[Important Notice](index=2&type=section&id=%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA) The Board approved the 2025 interim report and performance announcement, and the report is unaudited - The Board of Directors approved the 2025 semi-annual report and performance announcement on August 29, 2025, with all **16 directors** present[5](index=5&type=chunk) - The report is unaudited[5](index=5&type=chunk) - 2025 semi-annual profit distribution plan: based on **88.364 billion shares**, a cash dividend of **RMB 1.563 per 10 shares** (tax inclusive) will be distributed to registered A and H shareholders, totaling **RMB 13.811 billion**[5](index=5&type=chunk) - No bonus share or capital reserve to share capital conversion plan for this half-year period[5](index=5&type=chunk) - The Group primarily faces credit risk, market risk, operational risk, and compliance risk in its operations, and has taken measures for effective control[5](index=5&type=chunk) [Definitions](index=4&type=section&id=%E9%87%8A%E4%B9%89) This section defines key terms used in the report, including the Bank, the Group, and the "Five Key Initiatives" in financial services - Defines "The Bank / Bank of Communications" as Bank of Communications Co., Ltd., and "The Group" as the Bank and its subsidiaries[10](index=10&type=chunk) - Lists and explains the "Five Key Initiatives": Technology Finance, Green Finance, Inclusive Finance, Elderly Care Finance, and Digital Finance[10](index=10&type=chunk) - Introduces several Bank of Communications financial service brands, such as "Yuntong Wealth" for corporate and interbank wealth management, "Wode Wealth" as the main retail brand, and "Jiaoyin Zhanyetong" and "Jiaoyin Yinongtong" for inclusive finance services[10](index=10&type=chunk) [Company Profile](index=5&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E6%83%85%E5%86%B5) Bank of Communications, established in 1908, is a globally systemically important bank ranked 9th by Tier 1 capital, offering comprehensive financial services worldwide - Bank of Communications was founded in 1908 and restructured in 1987 as China's first national state-owned joint-stock commercial bank[20](index=20&type=chunk) - Listed on the Hong Kong Stock Exchange in 2005 and Shanghai Stock Exchange in 2007, it was designated a Global Systemically Important Bank in 2023, ranking **9th globally by Tier 1 capital**[20](index=20&type=chunk) - Its strategic goal is to "build a world-class banking group with distinctive advantages," focusing on green finance, inclusive finance, trade finance, technology finance, and wealth finance, while implementing the "Five Key Initiatives"[20](index=20&type=chunk) - Provides comprehensive financial services, including deposits, loans, supply chain finance, cash management, international settlement, and wealth management, to **2.95 million corporate clients** and **202 million retail clients** through over **2,800 domestic branches** and **24 overseas branches/subsidiaries and representative offices**[20](index=20&type=chunk) - The Group engages in financial leasing, funds, wealth management, trusts, insurance, overseas securities, and debt-to-equity swaps through wholly-owned or controlled subsidiaries[20](index=20&type=chunk) [Financial Highlights](index=7&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) This section presents key financial data and indicators for the first half of 2025, showing growth in net profit and total assets, alongside improved asset quality 2025 First Half Key Accounting Data and Financial Indicators | Indicator | 2025 Jan-Jun (RMB million) | 2024 Jan-Jun (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | 85,247 | 84,234 | 1.20 | | Net Fee and Commission Income | 20,458 | 21,000 | (2.58) | | Net Operating Income | 133,498 | 132,550 | 0.72 | | Credit Impairment Losses | 32,814 | 33,021 | (0.63) | | Operating Expenses | 39,933 | 39,621 | 0.79 | | Profit Before Tax | 46,910 | 47,678 | (1.61) | | Net Profit (Attributable to Parent Company Shareholders) | 46,016 | 45,287 | 1.61 | | Earnings Per Share (RMB) | 0.59 | 0.56 | 5.36 | | | | | | | **Balance Sheet (Period-end):** | 2025 Jun 30 | 2024 Dec 31 | Change (%) | | Total Assets | 15,435,405 | 14,900,717 | 3.59 | | Customer Loans | 8,998,499 | 8,555,122 | 5.18 | | Total Liabilities | 14,130,635 | 13,745,120 | 2.80 | | Customer Deposits | 9,171,358 | 8,800,335 | 4.22 | | Shareholders' Equity (Attributable to Parent Company Shareholders) | 1,293,989 | 1,144,306 | 13.08 | | Net Asset Per Share (RMB) | 12.67 | 13.06 | (2.99) | | Total Capital | 1,619,956 | 1,508,812 | 7.37 | | Common Equity Tier 1 Capital | 1,115,440 | 964,568 | 15.64 | | | | | | | **Key Financial Ratios (%):** | 2025 Jan-Jun | 2024 Jan-Jun | Change (percentage points) | | Annualized Return on Average Assets | 0.61 | 0.65 | (0.04) | | Annualized Weighted Average Return on Equity | 9.16 | 9.29 | (0.13) | | Net Interest Margin | 1.21 | 1.29 | (0.08) | | Cost-to-Income Ratio | 29.94 | 29.94 | – | | | | | | | **Asset Quality and Capital Adequacy Ratios (%):** | 2025 Jun 30 | 2024 Dec 31 | Change (percentage points) | | Non-performing Loan Ratio | 1.28 | 1.31 | (0.03) | | Provision Coverage Ratio | 209.56 | 201.94 | 7.62 | | Capital Adequacy Ratio | 16.59 | 16.02 | 0.57 | | Tier 1 Capital Adequacy Ratio | 13.21 | 12.11 | 1.10 | | Common Equity Tier 1 Capital Adequacy Ratio | 11.42 | 10.24 | 1.18 | | Leverage Ratio | 7.61 | 6.95 | 0.66 | [Management Discussion and Analysis](index=8&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) This section provides a comprehensive review of the Group's financial performance, business operations, and risk management strategies for the first half of 2025 [Financial Statement Analysis](index=8&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E5%88%86%E6%9E%90) The Group's net profit increased by 1.61% and net operating income by 0.72%, driven by net interest income growth, with improved asset quality and increased cash flows from operating and financing activities [Analysis of Key Profit and Loss Statement Items](index=8&type=section&id=%E5%88%A9%E6%B6%A6%E8%A1%A8%E4%B8%BB%E8%A6%81%E9%A1%B9%E7%9B%AE%E5%88%86%E6%9E%90) Net interest income grew 1.20%, driving net operating income, despite a decline in net interest margin; net fee and commission income decreased 2.58%, while other non-interest income rose 1.75%, and income tax expense significantly dropped 75.45% 2025 First Half Key Profit and Loss Statement Items Changes | Item | 2025 Jan-Jun (RMB million) | 2024 Jan-Jun (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | 85,247 | 84,234 | 1.20 | | Net Non-Interest Income | 48,251 | 48,316 | (0.13) | | Net Fee and Commission Income | 20,458 | 21,000 | (2.58) | | Net Operating Income | 133,498 | 132,550 | 0.72 | | Credit Impairment Losses | (32,814) | (33,021) | (0.63) | | Operating Expenses | (39,933) | (39,621) | 0.79 | | Profit Before Tax | 46,910 | 47,678 | (1.61) | | Income Tax Expense | (455) | (1,853) | (75.45) | | Net Profit | 46,455 | 45,825 | 1.37 | | Net Profit Attributable to Parent Company Shareholders | 46,016 | 45,287 | 1.61 | - Net interest margin was **1.21%**, a **decrease of 8 basis points** year-on-year, primarily due to LPR reductions, adjustments to existing mortgage rates, and market competition, leading to a decline in asset yields, though interest-bearing liability costs decreased year-on-year[28](index=28&type=chunk) - Customer loan interest income was **RMB 138.325 billion**, a year-on-year decrease of **RMB 12.396 billion**, or **8.22%**, mainly due to a **57 basis point** year-on-year decline in the annualized average yield on customer loans[32](index=32&type=chunk) - Net fee and commission income was **RMB 20.458 billion**, a year-on-year decrease of **RMB 542 million**, or **2.58%**, with reductions in investment banking, custody and other entrusted businesses, payment and settlement, and bank card business income[42](index=42&type=chunk) - Income tax expense was **RMB 455 million**, a year-on-year decrease of **75.45%**, with an effective tax rate of **0.97%**, primarily due to tax-exempt interest income from government and local government bonds[48](index=48&type=chunk) [Analysis of Key Balance Sheet Items](index=13&type=section&id=%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8%E4%B8%BB%E8%A6%81%E9%A1%B9%E7%9B%AE%E5%88%86%E6%9E%90) Total assets reached **RMB 15.44 trillion**, growing 3.59% from year-end, driven by a 5.18% increase in customer loans, while total liabilities rose 2.80% with customer deposits up 4.22% Composition of Total Assets as of June 30, 2025 | Item | 2025 Jun 30 (RMB million) | Share (%) | 2024 Dec 31 (RMB million) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Customer Loans | 8,777,937 | 56.87 | 8,351,131 | 56.05 | | Financial Investments | 4,421,066 | 28.64 | 4,320,089 | 28.99 | | Cash and Balances with Central Banks | 751,611 | 4.87 | 717,354 | 4.81 | | Deposits with and Loans to Banks and Other Financial Institutions | 971,094 | 6.29 | 974,042 | 6.54 | | Other Assets | 513,697 | 3.33 | 538,101 | 3.61 | | **Total Assets** | **15,435,405** | **100.00** | **14,900,717** | **100.00** | - Corporate loans balance was **RMB 5.931365 trillion**, an increase of **RMB 364.787 billion** from year-end, a **6.55%** growth[52](index=52&type=chunk) - Personal consumption loans balance was **RMB 385.798 billion**, an increase of **RMB 55.538 billion** from year-end, a **16.82%** growth[53](index=53&type=chunk) - Bond investments balance was **RMB 3.955194 trillion**, an increase of **RMB 98.149 billion** from year-end, a **2.54%** growth; the Group will continue to prioritize interest-rate bond investments, strengthen credit bond market analysis, and serve the real economy[60](index=60&type=chunk) Composition of Total Liabilities as of June 30, 2025 | Item | 2025 Jun 30 (RMB million) | Share (%) | 2024 Dec 31 (RMB million) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Customer Deposits | 9,171,358 | 64.90 | 8,800,335 | 64.03 | | Deposits from and Loans from Banks and Other Financial Institutions | 2,324,674 | 16.45 | 2,431,451 | 17.69 | | Certificates of Deposit Issued | 1,515,200 | 10.72 | 1,384,372 | 10.07 | | Bonds Issued | 711,828 | 5.04 | 691,248 | 5.03 | | Other Liabilities | 407,575 | 2.89 | 437,714 | 3.18 | | **Total Liabilities** | **14,130,635** | **100.00** | **13,745,120** | **100.00** | - Customer deposits balance was **RMB 9.171358 trillion**, an increase of **RMB 371.023 billion** from year-end, a **4.22%** growth[65](index=65&type=chunk) [Analysis of Key Cash Flow Statement Items](index=18&type=section&id=%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8%E4%B8%BB%E8%A6%81%E9%A1%B9%E7%9B%AE%E5%88%86%E6%9E%90) Cash and cash equivalents increased by **RMB 52.282 billion**, with operating cash flow net inflow of **RMB 53.479 billion** and financing cash flow net inflow of **RMB 100.143 billion**, while investing cash flow saw a net outflow of **RMB 102.296 billion** - As of the end of the reporting period, cash and cash equivalents balance was **RMB 214.232 billion**, an increase of **RMB 52.282 billion** from year-end[69](index=69&type=chunk) - Net cash flow from operating activities was a net inflow of **RMB 53.479 billion**, a year-on-year increase of **RMB 275.921 billion**, primarily due to increased cash inflows from customer deposits[69](index=69&type=chunk) - Net cash flow from investing activities was a net outflow of **RMB 102.296 billion**, a year-on-year increase in outflow of **RMB 200.338 billion**, mainly due to net cash outflow from bond investments during the period[69](index=69&type=chunk) - Net cash flow from financing activities was a net inflow of **RMB 100.143 billion**, a year-on-year increase in inflow of **RMB 104.339 billion**, primarily due to increased cash inflows from the issuance of additional ordinary shares during the period[69](index=69&type=chunk) [Segment Performance](index=18&type=section&id=%E5%88%86%E9%83%A8%E6%83%85%E5%86%B5) The Yangtze River Delta region led in profit before tax and net operating income, while corporate finance dominated business segments, despite a significant year-on-year decline in personal finance profit before tax 2025 First Half Profit Before Tax and Net Operating Income by Region | Region | 2025 Profit Before Tax (RMB million) | Share (%) | 2025 Net Operating Income (RMB million) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Yangtze River Delta | 25,385 | 54.11 | 48,610 | 36.41 | | Pearl River Delta | (3,820) | (8.14) | 12,399 | 9.29 | | Bohai Rim Region | 9,152 | 19.51 | 16,254 | 12.18 | | Central Region | 8,346 | 17.79 | 17,854 | 13.36 | | Western Region | 6,317 | 13.47 | 11,476 | 8.60 | | Northeast Region | 2,036 | 4.34 | 3,708 | 2.78 | | Overseas | 7,303 | 15.57 | 10,076 | 7.55 | | Head Office | (7,809) | (16.65) | 13,121 | 9.83 | | **Total** | **46,910** | **100.00** | **133,498** | **100.00** | 2025 First Half Profit Before Tax and Net Operating Income by Business Segment | Business Segment | 2025 Net Operating Income (RMB million) | Share (%) | 2025 Profit Before Tax (RMB million) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Corporate Banking Business | 64,662 | 48.44 | 25,101 | 53.51 | | Personal Banking Business | 49,584 | 37.14 | 7,461 | 15.90 | | Treasury Business | 18,632 | 13.96 | 14,273 | 30.43 | | Other Businesses | 620 | 0.46 | 75 | 0.16 | | **Total** | **133,498** | **100.00** | **46,910** | **100.00** | - The Yangtze River Delta region accounted for **28.89%** of loan balances and **27.94%** of deposit balances, ranking first among all regions[74](index=74&type=chunk)[78](index=78&type=chunk) [Business Review](index=20&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%B1) The Group advanced its "1-4-5" strategy, achieving significant progress in the "Five Key Initiatives," optimizing credit structure, growing corporate and personal finance, enhancing global services, and accelerating digital transformation [Progress of Development Strategy](index=20&type=section&id=%E5%8F%91%E5%B1%95%E6%88%98%E7%95%A5%E6%8E%A8%E8%BF%9B%E6%83%85%E5%86%B5) The Group made significant strides in its "Five Key Initiatives" and Shanghai home-field development, with technology loans exceeding **RMB 1.5 trillion**, green loans over **RMB 870 billion**, and inclusive loans growing **12.96%** - Technology Finance: Provided technology loan support to **68,000 enterprises**, with loan balances exceeding **RMB 1.5 trillion**[80](index=80&type=chunk) - Green Finance: Green loan balances exceeded **RMB 870 billion**, with energy-saving and carbon reduction industry balances growing **6.58%** from year-end; cumulatively issued **RMB 145 billion** in green financial bonds in mainland China[81](index=81&type=chunk) - Inclusive Finance: Inclusive loan balances reached **RMB 852.401 billion**, an increase of **RMB 97.817 billion** from year-end, a **12.96%** growth[82](index=82&type=chunk) - Elderly Care Finance: Elderly care industry loan balances grew **21.39%** from year-end, with significant increases in social security card and personal pension business volumes[85](index=85&type=chunk) - Digital Finance: Digital economy core industry loan balances exceeded **RMB 286 billion**, with internet loans growing **8.52%** from year-end[86](index=86&type=chunk) - Shanghai Home-field Development: Achieved over **RMB 488 billion** in "Bond Connect" transactions and over **RMB 491 billion** in "Swap Connect" transactions; added over **RMB 2.7 billion** in equity investments in Shanghai-based technology enterprises[87](index=87&type=chunk) [Corporate Banking Business](index=22&type=section&id=%E5%85%AC%E5%8F%B8%E9%87%91%E8%9E%8D%E4%B8%9A%E5%8A%A1) Corporate loans grew **6.55%** from year-end, with technology, inclusive micro, and elderly care loans exceeding the Group's average growth, while corporate client numbers increased **3.75%** and investment banking actively served national strategies - As of the end of the reporting period, the Group's corporate loans increased by **RMB 364.787 billion** from year-end, a **6.55%** growth[88](index=88&type=chunk) - Loans to technology-based enterprises, inclusive micro and small enterprises, and elderly care industry loans grew by **12.73%**, **11.45%**, and **21.39%** respectively, all exceeding the Group's average loan growth[88](index=88&type=chunk) - The total number of corporate clients in domestic branches was **2.95 million**, an increase of **3.75%** from year-end[89](index=89&type=chunk) - Inclusive micro and small enterprise loan balances reached **RMB 849.317 billion**, an increase of **RMB 87.245 billion** from year-end, a **11.45%** growth; the average interest rate for newly issued inclusive micro and small enterprise loans in the first half was **2.99%**[92](index=92&type=chunk) - Supply chain finance business volume was **RMB 319.163 billion**, a year-on-year increase of **4.90%**; serving **38,200 upstream and downstream enterprises** in the supply chain, a year-on-year increase of **3.99%**[94](index=94&type=chunk) - Underwrote **RMB 77.040 billion** in NAFMII-standard bonds; provided investment and financing services of **RMB 39.344 billion** for technology-based enterprises and related industries[96](index=96&type=chunk) [Personal Banking Business](index=23&type=section&id=%E4%B8%AA%E4%BA%BA%E9%87%91%E8%9E%8D%E4%B8%9A%E5%8A%A1) Personal deposits, loans, and AUM showed stable growth, with personal consumption loans increasing **16.82%**, private banking clients growing **8.94%**, and elderly care industry loans rising **21.39%** - Personal deposit balances grew **6.18%** from year-end, and personal loan balances grew **2.83%** from year-end[97](index=97&type=chunk) - AUM reached **RMB 5.792553 trillion**, a **5.52%** increase from year-end[98](index=98&type=chunk) - Personal consumption loan balances were **RMB 385.798 billion**, a **16.82%** increase from year-end[101](index=101&type=chunk) - The Group's private banking client count was **102,600**, an **8.94%** increase from year-end; assets under management for private banking clients reached **RMB 1.388874 trillion**, a **7.20%** increase from year-end[103](index=103&type=chunk) - Elderly care industry loan balances grew **21.39%** from year-end[107](index=107&type=chunk) [Interbank and Financial Market Business](index=25&type=section&id=%E5%90%8C%E4%B8%9A%E4%B8%8E%E9%87%91%E8%9E%8D%E5%B8%82%E5%9C%BA%E4%B8%9A%E5%8A%A1) The Group actively supported Shanghai's international financial center development, maintaining leading positions in interbank clearing and settlement, innovating financial market products, and growing asset custody to **RMB 16.84 trillion** - Ranked among the top in the market for Shanghai Clearing House agency clearing volume, Shanghai Gold Exchange agency settlement volume, and settlement volumes for securities, futures, and other factor markets[110](index=110&type=chunk) - Completed the first batch of credit derivative transactions referencing technology-based enterprises and launched the first batch of special interbank loans supporting green businesses[111](index=111&type=chunk) - As of the end of the reporting period, assets under custody reached **RMB 16.84 trillion**[112](index=112&type=chunk) [Integrated Operations](index=26&type=section&id=%E7%BB%BC%E5%90%88%E5%8C%96%E7%BB%8F%E8%90%A5) The Group's integrated operations, led by commercial banking, achieved **RMB 4.561 billion** in net profit attributable to parent company shareholders from subsidiaries, representing **9.91%** of the Group's net profit, with strong performance across financial leasing, wealth management, and insurance - Subsidiaries achieved **RMB 4.561 billion** in net profit attributable to parent company shareholders, accounting for **9.91%** of the Group's net profit[113](index=113&type=chunk) - As of the end of the reporting period, total assets of subsidiaries were **RMB 784.731 billion**, accounting for **5.08%** of the Group's total assets[113](index=113&type=chunk) - BoCom Financial Leasing's total assets were **RMB 467.954 billion**, with shipping leasing assets of **RMB 166.370 billion**, maintaining its position as the **world's largest financial shipowner**; operating income reached **RMB 16.779 billion**, a year-on-year increase of **11.09%**[113](index=113&type=chunk) - BoCom Wealth Management's managed wealth management product balance was **RMB 1.701318 trillion**, a **5.15%** increase from year-end; net profit reached **RMB 773 million**, a year-on-year increase of **8.73%**[120](index=120&type=chunk) - BoComm Life Insurance's insurance service income was **RMB 1.412 billion**, a year-on-year increase of **13.06%**; operating income reached **RMB 4.223 billion**, a year-on-year increase of **21.17%**[121](index=121&type=chunk) [Global Service Capabilities](index=28&type=section&id=%E5%85%A8%E7%90%83%E6%9C%8D%E5%8A%A1%E8%83%BD%E5%8A%9B) The Group expanded its global network across five continents, with overseas banking institutions contributing **RMB 6.152 billion** in net profit, while international settlement volume grew **24.38%** and cross-border RMB settlement volume increased **56.65%** - Overseas banking institutions achieved net profit of **RMB 6.152 billion**, accounting for **13.37%** of the Group's net profit[126](index=126&type=chunk) - As of the end of the reporting period, total assets of overseas banking institutions were **RMB 1.263561 trillion**, accounting for **8.19%** of the Group's total assets[126](index=126&type=chunk) - The Bank's international settlement volume was **USD 299.965 billion**, a year-on-year increase of **24.38%**[129](index=129&type=chunk) - Domestic banking institutions' cross-border RMB settlement volume was **RMB 1.37 trillion**, a year-on-year increase of **56.65%**[131](index=131&type=chunk) - As of the end of the reporting period, offshore business asset balance was **USD 13.719 billion**[133](index=133&type=chunk) [Channel Development and Operations](index=29&type=section&id=%E6%B8%A0%E9%81%93%E5%BB%BA%E8%AE%BE%E4%B8%8E%E7%BB%8F%E8%90%A5) The Group enhanced digital operations, with enterprise online and mobile banking showing increased client numbers and transaction volumes, personal mobile banking MAU growing **8.63%**, and remote video service volume increasing **90.86%** - Enterprise online banking (bank-enterprise direct connection) signed client numbers grew **4.96%** from year-end, with cumulative transaction client numbers increasing **6.85%** year-on-year[135](index=135&type=chunk) - Enterprise mobile banking signed client numbers grew **5.33%** from year-end, with cumulative transaction volume increasing **11.64%** year-on-year[135](index=135&type=chunk) - Personal mobile banking Monthly Active Users (MAU) reached **49.1228 million**, a year-on-year increase of **8.63%**[136](index=136&type=chunk) - "Maidanba" APP accumulated **80.4867 million** linked card users, with **26.5997 million** monthly active users[137](index=137&type=chunk) - Open banking online chain finance services disbursed **RMB 143.564 billion**, a year-on-year increase of **6.32%**[138](index=138&type=chunk) - "Cloud BoCom" remote video service provided **1.29 million transactions**, a year-on-year increase of **90.86%**[139](index=139&type=chunk) - "Huimindai" credit approval efficiency improved by **63%**, and loan disbursement approval efficiency improved by **75%**[141](index=141&type=chunk) [FinTech and Digital Transformation](index=31&type=section&id=%E9%87%91%E8%9E%8D%E7%A7%91%E6%8A%80%E4%B8%8E%E6%95%B0%E5%AD%97%E5%8C%96%E8%BD%AC%E5%9E%8B) The Group strengthened digital infrastructure, data governance, and AI applications, completing front-to-back integration for financial market businesses and launching an online bulk commodity trade finance platform - The phased integration of front, middle, and back offices for financial market businesses was successfully completed, covering interbank lending, repurchase, and bond businesses[143](index=143&type=chunk) - Established an investment and financing client carbon emission measurement system, completing the latest round of measurement and for the first time including retail assets like mortgages and auto loans[175](index=175&type=chunk) - Developed a data asset map and explored building large model-driven data analysis intelligent agents to promote data visualization and intelligent data utilization[144](index=144&type=chunk) - Launched the "BoCom Shipping and Trade Connect" platform, innovating a fully online bulk commodity trade finance model, providing instant financial support[145](index=145&type=chunk) - "Proactive Credit Granting" expanded coverage and efficiency, enhancing the online, batch, and credit-based nature of credit products[145](index=145&type=chunk) [Risk Management](index=32&type=section&id=%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) The Group maintained a "prudent, balanced, compliant, innovative" risk appetite, enhancing its risk governance and digital transformation, resulting in improved asset quality with NPL ratio down to **1.28%** and provision coverage ratio up to **209.56%** - The Group's overall risk appetite is "prudent, balanced, compliant, and innovative," with various risk limit indicators set[146](index=146&type=chunk) - Non-performing loan (NPL) balance was **RMB 115.036 billion**, and the NPL ratio was **1.28%**, an increase of **RMB 3.359 billion** and a decrease of **0.03 percentage points** respectively from year-end[150](index=150&type=chunk) - Provision coverage ratio was **209.56%**, an increase of **7.62 percentage points** from year-end[24](index=24&type=chunk) - Accumulated disposal of non-performing loans totaled **RMB 37.83 billion**, a year-on-year increase of **27.9%**, with actual cash recovery of **RMB 20.37 billion**, a year-on-year increase of **54.3%**[149](index=149&type=chunk) - The average daily Liquidity Coverage Ratio (LCR) for Q2 2025 was **135.38%**, and the Net Stable Funding Ratio (NSFR) at the end of Q2 was **113.19%**, both meeting regulatory requirements[169](index=169&type=chunk) - As of the end of the reporting period, the Group's total loans to its largest single customer accounted for **3.77%** of the Group's total capital, and total loans to its top ten customers accounted for **18.44%** of the Group's total capital[162](index=162&type=chunk) [Risk Management Architecture](index=32&type=section&id=%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86%E6%9E%B6%E6%9E%84) The Group's risk management architecture features the Board of Directors with ultimate responsibility, supported by a Risk Management and Connected Transactions Control Committee, and a senior management-level comprehensive risk management committee - The Board of Directors bears ultimate responsibility and supreme decision-making authority for risk management, overseeing the Bank's risk profile through the Risk Management and Connected Transactions Control Committee[147](index=147&type=chunk) - Senior management established a Comprehensive Risk Management and Internal Control Committee, along with two types of business review committees: Loan Review and Risk Asset Review[147](index=147&type=chunk) - Provincial branches, overseas branches, and subsidiaries have established corresponding Comprehensive Risk Management and Internal Control Committees, following this framework[147](index=147&type=chunk) [Risk Management Tools](index=32&type=section&id=%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86%E5%B7%A5%E5%85%B7) The Group is advancing digital risk management, building a comprehensive digital system with a robust data foundation, enhancing strategic measurement models, and developing unified model and risk monitoring systems - Continuously advancing digital transformation of risk management, committed to building a full-process, comprehensive digital risk management system[148](index=148&type=chunk) - Strengthening the supply of measurement models in strategic areas, building a unified model management system, and promoting the construction of a risk monitoring system[148](index=148&type=chunk) - Exploring application scenarios for artificial intelligence technology to assist risk management, continuously enhancing the effectiveness of risk management[148](index=148&type=chunk) [Credit Risk Management](index=32&type=section&id=%E4%BF%A1%E7%94%A8%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) The Group strengthened credit risk management, optimizing asset structure and increasing NPL disposal, resulting in an NPL ratio of **1.28%**, a **0.03 percentage point** decrease from year-end, with all loans overdue for over 90 days classified as non-performing - As of the end of the reporting period, non-performing loan (NPL) balance was **RMB 115.036 billion**, and the NPL ratio was **1.28%**, an increase of **RMB 3.359 billion** and a decrease of **0.03 percentage points** respectively from year-end[150](index=150&type=chunk) - Accumulated disposal of non-performing loans totaled **RMB 37.83 billion**, a year-on-year increase of **27.9%**, with actual cash recovery of **RMB 20.37 billion**, a year-on-year increase of **54.3%**[149](index=149&type=chunk) - Overdue loan balance was **RMB 127.102 billion**, an increase of **RMB 9.004 billion** from year-end, with an overdue ratio of **1.41%**, an increase of **0.03 percentage points** from year-end[159](index=159&type=chunk) - All loans overdue for more than 90 days were classified as non-performing loans, accounting for **78.82%** of total non-performing loans[150](index=150&type=chunk) Loan Five-Category Classification Distribution as of June 30, 2025 | Category | Amount (RMB million) | Share (%) | | :--- | :--- | :--- | | Normal Loans | 8,740,366 | 97.13 | | Special Mention Loans | 143,097 | 1.59 | | Substandard Loans | 25,388 | 0.28 | | Doubtful Loans | 27,870 | 0.31 | | Loss Loans | 61,778 | 0.69 | | **Total Non-Performing Loans** | **115,036** | **1.28** | | **Total** | **8,998,499** | **100.00** | - As of the end of the reporting period, the Group's total loans to its largest single customer accounted for **3.77%** of the Group's total capital, and total loans to its top ten customers accounted for **18.44%** of the Group's total capital[162](index=162&type=chunk) [Market Risk Management](index=36&type=section&id=%E5%B8%82%E5%9C%BA%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) The Group primarily manages interest rate and exchange rate risks, aiming to identify, measure, monitor, control, and report market risks within acceptable limits through various tools, while continuously enhancing its risk management system - The Group's primary market risks are **interest rate risk** and **exchange rate risk**[164](index=164&type=chunk) - The objective of market risk management is to proactively identify, measure, monitor, control, and report market risks, keeping them within an acceptable and reasonable range through limit management, risk hedging, and risk transfer methods[164](index=164&type=chunk) - The Group applies the **standardized approach** for market risk capital measurement, while non-bank subsidiaries and the Brazil subsidiary apply the **simplified standardized approach** during the transition period[164](index=164&type=chunk) [Liquidity Risk Management](index=37&type=section&id=%E6%B5%81%E5%8A%A8%E6%80%A7%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) The Group maintained a robust liquidity risk management framework, with a governance structure involving the Board and senior management, and achieved a Q2 2025 average Liquidity Coverage Ratio of **135.38%** and Net Stable Funding Ratio of **113.19%**, both exceeding regulatory requirements - The Group's liquidity risk management governance structure includes decision-making bodies (Board of Directors and its special committees, senior management), supervisory bodies (Board of Supervisors, Audit and Supervision Bureau), and executive bodies (various departments)[167](index=167&type=chunk) - During the reporting period, the Group continuously improved its liquidity risk management system, flexibly adjusting liquidity management strategies and business development structure and pace as appropriate[167](index=167&type=chunk) Liquidity Ratio Indicators as of June 30, 2025 | Indicator | Standard Value | 2025 Jun 30 (%) | 2024 Dec 31 (%) | | :--- | :--- | :--- | :--- | | Liquidity Ratio | ≥25 | 77.06 | 73.34 | - The average daily Liquidity Coverage Ratio (LCR) for Q2 2025 was **135.38%**, the Net Stable Funding Ratio (NSFR) at the end of Q1 was **111.64%**, and at the end of Q2 was **113.19%**, all meeting regulatory requirements[169](index=169&type=chunk) [Operational Risk Management](index=37&type=section&id=%E6%93%8D%E4%BD%9C%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) The Group upheld an "internal control first, compliance-based" philosophy, continuously improving its operational risk management system, enhancing event management, self-assessment, and key indicator tools, and optimizing related systems and outsourcing mechanisms - The Group's operational risk management adheres to the philosophy of "internal control first, compliance-based," continuously improving its operational risk management system[170](index=170&type=chunk) - Strengthening the standardized use of management tools such as operational risk event management, self-assessment, and key indicators[170](index=170&type=chunk) - Optimizing operational risk management system functions, improving outsourcing management mechanisms, and strengthening business continuity management[170](index=170&type=chunk) [Compliance and Anti-Money Laundering](index=38&type=section&id=%E5%90%88%E8%A7%84%E4%B8%8E%E5%8F%8D%E6%B4%97%E9%92%B1) The Group established a compliance management system aligned with its operations, continuously enhancing risk identification, monitoring, prevention, and resolution capabilities, while deepening anti-money laundering reforms and improving customer due diligence - The Group established a compliance management system commensurate with its operating scale, business scope, and risk level, continuously strengthening its capabilities in compliance risk identification, monitoring, prevention, and resolution[171](index=171&type=chunk) - Further improved the internal control and compliance management system, strengthening supervision, inspection, and issue rectification[171](index=171&type=chunk) - Deepened reforms in anti-money laundering systems and mechanisms, enhancing the effectiveness of anti-money laundering customer due diligence and strengthening integrated Group management[171](index=171&type=chunk) [Reputational Risk Management](index=38&type=section&id=%E5%A3%B0%E8%AA%89%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) The Group adhered to a "prevention-first, effective disposal, timely restoration, comprehensive coverage" strategy for reputational risk, strengthening full-process management and normalized construction, with the system operating effectively during the period - The Group adheres to a management strategy of "prevention first, effective disposal, timely restoration, and comprehensive coverage," strengthening full-process management and normalized construction[172](index=172&type=chunk) - Improved and optimized the Group's long-term reputational risk management mechanism, strengthening reputational risk management for overseas institutions[172](index=172&type=chunk) - During the reporting period, the reputational risk management system operated effectively, and reputational risk was properly controlled[172](index=172&type=chunk) [Cross-Industry, Cross-Border, and Country Risk Management](index=38&type=section&id=%E8%B7%A8%E4%B8%9A%E8%B7%A8%E5%A2%83%E4%B8%8E%E5%9B%BD%E5%88%AB%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) The Group established a comprehensive cross-industry, cross-border, and country risk management system, strengthening overseas institution risk management, enhancing consolidated management, and optimizing country-level asset-liability structures - The Group established a cross-industry and cross-border risk management system characterized by "unified management, clear division of labor, complete tools, IT support, quantified risks, and substantive consolidation"[173](index=173&type=chunk) - Strengthened risk management for overseas institutions, improved the institutional framework, optimized risk indicator monitoring tools, and enhanced the formulation and drills of various emergency plans[173](index=173&type=chunk) - Strengthened consolidated management, refined the full lifecycle management of subsidiaries at all levels, and deepened the transmission of Group risk appetite and management measures to subsidiaries[173](index=173&type=chunk) - Strengthened country risk management, conducted country risk assessments, ratings, and stress tests, guiding operating units to optimize asset-liability structures from a country perspective[173](index=173&type=chunk) [Large Exposure Risk Management](index=38&type=section&id=%E5%A4%A7%E9%A2%9D%E9%A3%8E%E9%99%A9%E6%9A%B4%E9%9C%B2%E7%AE%A1%E7%90%86) The Group diligently implemented regulatory requirements for large exposure risk, advancing management system construction, continuously monitoring exposures, and strictly enforcing limits, with all indicators meeting regulatory standards by period-end - The Group diligently implemented regulatory requirements, promoted the construction of management systems, and continuously monitored large exposure risks[174](index=174&type=chunk) - Strictly implemented various limit management measures to enhance the Group's ability to prevent systