 and Listing Rules, unaudited but reviewed by the Audit Committee and external auditor - The interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[150](index=150&type=chunk) - The interim financial information is unaudited but has been reviewed by the Company's Audit Committee and the Company's external auditor in accordance with Hong Kong Standard on Review Engagements 2410[152](index=152&type=chunk) [3. PRINCIPAL ACCOUNTING POLICIES](index=41&type=section&id=3.%20PRINCIPAL%20ACCOUNTING%20POLICIES) The interim financial information is prepared on a historical cost basis, consistent with the 2024 audited financial statements, with no significant impact from new HKFRSs, and enhanced disclosure on principal-agent relationships in revenue recognition for the footwear business - The interim financial information is prepared on a historical cost basis, except for financial assets at fair value through profit or loss which are measured at fair value[154](index=154&type=chunk) - The adoption of new/revised Hong Kong Financial Reporting Standards (HKFRSs) that are relevant to the Group and effective for the current period had no significant impact on the Group's results or financial position for the current or prior periods[155](index=155&type=chunk) - The Group has enhanced disclosures related to its revenue recognition accounting policies, particularly regarding the assessment of principal-agent relationships, which does not result in a change in accounting policy[156](index=156&type=chunk)[157](index=157&type=chunk) - In the footwear business, the Group acts as a principal, primarily responsible for fulfilling the promise to provide the specified goods, bearing inventory risk, and having discretion to establish the price of the specified goods[160](index=160&type=chunk) [4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS](index=43&type=section&id=4.%20CRITICAL%20ACCOUNTING%20ESTIMATES%20AND%20JUDGEMENTS) The preparation of interim financial information involves judgments, estimates, and assumptions consistent with the 2024 audited financial statements, with the Group determining its role as a principal in footwear customer contracts - Other significant judgments made by the directors in applying the Group's accounting policies and key sources of estimation uncertainty were the same as those applied to the Group's 2024 audited financial statements[165](index=165&type=chunk) - The Group determined it acts as a principal in customer contracts for the footwear business, considering the concept of control and related factors, as it is primarily responsible for providing the goods, bearing inventory risk, and having the right to establish the price of the goods[166](index=166&type=chunk)[168](index=168&type=chunk) [5. SEGMENT INFORMATION](index=45&type=section&id=5.%20SEGMENT%20INFORMATION) Effective January 1, 2025, the Group adjusted its reportable operating segments to two: lace and dyeing & finishing, and footwear, with footwear remaining the primary revenue source and all revenue originating from Mainland China and Hong Kong - Effective **January 1, 2025**, the Group's management changed the presentation of information reported to the chief operating decision maker, and segment reporting has been updated to conform to this change, now having two reportable operating segments: (i) lace and dyeing & finishing, and (ii) footwear[171](index=171&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) Segment Revenue and Results (For the Six Months Ended June 30, 2025) | Segment | Revenue (RMB'000) | Gross Profit (RMB'000) | Segment Results (RMB'000) | | :--- | :--- | :--- | :--- | | Lace and dyeing & finishing | 39,733 | (382) | (1,085) | | Footwear | 248,873 | 28,383 | 14,546 | | Unallocated | – | – | – | | **Total** | **288,606** | **28,001** | **13,461** | Segment Revenue and Results (For the Six Months Ended June 30, 2024) | Segment | Revenue (RMB'000) | Gross Profit (RMB'000) | Segment Results (RMB'000) | | :--- | :--- | :--- | :--- | | Lace and dyeing & finishing | 38,998 | 1,436 | 752 | | Footwear | 234,399 | 26,722 | 11,158 | | Unallocated | – | – | – | | **Total** | **273,397** | **28,158** | **11,910** | - The Group's revenue by geographical location of operations was **100% derived from Mainland China and Hong Kong**[198](index=198&type=chunk) - Among major customers, Customer B contributed over **10% of total revenue** to the footwear business, and Customer A also became a major customer in 2025[202](index=202&type=chunk) - Almost all of the Group's non-current assets are located in Mainland China[203](index=203&type=chunk) [6. EXPENSES BY NATURE](index=55&type=section&id=6.%20EXPENSES%20BY%20NATURE) The Group's expense structure shows increases in raw materials and consumables, employee benefit expenses, utilities, and depreciation, alongside an impairment loss on property, plant and equipment, while commissions and R&D expenses decreased Expenses by Nature Summary | Expense Category | For the Six Months Ended June 30, 2025 (RMB'000) | For the Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Raw materials and consumables used | 233,894 | 220,208 | | Employee benefit expenses (including directors' emoluments) | 28,823 | 26,070 | | Depreciation of property, plant and equipment and right-of-use assets | 7,194 | 6,684 | | Write-down of inventories | 565 | 198 | | Commission and handling fees | 8,770 | 10,217 | | Impairment loss on property, plant and equipment | 4,447 | – | | Research and development expenses | 5,987 | 8,603 | | **Total** | **301,414** | **277,675** | [7. OTHER INCOME](index=56&type=section&id=7.%20OTHER%20INCOME) The Group's other income slightly decreased, with government grants remaining stable Other Income Summary | Category | For the Six Months Ended June 30, 2025 (RMB'000) | For the Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Government grants | 272 | 245 | | Others | 481 | 668 | | **Total** | **753** | **913** | [8. OTHER (LOSSES)/GAINS, NET](index=57&type=section&id=8.%20OTHER%20(LOSSES)%2FGains%2C%20Net) The Group shifted from net other gains in 2024 to net other losses in 2025, primarily due to losses on disposal of property, plant and equipment and exchange differences Other (Losses)/Gains, Net Summary | Category | For the Six Months Ended June 30, 2025 (RMB'000) | For the Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Loss on disposal of property, plant and equipment | (891) | – | | Exchange differences | (307) | 2,791 | | Fair value gain on financial assets at fair value through profit or loss | 15 | – | | **Total** | **(1,183)** | **2,791** | [9. FINANCE COSTS, NET](index=58&type=section&id=9.%20FINANCE%20COSTS%2C%20NET) The Group's net finance costs significantly increased, mainly due to interest expenses on loans from the ultimate holding company and bills payable fees Finance Costs, Net Summary | Category | For the Six Months Ended June 30, 2025 (RMB'000) | For the Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Finance income (interest income) | 954 | 1,397 | | Finance costs (total) | (2,118) | (1,454) | | Of which: Interest expense on loans from ultimate holding company | (1,566) | – | | Of which: Bills payable fees | (401) | – | | **Net finance costs** | **(1,164)** | **(57)** | [10. DIVIDENDS](index=58&type=section&id=10.%20DIVIDENDS) The Company neither paid nor declared dividends for the six months ended June 30, 2025, and 2024 - The Company neither paid nor declared dividends for the six months ended June 30, 2025, and 2024[215](index=215&type=chunk) [11. INCOME TAX EXPENSES](index=59&type=section&id=11.%20INCOME%20TAX%20EXPENSES) The Group's income tax expenses significantly decreased, consistent with its loss-making status, benefiting from preferential tax rates and R&D super deductions for its Chinese subsidiary and a two-tiered profits tax system in Hong Kong Income Tax Expenses Summary | Category | For the Six Months Ended June 30, 2025 (RMB'000) | For the Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Current income tax (PRC corporate income tax) | – | 12 | | Current income tax (Hong Kong profits tax) | – | 159 | | Deferred tax | 55 | 146 | | **Income tax expenses** | **55** | **317** | - Fujian Deyun Technology Co., Ltd., a Chinese subsidiary of the Group, qualified as a High-New Technology Enterprise since **December 2022**, with a validity period of 10 years, thus enjoying a preferential income tax rate of **15%** during the effective period[218](index=218&type=chunk) - Enterprises engaged in research and development activities are eligible to claim a "super deduction" of up to **200%** for research and development expenses[219](index=219&type=chunk) - No PRC corporate income tax was provided for the six months ended June 30, 2025, as the subsidiary operating in China did not generate assessable profits[220](index=220&type=chunk) - The Hong Kong Inland Revenue Department's two-tiered profits tax system taxes the first **HK$2 million** of assessable profits of qualifying group entities at a rate of **8.25%**, while assessable profits above **HK$2 million are taxed at 16.5%**[223](index=223&type=chunk) [12. LOSS PER SHARE](index=61&type=section&id=12.%20LOSS%20PER%20SHARE) Basic and diluted loss per share attributable to owners of the Company was RMB 1.79 cents for the six months ended June 30, 2025, a significant increase from 0.08 cents in the prior year, with no difference between basic and diluted loss due to the absence of dilutive potential ordinary shares Loss Per Share Summary | Indicator | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company (RMB'000) | (22,511) | (948) | | Weighted average number of ordinary shares in issue (thousands) | 1,260,000 | 1,260,000 | | Basic and diluted loss per share (RMB cents) | (1.79) | (0.08) | - There was no difference between basic and diluted loss per share as no potential dilutive ordinary shares were outstanding for the six months ended June 30, 2025, and 2024[230](index=230&type=chunk) [13. PROPERTY, PLANT AND EQUIPMENT AND RIGHT-OF-USE ASSETS](index=62&type=section&id=13.%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT%20AND%20RIGHT-OF-USE%20ASSETS) As of June 30, 2025, the net book value of property, plant and equipment and right-of-use assets decreased due to depreciation, disposals, and an impairment loss of approximately RMB 4.4 million resulting from deteriorating performance in the lace and dyeing & finishing businesses Net Book Value of Property, Plant and Equipment and Right-of-Use Assets (As of June 30, 2025) | Category | Buildings (RMB'000) | Plant and Machinery (RMB'000) | Office Equipment (RMB'000) | Motor Vehicles (RMB'000) | Construction in Progress (RMB'000) | Leasehold Improvements (RMB'000) | Subtotal (RMB'000) | Right-of-Use Assets (RMB'000) | Total (RMB'000) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net book value at beginning of period (January 1, 2025) | 22,686 | 83,150 | 1,661 | 2,721 | – | – | 110,218 | 8,738 | 118,956 | | Additions | – | 841 | 789 | 475 | 757 | 1,634 | 4,496 | – | 4,496 | | Depreciation | (722) | (4,880) | (188) | (227) | – | (96) | (6,113) | (1,081) | (7,194) | | Disposals | – | (1,236) | – | (121) | – | – | (1,357) | – | (1,357) | | Impairment loss | – | (4,447) | – | – | – | – | (4,447) | – | (4,447) | | Exchange adjustments | – | – | (8) | (4) | – | (13) | (25) | (85) | (110) | | Net book value at end of period (June 30, 2025) | 21,964 | 73,428 | 2,254 | 2,844 | 757 | 1,525 | 102,772 | 7,572 | 110,344 | - For the six months ended June 30, 2025, the Group recorded an impairment loss of approximately **RMB 4.4 million** on property, plant and equipment (2024: nil)[237](index=237&type=chunk) - The impairment was primarily due to the lace and dyeing & finishing businesses not meeting management's expectations, with the recoverable amount (approximately **RMB 88,675,000**) being lower than the carrying amount[235](index=235&type=chunk)[237](index=237&type=chunk) [14. INTANGIBLE ASSETS](index=64&type=section&id=14.%20INTANGIBLE%20ASSETS) For the six months ended June 30, 2025, amortization of intangible assets totaling approximately RMB 25,000 was deducted from administrative expenses, and approximately RMB 77,000 from cost of sales - For the six months ended June 30, 2025, amortization of approximately **RMB 25,000** was deducted from administrative expenses, and approximately **RMB 77,000** was deducted from cost of sales[238](index=238&type=chunk) [15. INTEREST IN A JOINT VENTURE](index=65&type=section&id=15.%20INTEREST%20IN%20A%20JOINT%20VENTURE) The Group's interest in the joint venture, Star Park Development Limited, resulted in a share of loss of approximately RMB 8.1 million, mainly due to one-off installation costs for the CR7® LIFE Hong Kong Museum, and the Group also provided additional loans to the joint venture Interest in a Joint Venture Summary | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Share of net liabilities | (8,054) | – | | Loans to a joint venture | 36,934 | 32,410 | | **Total** | **28,880** | **32,410** | - The joint venture is Star Park Development Limited, primarily engaged in event planning, with the Group indirectly holding a **50% interest**[245](index=245&type=chunk) - The Group's share of loss from the joint venture of approximately **RMB 8.1 million** was due to one-off installation costs for establishing the museum brand of Portuguese renowned footballer Mr. Cristiano Ronaldo dos Santos Aveiro in Hong Kong[247](index=247&type=chunk) - The Group has unrecognised commitments for its interest in the joint venture, including financial support of approximately **RMB 26.9 million**[252](index=252&type=chunk) [16. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES](index=68&type=section&id=16.%20PREPAYMENTS%2C%20DEPOSITS%20AND%20OTHER%20RECEIVABLES) Net prepayments, deposits, and other receivables slightly increased, including a deposit of approximately RMB 13.8 million for an IP merchandise sales opportunity, fully borne by the ultimate holding company Net Prepayments, Deposits and Other Receivables Summary | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Prepayments to suppliers | 589 | 519 | | Other prepayments | 895 | 501 | | Other deposits | 13,806 | 14,018 | | Other receivables | 3,101 | 2,588 | | Deposits | 997 | 505 | | Other tax receivables | – | 1,001 | | Less: Loss allowance | (9) | – | | **Net** | **19,379** | **19,132** | - The Group provided a deposit of approximately **RMB 13,806,000** for an intellectual property merchandise sales opportunity, which was fully borne by the ultimate holding company, who also agreed to compensate for related losses[254](index=254&type=chunk) [17. INVENTORIES](index=69&type=section&id=17.%20INVENTORIES) The Group's net inventories decreased, with a reduction in raw materials and an increase in inventory provision Inventories Summary | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Raw materials | 9,231 | 10,928 | | Less: Provision for inventories | (6,201) | (5,636) | | **Net** | **3,030** | **5,292** | - For the six months ended June 30, 2025, an inventory provision of approximately **RMB 565,000** was recognized in the condensed consolidated income statement and charged to cost of sales (2024: approximately RMB 198,000)[257](index=257&type=chunk) [18. CONTRACT ASSETS, TRADE AND BILLS RECEIVABLES](index=70&type=section&id=18.%20CONTRACT%20ASSETS%2C%20TRADE%20AND%20BILLS%20RECEIVABLES) The Group's net trade and bills receivables significantly increased, while net contract assets slightly decreased, with a maximum credit period of 90 days offered Contract Assets, Trade and Bills Receivables Net Summary | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Net contract assets | 4,091 | 4,677 | | Net trade and bills receivables | 91,417 | 72,004 | | **Total** | **95,508** | **76,681** | - The Group offers a credit period of up to **90 days** after invoicing[262](index=262&type=chunk) Aging Analysis of Trade and Bills Receivables (by invoice date) | Aging | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 1 to 3 months | 89,013 | 71,504 | | Over 3 months | 5,462 | 2,843 | | **Total** | **94,475** | **74,347** | | Less: Loss allowance for trade receivables | (3,058) | (2,343) | | **Net** | **91,417** | **72,004** | [19. FINANCIAL ASSETS AT FVPL](index=74&type=section&id=19.%20FINANCIAL%20ASSETS%20AT%20FVPL) The Group's financial assets at fair value through profit or loss, primarily bank-issued financial products, increased to RMB 13.0 million, measured using Level 3 fair value with an expected annual return rate of up to 1.77% Financial Assets at FVPL Summary | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Bank-issued financial products | 13,021 | 8,006 | - Bank-issued financial products are measured using Level 3 fair value, with the unobservable input being the fixed expected annual return rate in the investment contract[270](index=270&type=chunk)[275](index=275&type=chunk) - As of June 30, 2025, these expected annual return rates were up to **1.77%** (December 31, 2024: 1.74%)[275](index=275&type=chunk) Changes in Bank-Issued Financial Products Summary | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Beginning balance | 8,006 | – | | Additions | 38,000 | 16,000 | | Disposals | (33,000) | (8,000) | | Fair value changes | 15 | 6 | | **Ending balance** | **13,021** | **8,006** | [20. SHARE CAPITAL](index=77&type=section&id=20.%20SHARE%20CAPITAL) The Company's authorized and issued share capital remained unchanged as of June 30, 2025 Share Capital Summary | Category | Number of Shares ('000) | Par Value (HKD'000) | Par Value (RMB'000) | | :--- | :--- | :--- | :--- | | Authorized share capital (ordinary shares of HK$0.01 each) | 10,000,000 | 100,000 | 84,177 | | Issued and fully paid share capital (ordinary shares of HK$0.01 each) | 1,260,000 | 12,600 | 10,511 | [21. CONTRACT LIABILITIES, OTHER PAYABLES AND ACCRUALS](index=78&type=section&id=21.%20CONTRACT%20LIABILITIES%2C%20OTHER%20PAYABLES%20AND%20ACCRUALS) The Group's contract liabilities significantly increased, while total other payables and accruals remained stable Contract Liabilities, Other Payables and Accruals Summary | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Current portion (total) | 13,331 | 13,405 | | Contract liabilities | 5,616 | 1,147 | | Non-current portion (other payables) | 1,296 | 1,321 | | **Total** | **18,947** | **14,552** | [22. LEASE LIABILITIES](index=79&type=section&id=22.%20LEASE%20LIABILITIES) The present value of the Group's lease liabilities decreased, with a weighted average effective interest rate of 5.2% per annum Present Value of Lease Liabilities Summary | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Within one year | 2,139 | 1,980 | | In the second to fifth years inclusive | 3,374 | 3,797 | | After five years | – | 728 | | **Present value of lease liabilities** | **5,513** | **6,505** | - As of June 30, 2025, the weighted average effective interest rate for the Group's lease liabilities was **5.2% per annum** (December 31, 2024: 5.2% per annum)[284](index=284&type=chunk) [23. TRADE AND BILLS PAYABLES](index=80&type=section&id=23.%20TRADE%20AND%20BILLS%20PAYABLES) The Group's total trade and bills payables increased, with bills payable carrying fixed interest rates and guaranteed by related parties Trade and Bills Payables Summary | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade payables (due to third parties) | 86,563 | 80,633 | | Bills payable | 37,000 | 28,667 | | **Total** | **123,563** | **109,569** | - Trade payables are non-interest bearing and have normal credit terms of up to **30 days**[286](index=286&type=chunk) - Bills payable bear fixed annual interest rates ranging from **1.9% to 2.0%** and are guaranteed by related parties[286](index=286&type=chunk) Aging Analysis of Trade and Bills Payables (by invoice/issue date) | Aging | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 1 to 3 months | 120,301 | 107,948 | | Over 3 months | 3,262 | 1,621 | | **Total** | **123,563** | **109,569** | [24. LOANS FROM ULTIMATE HOLDING COMPANY](index=81&type=section&id=24.%20LOANS%20FROM%20ULTIMATE%20HOLDING%20COMPANY) Loans from the ultimate holding company increased, with most being unsecured, fixed-interest, and repayable on demand, used for working capital - As of June 30, 2025, the outstanding balance of loans from the ultimate holding company was approximately **RMB 73,928,000** (December 31, 2024: RMB 52,349,000)[138](index=138&type=chunk) - Approximately **RMB 72,141,000** of these loans are unsecured, bear fixed annual interest rates ranging from **5.68% to 6.5%**, and are repayable on demand[289](index=289&type=chunk) - The remaining balance is unsecured, non-interest bearing, repayable on demand, and represents advances used for the Group's working capital needs[289](index=289&type=chunk) [25. CAPITAL COMMITMENTS](index=82&type=section&id=25.%20CAPITAL%20COMMITMENTS) The Group's contracted but unprovided capital expenditure as of June 30, 2025, primarily for the acquisition of property, plant and equipment, increased Capital Commitments Summary | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Contracted but not provided for in the interim financial information in respect of acquisition of property, plant and equipment | 370 | 73 | [26. RELATED PARTY TRANSACTIONS](index=82&type=section&id=26.%20RELATED%20PARTY%20TRANSACTIONS) The Group engaged in various related party transactions, including office rent, footwear product purchases, and interest expenses, all conducted on mutually agreed terms, with an increase in key management personnel remuneration [Holding entity](index=82&type=section&id=Holding%20entity) The ultimate holding company and controlling shareholder are disclosed in Note 1, with details of ultimate holding company loans in Note 24 - The ultimate holding company and controlling shareholder are disclosed in Note 1 to the interim financial information; details of loans from the ultimate holding company are in Note 24 to the interim financial information[295](index=295&type=chunk) [Transaction with related parties](index=83&type=section&id=Transaction%20with%20related%20parties) The Group conducted transactions with related parties, including office rent, footwear product purchases, and interest expenses, all on mutually agreed terms in the ordinary course of business Transactions with Related Parties Summary | Transaction Category | For the Six Months Ended June 30, 2025 (RMB'000) | For the Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Office rent paid | 776 | 771 | | Purchase of footwear products | 64,982 | 50,366 | | Interest expense | 1,566 | – | | **Total** | **67,324** | **51,137** | - Directors' family members have control and/or significant influence over the related companies[300](index=300&type=chunk) - The above transactions were charged on terms mutually agreed upon by the related parties and conducted in the ordinary and usual course of business[300](index=300&type=chunk) [Key management personnel remuneration](index=85&type=section&id=Key%20management%20personnel%20remuneration) Key management personnel remuneration increased, encompassing wages and salaries, and retirement benefit costs Key Management Personnel Remuneration Summary | Category | For the Six Months Ended June 30, 2025 (RMB'000) | For the Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Wages and salaries | 2,092 | 997 | | Retirement benefit costs – defined contribution plans | 42 | 16 | | **Total** | **2,134** | **1,013** |

[Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) The Group's financial performance in the first half of 2025 saw a revenue decrease but significant gross profit growth and improved net profit, driven by new business models and reduced finance costs [Financial Performance](index=3&type=section&id=Financial%20Performance) The Group's revenue decreased by 7.2% to HK$237 million in H1 2025, but gross profit increased by 8.9% to HK$73.3 million, with a significant rise in gross profit margin to 30.9% [Revenue](index=3&type=section&id=Revenue) | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 236,882 | 255,249 | -7.2% | | Gross Profit | 73,263 | 67,246 | +8.9% | | Gross Profit Margin | 30.9% | 26.3% | +4.6pp | - Revenue decreased but gross profit margin increased, primarily due to a new business model shifting to commission income, where only net income is recognized as revenue[5](index=5&type=chunk) [Other Income and Net Gains](index=3&type=section&id=Other%20Income%20and%20Net%20Gains) | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Other Income and Net Gains | (6) | 8,948 | | Fair value changes of financial assets at FVTPL | Loss 2,815 | Gain 6,507 | | Rental income | 1,975 | 1,809 | | Supplier incentive income | 689 | 486 | - Other income and net gains turned from a gain to a loss compared to the same period last year, mainly due to fair value losses on financial assets[6](index=6&type=chunk) - Rental income increased by **9.2%** year-on-year, and supplier incentive income increased by **41.8%**[6](index=6&type=chunk)[7](index=7&type=chunk) [Operating Expenses](index=4&type=section&id=Operating%20Expenses) | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 12,232 | 9,383 | +30.4% | | Administrative Expenses | 40,291 | 49,570 | -18.7% | - Selling and distribution expenses increased by **30.4%**, primarily due to higher supply chain expenses[8](index=8&type=chunk) - Administrative expenses decreased by **18.7%**, mainly due to the recognition of exchange gains in 2025[8](index=8&type=chunk) [Net Finance Costs](index=4&type=section&id=Net%20Finance%20Costs) | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Finance Costs | 2,356 | 4,790 | -50.8% | | Finance income | 668 | 808 | -17.3% | | Finance costs | 3,024 | 5,598 | -46.0% | - Net finance costs significantly decreased by **50.8%**, mainly due to lower-cost loan financing and lower HIBOR rates[9](index=9&type=chunk)[10](index=10&type=chunk) - The net debt-to-equity ratio increased from **21.7%** at the end of December 2024 to **25.7%** at the end of June 2025[10](index=10&type=chunk) [Share of Loss of Associates after Tax](index=4&type=section&id=Share%20of%20Loss%20of%20Associates%20after%20Tax) | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Share of Loss of Associates after Tax | 5,254 | 5,511 | - Associates OPS-Ingersoll Funkenerosion GmbH and Prima Power Sheet Metal Machinery (Suzhou) Co Ltd both recorded losses[11](index=11&type=chunk) [Income Tax Expense](index=4&type=section&id=Income%20Tax%20Expense) | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Income Tax Expense | 3,113 | 401 | - Income tax expense significantly increased due to taxable profits generated in the current period and the full offset of tax losses carried forward from prior years[12](index=12&type=chunk) [Profit Attributable to Owners of the Company and Earnings Per Share](index=5&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Company%20and%20Earnings%20Per%20Share) | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 10,023 | 8,430 | +18.9% | | Operating Profit from Trading Business | 20,745 | 19,130 | +8.4% | | Basic Earnings Per Share (HK Cents) | 4.36 | 3.66 | +19.1% | [Closure of Register of Members](index=5&type=section&id=Closure%20of%20Register%20of%20Members) The company will close its register of members from September 16 to 17, 2025, to determine eligibility for the interim dividend, with the deadline for share transfers being 4:30 p.m. on September 15, 2025 - The register of members will be closed from Tuesday, September 16, 2025, to Wednesday, September 17, 2025[15](index=15&type=chunk) - Shareholders must complete share transfers by 4:30 p.m. on Monday, September 15, 2025, to qualify for the interim dividend[15](index=15&type=chunk) [Interim Dividend](index=5&type=section&id=Interim%20Dividend) The Board resolved to declare an interim dividend of HK 3 cents per share, consistent with the prior year, payable on or about October 2, 2025, to shareholders on record as of September 17, 2025 | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interim Dividend (HK Cents per share) | 3 | 3 | - The dividend will be paid to shareholders whose names appear on the register of members on Wednesday, September 17, 2025[16](index=16&type=chunk) - The interim dividend is expected to be distributed to shareholders on or about Thursday, October 2, 2025[16](index=16&type=chunk) [Business Review](index=6&type=section&id=Business%20Review) Despite economic challenges in China, H1 GDP grew by 5.5%, with strong exports and domestic consumption, benefiting the Group's trading business, particularly the machine tools division, which saw a 130.4% increase in total order volume, while investment associates continued to incur losses due to weak European economy and market competition [Trading](index=6&type=section&id=Trading) - China's economy grew by **5.5%** in H1 GDP, with exports increasing by **7.2%** and domestic consumption contributing **68.8%** to GDP growth[17](index=17&type=chunk) - Manufacturing investment grew by **7.5%**, high-tech industries by **9.5%**, and new energy vehicle sales by **40.3%**[18](index=18&type=chunk) - The machine tools division performed well, supported by strong demand from new energy vehicle and mobile phone manufacturers, securing large orders from key customers[18](index=18&type=chunk) | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Order Volume | 1,106,143 | 480,038 | +130.4% | [Investment](index=7&type=section&id=Investment) - The weak European economy, particularly in Germany, negatively impacted the associate OPS Ingersoll Funkenerosion GmbH[19](index=19&type=chunk) - Prima Power Sheet Metal Machinery (Suzhou) Co Ltd also faced intense competition from local manufacturers in China[19](index=19&type=chunk) - Both associates continued to record losses[19](index=19&type=chunk) [Liquidity and Financial Resources](index=7&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's cash and cash equivalents slightly decreased, while inventory and trade receivables increased, extending turnover days. Short-term borrowings rose to meet working capital needs, pushing the net debt-to-equity ratio to 25.7%, though the Group maintains sufficient bank facilities with pledged assets | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 25,487 | 26,048 | | Inventories | 77,901 | 69,993 | | Trade and Bills Receivables | 242,139 | 206,372 | | Trade and Bills Payables | 58,341 | 76,678 | | Short-term Borrowings | 141,938 | 128,071 | - Inventory turnover days increased from **61 days** to **87 days**, and trade receivables turnover days increased from **125 days** to **188 days**[20](index=20&type=chunk) - The net debt-to-equity ratio increased from **21.7%** at the end of December 2024 to **25.7%** at the end of June 2025, partly due to increased borrowings[10](index=10&type=chunk)[22](index=22&type=chunk) - The Group has total bank facilities of approximately **HK$227 million**, with approximately **HK$155 million** utilized, secured by land and buildings, investment properties, and financial assets[22](index=22&type=chunk) [Future Plans and Prospects](index=8&type=section&id=Future%20Plans%20and%20Prospects) The Group anticipates continued economic momentum in China, supported by government policies, and plans to focus on high-tech clients, expand product offerings, invest in a new CRM system, and leverage a new metal sheet machinery joint venture for growth, expecting improved financial results for 2025 despite potential short-term delivery delays - China's economy in H2 will continue to benefit from government support for domestic consumption (new energy vehicles, smart home appliances) and high-tech industries (smartphones, computers, printed circuit boards)[23](index=23&type=chunk) - The Group will continue to maintain key customer relationships, expand its product range for new energy vehicle and smartphone manufacturers, and focus on high-tech clients[23](index=23&type=chunk) - A joint venture with a European metal sheet machinery manufacturer, covering China and Southeast Asian markets, is expected to drive growth[24](index=24&type=chunk) - Investment in a new customer relationship management system aims to enhance sales management and customer service[25](index=25&type=chunk) - While a large number of machine tool orders in H2 2025 may not be delivered by year-end, the Group is confident in achieving better financial results compared to 2024[25](index=25&type=chunk) [Employees](index=9&type=section&id=Employees) As of June 30, 2025, the Group had 225 employees, a slight decrease from the end of 2024, offering competitive remuneration packages and benefits including basic salary, pension schemes, medical plans, education allowances, and discretionary performance bonuses | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Employees | 225 | 233 | | Hong Kong Employees | 37 | - | | Mainland China Employees | 176 | - | | Employees in other Asian offices | 12 | - | - The Group offers competitive remuneration packages based on individual responsibilities, qualifications, performance, and seniority, along with benefits such as medical plans, education allowances, and discretionary performance bonuses[26](index=26&type=chunk) [Particulars of Pledged Assets of the Group](index=9&type=section&id=Particulars%20of%20Pledged%20Assets%20of%20the%20Group) As of June 30, 2025, certain land and buildings, investment properties, and a financial asset at fair value through profit or loss, with a total carrying amount of approximately HK$92.45 million, were pledged as fixed charges to secure the Group's banking facilities | Type of Pledged Assets | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total carrying amount of land and buildings, investment properties, and financial assets at FVTPL | 92,453 | 97,273 | - The pledged assets are used to secure the Group's banking facilities[27](index=27&type=chunk) [Capital Expenditure and Contingent Liabilities](index=9&type=section&id=Capital%20Expenditure%20and%20Contingent%20Liabilities) The Group's total capital expenditure for H1 2025 was HK$54 thousand, mainly for plant and equipment, a decrease from the prior year. As of June 30, 2025, the Group had no capital commitments but contingent liabilities of HK$4.208 million for customer guarantees | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total Capital Expenditure | 54 | 111 | | Contingent Liabilities (Customer Guarantees) | 4,208 | 3,811 | - Capital expenditure primarily included plant and equipment[28](index=28&type=chunk) - As of June 30, 2025, the Group had no capital commitments[28](index=28&type=chunk) [Exchange Rate Fluctuations and Related Hedging Risks](index=9&type=section&id=Exchange%20Rate%20Fluctuations%20and%20Related%20Hedging%20Risks) The Group faces exchange rate risk as most of its revenue and purchases are denominated in foreign currencies, managing this by offsetting foreign currency receipts against payments to overseas suppliers and entering into forward foreign exchange contracts when necessary, with no open contracts during the reporting period - The Group is exposed to exchange rate risk as most of its revenue and purchases are denominated in foreign currencies[29](index=29&type=chunk) - The Group will utilize foreign currencies received from customers to settle payments to overseas suppliers and may enter into forward foreign exchange contracts to minimize exchange rate risk[29](index=29&type=chunk) - As of June 30, 2025, the Group had no outstanding gross settlement foreign currency forward contracts[29](index=29&type=chunk) [Purchase, Sale or Redemption of Shares](index=10&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Shares) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares, and as of June 30, 2025, the Company held no treasury shares - The Company did not redeem any of its shares during the period, and neither the Company nor any of its subsidiaries purchased or sold any of the Company's shares[31](index=31&type=chunk) - As of June 30, 2025, the Company had no treasury shares[31](index=31&type=chunk) [Share Option Scheme](index=10&type=section&id=Share%20Option%20Scheme) The Company's share option scheme expired on May 14, 2023. As of June 30, 2025, there was no share option scheme, and no options were granted, cancelled, exercised, or lapsed during the period, nor were there any outstanding options - The Company's share option scheme expired on May 14, 2023[32](index=32&type=chunk) - As of June 30, 2025, the Company had no share option scheme, and no share options were granted, cancelled, exercised, or lapsed during the period, nor were there any outstanding share options[32](index=32&type=chunk) [Major Transactions in August 2025](index=10&type=section&id=Major%20Transactions%20in%20August%202025) Details of major transactions in August 2025 are provided in Note 17 to the condensed consolidated financial information - Details of major transactions are set out in Note 17 to the condensed consolidated financial information[33](index=33&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or Any Associated Corporation](index=11&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20Any%20Associated%20Corporation) As of June 30, 2025, Mr. Li Sau Leung held a 74.41% equity interest in the Company, including personal, corporate, and other interests, while Mr. Chan Ching Suen and Mr. ZAVATTI Salvatore also held minor personal interests | Director's Name | Type of Interest | Number of Ordinary Shares Held | Percentage (%) | | :--- | :--- | :--- | :--- | | Mr. Li Sau Leung | Personal Interest | 25,176,000 | | | | Corporate Interest | 1,500,000 | | | | Other Interest | 144,529,982 | | | | **Total** | **171,205,982** | **74.41%** | | Mr. Chan Ching Suen | Personal Interest | 1,104,000 | 0.48% | | Mr. ZAVATTI Salvatore | Personal Interest | 110,000 | 0.05% | - Mr. Li Sau Leung's interests include shares held by Peak Power Technology Limited as trustee of the Li Family Unit Trust, and shares held by J AND LEM Limited, which is wholly owned by him[34](index=34&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company](index=12&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, the Company had not received any notification from substantial shareholders holding 5% or more of the Company's issued share capital, other than the directors' interests already disclosed - Apart from the interests and short positions of the Directors disclosed above, the Company had not received any notification from any substantial shareholder holding 5% or more of the Company's issued share capital and short positions[36](index=36&type=chunk) [Corporate Governance](index=12&type=section&id=Corporate%20Governance) For the six months ended June 30, 2025, the Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, except for the combined roles of Chairman and Group Chief Executive Officer held by Mr. Li Sau Leung, which the Board believes is sufficient to ensure a balance of power and will be continuously reviewed - The Company has complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules, except for the combined roles of Chairman and Group Chief Executive Officer[37](index=37&type=chunk) - The Board believes the current arrangement is sufficient to ensure a balance of power and will continue to review the effectiveness of the Group's corporate governance structure from time to time[37](index=37&type=chunk) [Standard of Dealings in Securities](index=12&type=section&id=Standard%20of%20Dealings%20in%20Securities) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules, and all Directors confirmed their compliance throughout the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[38](index=38&type=chunk) - All Directors confirmed their compliance with the Model Code throughout the period ended June 30, 2025[38](index=38&type=chunk) [Audit Committee](index=13&type=section&id=Audit%20Committee) The Audit Committee has reviewed the Group's accounting principles, internal controls, and financial reporting matters, including the unaudited condensed consolidated financial information for the six months ended June 30, 2025, and this report - The Audit Committee has reviewed the accounting principles and practices adopted by the Group with management and discussed internal controls and financial reporting matters[39](index=39&type=chunk) - The review included the unaudited condensed consolidated financial information for the six months ended June 30, 2025, and this report with the Directors[39](index=39&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=14&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group achieved a profit for the period of HK$10.022 million in H1 2025, an 18.9% increase year-on-year, primarily due to improved gross profit margin and reduced finance costs, with total comprehensive income significantly rising to HK$14.54 million, mainly from a reversal of foreign currency translation losses | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 236,882 | 255,249 | -7.2% | | Gross Profit | 73,263 | 67,246 | +8.9% | | Operating Profit | 20,745 | 19,130 | +8.4% | | Profit Before Tax | 13,135 | 8,829 | +48.8% | | Profit for the Period | 10,022 | 8,428 | +18.9% | | Profit Attributable to Owners of the Company | 10,023 | 8,430 | +18.9% | | Basic and Diluted Earnings Per Share (HK Cents) | 4.36 | 3.66 | +19.1% | | Other Comprehensive Income/(Loss) | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Exchange differences on translation of foreign operations | 4,273 | (5,192) | | Gain on revaluation of land and buildings | – | 433 | | Deferred tax movement | 245 | 203 | | Other comprehensive income/(loss) for the period | 4,518 | (4,556) | | **Total Comprehensive Income for the Period** | **14,540** | **3,872** | - Exchange differences on translation of foreign operations turned from a loss to a gain compared to the same period last year, which is the main reason for the significant increase in total comprehensive income[41](index=41&type=chunk) [Condensed Consolidated Statement of Financial Position](index=16&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly decreased, with non-current assets declining and current assets increasing. Net current assets significantly grew, mainly due to the reclassification of financial assets at FVTPL from non-current to current, and increases in inventories and trade receivables, while total equity also increased | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total Non-current Assets | 330,170 | 400,969 | | Total Current Assets | 456,988 | 336,349 | | Total Current Liabilities | 304,289 | 263,452 | | Net Current Assets | 152,699 | 72,897 | | Net Assets | 452,686 | 445,048 | | Total Equity | 452,686 | 445,048 | - **HK$67 million** of financial assets at fair value through profit or loss were reclassified from non-current to current assets[42](index=42&type=chunk) - Both inventories and trade and bills receivables balances increased[42](index=42&type=chunk) - Borrowings increased to meet working capital requirements for trading operations[21](index=21&type=chunk)[43](index=43&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=18&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, total equity attributable to owners of the Company increased to HK$457.538 million, primarily driven by profit for the period and positive foreign currency translation differences, despite dividend payments | Equity Item | January 1, 2025 (HK$ Thousand) | June 30, 2025 (HK$ Thousand) | | :--- | :--- | :--- | | Share Capital | 23,007 | 23,007 | | Share Premium | 37,510 | 37,510 | | Land and Buildings Revaluation Reserve | 185,196 | 184,606 | | Exchange Reserve | (23,116) | (19,494) | | Other Reserve | (261) | (261) | | Merger Reserve | 11,310 | 11,310 | | Retained Earnings | 216,253 | 220,860 | | **Total Attributable to Ordinary Equity Holders of the Company** | **449,899** | **457,538** | | Non-controlling Interests | (4,851) | (4,852) | | **Total Equity** | **445,048** | **452,686** | - Profit for the period of **HK$10.023 million** and exchange differences on translation of foreign operations of **HK$4.273 million** had a positive impact on total equity[44](index=44&type=chunk) - Dividends payable related to 2024 of **HK$6.902 million** reduced retained earnings[44](index=44&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2025, the Group's net cash flow from operating activities was an outflow of HK$17.631 million, a reversal from an inflow in the prior year. Net cash flow from investing activities turned into an inflow of HK$0.614 million. Net cash flow from financing activities was an inflow of HK$15.702 million, mainly from new bank borrowings, resulting in a slight decrease in cash and cash equivalents at period-end | Cash Flow Type | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net cash flows from/(used in) operating activities | (17,631) | 46,664 | | Net cash flows from/(used in) investing activities | 614 | (1,374) | | Net cash flows from/(used in) financing activities | 15,702 | (41,916) | | Net increase/(decrease) in cash and cash equivalents | (1,315) | 3,374 | | Cash and cash equivalents at end of period | 25,487 | 32,516 | - Net cash flow from operating activities changed from an inflow to an outflow, primarily due to increased cash used in operations[46](index=46&type=chunk) - Net cash flow from financing activities turned into an inflow, mainly due to new bank borrowings exceeding repayments[46](index=46&type=chunk) [Notes to the Condensed Consolidated Financial Information](index=21&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes to the condensed consolidated financial information, covering general information, accounting policies, segment data, and specific financial instrument disclosures [1. General Information](index=21&type=section&id=1.%20General%20Information) Leeport (Holdings) Limited and its subsidiaries primarily engage in the trading of metal processing machinery, measuring instruments, cutting tools, and electronic equipment. The Company is incorporated in Bermuda and listed on the Main Board of the Hong Kong Stock Exchange. This condensed consolidated financial information is presented in Hong Kong Dollars and was approved for issue on August 28, 2025 - The Group is principally engaged in the trading of metal processing machinery, measuring instruments, cutting tools, and electronic equipment[47](index=47&type=chunk) - The Company is a limited liability company incorporated in Bermuda and listed on the Main Board of The Stock Exchange of Hong Kong Limited[47](index=47&type=chunk)[48](index=48&type=chunk) - This condensed consolidated financial information is presented in Hong Kong Dollars and was approved for issue on August 28, 2025[48](index=48&type=chunk) [2.1 Basis of Preparation](index=21&type=section&id=2.1%20Basis%20of%20Preparation) This condensed consolidated financial information is prepared in accordance with HKAS 34 "Interim Financial Reporting" issued by the HKICPA and the applicable disclosure requirements of Appendix D2 of the Listing Rules, and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024 - The Group's unaudited condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix D2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[50](index=50&type=chunk) - The condensed consolidated financial information should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024, prepared in accordance with Hong Kong Financial Reporting Standards[50](index=50&type=chunk) [2.2 Changes in Accounting Policies and Disclosures](index=22&type=section&id=2.2%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) The accounting policies adopted for this condensed consolidated financial information are consistent with those used for the 2024 annual consolidated financial statements, except for the initial adoption of the amended HKAS 21 "Lack of Exchangeability," which had no impact as the Group's transaction and functional currencies are exchangeable - The accounting policies adopted for the preparation of the condensed consolidated financial information are consistent with those adopted for the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024, except for the initial adoption of amended Hong Kong Financial Reporting Standards in the current period[51](index=51&type=chunk) - The initial adoption of HKAS 21 (Amendment) "Lack of Exchangeability" had no impact on the condensed consolidated financial information, as the currencies in which the Group transacts with group entities and the functional currencies of group entities translated into the Group's presentation currency are exchangeable[52](index=52&type=chunk) [3. Segment Information](index=22&type=section&id=3.%20Segment%20Information) The Group's business is segmented by region (Mainland China, Hong Kong, and other countries), primarily trading metal processing machinery, measuring instruments, cutting tools, and electronic equipment. In H1 2025, Mainland China contributed the vast majority of revenue and segment results, though its revenue decreased year-on-year, while revenue from Hong Kong and other countries slightly increased their share - The Group is principally engaged in the trading of metal processing machinery, measuring instruments, cutting tools, and electronic equipment in three main geographical areas: Mainland China, Hong Kong, and other countries[53](index=53&type=chunk) | Region | H1 2025 Revenue (HK$ Thousand) | H1 2024 Revenue (HK$ Thousand) | H1 2025 Segment Results (HK$ Thousand) | H1 2024 Segment Results (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Mainland China | 227,584 | 242,606 | 19,278 | 13,823 | | Hong Kong | 1,661 | 6,157 | 843 | 3,594 | | Other Countries | 7,637 | 6,486 | 624 | 1,713 | | **Total** | **236,882** | **255,249** | **20,745** | **19,130** | - Mainland China's revenue decreased year-on-year, but its segment results significantly increased[54](index=54&type=chunk)[55](index=55&type=chunk) - Capital expenditure is primarily concentrated in Mainland China[54](index=54&type=chunk)[55](index=55&type=chunk)[57](index=57&type=chunk) [4. Revenue](index=25&type=section&id=4.%20Revenue) The Group's revenue is derived from the sale of goods, provision of agency services, and other after-sales services. In H1 2025, commission income significantly increased to HK$59.527 million, representing a higher proportion of total revenue, reflecting the contribution from new revenue models, while revenue from the sale of goods decreased - Revenue is derived from the sale of goods, provision of agency services, and other after-sales services[58](index=58&type=chunk) | Type of Goods or Services | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Sale of Goods | 167,976 | 215,160 | -21.9% | | Commission Income | 59,527 | 28,677 | +107.6% | | Service Income | 9,379 | 11,412 | -17.7% | | **Total** | **236,882** | **255,249** | **-7.2%** | - Commission income significantly increased, mainly from a new revenue model adopted since H2 2023[59](index=59&type=chunk) - As of H1 2025, approximately **HK$59.551 million** in revenue was derived from a single customer, accounting for more than **10%** of the Group's total revenue[59](index=59&type=chunk) [5. Profit Before Tax](index=26&type=section&id=5.%20Profit%20Before%20Tax) The Group's profit before tax is stated after deducting or crediting various expenses and income, including cost of inventories sold, depreciation, employee benefit expenses, net exchange gains, provision for obsolete inventories, and professional service fees | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Cost of inventories sold | 160,315 | 185,299 | | Depreciation of property, plant and equipment | 1,072 | 1,070 | | Depreciation of right-of-use assets | 2,272 | 2,760 | | Employee benefit expenses (including directors' emoluments) | 29,731 | 28,689 | | Exchange (gains)/losses, net | (4,495) | 5,829 | | Provision for obsolete inventories | 2,152 | 944 | - Net exchange differences turned from a loss to a gain, positively impacting profit before tax[61](index=61&type=chunk) [6. Income Tax Expense](index=26&type=section&id=6.%20Income%20Tax%20Expense) The Group's income tax expense for H1 2025 was HK$3.113 million, primarily from Hong Kong profits tax, whereas the prior period's tax was mainly from Mainland China and other countries. The Hong Kong profits tax provision is due to taxable profits generated in the current period, with tax losses carried forward from prior years having been fully offset | Tax Source | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 3,113 | – | | Mainland China and Other Countries | – | 401 | | **Total Tax Expense for the Period** | **3,113** | **401** | - Hong Kong profits tax has been provided at a rate of **16.5%** on the estimated assessable profits arising in Hong Kong for the period, as the Group had available tax losses brought forward from prior years that offset the assessable profits generated during the period[12](index=12&type=chunk)[62](index=62&type=chunk) [7. Dividends](index=27&type=section&id=7.%20Dividends) The Board has resolved to declare an interim dividend of HK 3 cents per share, consistent with the prior year. This dividend was declared after the reporting period and is therefore not recognized as a liability in the condensed consolidated statement of financial position | Dividend Type | H1 2025 (HK Cents per share) | H1 2024 (HK Cents per share) | | :--- | :--- | :--- | | Interim Dividend | 3 | 3 | - The final dividend of **HK$6.902 million** for the year ended December 31, 2024, was payable as of June 30, 2025[64](index=64&type=chunk) - This interim dividend was declared after the reporting period and is therefore not recognized as a liability in the condensed consolidated statement of financial position[64](index=64&type=chunk) [8. Earnings Per Share Attributable to Owners of the Company](index=27&type=section&id=8.%20Earnings%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) Basic earnings per share for H1 2025 was HK 4.36 cents, an increase of 19.1% from the prior year. EPS is calculated based on profit attributable to owners of the Company and the weighted average number of ordinary shares outstanding. There were no issued or outstanding share options during the period, resulting in no dilutive effect | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (HK$ Thousand) | 10,023 | 8,430 | | Weighted Average Number of Ordinary Shares (Thousand Shares) | 230,076 | 230,076 | | Basic Earnings Per Share Attributable to Owners of the Company (HK Cents per share) | 4.36 | 3.66 | - For the periods ended June 30, 2025, and 2024, there were no issued or outstanding share options, thus diluted earnings per share were the same as basic earnings per share[66](index=66&type=chunk) [9. Property, Plant and Equipment, Right-of-Use Assets and Investment Properties](index=28&type=section&id=9.%20Property%2C%20Plant%20and%20Equipment%2C%20Right-of-Use%20Assets%20and%20Investment%20Properties) As of June 30, 2025, the carrying amounts of the Group's property, plant and equipment, right-of-use assets, and investment properties were HK$7.356 million, HK$177.894 million, and HK$74.354 million, respectively. Additions during the period were minimal, and depreciation continued. The Directors believe there have been no significant changes in the value of land and buildings and investment properties since the last annual report date | Asset Category | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Property, Plant and Equipment | 7,356 | 8,336 | | Right-of-Use Assets | 177,894 | 177,729 | | Investment Properties | 74,354 | 73,643 | - Bank borrowings are secured by land and buildings and investment properties with a carrying amount of **HK$85.55 million**[68](index=68&type=chunk) - The Directors believe that there have been no significant changes in the value of the Group's land and buildings and investment properties held as of June 30, 2025, since the date of the last annual report[67](index=67&type=chunk) [10. Investments in Associates](index=29&type=section&id=10.%20Investments%20in%20Associates) As of June 30, 2025, the Group's investments in associates had a carrying amount of HK$32.493 million, a decrease from the beginning of the period, primarily due to the share of loss of associates after tax, partially offset by exchange differences | Metric | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Investments at beginning of period | 35,817 | 47,061 | | Share of loss of associates after tax | (5,254) | (5,511) | | Exchange differences | 1,930 | (875) | | **Investments at end of period** | **32,493** | **40,675** | - Associates continued to record losses, impacting the Group's investment value[11](index=11&type=chunk)[19](index=19&type=chunk)[69](index=69&type=chunk) [11. Trade and Bills Receivables](index=29&type=section&id=11.%20Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables amounted to HK$242.1 million, an increase from the end of 2024. An aging analysis shows a significant increase in receivables aged 7 to 12 months, leading to an extended trade receivables turnover period. The Group maintains strict credit control and has made adequate impairment provisions | Aging (by invoice date) | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Within 3 months | 144,707 | 145,397 | | 4 to 6 months | 3,189 | 31,902 | | 7 to 12 months | 83,430 | 1,795 | | Over 12 months | 13,232 | 29,638 | | Less: Impairment | (2,419) | (2,360) | | **Total** | **242,139** | **206,372** | - Trade receivables aged **7 to 12 months** significantly increased, and trade receivables turnover days increased from **125 days** to **188 days**[20](index=20&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) - The Group maintains strict credit control over its customers and outstanding receivables, making impairment provisions on an individual basis for high-risk customers and on a collective basis for low-risk customers[20](index=20&type=chunk) [12. Trade and Bills Payables](index=30&type=section&id=12.%20Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables amounted to HK$58.341 million, a decrease from the end of 2024, including HK$0.688 million payable to an associate | Aging (by invoice date) | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Within 3 months | 48,144 | 65,652 | | 4 to 6 months | 2,489 | 6,113 | | 7 to 12 months | 5,524 | 1,237 | | Over 12 months | 2,184 | 3,676 | | **Total** | **58,341** | **76,678** | - Trade and bills payables include **HK$0.688 million** payable to an associate, which is unsecured, interest-free, and repayable on demand[72](index=72&type=chunk) [13. Borrowings](index=31&type=section&id=13.%20Borrowings) As of June 30, 2025, the Group's total short-term borrowings increased to HK$141.9 million from the end of 2024, primarily comprising trust receipt loans and bank term loans repayable within one year. All bank borrowings are secured by certain land and buildings, investment properties, and a financial asset at fair value through profit or loss | Type of Borrowing | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trust Receipt Loans | 83,575 | 75,963 | | Bank Term Loans repayable within one year | 58,363 | 52,108 | | **Total Borrowings** | **141,938** | **128,071** | - The increase in borrowings is to meet working capital requirements for trading operations[21](index=21&type=chunk) - Bank borrowings are secured by certain land and buildings, investment properties, and a financial asset at fair value through profit or loss of the Group[73](index=73&type=chunk) [14. Contingent Liabilities](index=32&type=section&id=14.%20Contingent%20Liabilities) As of June 30, 2025, the Group had contingent liabilities of HK$4.208 million related to bank guarantees granted to customers, an increase from the end of 2024 | Type of Contingent Liability | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Bank Guarantees granted to customers | 4,208 | 3,811 | - Certain subsidiaries have undertaken to banks to fulfill certain non-financial contractual obligations to third parties, for which the banks have provided bank guarantees on behalf of these subsidiaries to the third parties[75](index=75&type=chunk) [15. Related Party Transactions](index=32&type=section&id=15.%20Related%20Party%20Transactions) The Group is controlled by Peak Power Technology Limited. During the period, the Group had significant transactions with associates, including purchases of goods from Prima Power Sheet Metal Machinery (Suzhou) Co Ltd and interest income from a loan to OPS-Ingersoll Holding GmbH. Total key management personnel compensation amounted to HK$4.101 million - As of June 30, 2025, the Group is controlled by Peak Power Technology Limited (incorporated in the British Virgin Islands), which owns **62.8%** of the Company's shares[76](index=76&type=chunk) | Type of Transaction | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Purchases of goods from an associate (Prima Power Sheet Metal Machinery (Suzhou) Co Ltd) | 1,597 | 2,471 | | Interest income from a loan to an associate (OPS-Ingersoll Holding GmbH) | 545 | 574 | | Total key management personnel compensation | 4,101 | 4,169 | - The loan provided to OPS is unsecured, bears interest at **6%** per annum, and is not repayable within twelve months from the reporting date[78](index=78&type=chunk) [16. Fair Value and Fair Value Hierarchy of Financial Instruments](index=34&type=section&id=16.%20Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) The Group's management assesses that the fair value of most financial instruments approximates their carrying amounts. Fair values of unlisted securities are determined using the market approach, applying valuation multiples of comparable companies and considering discounts for lack of marketability. The fair value of unlisted key management personnel insurance contracts is considered their surrender cash value. During the period, financial assets at fair value through profit or loss recognized a HK$3 million fair value loss on unlisted securities and a HK$0.185 million fair value gain on unlisted key management personnel insurance contracts - Management has assessed that the fair value of financial instruments such as cash and cash equivalents, trade and bills receivables, trade and bills payables, and borrowings approximates their carrying amounts[82](index=82&type=chunk) - The fair value of unlisted securities classified as financial assets at fair value through other comprehensive income is determined using the market approach, with key unobservable inputs including EV/EBITDA ratios, price-to-revenue ratios, and discounts for lack of marketability[83](index=83&type=chunk) - The fair value of unlisted policy investments classified as financial assets at fair value through profit or loss is considered the surrender cash value of the policies[84](index=84&type=chunk) | Financial Asset Category | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Financial assets at fair value through other comprehensive income (Unlisted securities) | 7,389 | 7,389 | | Financial assets at fair value through profit or loss (Unlisted securities) | 67,000 | 70,000 | | Financial assets at fair value through profit or loss (Unlisted key management personnel insurance contracts) | 6,903 | 6,718 | | **Total** | **81,292** | **84,107** | - During the period, a fair value loss of **HK$3 million** on unlisted securities and a fair value gain of **HK$0.185 million** on unlisted key management personnel insurance contracts were recognized in the condensed consolidated statement of profit or loss and other comprehensive income, respectively[86](index=86&type=chunk) [17. Events After the Reporting Period](index=37&type=section&id=17.%20Events%20After%20the%20Reporting%20Period) On August 1, 2025, a wholly-owned subsidiary of the Group entered into a share redemption agreement with Femto S.à.r.l. to redeem target shares for a consideration of EUR 7.5 million (approximately HK$68.119 million). This transaction was completed on August 1, 2025, with estimated net proceeds of approximately HK$67.771 million. The Group also announced a special dividend of HK$0.1 per share to be paid on September 12, 2025 - On August 1, 2025, a wholly-owned subsidiary of the Group entered into a share redemption agreement with Femto S.à.r.l. to redeem target shares[89](index=89&type=chunk) | Transaction Details | Amount | | :--- | :--- | | Redemption Consideration | EUR 7,500,000 (approximately HK$68,119,000) | | Estimated Net Proceeds | approximately HK$67,771,000 | - The completion of the share redemption took effect on August 1, 2025[89](index=89&type=chunk) - The Group announced a special dividend of **HK$0.1** per share to be paid on September 12, 2025[89](index=89&type=chunk) [18. Approval of Condensed Consolidated Financial Information](index=37&type=section&id=18.%20Approval%20of%20Condensed%20Financial%20Information) The condensed consolidated financial information was approved and authorized for issue by the Company's Board of Directors on August 28, 2025 - The condensed consolidated financial information was approved and authorized for issue by the Company's Board of Directors on August 28, 2025[90](index=90&type=chunk)

（於開曼群島註冊成立的有限公司） 股份代號 : 6699 中期報告 2025 INTERIM REPORT 中期報告 目錄 02 公司資料 03 業績概要 05 管理層討論與分析 18 非國際財務報告準則計量 20 企業管治及其他資料 39 中期財務資料的審閱報告 40 中期簡明綜合全面收益表 41 中期簡明綜合財務狀況表 43 中期簡明綜合權益變動表 45 中期簡明綜合現金流量表 46 簡明綜合財務資料附註 90 釋義 2025年中期報告 02 公司資料 董事會 執行董事 胡杰章先生 （首席執行官） 黃琨先生 宋鑫先生 董莉女士 非執行董事 馮岱先生 （主席） 獨立非執行董事 韓小京先生 石子先生 周浩先生 審核委員會 周浩先生 （主席） 韓小京先生 石子先生 薪酬委員會 韓小京先生 （主席） 胡杰章先生 黃琨先生 石子先生 周浩先生 提名委員會 馮岱先生 （主席） 董莉女士 （自2025年6月24日起獲委任為 提名委員會成員） 韓小京先生 石子先生 周浩先生 宋鑫先生 （自2025年6月24日起不再擔任 提名委員會成員） 公司秘書 李亮賢先生 （自2025年5月15日起獲委任） 朱凌波先生 （自2025年 ...

Company Information [Company Profile and Governance Structure](index=3&type=section&id=Company%20Profile%20and%20Governance%20Structure) Yeahka Limited provides its registration information, headquarters, and principal place of business in Hong Kong, along with details of its board members' roles in various committees and information on external legal counsel and independent auditors - The company is incorporated in the Cayman Islands, headquartered in Shenzhen, China, with its principal place of business in Hong Kong located in Causeway Bay[3](index=3&type=chunk) - The Board of Directors comprises executive directors (Mr. Liu Yingqi, Mr. Yao Zhijian, Mr. Luo Xiaohui, Ms. Liang Shengtian) and independent non-executive directors (Mr. Tam Ping Chung, Mr. Yao Wei, Mr. Au Yeung Yat Fai)[3](index=3&type=chunk) - The company has established an Audit Committee, Remuneration Committee, Nomination Committee, and Environmental, Social and Governance Committee, with the chairpersons for each committee clearly defined[5](index=5&type=chunk) Business Review and Outlook [Business and Financial Summary](index=6&type=section&id=Business%20and%20Financial%20Summary) Yeahka achieved several business and financial milestones in H1 2025, including overseas payment license approvals, significant AI digital human marketing growth, and year-on-year revenue and gross profit increases, despite a slight decrease in total Gross Payment Volume (GPV) - Successfully obtained US MSB federal payment license and Arizona MTL state-level payment license, and approved by Japan's Ministry of Economy, Trade and Industry to conduct online and offline QR code acquiring business in Japan, continuously expanding its global footprint[9](index=9&type=chunk) - The transaction volume of AI-generated digital human videos by its precision marketing company, Chuangxinzong, grew approximately **40% month-on-month**, with material costs reduced by **80%**, and AI-generated content now accounts for **20%** of total video production[9](index=9&type=chunk) H1 2025 Key Business and Financial Data | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Payment Volume (GPV) | RMB 1,144.4 billion | RMB 1,166.2 billion | -1.9% | | Overseas Business Transaction Volume | Over RMB 1.5 billion | Approx. RMB 1.1 billion (full year last year) | Significant growth | | Payment Fee Rate | 12.5 basis points | 11.5 basis points | +1.0 basis points | | Overseas Payment Fee Rate | 67.0 basis points | - | - | | Revenue | RMB 1,641.5 million | RMB 1,577.7 million | +4.0% | | Gross Profit | RMB 383.0 million | RMB 300.2 million | +27.6% | | Gross Profit Margin | 23.3% | 19.0% | +4.3 percentage points | [About Yeahka](index=7&type=section&id=About%20Yeahka) Yeahka is a leading business empowerment technology platform dedicated to creating value for merchants and consumers through one-stop payment services, merchant solutions, and in-store e-commerce services, building an independent digital business ecosystem - The company is positioned as a leading business empowerment technology platform, focused on creating value for merchants and consumers[11](index=11&type=chunk) - Core businesses include one-stop payment services, merchant solutions, and in-store e-commerce services, aiming to provide seamless, convenient, and reliable payment and digital business empowerment[11](index=11&type=chunk) [Strategic Progress and Outlook](index=7&type=section&id=Strategic%20Progress%20and%20Outlook) Yeahka achieved strong overseas business growth and improved domestic payment business profitability in H1 2025, realizing high-quality growth in value-added services through strategic business model upgrades and deepened AI application, significantly optimizing operational efficiency and financial costs - Overseas business maintained strong growth momentum with a diversified business portfolio, providing one-stop payment and diversified value-added services to international brand clients[12](index=12&type=chunk) - Domestic payment business fee rates and profitability gradually recovered, with partner relationships and the digital ecosystem becoming more robust[12](index=12&type=chunk) - Value-added services achieved sustained high-quality growth, with precision marketing business transaction volume reaching a new high, and in-store e-commerce business achieving continuous monthly profitability[12](index=12&type=chunk) - Deepened application of AI technology simplified processes, reduced costs, and gained high industry and customer recognition in areas such as AI digital human-generated promotional activities[12](index=12&type=chunk) H1 2025 Key Financial Efficiency Indicators | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Selling, Administrative and R&D Expenses | Decreased 19.3% | - | - | | Finance Costs | Decreased 52.7% | - | - | | Profit for the Period | RMB 41.4 million | RMB 32.6 million | Increased 27.0% | | Profit Margin for the Period | 2.5% | 2.1% | Increased 0.4 percentage points | [Overseas Business Continues Rapid Growth, Global Expansion Deepens](index=9&type=section&id=Overseas%20Business%20Continues%20Rapid%20Growth%2C%20Global%20Expansion%20Deepens) Yeahka's overseas business achieved robust and rapid growth in H1 2025, with GPV exceeding RMB 1.5 billion, surpassing the previous full year's total, and successfully obtaining payment licenses in the US and Japan, deepening cooperation with global financial institutions to expand its international service footprint - For the six months ended June 30, 2025, overseas GPV transaction volume exceeded **RMB 1.5 billion**, surpassing the total transaction volume of approximately RMB 1.1 billion for the entire previous year[18](index=18&type=chunk) - Overseas payment fee rate reached **67.0 basis points**, with a gross profit margin exceeding **50%**, and overseas merchant quarterly transaction volume per account significantly higher than domestic levels, unlocking substantial profit potential[18](index=18&type=chunk) - Successfully obtained US MSB federal payment license and Arizona MTL state-level payment license, and approved by Japan's Ministry of Economy, Trade and Industry to conduct online and offline QR code acquiring business in Japan[19](index=19&type=chunk) - Supported strategic partner HSBC to enhance collection management solutions, adding support for Alipay, Alipay HK, and WeChat Pay, and jointly exploring digital currency and overseas market cooperation[19](index=19&type=chunk) [Deep Integration of AI Technology and Vertical Domain Expertise, Leading Industry Innovation](index=10&type=section&id=Deep%20Integration%20of%20AI%20Technology%20and%20Vertical%20Domain%20Expertise%2C%20Leading%20Industry%20Innovation) Yeahka, through its AI Lab's cutting-edge technology, deeply integrates large language models with merchant operational insights, widely applying AI in marketing content creation, merchant data analysis, customer service, and internal operational processes, significantly enhancing efficiency, reducing costs, and driving innovative growth - Its subsidiary Chuangxinzong's AI-generated digital human videos saw monthly transaction volume grow by approximately **40% month-on-month**, with material costs reduced by **80%**, and AI-generated content accounting for **20%** of total video production[21](index=21&type=chunk) - On the merchant side, AI-driven merchant data analysis and natural language dialogue technology are used to shorten operational decision cycles, improve data query efficiency, and reduce customer service labor costs by **60%**[22](index=22&type=chunk) - On the consumer side, by investing in Futong Technology to build AI Shop, the company creates a demand-driven immersive shopping journey, with intelligent recommendations optimizing sales conversion rates[22](index=22&type=chunk) - AI technology is widely applied in KYC, risk control, customer service, and operations, with AI-assisted programming adoption rate approaching **40%** and operational expenditures reduced by approximately **20%**[22](index=22&type=chunk) [One-Stop Payment Services: Steadily Leading the Market, Driving High-Quality Growth and Profitability](index=11&type=section&id=One-Stop%20Payment%20Services%3A%20Steadily%20Leading%20the%20Market%2C%20Driving%20High-Quality%20Growth%20and%20Profitability) Despite macroeconomic fluctuations leading to a year-on-year decrease in GPV, Yeahka's one-stop payment services achieved significant revenue and gross profit growth in H1 2025 through increased fee rates and refined operations, with overseas business showing high profitability potential and active deployment in digital currency payment scenarios - H1 2025 GPV decreased by **1.9% year-on-year**, but increased quarter-on-quarter in Q2, showing initial signs of bottoming out and recovery; daily transaction peak still reached **60 million transactions**[23](index=23&type=chunk) - Payment fee rate increased from **11.5 basis points** in the same period last year to **12.5 basis points**, reflecting the company's pricing power as a leading payment technology brand[23](index=23&type=chunk) One-Stop Payment Services Financial Performance | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Payment Services Revenue | 1,429.3 | 1,346.6 | Increased 6.1% | | Payment Services Gross Profit | 195.3 | 92.9 | Increased 110.3% | | Payment Services Gross Profit Margin | 13.7% | 6.9% | Increased 6.8 percentage points | - Overseas payment business fee rate reached **67.0 basis points**, with a gross profit margin exceeding **50%**, and profitability generated per unit transaction significantly higher than domestic levels[26](index=26&type=chunk) - Actively promoted the implementation of digital currency payment scenarios, including digital RMB in China, and pioneered expansion into the local life services sector[26](index=26&type=chunk) [Merchant Solutions: AI and Data Technology Drive Commercialization, Gross Margin Further Improves](index=12&type=section&id=Merchant%20Solutions%3A%20AI%20and%20Data%20Technology%20Drive%20Commercialization%2C%20Gross%20Margin%20Further%20Improves) Yeahka's merchant solutions business saw a year-on-year revenue decrease in H1 2025 but significant quarter-on-quarter growth, with gross margin further improving to 91.3%, primarily due to AI technology application and cost control; precision marketing business transaction volume reached a new high, and AI digital human video production significantly boosted efficiency and reduced costs Merchant Solutions Financial Performance | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 186.5 | 202.3 | Decreased 7.8% | | Gross Margin | 91.3% | 90.9% | Increased 0.4 percentage points | | QoQ Growth | 35.8% | - | - | - Precision marketing business transaction volume exceeded **RMB 1.7 billion** in H1 2025, a year-on-year increase of over **23%**, setting a new semi-annual record, benefiting from adoption by major clients like JD.com, Meituan, and Kuaishou[27](index=27&type=chunk) - Its precision marketing subsidiary, Chuangxinzong, achieved approximately **40% month-on-month growth** in AI-generated digital human video transaction volume, with material costs reduced by about **80%**[27](index=27&type=chunk) - The contribution of merchant solutions to total revenue increased quarter-on-quarter from **9.1%** in H2 2024 to **11.3%** in H1 2025[28](index=28&type=chunk) [In-Store E-commerce Services: Strategic Upgrade to Build an Intelligent Aggregation Platform, Profitability Significantly Optimized](index=13&type=section&id=In-Store%20E-commerce%20Services%3A%20Strategic%20Upgrade%20to%20Build%20an%20Intelligent%20Aggregation%20Platform%2C%20Profitability%20Significantly%20Optimized) Yeahka's in-store e-commerce business achieved break-even and continuous monthly profitability in H1 2025 after a strategic upgrade, focusing on high-profitability clients, developing a distribution network, and introducing AI applications; despite a year-on-year revenue decrease, gross margin and average profit contribution improved, and the business model was successfully replicated in overseas markets - Achieved break-even in H1 2025 and continuous monthly profitability in the second quarter[29](index=29&type=chunk) - Business focused on high-quality and high-profitability clients, significantly reducing self-operated sales investment and developing a distribution network, leading to a year-on-year decrease in revenue[29](index=29&type=chunk) - Upfront revenue contribution to in-store e-commerce revenue further increased to over **60%**, providing stronger assurance for the profitability of each service project[29](index=29&type=chunk) - The open Winsfor in-store business intelligent platform, combined with AI technology, efficiently connects mainstream platforms like Douyin, Xiaohongshu, Dianping, and Amap, enhancing marketing conversion performance[30](index=30&type=chunk) In-Store E-commerce Services Gross Margin | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Gross Margin | 68.0% | 81.5% | Decreased 13.5 percentage points | - Successfully replicated the business model in overseas markets such as Japan, Singapore, Hong Kong, and Macau, assisting local F&B and hospitality merchants in improving operational efficiency[30](index=30&type=chunk) [Company Outlook](index=14&type=section&id=Company%20Outlook) Yeahka will adhere to a long-term strategy driven by international expansion and product innovation, deepening its presence in international markets, leveraging one-stop payment services as its foundation, continuously optimizing merchant solutions and in-store e-commerce businesses, and actively embracing cutting-edge technologies like AI and blockchain to enhance operational efficiency and product competitiveness - Will adhere to a long-term strategy driven by international expansion and product innovation, continuously deepening its presence in international markets[32](index=32&type=chunk) - One-stop payment services will continue to play a core supporting role, injecting synergistic benefits and resource momentum into other business segments[32](index=32&type=chunk) - Continuously optimize the commercialization capabilities of merchant solutions and in-store e-commerce businesses, launching innovative products and services integrated with cutting-edge technologies[32](index=32&type=chunk) - Actively embrace technological trends such as artificial intelligence, blockchain, and forward-looking trends like digital currency, deepening technological applications to enhance operational efficiency, product competitiveness, and service intelligence[32](index=32&type=chunk) [Controlling Shareholder Share Purchases, Company Share Repurchases, and Restricted Share Unit Scheme Share Purchases](index=14&type=section&id=Controlling%20Shareholder%20Share%20Purchases%2C%20Company%20Share%20Repurchases%2C%20and%20Restricted%20Share%20Unit%20Scheme%20Share%20Purchases) The controlling shareholder, the company, and the trustee of the Restricted Share Unit Scheme all conducted share purchases or repurchases during the reporting period, demonstrating confidence in the company's future development prospects and intrinsic value - Controlling shareholder Creative Brocade International Limited purchased a total of **1,158,800 shares** from the open market from January 1 to June 30, 2025, representing **0.25%** of the issued shares[33](index=33&type=chunk) - The company utilized approximately **HKD 4.0 million** to repurchase **546,000 shares** at prices ranging from **HKD 6.78 to HKD 8.53 per share**, representing **0.12%** of the issued shares, and held them as treasury shares[34](index=34&type=chunk) - The trustee of the Restricted Share Unit Scheme utilized approximately **HKD 0.7 million** to purchase **82,000 shares** at prices ranging from **HKD 7.93 to HKD 8.45 per share**, representing **0.02%** of the issued shares, to be used for share awards[34](index=34&type=chunk) [Financing](index=15&type=section&id=Financing) Yeahka successfully raised a net amount of approximately HKD 189.2 million in January 2025 through a placing and subscription agreement, aimed at supplementing long-term capital, supporting the group's expansion plans and development strategies, and broadening its shareholder and capital base - On January 6, 2025, the company placed **19,150,000 shares** at a price of **HKD 10.10 per share** through a placing and subscription agreement[35](index=35&type=chunk)[36](index=36&type=chunk) - The net proceeds from the subscription, after deducting all applicable costs and expenses, are estimated to be approximately **HKD 189.2 million**[36](index=36&type=chunk) - The placing aims to supplement long-term capital for the group's expansion plans and development strategies, providing the company with opportunities to raise further capital while also broadening its shareholder and capital base[36](index=36&type=chunk) [Environmental, Social, and Governance (ESG)](index=16&type=section&id=Environmental%2C%20Social%2C%20and%20Governance%20%28ESG%29) Yeahka adheres to sustainable development principles, actively practicing environmental, social, and governance initiatives; environmentally, it promotes private cloud construction and discloses climate-related management; socially, it leverages digital technology to support small and micro merchants, enhance community life quality, and strengthen transaction risk control; in governance, it improves the ESG governance system, prioritizes information security, and obtains multiple authoritative certifications - The company was once again selected for the "Sustainability Yearbook (China Edition) 2025," demonstrating its outstanding performance in sustainable development[38](index=38&type=chunk) - Environmentally, it continues to advance private cloud system construction, implement a "hybrid cloud" deployment strategy, and disclose climate-related management practices in accordance with TCFD and IFRS S2 guidelines[38](index=38&type=chunk) - Socially, it leverages digital technology to support the development of small and micro merchants, provides local life services, enhances community quality of life, and strengthens transaction risk management[39](index=39&type=chunk) - In corporate governance, the ESG Committee actively identifies sustainable development opportunities and risks, continuously improves its information security management system, and has obtained multiple authoritative certifications including MLPS Level 3, PCI-DSS, and UPDSS[39](index=39&type=chunk) Management Discussion and Analysis [H1 2025 Performance](index=17&type=section&id=H1%202025%20Performance) Yeahka achieved significant revenue and gross profit growth in H1 2025, with operating profit and profit for the period also increasing year-on-year, reflecting the company's resilient profitability amidst macroeconomic fluctuations H1 2025 Core Financial Data | Indicator | H1 2025 (RMB '000) | H1 2024 (RMB '000) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,641,526 | 1,577,719 | +4.0% | | Cost of Revenue | (1,258,496) | (1,277,500) | -1.5% | | Gross Profit | 383,030 | 300,219 | +27.6% | | Operating Profit | 58,799 | 56,842 | +3.4% | | Profit for the Period | 41,373 | 32,580 | +27.0% | [Revenue Analysis](index=17&type=section&id=Revenue%20Analysis) Yeahka's total revenue for H1 2025 increased by 4.0% year-on-year to RMB 1,641.5 million, primarily driven by growth in one-stop payment services revenue, despite a decrease in merchant solutions and in-store e-commerce services revenue - Total revenue increased by **4.0%** from **RMB 1,577.7 million** in H1 2024 to **RMB 1,641.5 million** in the same period of 2025[41](index=41&type=chunk) Revenue by Business Segment | Business Segment | H1 2025 (RMB '000) | % of Total | H1 2024 (RMB '000) | % of Total | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | One-Stop Payment Services Revenue | 1,429,317 | 87.1 | 1,346,561 | 85.4 | +6.1 | | Merchant Solutions Revenue | 186,527 | 11.3 | 202,319 | 12.8 | -7.8 | | In-Store E-commerce Services Revenue | 25,682 | 1.6 | 28,839 | 1.8 | -10.9 | | **Total** | **1,641,526** | **100.0** | **1,577,719** | **100.0** | **+4.0** | - One-stop payment services revenue increased by **6.1%**, primarily due to an increase in fee rates[43](index=43&type=chunk) - Merchant solutions revenue decreased by **7.8%**, as growth in precision marketing business could not fully offset the shrinking user base[44](index=44&type=chunk) - In-store e-commerce services revenue decreased by **10.9%**, mainly due to the company's focus on high-quality, high-margin customers and gradual phasing out of low-profit contribution customers[45](index=45&type=chunk) [Cost of Revenue Analysis](index=19&type=section&id=Cost%20of%20Revenue%20Analysis) Yeahka's cost of revenue for H1 2025 decreased by 1.5% year-on-year to RMB 1,258.5 million, primarily due to a reduction in commissions and fees, reflecting the company's improved pricing power over agents - Cost of revenue decreased by **1.5%** from **RMB 1,277.5 million** in H1 2024 to **RMB 1,258.5 million** in the same period of 2025[47](index=47&type=chunk) - The decrease in costs was primarily due to a reduction in commissions and fees, reflecting the company's improved pricing power over agents[47](index=47&type=chunk) Cost of Revenue by Nature | Cost Category | H1 2025 (RMB '000) | % of Total | H1 2024 (RMB '000) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Commissions and Fees | 1,182,388 | 94.0 | 1,199,748 | 93.9 | | Amortization of Non-current Assets | 51,172 | 4.0 | 52,783 | 4.1 | | Raw Materials and Consumables | 2,563 | 0.2 | 4,568 | 0.4 | | Others | 22,373 | 1.8 | 20,401 | 1.6 | | **Total** | **1,258,496** | **100.0** | **1,277,500** | **100.0** | [Gross Profit and Gross Margin Analysis](index=20&type=section&id=Gross%20Profit%20and%20Gross%20Margin%20Analysis) Yeahka's gross profit for H1 2025 increased by 27.6% year-on-year to RMB 383.0 million, with gross margin improving to 23.3%, primarily driven by significant growth in one-stop payment services gross margin and a high gross margin maintained in merchant solutions - Gross profit increased by **27.6%** from **RMB 300.2 million** in H1 2024 to **RMB 383.0 million** in the same period of 2025[49](index=49&type=chunk) - Gross profit margin increased from **19.0%** in H1 2024 to **23.3%** in the same period of 2025, mainly due to an increase in one-stop payment services gross margin and a high gross margin in merchant solutions[50](index=50&type=chunk) Gross Profit and Gross Margin by Business Segment | Business Segment | H1 2025 Gross Profit (RMB '000) | H1 2025 Gross Margin (%) | H1 2024 Gross Profit (RMB '000) | H1 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | One-Stop Payment Services | 195,297 | 13.7 | 92,858 | 6.9 | | Merchant Solutions | 170,277 | 91.3 | 183,854 | 90.9 | | In-Store E-commerce Services | 17,456 | 68.0 | 23,507 | 81.5 | | **Total** | **383,030** | **23.3** | **300,219** | **19.0** | - One-stop payment services gross margin increased from **6.9%** to **13.7%**, primarily due to increased fee rates to optimize profitability[50](index=50&type=chunk) - In-store e-commerce services gross margin decreased from **81.5%** to **68.0%**, mainly due to a greater focus on large-scale, chain customers, leading to a corresponding increase in costs[50](index=50&type=chunk) [Selling Expenses](index=21&type=section&id=Selling%20Expenses) Yeahka's selling expenses for H1 2025 decreased by 9.6% year-on-year to RMB 47.2 million, primarily due to a reduction in outsourced service fees - Selling expenses decreased by **9.6%** from **RMB 52.3 million** in H1 2024 to **RMB 47.2 million** in the same period of 2025[51](index=51&type=chunk) - The decrease was primarily due to a reduction in outsourced service fees[51](index=51&type=chunk) [Administrative Expenses](index=21&type=section&id=Administrative%20Expenses) Yeahka's administrative expenses for H1 2025 decreased by 12.3% year-on-year to RMB 136.6 million, primarily due to a reduction in employee headcount and the widespread application of AI technology in operations - Administrative expenses decreased by **12.3%** from **RMB 155.7 million** in H1 2024 to **RMB 136.6 million** in the same period of 2025[52](index=52&type=chunk) - The decrease was primarily due to a reduction in employee headcount and the company's expanded use of AI technology in operations[52](index=52&type=chunk) [Research and Development Expenses](index=21&type=section&id=Research%20and%20Development%20Expenses) Yeahka's R&D expenses for H1 2025 significantly decreased by 31.7% year-on-year to RMB 87.6 million, primarily due to the widespread adoption of more cost-effective AI tools and a reduction in labor costs and outsourced service fees - R&D expenses decreased by **31.7%** from **RMB 128.3 million** in H1 2024 to **RMB 87.6 million** in the same period of 2025[53](index=53&type=chunk) - The decrease was primarily due to the widespread adoption of more cost-effective AI tools and a reduction in labor costs and outsourced service fees[53](index=53&type=chunk) [Net Impairment Loss on Financial Assets](index=21&type=section&id=Net%20Impairment%20Loss%20on%20Financial%20Assets) Yeahka's net impairment loss on financial assets for H1 2025 increased by 45.9% year-on-year to RMB 61.4 million, primarily due to the adverse impact of macroeconomic fluctuations on customer loan performance, with the company actively implementing risk mitigation measures - Net impairment loss on financial assets increased by **45.9%** from **RMB 42.1 million** in H1 2024 to **RMB 61.4 million** in the same period of 2025[54](index=54&type=chunk) - The increase was primarily due to the adverse impact of macroeconomic fluctuations on customer loan performance[54](index=54&type=chunk) - The company has actively implemented risk mitigation measures, including strengthening risk control and audit processes, restricting transactions with high-risk customers, and refining customer acquisition channels[54](index=54&type=chunk) [Other Income](index=21&type=section&id=Other%20Income) Yeahka's other income for H1 2025 decreased by 47.7% year-on-year to RMB 9.7 million, primarily due to reduced interest income from bank deposits and government grants - Other income decreased by **47.7%** from **RMB 18.6 million** in H1 2024 to **RMB 9.7 million** in the same period of 2025[55](index=55&type=chunk) - The decrease was primarily due to reduced interest income from bank deposits and government grants[55](index=55&type=chunk) [Fair Value Changes of Financial Assets and Liabilities at Fair Value Through Profit or Loss](index=21&type=section&id=Fair%20Value%20Changes%20of%20Financial%20Assets%20and%20Liabilities%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) Yeahka recorded a significant decrease in fair value changes of financial assets and liabilities at fair value through profit or loss to RMB 2.8 million in H1 2025, compared to RMB 94.2 million in the prior year, primarily due to fair value changes in listed company investments - H1 2025 recorded a gain from fair value changes of financial assets and liabilities at fair value through profit or loss of **RMB 2.8 million**, compared to **RMB 94.2 million** in H1 2024[56](index=56&type=chunk) - The change was primarily due to an increase in the fair value of the company's investments in listed companies[56](index=56&type=chunk) [Other (Losses)/Gains – Net](index=22&type=section&id=Other%20%28Losses%29%2FGains%20%E2%80%93%20Net) Yeahka recorded other net losses of RMB 4.0 million in H1 2025, compared to net gains of RMB 22.2 million in the prior year, primarily because there were no repurchases of convertible bonds and related gains during the reporting period - H1 2025 recorded other net losses of **RMB 4.0 million**, compared to other net gains of **RMB 22.2 million** in H1 2024[58](index=58&type=chunk) - The decrease was primarily due to no repurchase of convertible bonds and related gains during the reporting period, unlike H1 2024[58](index=58&type=chunk) [Operating Profit](index=22&type=section&id=Operating%20Profit) Yeahka's operating profit for H1 2025 increased by 3.4% year-on-year to RMB 58.8 million, reflecting the company's comprehensive performance in revenue growth and cost control - Operating profit increased from **RMB 56.8 million** in H1 2024 to **RMB 58.8 million** in the same period of 2025[59](index=59&type=chunk) [Finance Costs](index=22&type=section&id=Finance%20Costs) Yeahka's finance costs for H1 2025 significantly decreased by 52.7% year-on-year to RMB 19.8 million, primarily due to the absence of interest expenses related to convertible bonds during the reporting period - Finance costs decreased by **52.7%** from **RMB 41.9 million** in H1 2024 to **RMB 19.8 million** in the same period of 2025[60](index=60&type=chunk) - The decrease was primarily due to the absence of interest expenses related to convertible bonds during the reporting period, unlike H1 2024[60](index=60&type=chunk) [Share of Net Profit of Investments Accounted for Using Equity Method](index=22&type=section&id=Share%20of%20Net%20Profit%20of%20Investments%20Accounted%20for%20Using%20Equity%20Method) Yeahka's share of net profit of investments accounted for using the equity method was RMB 6.1 million in H1 2025, a decrease from RMB 21.4 million in the prior year, primarily due to an increase in the net profit of one of the Group's associates - Share of net profit of investments accounted for using the equity method decreased from a profit of **RMB 21.4 million** in H1 2024 to a profit of **RMB 6.1 million** in the same period of 2025[61](index=61&type=chunk) - The change was primarily due to an increase in the net profit of one of the Group's associates[61](index=61&type=chunk) [Profit Before Income Tax](index=22&type=section&id=Profit%20Before%20Income%20Tax) Yeahka's profit before income tax for H1 2025 increased by 24.0% year-on-year to RMB 45.1 million, reflecting positive improvements across various financial indicators - Profit before income tax increased by **24.0%** from **RMB 36.4 million** in H1 2024 to **RMB 45.1 million** in the same period of 2025[62](index=62&type=chunk) [Income Tax Expense](index=23&type=section&id=Income%20Tax%20Expense) Yeahka's income tax expense for H1 2025 slightly decreased by 1.7% to RMB 3.7 million, with the effective tax rate remaining relatively stable - Income tax expense slightly decreased by **1.7%** from **RMB 3.8 million** in H1 2024 to **RMB 3.7 million** in the same period of 2025[63](index=63&type=chunk) - The effective tax rate remained relatively stable at **8.3%** in H1 2025 and **10.4%** in H1 2024[63](index=63&type=chunk) [Profit for the Period](index=23&type=section&id=Profit%20for%20the%20Period) Yeahka's profit for the period in H1 2025 increased by 27.0% year-on-year to RMB 41.4 million, with the profit margin for the period improving from 2.1% to 2.5% - Profit for the period increased by **27.0%** from **RMB 32.6 million** in H1 2024 to **RMB 41.4 million** in the same period of 2025[64](index=64&type=chunk) - The profit margin for the period improved from **2.1%** to **2.5%**[16](index=16&type=chunk) [Non-IFRS Measures (Adjusted EBITDA)](index=23&type=section&id=Non-IFRS%20Measures%20%28Adjusted%20EBITDA%29) Yeahka uses Adjusted EBITDA as a supplementary financial measure, with H1 2025 Adjusted EBITDA increasing by 6.2% year-on-year to RMB 173.3 million, primarily due to an increase in net profit for the period - Adjusted EBITDA increased by **6.2%** from **RMB 163.3 million** in H1 2024 to **RMB 173.3 million** in the same period of 2025[67](index=67&type=chunk) - The increase was primarily due to an increase in net profit for the reporting period[67](index=67&type=chunk) Reconciliation of Adjusted EBITDA to Profit | Indicator | H1 2025 (RMB '000) | H1 2024 (RMB '000) | | :--- | :--- | :--- | | Profit for the Period | 41,373 | 32,580 | | Add: Finance Costs | 19,804 | 41,872 | | Add: Amortization of Non-current Assets | 51,172 | 52,783 | | Add: Depreciation of Property, Plant and Equipment | 12,284 | 15,191 | | Add: Amortization of Intangible Assets | 8,550 | 9,055 | | Add: Income Tax Expense | 3,732 | 3,798 | | **EBITDA** | **136,915** | **155,279** | | Add: Share-based Payment Expenses | 39,220 | 40,803 | | Add: Non-recurring Income Adjustment | – | 86,100 | | Less: Gain on Repurchase of Convertible Bonds | – | (24,727) | | Less: Fair Value Changes of Financial Assets and Liabilities at Fair Value Through Profit or Loss | (2,806) | (94,184) | | **Adjusted EBITDA** | **173,329** | **163,271** | [Capital Structure](index=24&type=section&id=Capital%20Structure) Yeahka's total assets slightly increased in H1 2025, total liabilities decreased, and the gearing ratio declined from 66.4% to 63.6%, indicating an optimized capital structure - Total assets increased from **RMB 7,705.5 million** as at December 31, 2024, to **RMB 7,761.4 million** as at June 30, 2025[68](index=68&type=chunk) - Total liabilities decreased from **RMB 5,116.0 million** as at December 31, 2024, to **RMB 4,937.0 million** as at June 30, 2025[68](index=68&type=chunk) - The gearing ratio decreased from **66.4%** as at December 31, 2024, to **63.6%** as at June 30, 2025[68](index=68&type=chunk) [Liquidity, Capital Resources, and Gearing Ratio](index=25&type=section&id=Liquidity%2C%20Capital%20Resources%2C%20and%20Gearing%20Ratio) Yeahka's current ratio increased in H1 2025, cash and cash equivalents increased by 14.8% to RMB 684.2 million, primarily due to share placing, and the gearing ratio decreased, maintaining a strong cash position - The current ratio increased from **1.18** as at December 31, 2024, to **1.24** as at June 30, 2025[69](index=69&type=chunk) - Cash and cash equivalents increased by **14.8%** from **RMB 595.7 million** as at December 31, 2024, to **RMB 684.2 million** as at June 30, 2025, primarily due to the placing of shares in January 2025[70](index=70&type=chunk) - The gearing ratio (total debt divided by total equity) decreased from **35.9%** as at December 31, 2024, to **33.4%** as at June 30, 2025[70](index=70&type=chunk) [Capital Expenditure](index=25&type=section&id=Capital%20Expenditure) Yeahka's total capital expenditure for H1 2025 increased by 133.7% year-on-year to RMB 31.9 million, primarily due to the rapid recovery of domestic payment business, leading to increased procurement of payment terminals - Total capital expenditure increased by **133.7%** from **RMB 13.6 million** in H1 2024 to **RMB 31.9 million** in the same period of 2025[71](index=71&type=chunk) - The increase was primarily due to the rapid recovery of domestic payment business, followed by increased procurement of payment terminals[71](index=71&type=chunk) [Debt](index=25&type=section&id=Debt) Yeahka's total debt as at June 30, 2025, slightly increased, primarily comprising bank borrowings and lease liabilities, with most short-term borrowings guaranteed by the company and its subsidiaries, and some bank borrowings secured by trade receivables Details of Interest-Bearing Borrowings and Lease Liabilities | Category | As at June 30, 2025 (RMB '000) | As at December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Non-current Bank Borrowings | 12,000 | 3,000 | | Non-current Lease Liabilities | 17,122 | 16,767 | | Current Bank and Other Borrowings | 944,341 | 928,993 | | Current Lease Liabilities | 12,836 | 19,165 | | **Total** | **986,299** | **967,925** | - Short-term borrowings of **RMB 854,361,000** are guaranteed by the company and certain subsidiaries, and **RMB 64,990,000** are guaranteed by certain independent third parties and Mr. Qin Lingjin[217](index=217&type=chunk) - Bank borrowings of **RMB 15,000,000** are secured by a pledge of certain trade receivables[218](index=218&type=chunk) - For the six months ended June 30, 2025, the effective annual interest rate for these short-term bank and other borrowings was **3.9%**[218](index=218&type=chunk) [Contingent Liabilities](index=26&type=section&id=Contingent%20Liabilities) As at June 30, 2025, Yeahka had no significant contingent liabilities, guarantees, or pending litigations that could materially adversely affect its business, financial condition, or operating results - As at June 30, 2025, the company had no significant contingent liabilities, guarantees, or pending litigations that could materially adversely affect its business, financial condition, or operating results[74](index=74&type=chunk) [Pledge of Assets](index=26&type=section&id=Pledge%20of%20Assets) As at June 30, 2025, Yeahka pledged approximately RMB 15.0 million in trade receivables to a bank - As at June 30, 2025, the company pledged trade receivables of approximately **RMB 15.0 million** to a bank[75](index=75&type=chunk) [Foreign Exchange Risk and Hedging](index=26&type=section&id=Foreign%20Exchange%20Risk%20and%20Hedging) Yeahka primarily operates in China, with most transactions settled in RMB, thus it does not believe it faces significant foreign exchange risk and does not use derivative instruments for hedging, managing currency risk by closely monitoring exchange rate fluctuations - The company primarily operates in China, with most transactions settled in RMB, and therefore does not face any significant foreign exchange risk[76](index=76&type=chunk) - The company does not use any derivative instrument contracts to hedge foreign exchange risk, managing currency risk by closely monitoring foreign currency exchange rate fluctuations[76](index=76&type=chunk) [Major Acquisitions and Disposals and Future Plans for Major Investments](index=26&type=section&id=Major%20Acquisitions%20and%20Disposals%20and%20Future%20Plans%20for%20Major%20Investments) Yeahka did not undertake any material investments, acquisitions, or disposals in H1 2025, and the Board currently has no definite plans for major investments or capital assets, but will continue to identify new business development opportunities - The company did not undertake any material investments, acquisitions, or disposals for the six months ended June 30, 2025[77](index=77&type=chunk) - Save for the expansion plans disclosed in the use of proceeds from placing, the Board has not authorized any definite plans regarding major investments or capital assets[77](index=77&type=chunk) [Material Investments Held](index=26&type=section&id=Material%20Investments%20Held) As at June 30, 2025, Yeahka held ordinary and preference share interests in associate Futong, with a total carrying amount and fair value of approximately RMB 834.957 million, representing about 10.8% of total assets, and Futong is considered a key component in expanding the company's merchant base and providing a merchant services ecosystem - The company holds **4,500,000 ordinary shares (15.1%)** and **8,899,914 preference shares (29.8%)** in associate Futong[78](index=78&type=chunk) - As at June 30, 2025, the carrying amount of the investment in Futong's ordinary shares and the fair value of its preference shares was approximately **RMB 834,957,000**, representing approximately **10.8%** of the company's total assets[78](index=78&type=chunk) - Futong is considered a key component in Yeahka's expansion of its merchant base and provision of a merchant services ecosystem[78](index=78&type=chunk) [Events After Reporting Period](index=27&type=section&id=Events%20After%20Reporting%20Period) As of the date of the interim report, no significant events have occurred after June 30, 2025, that could materially impact the company's operations and financial performance - As of the date of this interim report after June 30, 2025, no significant events have occurred that could materially impact the company's operations and financial performance[79](index=79&type=chunk) [Interim Dividend](index=27&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[80](index=80&type=chunk) [Basic Company Information](index=27&type=section&id=Basic%20Company%20Information) Yeahka Limited was incorporated in the Cayman Islands on September 8, 2011, and listed on the Main Board of the Stock Exchange on June 1, 2020 - The company was incorporated as an exempted limited liability company in the Cayman Islands on September 8, 2011[81](index=81&type=chunk) - The company's shares were listed on the Main Board of the Stock Exchange on June 1, 2020[81](index=81&type=chunk) [Employees](index=27&type=section&id=Employees) As at June 30, 2025, Yeahka had 808 employees, primarily located in China, and is committed to attracting, retaining, and motivating talent by providing comprehensive compensation, benefits, and training programs - As at June 30, 2025, the company had **808 employees**, mostly located in China[82](index=82&type=chunk) - The company provides salaries, bonuses, healthcare, retirement benefits, work injury insurance, and other miscellaneous benefits, and has comprehensive training programs to attract, retain, and motivate qualified talent[82](index=82&type=chunk) Other Information [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures](index=28&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%2C%20and%20Debentures) As at June 30, 2025, the company's directors and chief executive held interests in the company's shares and underlying shares, with Mr. Liu Yingqi holding the largest share as the founder of a discretionary trust Directors' and Chief Executive's Interests in Shares and Underlying Shares | Director/Chief Executive Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Shareholding (%) | | :--- | :--- | :--- | :--- | | Mr. Liu Yingqi | Founder of a discretionary trust | 161,953,164 | 35.04 | | Mr. Yao Zhijian | Beneficial owner | 3,279,827 | 0.70 | | Mr. Luo Xiaohui | Beneficial owner | 2,430,251 | 0.52 | | Ms. Liang Shengtian | Beneficial owner | 280,778 | 0.06 | - Mr. Liu Yingqi holds a **99.27%** beneficial interest in Shenzhen Yeahka[85](index=85&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=29&type=section&id=Substantial%20Shareholders%27%20and%20Other%20Persons%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As at June 30, 2025, apart from the directors, substantial shareholders included Creative Brocade International Limited and its associated entities, Ms. Luo Haiying, Recruit Holdings Co., Ltd, and TMF Trust Services (Hong Kong) Limited, holding interests in the company's shares or underlying shares Substantial Shareholders' Interests in Company Shares | Shareholder Name/Entity | Capacity/Nature of Interest | Number of Shares | Percentage of Shareholding (%) | | :--- | :--- | :--- | :--- | | Creative Brocade International Limited | Beneficial owner | 161,953,164 | 35.04 | | Brocade Creation Investment Limited | Interest in controlled corporation | 161,953,164 | 35.04 | | Brocade Creation Limited | Interest in controlled corporation | 161,953,164 | 35.04 | | Cantrust (Far East) Limited | Trustee of a trust | 161,953,164 | 35.04 | | Ms. Luo Haiying | Spouse's interest | 161,953,164 | 35.04 | | Recruit Holdings Co., Ltd | Beneficial owner | 30,051,196 | 6.74 | | TMF Trust Services (Hong Kong) Limited | Trustee of a trust | 67,684,006 | 14.65 | [Restricted Share Unit Scheme](index=31&type=section&id=Restricted%20Share%20Unit%20Scheme) Yeahka adopted a Restricted Share Unit Scheme on August 1, 2019, to incentivize directors, senior management, and other selected individuals; since June 5, 2024, the scheme no longer grants new shares, only involving the purchase and transfer of existing shares; as at June 30, 2025, restricted share units involving 10,468,452 underlying shares have been granted but not yet vested - The Restricted Share Unit Scheme was approved and adopted by the Board on August 1, 2019, to incentivize directors, senior management, and other selected individuals[91](index=91&type=chunk) - Since June 5, 2024, the company will not grant any new shares under the Restricted Share Unit Scheme, which will only involve existing shares purchased from the market[91](index=91&type=chunk) - As at June 30, 2025, restricted share units involving a total of **10,468,452 underlying shares** have been granted but not yet vested, representing approximately **2.27%** of the total issued shares[96](index=96&type=chunk) Restricted Share Unit Movement | Indicator | Unexercised Balance as at Jan 1, 2025 | Granted During Period | Vested During Period | Forfeited During Period | Unexercised Balance as at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Number of Restricted Share Units | 10,680,130 | 7,194,626 | (6,705,818) | (700,486) | 10,468,452 | [Share Option Scheme](index=35&type=section&id=Share%20Option%20Scheme) Yeahka adopted a Share Option Scheme on October 13, 2020, to attract, retain, and motivate talent; the scheme has a ten-year term, with approximately five years and three and a half months remaining as at June 30, 2025; as at June 30, 2025, the number of unexercised share options was 5,232,750 shares - The Share Option Scheme was adopted on October 13, 2020, to attract, retain, and incentivize talented employees[101](index=101&type=chunk) - The scheme has a term of ten years from the adoption date, with approximately five years and three and a half months remaining as at June 30, 2025[101](index=101&type=chunk) - The maximum number of shares that may be issued upon exercise of all share options shall not exceed **10%** of the total issued shares (excluding treasury shares) as at October 13, 2020[104](index=104&type=chunk) - As at June 30, 2025, the number of unexercised share options granted under the Share Option Scheme was **5,232,750 shares**, representing **1.1%** of the issued shares[109](index=109&type=chunk) Share Option Movement | Indicator | Unexercised as at Jan 1, 2025 | Granted During Period | Exercised During Period | Cancelled During Period | Lapsed During Period | Unexercised as at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Number of Directors' Share Options | 490,000 | – | – | – | – | 490,000 | | Number of Employees' Share Options | 4,767,250 | – | – | – | (24,500) | 4,742,750 | | **Total** | **5,257,250** | **–** | **–** | **–** | **(24,500)** | **5,232,750** | [Purchase, Sale or Redemption of the Company's Listed Securities](index=39&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, the company repurchased 546,000 shares as treasury stock, and the trustee of the Restricted Share Unit Scheme purchased 82,000 shares for awards; apart from the placing, neither the company nor its subsidiaries engaged in other redemptions, purchases, or sales of listed securities - The company utilized approximately **HKD 4.0 million** to repurchase **546,000 shares** at prices ranging from **HKD 6.78 to HKD 8.53 per share**, representing **0.12%** of the issued shares, and held them as treasury shares[111](index=111&type=chunk) - The trustee of the Restricted Share Unit Scheme utilized approximately **HKD 0.7 million** to purchase **82,000 shares** at prices ranging from **HKD 7.93 to HKD 8.45 per share**, representing **0.02%** of the issued shares, to be used for share awards[111](index=111&type=chunk) - Save for the aforementioned disclosures and the placing, neither the company nor any of its subsidiaries redeemed, purchased, or sold any of the company's listed securities during the reporting period[111](index=111&type=chunk) [Compliance with Corporate Governance Code](index=39&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) Yeahka is committed to maintaining stringent corporate governance and has complied with most provisions of the Corporate Governance Code; the roles of Chairman and Chief Executive Officer are held by the same individual, which deviates from Code Provision C.2.1, but the Board believes this structure does not impair the balance of power and authority - The company has adopted the principles of the Corporate Governance Code set out in Appendix C1 of the Listing Rules and has complied with most of its provisions[112](index=112&type=chunk) - The roles of Chairman of the Board and Chief Executive Officer are both held by Mr. Liu Yingqi, constituting a deviation from Code Provision C.2.1 of Part 2 of the Corporate Governance Code[112](index=112&type=chunk) - The Board believes this structure does not impair the balance of power and authority between the Board and the company's management, as decisions require approval by a majority of directors, directors fulfill their fiduciary duties, and the Board comprises experienced individuals[114](index=114&type=chunk) [Compliance with Model Code for Securities Transactions by Directors](index=40&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) Yeahka's directors confirmed strict compliance with the Model Code for Securities Transactions by Directors set out in Appendix C3 of the Listing Rules, and the company also adopted written guidelines for employees no less exacting than the Model Code, with no non-compliance incidents found among relevant employees during the reporting period - The company has adopted the Model Code for Securities Transactions by Directors set out in Appendix C3 of the Listing Rules, and all directors confirmed strict compliance[115](index=115&type=chunk) - The company has also adopted written guidelines for employees, no less exacting than the Model Code, to regulate all transactions by relevant employees who may possess unpublished inside information regarding the company's securities[115](index=115&type=chunk) - During the reporting period, after reasonable inquiry, no incidents of non-compliance with the employee written guidelines by relevant company employees were found[115](index=115&type=chunk) [Audit Committee and Review of Financial Information](index=40&type=section&id=Audit%20Committee%20and%20Review%20of%20Financial%20Information) Yeahka has established an Audit Committee, composed of three independent non-executive directors, responsible for reviewing and overseeing financial reporting, internal controls, audit procedures, and risk management; the Audit Committee has reviewed the unaudited interim financial information for the six months ended June 30, 2025 - The company has established an Audit Committee, composed of three independent non-executive directors, among whom Mr. Yao Wei possesses appropriate professional qualifications and expertise in accounting and related financial management[116](index=116&type=chunk) - The primary responsibilities of the Audit Committee are to review and oversee the Group's financial reporting process and internal control mechanisms, supervise audit procedures, and review and monitor the Group's existing and potential risks[116](index=116&type=chunk) - The Audit Committee has reviewed the Group's unaudited interim financial information for the six months ended June 30, 2025[116](index=116&type=chunk) [Changes in Directors' Biographical Details as Required by Listing Rules](index=40&type=section&id=Changes%20in%20Directors%27%20Biographical%20Details%20as%20Required%20by%20Listing%20Rules) For the six months ended June 30, 2025, there were no changes in directors' biographical details requiring disclosure under the Listing Rules - For the six months ended June 30, 2025, there were no changes in directors' biographical details requiring disclosure under Rules 13.51(2) and 13.51B(1) of the Listing Rules[117](index=117&type=chunk) [Use of Proceeds from Placing](index=41&type=section&id=Use%20of%20Proceeds%20from%20Placing) Yeahka raised net proceeds of approximately HKD 189.2 million through a placing in January 2025, of which HKD 31.9 million had been utilized as at June 30, 2025, primarily for expanding its overseas footprint, investing in R&D, and working capital, with the remaining funds expected to be fully utilized by the end of 2027 - The company raised net proceeds of approximately **HKD 189.2 million** through a placing in January 2025[118](index=118&type=chunk) Use of Proceeds from Placing and Utilization Status | Intended Use of Proceeds | % of Intended Use | Intended Use (HKD million) | Actual Use for H1 2025 (HKD million) | Total Net Proceeds Utilized as at June 30, 2025 (HKD million) | Total Net Proceeds Unutilized as at June 30, 2025 (HKD million) | Expected Timeline for Utilizing Remaining Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Expanding the Group's overseas footprint in various business segments in Asia | 40.0 | 75.7 | 12.9 | 12.9 | 62.9 | By end of 2027 | | Investing in R&D, including the use of AI in proprietary software, to enhance the competitiveness of the Group's digital business ecosystem | 40.0 | 75.7 | 12.7 | 12.7 | 62.9 | By end of 2027 | | Working capital and general corporate purposes | 20.0 | 37.8 | 6.3 | 6.3 | 31.5 | By end of 2027 | | **Total** | **100.0** | **189.2** | **31.9** | **31.9** | **157.3** | | Interim Condensed Consolidated Statement of Comprehensive Income [H1 2025 Consolidated Comprehensive Income](index=41&type=section&id=H1%202025%20Consolidated%20Comprehensive%20Income) Yeahka's H1 2025 revenue increased by 4.0%, gross profit by 27.6%, and profit for the period by 27.0%, with basic and diluted earnings per share both at RMB 0.11, indicating a significant improvement in the company's profitability H1 2025 Consolidated Comprehensive Income Overview | Indicator | H1 2025 (RMB '000) | H1 2024 (RMB '000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,641,526 | 1,577,719 | +4.0 | | Cost of Revenue | (1,258,496) | (1,277,500) | -1.5 | | Gross Profit | 383,030 | 300,219 | +27.6 | | Operating Profit | 58,799 | 56,842 | +3.4 | | Profit Before Income Tax | 45,105 | 36,378 | +24.0 | | Profit for the Period | 41,373 | 32,580 | +27.0 | | Basic Earnings Per Share Attributable to Equity Holders of the Company (RMB) | 0.11 | 0.09 | +22.2 | | Diluted Earnings Per Share Attributable to Equity Holders of the Company (RMB) | 0.11 | 0.09 | +22.2 | - Other comprehensive loss for the period, net of tax, was **RMB (217) thousand**, a significant narrowing compared to **RMB (4,196) thousand** in the same period last year[122](index=122&type=chunk) Interim Condensed Consolidated Statement of Financial Position [Consolidated Financial Position as at June 30, 2025](index=43&type=section&id=Consolidated%20Financial%20Position%20as%20at%20June%2030%2C%202025) As at June 30, 2025, Yeahka's total assets slightly increased, restricted cash and loans receivable within current assets grew significantly, while total liabilities decreased and total equity increased, indicating a robust financial position Consolidated Balance Sheet Overview as at June 30, 2025 | Indicator | As at June 30, 2025 (RMB '000) | As at December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | **Assets** | | | | Total Non-current Assets | 1,785,842 | 1,813,479 | | Total Current Assets | 5,975,556 | 5,891,997 | | **Total Assets** | **7,761,398** | **7,705,476** | | **Equity** | | | | Equity Attributable to Equity Holders of the Company | 2,900,165 | 2,665,238 | | Non-controlling Interests | (75,784) | (75,735) | | **Total Equity** | **2,824,381** | **2,589,503** | | **Liabilities** | | | | Total Non-current Liabilities | 110,522 | 103,016 | | Total Current Liabilities | 4,826,495 | 5,012,957 | | **Total Liabilities** | **4,937,017** | **5,115,973** | | **Total Equity and Liabilities** | **7,761,398** | **7,705,476** | - Within current assets, restricted cash increased from **RMB 1,714,296 thousand** to **RMB 2,775,548 thousand**, and loans receivable increased from **RMB 658,127 thousand** to **RMB 700,555 thousand**[124](index=124&type=chunk) - Within current liabilities, trade and other payables decreased from **RMB 3,922,776 thousand** to **RMB 3,726,639 thousand**[125](index=125&type=chunk) Interim Condensed Consolidated Statement of Changes in Equity [H1 2025 Consolidated Changes in Equity](index=45&type=section&id=H1%202025%20Consolidated%20Changes%20in%20Equity) Yeahka's total equity increased in H1 2025, primarily due to profit for the period, issuance of ordinary shares, and recognition of employee service value under equity incentive plans, while treasury share repurchases and restricted share unit vesting also impacted the equity structure H1 2025 Equity Movement Overview | Indicator | Balance as at Jan 1, 2025 (RMB '000) | Profit for the Period (RMB '000) | Issuance of Ordinary Shares (RMB '000) | Equity Incentive Plan: Employee Service Value (RMB '000) | Balance as at June 30, 2025 (RMB '000) | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Equity Holders of the Company | 2,665,238 | 43,075 | 174,693 | 36,783 | 2,900,165 | | Non-controlling Interests | (75,735) | (1,702) | - | - | (75,784) | | **Total Equity** | **2,589,503** | **41,373** | **174,693** | **36,783** | **2,824,381** | - Total comprehensive income for the period was **RMB 41,156 thousand**, of which **RMB 42,858 thousand** was attributable to equity holders of the company[129](index=129&type=chunk) - Transactions with equity holders included a decrease of **RMB 3,680 thousand** for cancellation of repurchased shares and a decrease of **RMB 630 thousand** for shares repurchased under the equity incentive plan[129](index=129&type=chunk) Interim Condensed Consolidated Statement of Cash Flows [H1 2025 Consolidated Cash Flows](index=47&type=section&id=H1%202025%20Consolidated%20Cash%20Flows) Yeahka's H1 2025 saw net cash outflow from operating activities of RMB 57.6 million and net cash outflow from investing activities of RMB 27.6 million, but net cash inflow from financing activities reached RMB 176.4 million, primarily due to new share issuance and bank borrowings, resulting in a net increase in cash and cash equivalents of RMB 91.3 million H1 2025 Cash Flow Overview | Cash Flow Category | H1 2025 (RMB '000) | H1 2024 (RMB '000) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (57,576) | (51,406) | | Net Cash (Used in)/Generated from Investing Activities | (27,594) | 67,491 | | Net Cash Generated from/(Used in) Financing Activities | 176,438 | (222,122) | | **Net Increase/(Decrease) in Cash and Cash Equivalents** | **91,268** | **(206,037)** | | Cash and Cash Equivalents at End of Period | 684,167 | 683,711 | - Net cash generated from financing activities primarily came from net proceeds from the issuance of new shares of **RMB 174,693 thousand** and proceeds from bank and other borrowings of **RMB 531,925 thousand**[134](index=134&type=chunk) - Cash outflow from investing activities primarily included purchases of property, plant and equipment and intangible assets of **RMB 11,520 thousand**, and payments for other non-current assets of **RMB 20,340 thousand**[133](index=133&type=chunk) Notes to the Interim Condensed Consolidated Financial Information [General Information, Reorganization, and Basis of Presentation](index=50&type=section&id=General%20Information%2C%20Reorganization%2C%20and%20Basis%20of%20Presentation) This section outlines Yeahka Limited's registration information, business scope, and the basis of preparation for the interim financial information, emphasizing the company's primary engagement in one-stop payment services, merchant solutions, and in-store e-commerce services in China - Yeahka Limited was incorporated in the Cayman Islands on September 8, 2011, and listed on the Main Board of the Hong Kong Stock Exchange on June 1, 2020[136](index=136&type=chunk) - The company and its subsidiaries are primarily engaged in one-stop payment services, merchant solutions, and in-store e-commerce services in China[136](index=136&type=chunk) - The interim financial information is presented in RMB and prepared in accordance with International Accounting Standard 34, and should be read in conjunction with the 2024 annual consolidated financial statements[136](index=136&type=chunk)[137](index=137&type=chunk) [Summary of Significant Accounting Policies](index=50&type=section&id=Summary%20of%20Significant%20Accounting%20Policies) This section introduces the revised standards first adopted by Yeahka in H1 2025 and lists new standards and amendments to existing standards not yet adopted, which management expects to have no significant impact on the company's financial position and operating results - The Group first adopted the amendments to International Accounting Standard 21 – Lack of Exchangeability for the financial year beginning January 1, 2025[138](index=138&type=chunk) - Management has made a preliminary assessment and expects that the adoption of these standards and amendments to existing IFRS will not have any significant impact on the Group's financial position and operating results[139](index=139&type=chunk) New Standards and Amendments to Existing Standards Not Yet Adopted | Standard Name | Description | Effective Date | | :--- | :--- | :--- | | Amendments to IFRS 9 and 7 | Classification and Measurement of Financial Instruments | January 1, 2026 | | Annual Improvements to IFRS | Volume 11 | January 1, 2026 | | IFRS 19 | Non-publicly Accountable Subsidiaries: Disclosure | January 1, 2027 | | IFRS 18 | Presentation and Disclosure in Financial Statements | January 1, 2027 | | Amendments to IFRS 10 and IAS 28 | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | To be determined | [Estimates](index=52&type=section&id=Estimates) This section notes that the preparation of interim financial information involves management's judgments, estimates, and assumptions, actual results may differ from these estimates, and the significant judgments and sources of estimation uncertainty applied are the same as those in the 2024 annual financial statements - The preparation of interim financial information requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expenses[141](index=141&type=chunk) - The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty in preparing the interim financial information are the same as those applied in the 2024 financial statements[141](index=141&type=chunk) [Financial Risk Management](index=52&type=section&id=Financial%20Risk%20Management) Yeahka faces market risk, credit risk, and liquidity risk, which are managed by senior management; this section details the maximum exposure to credit risk, changes in expected credit loss provisions for trade and loans receivable, and fair value estimation methods for financial instruments - The Group's business activities expose it to market risk (including foreign exchange risk and cash flow interest rate risk), credit risk, and liquidity risk[142](index=142&type=chunk) - As at June 30, 2025, the maximum risk exposure from providing financial guarantees to certain loan facilitation partners was approximately **RMB 827 million**[144](index=144&type=chunk) Expected Loss Rates and Provisions for Trade Receivables | Indicator | Not Overdue | Overdue Less Than 90 Days | Overdue 90 to 180 Days | Overdue 180 to 270 Days | Overdue Over 270 Days | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Expected Loss Rate as at June 30, 2025 | 0.97% | 18.38% | 32.61% | 53.33% | 100.00% | 4.68% | | Loss Provision as at June 30, 2025 (RMB '000) | 4,141 | 263 | 15 | 8 | 16,336 | 20,763 | - Fair value estimation of financial instruments uses a three-level hierarchy, with a team established by the company's finance department for valuation, and the CFO and valuation team discuss valuation processes and results at least twice a year[152](index=152&type=chunk)[155](index=155&type=chunk)[159](index=159&type=chunk) [Segment Information](index=58&type=section&id=Segment%20Information) Yeahka's chief operating decision maker (CEO) reviews consolidated results and considers the company's business to be operated and

[Corporate Information](index=3&type=section&id=CORPORATE%20INFORMATION) This chapter outlines the company's basic corporate information, including its governance structure, key management, committee composition, registration details, principal places of business, and legal and financial advisors - The Board of Directors comprises executive directors (including Mr. Shan Weijun, Chairman of the Board, Ms. Zhou Rongrong, Mr. Zhou Tianmu, Mr. Wang Jiaxing) and independent non-executive directors (Mr. Han Dingguo, Mr. Zhong Chuangxin, Ms. Yu Fangjin)[6](index=6&type=chunk) - Mr. Zhong Chuangxin chairs the Audit Committee, Mr. Han Dingguo chairs the Remuneration Committee, and Mr. Shan Weijun chairs the Nomination Committee[6](index=6&type=chunk)[7](index=7&type=chunk) - The company's stock code is **2589**, and its auditor is Ernst & Young[8](index=8&type=chunk)[10](index=10&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This chapter details the company's business performance, financial condition, future outlook, and key operational strategies during the reporting period, encompassing brand development, store network expansion, franchise model, product R&D, supply chain management, and marketing activities [Business Review](index=5&type=section&id=BUSINESS%20REVIEW) The company, a rapidly growing multi-brand freshly-made beverage company, focuses on the franchise business and lower-tier markets, continuously expanding its store network, optimizing its brand portfolio, and enhancing market influence through product R&D and digital marketing during the reporting period [Overview](index=5&type=section&id=Overview) The company is a fast-growing multi-brand freshly-made beverage company, centered on its franchise business, strategically focusing on China's lower-tier markets, and holding a strong market position among mid-priced freshly-made tea beverage brands - The company is positioned as a fast-growing multi-brand freshly-made beverage company, precisely meeting consumer demands through a rich brand portfolio[12](index=12&type=chunk)[15](index=15&type=chunk) - The business model is franchise-centric, with a mutually beneficial franchise system forming the foundation for long-term stable cooperation[12](index=12&type=chunk)[15](index=15&type=chunk) - The strategic layout focuses on lower-tier markets, holding a strong market position among mid-priced freshly-made tea beverage brands in China's lower-tier markets by total store count[12](index=12&type=chunk)[15](index=15&type=chunk) [Our Brands](index=5&type=section&id=Our%20brands) The company operates three major brands: "Hushang Aiyi," "Tea Waterfall," and "Huka," each targeting different consumer groups and price segments with diverse products and flexible pricing strategies to meet market demand - "**Hushang Aiyi**," launched in 2013, is the main brand offering fresh fruit teas and multi-ingredient milk teas, priced from **RMB 7 to RMB 22**, primarily targeting third-tier and lower cities[13](index=13&type=chunk)[16](index=16&type=chunk) - "**Tea Waterfall**," launched in 2023 and promoted from March 2024, offers products priced from **RMB 2 to RMB 12**, with more flexible pricing and store selection to further capture demand in lower-tier markets[13](index=13&type=chunk)[17](index=17&type=chunk) - "**Huka**," launched in 2022, is typically located within "Hushang Aiyi" stores, offering coffee beverages priced from **RMB 13 to RMB 23**[13](index=13&type=chunk)[18](index=18&type=chunk) [Store Network](index=5&type=section&id=Store%20network) As of June 30, 2025, the company's store network reached 9,436 outlets, with franchised stores accounting for the vast majority, covering extensive areas across China, particularly with over half located in third-tier and lower cities, a proportion that increased year-on-year, demonstrating the company's continued deep cultivation in lower-tier markets - As of June 30, 2025, the company's store network comprised **9,436 stores**, including **24 self-operated stores** and **9,412 franchised stores**[14](index=14&type=chunk)[19](index=19&type=chunk) - Stores cover over **300 cities** across all four municipalities, five autonomous regions, and 22 provinces in China[14](index=14&type=chunk)[19](index=19&type=chunk) Store Network by City Tier (As of June 30, 2025) | City Tier | 2025 Store Count | 2025 Proportion | 2024 Store Count | 2024 Proportion | | :--- | :--- | :--- | :--- | :--- | | First-tier Cities | 714 | 7.6% | 638 | 7.6% | | New First-tier Cities | 1,899 | 20.1% | 1,795 | 21.3% | | Second-tier Cities | 1,998 | 21.2% | 1,762 | 20.9% | | Third-tier and Lower Cities | 4,824 | 51.1% | 4,241 | 50.3% | | Overseas | 1 | 0.0% | 1 | 0.0% | | **Total** | **9,436** | **100.0%** | **8,437** | **100.0%** | - Stores in third-tier and lower cities account for **51.1%**, a year-on-year increase of **0.8 percentage points**, with this market segment projected by a Frost & Sullivan report to be the fastest-growing from 2023 to 2028[25](index=25&type=chunk)[26](index=26&type=chunk) [Our Franchise Model](index=7&type=section&id=Our%20franchise%20model) The company's core is a mutually beneficial franchise model, providing franchisees with full lifecycle support and supervision, including site selection, store opening, digital operations, oversight, and training, to enhance store profitability and support network expansion. As of June 30, 2025, **5,706 franchisees** operated **9,412 stores** - The core business model involves cooperation with franchisees, adopting a mutually beneficial franchise model characterized by **low initial investment** and comprehensive franchise support[27](index=27&type=chunk)[28](index=28&type=chunk) - Full lifecycle support, including site selection, store opening, digital operations, supervision, and training, is provided to franchisees through a highly standardized and digitized store management system[27](index=27&type=chunk)[28](index=28&type=chunk) Changes in Number of Franchisees (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Number of franchisees at beginning of period | 5,455 | 4,576 | | New franchisees during the period | 782 | 766 | | Franchisees ceasing store operations during the period | (531) | (412) | | **Number of franchisees at end of period** | **5,706** | **4,930** | Changes in Number of Franchised Stores (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Number of franchised stores at beginning of period | 9,152 | 7,756 | | New franchised stores opened during the period | 905 | 1,184 | | Franchised stores closed during the period | (645) | (531) | | **Number of franchised stores at end of period** | **9,412** | **8,409** | [Product Development](index=8&type=section&id=PRODUCT%20DEVELOPMENT) The company has established a comprehensive product development system, dedicated to creating unique products and improving existing ones to meet evolving consumer tastes. In the first half of 2025, **136 new products** were launched, particularly the fruit and vegetable tea series, which gained market recognition for its health benefits, delicious taste, and appealing appearance - A comprehensive product development system has been established, continuously optimizing and upgrading products based on fresh seasonal ingredients, popular trends, and consumer tastes[33](index=33&type=chunk) - In the first half of 2025, a total of **136 new products** were launched, with the main theme being "healthier and more delicious"[34](index=34&type=chunk)[35](index=35&type=chunk) - The fruit and vegetable tea series gained consumer recognition for its appealing appearance, refreshing taste, and rich dietary fiber, strengthening the brand's healthy image perception[34](index=34&type=chunk)[35](index=35&type=chunk) [Supply Chain Management](index=9&type=section&id=SUPPLY%20CHAIN%20MANAGEMENT) The company has established a nationwide supply chain network, including multiple warehousing and logistics bases and self-owned production facilities, to ensure fresh, high-quality ingredients and support rapid store network expansion - Store network members are required to procure most ingredients from a centralized purchasing platform, which sources from vetted suppliers and self-owned factories[36](index=36&type=chunk)[39](index=39&type=chunk) - As of June 30, 2025, the supply chain network includes **13 large warehousing and logistics bases**, **4 equipment warehouses**, **7 fresh produce warehouses**, and **14 front-end cold chain warehouses**[36](index=36&type=chunk)[39](index=39&type=chunk) - A production facility (Haiyan Factory) in Haiyan County, Zhejiang Province, commenced commercial production in 2022, with a total area exceeding **10,000 square meters**[37](index=37&type=chunk)[40](index=40&type=chunk) - The Haiyan Factory's theoretical annualized production capacity is **2,640.0 tonnes of pearls**, **1,320.0 tonnes of taro balls**, **2,640.0 tonnes of taro paste**, and **1,584.0 tonnes of tea leaves**[37](index=37&type=chunk)[40](index=40&type=chunk) [Marketing and Promotion](index=9&type=section&id=MARKETING%20AND%20PROMOTION) The company continuously enhances brand image and awareness through diversified strategies such as digital marketing, social media interaction, IP collaborations, and celebrity endorsements, while fostering customer loyalty through membership programs to effectively drive new product sales - Social media (Xiaohongshu, Douyin, Kuaishou, WeChat, Weibo) and IP marketing strategies are deployed to strengthen brand image and awareness, attracting new customers[38](index=38&type=chunk)[41](index=41&type=chunk) - In the first half of 2025, new product sales achieved significant results through digital marketing, celebrity endorsements, and IP collaborations[42](index=42&type=chunk)[44](index=44&type=chunk) - The "**Dark Night Rose**" series, launched in March, achieved approximately **300 million online exposures**, with sales exceeding **2.1 million cups** in the first week of launch[42](index=42&type=chunk)[44](index=44&type=chunk) - Ju Jingyi was appointed brand ambassador in May, with her endorsed fruit and vegetable tea "**Daily Fiber+**" series achieving approximately **850,000 cups** in sales on its launch day and exceeding **3 million cups** in the first week[42](index=42&type=chunk)[44](index=44&type=chunk) - As of June 30, 2025, WeChat mini-program registered members totaled **131.4 million**, with an average of **15.8 million quarterly active members** and a quarterly repurchase rate of **40.6%**[45](index=45&type=chunk) [Outlook](index=10&type=section&id=OUTLOOK) The company anticipates further cultivating existing markets, expanding online and offline channels, optimizing franchisee management, and continuously strengthening R&D, supply chain, and digitalization capabilities in the second half of 2025, while implementing a multi-brand strategy to explore new markets - In the second half of 2025, the company will further penetrate existing markets, developing both offline store networks and online sales channels[46](index=46&type=chunk) - Continuously improve the franchisee management system, enhance franchised store profitability, shorten investment payback periods, and attract and retain high-quality franchisee partners[46](index=46&type=chunk) - Further strengthen R&D capabilities, closely track consumer and industry trends, and continuously create popular products[47](index=47&type=chunk) - Enhance supply chain capabilities, explore new supply sources, improve bargaining power, and expand and increase the efficiency of the cold chain logistics network[48](index=48&type=chunk) - Further strengthen digitalization to enhance overall operational efficiency and ensure food safety[49](index=49&type=chunk)[54](index=54&type=chunk) - Implement a multi-brand strategy to expand into new markets, utilizing the three brand concepts to penetrate different market segments and increase market share[49](index=49&type=chunk)[55](index=55&type=chunk) [Financial Review](index=11&type=section&id=FINANCIAL%20REVIEW) For the six months ended June 30, 2025, the company achieved growth in both revenue and gross profit, with profit for the period increasing by **20.9%** year-on-year. Changes in various expenses were influenced by employee compensation, leased assets, and taxable income. Balance sheet items indicate ample liquidity and a decreased gearing ratio Revenue and Gross Profit (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Year-on-year Growth | | :--- | :--- | :--- | :--- | | Revenue | 1,818.5 | 1,657.6 | 9.7% | | Gross Profit | 571.5 | 517.9 | 10.4% | | Gross Profit Margin | 31.4% | 31.3% | No significant fluctuation | Major Expense Changes (For the six months ended June 30) | Expense Category | 2025 (RMB million) | 2024 (RMB million) | Year-on-year Change | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 187.9 | 197.6 | -4.9% | Decrease in employee compensation | | Administrative Expenses | 93.0 | 87.5 | +6.4% | Increase in employee compensation | | Research and Development Expenses | 24.8 | 25.1 | -1.1% | No significant fluctuation | | Finance Costs | 1.7 | 2.8 | -37.8% | Decrease in lease interest expense due to reduction in leased assets | | Income Tax Expense | 77.5 | 59.4 | +30.4% | Increase in taxable income | - For the six months ended June 30, 2025, profit for the period was **RMB 202.9 million**, an increase of **20.9%** compared to **RMB 167.8 million** in the same period last year[62](index=62&type=chunk)[66](index=66&type=chunk) Non-IFRS Measure: Adjusted Profit (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the period | 202,898 | 167,791 | | Add: Share-based payment expenses | 29,184 | 28,598 | | Add: Listing expenses | 11,648 | 17,394 | | **Adjusted Profit for the period** | **243,730** | **213,783** | | **Adjusted Profit Margin for the period** | **13.40%** | **12.90%** | Major Balance Sheet Item Changes (As of June 30, 2025, vs. December 31, 2024) | Item | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (RMB million) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Inventories | 168.9 | 168.1 | +0.8 | | | Trade Receivables | 2.4 | 1.5 | +0.9 | Increase in receivables from franchisees granted credit terms | | Property, Plant and Equipment | 35.0 | 42.9 | -7.9 | Amortization of office and factory renovations and depreciation of machinery | | Trade Payables | 254.4 | 226.3 | +28.1 | Increase in procurement from suppliers | | Contract Liabilities | 66.9 | 57.9 | +9.0 | Increase in prepayments from franchisees and franchise fee income | | Lease Liabilities | 70.4 | 96.1 | -25.7 | Payment of rent and termination of some warehouse leases | - As of June 30, 2025, cash generated from operating activities was **RMB 223.2 million**, an increase from **RMB 158.3 million** in the same period last year[97](index=97&type=chunk)[100](index=100&type=chunk) - As of June 30, 2025, total cash and bank balances amounted to **RMB 1,000.7 million**, indicating ample liquidity[101](index=101&type=chunk) - As of June 30, 2025, the gearing ratio was **29.6%**, a decrease from **36.2%** as of December 31, 2024[99](index=99&type=chunk)[105](index=105&type=chunk) [Employees and Remuneration Policies](index=17&type=section&id=Employees%20and%20remuneration%20policies) As of June 30, 2025, the company had **1,425 full-time employees** and attracts and retains talent by offering competitive compensation, performance bonuses, and career development programs. The company also has pre-IPO employee incentive schemes to motivate key staff - As of June 30, 2025, the company had **1,425 full-time employees**[106](index=106&type=chunk)[108](index=108&type=chunk) - For the six months ended June 30, 2025, employee benefit expenses were approximately **RMB 226.3 million**[106](index=106&type=chunk)[108](index=108&type=chunk) - Attracts and retains talent by offering competitive compensation and benefits, performance bonuses, and training and career development programs[109](index=109&type=chunk)[110](index=110&type=chunk) - The company adopted pre-IPO employee incentive schemes to improve incentive mechanisms and promote sustainable performance growth[107](index=107&type=chunk)[111](index=111&type=chunk) [Corporate Governance and Other Information](index=17&type=section&id=CORPORATE%20GOVERNANCE%20AND%20OTHER%20INFORMATION) This chapter covers the company's corporate governance practices, securities transaction compliance, adherence to laws and regulations, use of global offering proceeds, disclosure of directors' and substantial shareholders' interests, employee incentive schemes, dividend policy, and significant post-reporting period events [Compliance with Corporate Governance Code](index=18&type=section&id=COMPLIANCE%20WITH%20CORPORATE%20GOVERNANCE%20CODE) The company is committed to maintaining high standards of corporate governance and has fully complied with the Corporate Governance Code, with one deviation where the Chairman and Chief Executive Officer roles are held by the same person, an arrangement the Board believes ensures consistent leadership and efficient decision-making for the Group - The company has fully complied with all applicable code provisions of the Corporate Governance Code from its listing date up to the reporting date[112](index=112&type=chunk)[114](index=114&type=chunk) - There is one deviation: the roles of Chairman and Chief Executive Officer are held by Mr. Shan Weijun (Code Provision C.2.1)[113](index=113&type=chunk)[115](index=115&type=chunk) - The Board believes this arrangement ensures consistent leadership and efficient strategic planning for the Group, with sufficient independent non-executive directors to safeguard shareholders' interests[113](index=113&type=chunk)[115](index=115&type=chunk) [Model Code for Securities Transactions](index=19&type=section&id=MODEL%20CODE%20FOR%20SECUIRITIES%20TRANSACTIONS) The company has adopted the Model Code as the code of conduct for directors and supervisors engaging in securities transactions, with all directors and supervisors confirming full compliance since the listing date - The company has adopted the Model Code as the code for directors and supervisors to conduct securities transactions[116](index=116&type=chunk)[117](index=117&type=chunk) - All directors and supervisors confirmed full compliance with the Model Code from the listing date up to the reporting date[116](index=116&type=chunk)[117](index=117&type=chunk) [Compliance of Laws and Regulations](index=19&type=section&id=COMPLIANCE%20OF%20LAWS%20AND%20REGULATIONS) For the six months ended June 30, 2025, the company complied in all material respects with relevant Chinese laws and regulations that have a significant impact on it - For the six months ended June 30, 2025, the company complied in all material respects with relevant Chinese laws and regulations that have a significant impact on the Group[118](index=118&type=chunk)[121](index=121&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=19&type=section&id=PURCHASE,%20SALE%20OR%20REDEMPTION%20OF%20THE%20COMPANY'S%20LISTED%20SECURITIES) From the listing date up to June 30, 2025, the company neither purchased, sold, nor redeemed any of its own listed securities, and held no treasury shares - From the listing date up to June 30, 2025, the company did not purchase, sell, or redeem any of its own securities[119](index=119&type=chunk)[122](index=122&type=chunk) - As of June 30, 2025, the company held no treasury shares[119](index=119&type=chunk)[122](index=122&type=chunk) [Changes in Information of Directors, Supervisors and Chief Executive](index=19&type=section&id=CHANGES%20IN%20INFORMATION%20OF%20DIRECTORS,%20SUPERVISORS%20AND%20CHIEF%20EXECUTIVE) Independent Non-Executive Director Mr. Han Dingguo ceased to be a director of the International Cultural and Educational Foundation effective July 1, 2025. Other than this, the company is unaware of any other changes in information of directors, supervisors, and the chief executive requiring disclosure - Independent Non-Executive Director Mr. Han Dingguo ceased to be a director of the International Cultural and Educational Foundation effective **July 1, 2025**[120](index=120&type=chunk)[123](index=123&type=chunk) - Other than the above disclosure, the company is unaware of any changes in the information of directors, supervisors, and the chief executive requiring disclosure under Listing Rule 13.51B(1) since the date of the prospectus[120](index=120&type=chunk)[123](index=123&type=chunk) [Use of Proceeds from the Global Offering](index=20&type=section&id=USE%20OF%20PROCEEDS%20FROM%20THE%20GLOBAL%20OFFERING) The company's H-shares were listed on May 8, 2025, with net proceeds from the global offering amounting to approximately **HK$233.9 million**. These funds will be utilized as disclosed in the prospectus for enhancing digitalization capabilities, R&D, supply chain, brand building, marketing activities, and working capital, with full utilization expected by December 2027 - The company's H-shares were listed on the Main Board of the Stock Exchange on **May 8, 2025**[124](index=124&type=chunk) - Net proceeds from the global offering were approximately **HK$233.9 million**, including net proceeds from the full exercise of the over-allotment option[124](index=124&type=chunk) Intended Use and Allocation of Net Proceeds from Global Offering | Intended Use of Net Proceeds | Percentage of Total Net Proceeds | Allocation of Net Proceeds (HK$ million) | Actual Net Amount Used as of June 30, 2025 (HK$ million) | Unused Net Amount as of June 30, 2025 (HK$ million) | Expected Timeline for Full Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | | Enhancing our digitalization capabilities | 25% | 58.5 | – | 58.5 | December 2027 | | R&D to improve raw material and ingredient quality, create popular products, enrich our product categories, and upgrade our equipment and machinery | 20% | 46.8 | – | 46.8 | December 2027 | | Enhancing our production, processing, warehousing, logistics, and distribution capabilities, thereby strengthening our supply chain capabilities | 20% | 46.8 | – | 46.8 | December 2027 | | Enhancing our brand momentum and further expanding and strengthening our store network | 15% | 35.0 | – | 35.0 | December 2027 | | Investing in various marketing activities | 10% | 23.4 | – | 23.4 | December 2027 | | Working capital and other general corporate purposes | 10% | 23.4 | – | 23.4 | December 2027 | | **Total** | **100%** | **233.9** | **–** | **233.9** | | [Interests and Short Positions of Directors, Supervisors and Chief Executive in the Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=21&type=section&id=INTEREST%20AND%20SHORT%20POSITION%20OF%20DIRECTORS,%20SUPERVISORS%20AND%20CHIEF%20EXECUTIVE%20IN%20THE%20SHARES,%20UNDERLYING%20SHARES%20AND%20DEBENTURES%20OF%20THE%20COMPANY%20AND%20ITS%20ASSOCIATED%20CORPORATIONS) As of June 30, 2025, Mr. Shan Weijun, Chairman and Chief Executive Officer, and his spouse, Ms. Zhou Rongrong, held significant interests in the company's unlisted domestic shares and H-shares through controlled corporations, joint holdings, and spousal interests, reflecting their joint control over the company Interests of Directors and Chief Executive in the Company's Shares (As of June 30, 2025) | Name | Nature of Interest | Class of Shares | Number of Shares | Approximate Percentage of Shareholding in the Company | | :--- | :--- | :--- | :--- | :--- | | Mr. Shan Weijun | Interest in controlled corporation, joint interest with others, and spouse's interest | Unlisted Domestic Shares | 39,273,941 | 37.33% | | | | H-shares | 43,321,180 | 41.18% | | Ms. Zhou Rongrong | Interest in controlled corporation, joint interest with others, and spouse's interest | Unlisted Domestic Shares | 39,273,941 | 37.33% | | | | H-shares | 43,321,180 | 41.18% | - Mr. Shan Weijun and Ms. Zhou Rongrong entered into an acting-in-concert agreement on **September 25, 2023**, to jointly control and act in concert with respect to the company[131](index=131&type=chunk) - Mr. Shan Weijun and Ms. Zhou Rongrong are spouses and are deemed to have an interest in each other's shares in the company under the Securities and Futures Ordinance[131](index=131&type=chunk) [Interests and Short Positions of Substantial Shareholders in the Shares and Underlying Shares of the Company](index=23&type=section&id=INTEREST%20AND%20SHORT%20POSITION%20OF%20SUBSTANTIAL%20SHAREHOLDERS%20IN%20THE%20SHARES%20AND%20UNDERLYING%20SHARES%20OF%20THE%20COMPANY) This chapter discloses the interests and short positions of substantial shareholders (including Shanghai Puhai, Shanghai Senrui, Shanghai Yuchao, Suzhou Yizhong, Suzhou Weitelixin, and Mr. Wei Zhe) in the company's shares as of June 30, 2025, excluding directors and the chief executive Interests of Substantial Shareholders in the Company's Shares (As of June 30, 2025) | Name | Nature of Interest | Class of Shares | Number of Shares | Approximate Percentage of Shareholding in the Company | | :--- | :--- | :--- | :--- | :--- | | Shanghai Puhai | Beneficial owner | Unlisted Domestic Shares | 22,391,756 | 21.28% | | | | H-shares | 24,699,240 | 23.48% | | Shanghai Senrui | Beneficial owner | Unlisted Domestic Shares | 8,698,500 | 8.27% | | | | H-shares | 9,594,900 | 9.12% | | Shanghai Yuchao | Beneficial owner | Unlisted Domestic Shares | 8,183,685 | 7.78% | | | | H-shares | 9,027,040 | 8.58% | | Suzhou Yizhong | Beneficial owner | Unlisted Domestic Shares | 3,780,169 | 3.59% | | | | H-shares | 4,169,740 | 3.96% | | Suzhou Weitelixin | Interest in controlled corporation | Unlisted Domestic Shares | 4,457,734 | 4.24% | | | | H-shares | 4,917,180 | 4.67% | | Mr. Wei Zhe | Interest in controlled corporation | Unlisted Domestic Shares | 4,457,734 | 4.24% | | | | H-shares | 4,917,180 | 4.67% | - All interests are long positions, with percentages calculated based on the total issued shares of **105,203,020** as of June 30, 2025[131](index=131&type=chunk)[140](index=140&type=chunk) [Pre-IPO Employee Incentive Schemes](index=24&type=section&id=PRE-IPO%20EMPLOYEE%20INCENTIVE%20SCHEMES) The company has two pre-IPO employee incentive schemes from 2020 and 2023, designed to motivate management and key employees. These schemes are implemented through the grant of Restricted Share Units (RSUs), with vesting conditional on a minimum four-year service period, and the related shares are held by employee shareholding platforms, thus having no dilutive effect on issued shares - The company adopted the **2020 and 2023 Employee Incentive Schemes**, aiming to recognize employee contributions and incentivize them to drive the Group's development[138](index=138&type=chunk)[139](index=139&type=chunk)[244](index=244&type=chunk)[253](index=253&type=chunk) - Eligible participants are management members and key employees of the Group[142](index=142&type=chunk) - The granted shares will vest only after the expiry of the lock-up period, which is a minimum service period of **four years** for the Group from the date of signing the agreement[145](index=145&type=chunk)[149](index=149&type=chunk) - The relevant shares are held by employee shareholding platforms and will not have a dilutive effect on issued shares upon vesting[139](index=139&type=chunk) [Interim Dividend](index=27&type=section&id=INTERIM%20DIVIDEND) The Board recommends an interim dividend of **RMB 6.76 per ten shares** (tax inclusive) for the six months ended June 30, 2025, totaling approximately **RMB 71.12 million**, subject to shareholder approval. H-shareholders will receive dividends in Hong Kong Dollars - The Board recommends an interim dividend of **RMB 6.76 per ten shares** (tax inclusive) for the six months ended June 30, 2025[153](index=153&type=chunk)[155](index=155&type=chunk) - The proposed total interim dividend is approximately **RMB 71.12 million**, subject to shareholder approval at an extraordinary general meeting[153](index=153&type=chunk)[155](index=155&type=chunk) - The proposed interim dividend will be denominated and declared in RMB, and paid in HKD to H-shareholders, converted at the average benchmark exchange rate published by the People's Bank of China[153](index=153&type=chunk)[155](index=155&type=chunk) [Articles of Association](index=27&type=section&id=ARTICLES%20OF%20ASSOCIATION) During the reporting period, the company amended its Articles of Association to reflect changes in registered share capital and total issued shares, following the full exercise of the over-allotment option - The latest version of the Articles of Association is available on the company's and the Stock Exchange's websites[156](index=156&type=chunk) - During the reporting period, the company made corresponding amendments to its Articles of Association regarding the full exercise of the over-allotment option, involving **361,680 H-shares**, to reflect changes in registered share capital and total issued shares[154](index=154&type=chunk)[157](index=157&type=chunk) [Public Float](index=28&type=section&id=PUBLIC%20FLOAT) The company has obtained an exemption from the Stock Exchange and has maintained the minimum public float requirement since its listing date - The Stock Exchange has granted the company an exemption from strict compliance with Listing Rule 8.08(1)(a)[158](index=158&type=chunk)[161](index=161&type=chunk) - The company has maintained the minimum public float from its listing date up to the reporting date[158](index=158&type=chunk)[161](index=161&type=chunk) [Event After the Reporting Period](index=28&type=section&id=EVENT%20AFTER%20THE%20REPORTING%20PERIOD) Subsequent to the reporting period, the Board reviewed and approved the H-share full circulation plan (converting no more than **35,255,992 unlisted domestic shares** into H-shares) and related amendments to the Articles of Association, with the plan still in progress. Additionally, the Board recommended an interim dividend - On **July 4, 2025**, the Board reviewed and approved the proposed implementation of the H-share full circulation plan, converting no more than **35,255,992 unlisted domestic shares** into H-shares[159](index=159&type=chunk)[162](index=162&type=chunk) - On the same day, the Board reviewed and approved certain proposed amendments to the Articles of Association to reflect the share capital structure after H-share full circulation[159](index=159&type=chunk)[162](index=162&type=chunk) - As of the reporting date, participation in the H-share full circulation plan is still in progress[159](index=159&type=chunk)[162](index=162&type=chunk) [Independent Review Report](index=29&type=section&id=INDEPENDENT%20REVIEW%20REPORT) Ernst & Young conducted an independent review of the company's interim condensed consolidated financial information for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410. The review concluded that no material matters were identified, indicating that the financial information is prepared in all material respects in accordance with International Accounting Standard 34 - The independent auditor is **Ernst & Young**[164](index=164&type=chunk)[166](index=166&type=chunk)[174](index=174&type=chunk) - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, issued by the Hong Kong Institute of Certified Public Accountants[166](index=166&type=chunk)[171](index=171&type=chunk) - The review concluded that nothing has come to the auditor's attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34[172](index=172&type=chunk)[173](index=173&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=31&type=section&id=INTERIM%20CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS) This statement presents the company's revenue, cost of sales, gross profit, various expenses, profit before tax, income tax expense, and profit for the period for the six months ended June 30, 2025, along with basic and diluted earnings per share data Summary of Interim Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 1,818,461 | 1,657,600 | | Cost of sales | (1,246,917) | (1,139,711) | | Gross Profit | 571,544 | 517,889 | | Other income and gains, net | 16,300 | 22,227 | | Selling and marketing expenses | (187,886) | (197,573) | | Administrative expenses | (93,016) | (87,462) | | Research and development expenses | (24,824) | (25,101) | | Finance costs | (1,730) | (2,782) | | Profit before tax | 280,388 | 227,198 | | Income tax expense | (77,490) | (59,407) | | **Profit for the period** | **202,898** | **167,791** | | Basic earnings per share (RMB) | 1.97 | 1.65 | | Diluted earnings per share (RMB) | 1.97 | 1.65 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=32&type=section&id=INTERIM%20CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20COMPREHENSIVE%20INCOME) This statement presents the company's profit for the period and other comprehensive income/loss for the six months ended June 30, 2025, including exchange differences and fair value changes of equity investments designated at fair value through other comprehensive income, ultimately arriving at the total comprehensive income for the period Summary of Interim Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the period | 202,898 | 167,791 | | Other comprehensive income/(loss): | | | | Exchange differences on translation of foreign operations | (8) | (47) | | Equity investments designated at fair value through other comprehensive income: Fair value changes | 4,336 | – | | Income tax effect | (1,084) | – | | **Other comprehensive income/(loss) for the period, net of tax** | **3,244** | **(47)** | | **Total comprehensive income for the period** | **206,142** | **167,744** | [Interim Condensed Consolidated Statement of Financial Position](index=33&type=section&id=INTERIM%20CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) This statement presents the company's condensed consolidated data for assets, liabilities, and equity as of June 30, 2025, reflecting its financial health and structure at the end of the reporting period Summary of Interim Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Non-current Assets | 262,732 | 198,080 | | Total Current Assets | 2,126,353 | 1,657,703 | | **Total Assets** | **2,389,085** | **1,855,783** | | Total Current Liabilities | 669,487 | 616,113 | | Total Non-current Liabilities | 38,370 | 55,584 | | **Total Liabilities** | **707,857** | **671,697** | | **Net Assets** | **1,681,228** | **1,184,086** | | Total Equity | 1,681,228 | 1,184,086 | [Interim Condensed Consolidated Statement of Changes in Equity](index=35&type=section&id=INTERIM%20CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CHANGES%20IN%20EQUITY) This statement traces the changes in the company's share capital, reserves, and total equity for the six months ended June 30, 2025, including the impact of profit for the period, other comprehensive income, new share issuance upon listing, and share-based payments Summary of Interim Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Item | 2025 (RMB thousand) | | :--- | :--- | | As at December 31, 2024 (audited) | 1,184,086 | | Profit for the period | 202,898 | | Other comprehensive income for the period | 3,244 | | Issue of new shares upon listing on HKEX (net of issue costs) | 261,816 | | Share-based payments | 29,184 | | **As at June 30, 2025 (unaudited)** | **1,681,228** | [Interim Condensed Consolidated Statement of Cash Flows](index=37&type=section&id=INTERIM%20CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) This statement details the company's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025, reflecting the sources and uses of cash, and the balance of cash and cash equivalents at period-end Summary of Interim Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Activity Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash flows from operating activities | 223,162 | 158,259 | | Net cash flows from/(used in) investing activities | 185,375 | (473,635) | | Net cash flows from/(used in) financing activities | 235,456 | (74,591) | | **Net increase/(decrease) in cash and cash equivalents** | **643,993** | **(389,967)** | | Cash and cash equivalents at beginning of period | 342,659 | 631,310 | | Effect of exchange rate changes, net | 819 | (38) | | **Cash and cash equivalents at end of period** | **987,471** | **241,305** | [Notes to Interim Condensed Consolidated Financial Information](index=40&type=section&id=NOTES%20TO%20INTERIM%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20INFORMATION) These notes provide detailed explanations and supplementary information to the interim condensed consolidated financial information, covering the company's general information, changes in accounting policies, operating segment information, revenue breakdown, profit before tax components, income tax policy, dividends, earnings per share, property, plant and equipment, receivables, payables, share capital, share-based payments, commitments, related party transactions, fair value of financial instruments, and events after the reporting period [Corporate Information](index=41&type=section&id=CORPORATE%20INFORMATION_NOTES) This note reiterates the company's registration information, establishment history, business scope, and listing date on the Hong Kong Stock Exchange - Hushang Aiyi (Shanghai) Industrial Co., Ltd. was registered in China as a limited liability company on **November 18, 2013**, and restructured into a joint stock company in **November 2023**[186](index=186&type=chunk)[190](index=190&type=chunk) - The company and its subsidiaries are engaged in operating a franchised tea beverage retail network and selling tea beverage products in China[186](index=186&type=chunk)[191](index=191&type=chunk) - The company was listed on the Main Board of The Stock Exchange of Hong Kong Limited on **May 8, 2025**[187](index=187&type=chunk)[191](index=191&type=chunk) [Basis of Preparation and Changes in Accounting Policies](index=41&type=section&id=BASIS%20OF%20PREPARATION%20AND%20CHANGES%20IN%20ACCOUNTING%20POLICIES) The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 and is consistent with the accounting policies of historical financial information, except for amendments to International Accounting Standard 21, which have no significant impact on the Group - The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[188](index=188&type=chunk)[192](index=192&type=chunk) - The accounting policies adopted for preparation are consistent with historical financial information, with only the initial adoption of amendments to International Accounting Standard 21, which had no impact on the financial information[189](index=189&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) [Operating Segment Information](index=42&type=section&id=OPERATING%20SEGMENT%20INFORMATION) As the company's revenue, results, and assets all originate from a single operating segment and are primarily generated in China, no segment or geographical information is presented. Additionally, no single customer accounts for more than 10% of total revenue - As the Group's revenue, reported results, and total assets all originate from a single operating segment, no segment information is presented[196](index=196&type=chunk)[200](index=200&type=chunk) - The majority of the Group's revenue and non-current assets are generated in China, thus no further geographical segment information is presented[197](index=197&type=chunk)[201](index=201&type=chunk) - For the six months ended June 30, 2025, and 2024, no sales to a single customer accounted for more than **10%** of the Group's total revenue[198](index=198&type=chunk)[202](index=202&type=chunk) [Revenue](index=43&type=section&id=REVENUE_NOTES) This note provides a detailed analysis of the company's revenue sources for the six months ended June 30, 2025, primarily comprising sales of goods to franchisees and franchise services, with most revenue recognized at a point in time Revenue Data Breakdown (For the six months ended June 30) | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue from self-operated stores | 23,697 | 26,394 | | Sales of goods to franchisees | 1,471,208 | 1,335,347 | | Franchise services | 282,978 | 275,951 | | Others | 40,578 | 19,908 | | **Total** | **1,818,461** | **1,657,600** | Revenue Recognition Timing (For the six months ended June 30) | Recognition Timing | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | At a point in time | 1,531,496 | 1,381,146 | | Over time | 286,965 | 276,454 | | **Total** | **1,818,461** | **1,657,600** | [Profit Before Tax](index=44&type=section&id=PROFIT%20BEFORE%20TAX_NOTES) This note lists the components of the company's profit before tax for the six months ended June 30, 2025, including cost of inventories sold, depreciation, amortization, employee benefit expenses, marketing and promotion expenses, transportation expenses, and listing expenses Components of Profit Before Tax (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories sold | 1,058,855 | 989,931 | | Depreciation of property, plant and equipment | 10,758 | 12,684 | | Depreciation of right-of-use assets | 21,725 | 29,531 | | Employee benefit expenses (including directors' and supervisors' emoluments) | 226,295 | 209,160 | | Impairment of property, plant and equipment | 1,337 | – | | Marketing and promotion expenses | 71,821 | 70,942 | | Transportation expenses | 70,719 | 59,649 | | Listing expenses | 11,837 | 17,394 | - Cost of inventories sold excludes depreciation, amortization, employee benefit expenses, lease expenses, and transportation expenses already included in cost of sales[217](index=217&type=chunk) - An impairment loss of **RMB 1,337,000** on property, plant and equipment was recognized in the first half of 2025[208](index=208&type=chunk)[217](index=217&type=chunk) [Income Tax Expense](index=45&type=section&id=INCOME%20TAX%20EXPENSE_NOTES) This note explains the composition of the company's income tax expense for the six months ended June 30, 2025, and details the various preferential corporate income tax rates enjoyed by its Chinese subsidiaries, including tax incentives for encouraged industries in western regions, high-tech enterprises, and small and micro enterprises Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current income tax | 75,802 | 59,844 | | Deferred tax | 1,688 | (437) | | **Tax expense for the period** | **77,490** | **59,407** | - The corporate income tax rate for the Group's Chinese subsidiaries is **25%**, but some eligible companies may enjoy preferential tax rates[213](index=213&type=chunk) - Subsidiaries engaged in "encouraged industries in western regions" may enjoy a preferential corporate income tax rate of **15%**[214](index=214&type=chunk) - Subsidiaries recognized as "high-tech enterprises" may enjoy a preferential income tax rate of **15%** in the first half of 2025[215](index=215&type=chunk) - Chinese subsidiaries qualifying as small and micro enterprises with taxable income below **RMB 3 million** may enjoy a preferential corporate income tax rate of **5%**[215](index=215&type=chunk) [Dividend](index=46&type=section&id=DIVIDEND_NOTES) This note states that the company did not pay or declare any dividends for the six months ended June 30, 2025, but the Board subsequently recommended an interim dividend of **RMB 71.1 million**, subject to shareholder approval - For the six months ended June 30, 2025, neither the company nor its subsidiaries paid or declared any dividends[218](index=218&type=chunk)[220](index=220&type=chunk) - On **May 13, 2024**, the company declared and fully paid a dividend of **RMB 158,766,500** to shareholders on **May 20, 2024**[218](index=218&type=chunk)[220](index=220&type=chunk) - On **August 27, 2025**, the Board recommended an interim dividend of **RMB 71,117,242**, subject to shareholder approval[218](index=218&type=chunk)[220](index=220&type=chunk) [Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=46&type=section&id=EARNINGS%20PER%20SHARE%20ATTRIBUTABLE%20TO%20ORDINARY%20EQUITY%20HOLDERS%20OF%20THE%20PARENT_NOTES) This note provides details on the calculation of basic and diluted earnings per share for the six months ended June 30, 2025. As there were no potentially dilutive ordinary shares outstanding during the period, diluted earnings per share are the same as basic earnings per share Basic Earnings Per Share Calculation (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the parent (RMB thousand) | 202,898 | 167,791 | | Weighted average number of ordinary shares for basic EPS | 103,188,037 | 101,895,934 | | **Basic earnings per share (RMB)** | **1.97** | **1.65** | - The diluted earnings per share presented are the same as the basic earnings per share because there were no potentially dilutive ordinary shares outstanding for the six months ended June 30, 2025, and 2024[224](index=224&type=chunk)[225](index=225&type=chunk) [Property, Plant and Equipment](index=47&type=section&id=PROPERTY,%20PLANT%20AND%20EQUIPMENT_NOTES) This note discloses the additions, disposals, and impairment of the company's property, plant and equipment for the six months ended June 30, 2025, showing changes in asset scale and recognition of impairment losses - For the six months ended June 30, 2025, the Group's additions to assets at cost amounted to **RMB 4,600,000** (2024: **RMB 10,290,000**)[226](index=226&type=chunk)[227](index=227&type=chunk) - Assets with a net book value of **RMB 373,000** were disposed of in the first half of 2025 (2024: **RMB 606,000**)[226](index=226&type=chunk)[227](index=227&type=chunk) - In the first half of 2025, the Group recognized an impairment loss of **RMB 1,337,000** on certain property, plant and equipment (2024: zero)[226](index=226&type=chunk)[227](index=227&type=chunk) [Trade Receivables](index=47&type=section&id=TRADE%20RECEIVABLES_NOTES) This note provides an aging analysis of trade receivables as of June 30, 2025, showing their total amount and overdue status, and highlights the company's strict control over credit risk Aging Analysis of Trade Receivables (As of June 30, 2025) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within one month | 936 | 714 | | Over one month | 1,429 | 757 | | **Total** | **2,365** | **1,471** | - The Group maintains strict control over unpaid receivables and has a credit control department to minimize credit risk[230](index=230&type=chunk) - Trade receivables are non-interest bearing, and the Group holds no collateral or other credit enhancements for its trade receivable balances[230](index=230&type=chunk) [Prepayments, Other Receivables and Other Assets](index=48&type=section&id=PREPAYMENTS,%20OTHER%20RECEIVABLES%20AND%20OTHER%20ASSETS) This note details the composition of prepayments, other receivables, and other assets as of June 30, 2025, including advances to suppliers, recoverable VAT, and amounts due from online platforms Prepayments, Other Receivables and Other Assets (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Prepayments | 77,902 | 29,627 | | Recoverable VAT | 58,512 | 35,736 | | Amounts due from online platforms | 17,922 | 14,902 | | Other receivables | 12,172 | 9,588 | | Deposits | 3,912 | 3,235 | | Finance lease receivables | 1,866 | 1,429 | | **Total** | **172,273** | **97,137** | - Prepayments primarily refer to advances made to certain key suppliers for the purchase of goods or services[233](index=233&type=chunk) - Deposits primarily refer to lease deposits with remaining lease terms within one year[234](index=234&type=chunk) [Trade Payables](index=49&type=section&id=TRADE%20PAYABLES_NOTES) This note provides an aging analysis of trade payables as of June 30, 2025, showing their total amount and settlement period, and notes that they are non-interest bearing liabilities Aging Analysis of Trade Payables (As of June 30, 2025) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within one month | 235,270 | 203,450 | | One to three months | 15,935 | 21,562 | | Three to six months | 2,380 | 1,089 | | Over six months | 848 | 152 | | **Total** | **254,433** | **226,253** | - Trade payables are non-interest bearing, with a typical settlement period of **30 days**[237](index=237&type=chunk) [Other Payables and Accruals](index=49&type=section&id=OTHER%20PAYABLES%20AND%20ACCURALS) This note details the composition of other payables and accruals as of June 30, 2025, including accrued expenses, salaries and benefits, deposits, and other taxes payable, noting that they are non-interest bearing and repayable on demand Other Payables and Accruals (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Accrued expenses and others | 79,152 | 74,806 | | Salaries and welfare payable | 53,201 | 60,918 | | Deposits | 63,087 | 60,113 | | Other taxes payable | 31,389 | 17,179 | | **Total** | **226,829** | **213,016** | - Other payables and accruals are non-interest bearing and repayable on demand[240](index=240&type=chunk) [Share Capital](index=50&type=section&id=SHARE%20CAPITAL_NOTES) This note outlines the changes in the company's share capital as of the end of the reporting period, primarily reflecting the increase in share capital due to the issuance of new shares upon listing on the Hong Kong Stock Exchange Summary of Share Capital Changes (As of June 30, 2025) | Item | Number of Shares | Par Value of Shares (RMB thousand) | | :--- | :--- | :--- | | As at December 31, 2024 and January 1, 2025 (audited) | 102,430,000 | 102,430 | | Issue of new shares upon listing on HKEX (ordinary shares with par value of RMB 1.00 each) | 2,773,020 | 2,773 | | **As at June 30, 2025 (unaudited)** | **105,203,020** | **105,203** | [Share-Based Payments](index=50&type=section&id=SHARE-BASED%20PAYMENTS) This note details the company's share-based payments under the 2020 and 2023 Employee Incentive Schemes, including the grant of Restricted Share Units (RSUs), vesting conditions, fair value estimation, and recognition of related expenses - The **2020 Employee Incentive Scheme** aims to provide incentives and rewards to employees who contribute to the Group's operational success, with Restricted Share Units (RSUs) vesting over a minimum **four-year vesting period** from the grant date[244](index=244&type=chunk)[245](index=245&type=chunk) - The **2023 Employee Incentive Scheme** also aims to provide incentives and rewards, with granted RSUs vesting over a minimum **four-year vesting period** from the grant date[253](index=253&type=chunk)[255](index=255&type=chunk) - For the six months ended June 30, 2025, the Group recognized share-based payment expenses of **RMB 29,184,000** (2024: **RMB 28,598,000**) for the aforementioned Restricted Share Units[261](index=261&type=chunk) Changes in Restricted Share Units (RSUs) (As of June 30, 2025) | Item | Number of Restricted Share Units | Weighted Average Grant Date Fair Value per RSU (RMB) | | :--- | :--- | :--- | | Outstanding as at December 31, 2024 | 671,734 | 386.35 | | Forfeited | (18,600) | 415.07 | | **Outstanding as at June 30, 2025** | **653,134** | **385.53** | [Commitments](index=54&type=section&id=COMMITMENTS) This note discloses the company's capital commitments for the acquisition of property, plant and equipment and other intangible assets as of June 30, 2025 Capital Commitments (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Acquisition of property, plant and equipment and other intangible assets | 3,202 | 2,404 | [Related Party Transactions](index=54&type=section&id=RELATED%20PARTY%20TRANSACTIONS) This note details transactions between the company and close family members of controlling shareholders, including sales of goods and franchise services to franchisees, and the composition of key management personnel's remuneration Transactions with Close Family Members of Controlling Shareholders (For the six months ended June 30) | Transaction Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Sales of goods to franchisees | 2,822 | 3,627 | | Franchise services | 548 | 691 | | **Total** | **3,370** | **4,318** | - As of June 30, 2025, current contract liabilities with close family members of controlling shareholders amounted to **RMB 195,000**[267](index=267&type=chunk)[269](index=269&type=chunk) Key Management Personnel Remuneration (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Fees | 190 | 115 | | Salaries, allowances and benefits in kind | 3,141 | 3,439 | | Performance-related bonuses | 1,349 | 845 | | Contributions to pension schemes and other social welfare | 305 | 306 | | Share-based payment expenses | 7,909 | 7,909 | | **Total** | **12,894** | **12,614** | [Fair Value and Fair Value Hierarchy of Financial Instruments](index=56&type=section&id=FAIR%20VALUE%20AND%20FAIR%20VALUE%20HIERARCHY%20OF%20FINANCIAL%20INSTRUMENTS) This note provides fair value measurement information for the company's financial instruments, including their classification within the fair value hierarchy (Level 1, Level 2, Level 3), and a sensitivity analysis for significant unobservable inputs used in Level 3 valuations Fair Value Hierarchy of Financial Instruments (As of June 30, 2025) | Item | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Level 3 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Equity investments designated at fair value through other comprehensive income | 89,336 | – | – | 89,336 | | Financial investments at fair value through profit or loss | – | – | 3,500 | 3,500 | | Financial assets at fair value through profit or loss | – | 782,125 | – | 782,125 | | **Total** | **89,336** | **782,125** | **3,500** | **874,961** | - Management has assessed that the fair values of most financial instruments approximate their carrying amounts[273](index=273&type=chunk) - For Level 3 valuations, significant unobservable inputs for private company equity investments include the peer average EV/Revenue multiple (**3.34**) and a lack of marketability discount (**0.3%-17.5%**)[276](index=276&type=chunk)[277](index=277&type=chunk) - A **10%** increase/decrease in the valuation multiple would result in an increase/decrease in fair value of **RMB 370,000**[277](index=277&type=chunk) [Events After the Reporting Period](index=61&type=section&id=EVENTS%20AFTER%20THE%20REPORTING%20PERIOD_NOTES) This note discloses significant events occurring after the reporting period, including the Board's approval of the H-share full circulation plan and related amendments to the Articles of Association, as well as the recommendation for an interim dividend - On **July 4, 2025**, the Board reviewed and approved the proposed implementation of the H-share full circulation plan, converting no more than **35,255,992 unlisted domestic shares** into H-shares[286](index=286&type=chunk)[288](index=288&type=chunk) - On the same day, the Board reviewed and approved certain proposed amendments to the Articles of Association to reflect the share capital structure after H-share full circulation[286](index=286&type=chunk)[288](index=288&type=chunk) - On **August 27, 2025**, the Board recommended an interim dividend of **RMB 71,117,242**, subject to shareholder approval[287](index=287&type=chunk)[289](index=289&type=chunk) [Definitions](index=61&type=section&id=DEFINITIONS) This chapter provides definitions for key terms and abbreviations used in the interim report, ensuring readers have a clear and consistent understanding of the report's content - This chapter lists definitions for key terms used in the report, such as "Articles of Association," "Board," "Company," "Controlling Shareholder," "H-shares," "Listing Rules," "Mr. Shan," "Ms. Zhou," "Prospectus," "Reporting Period," and "SFO"[291](index=291&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk)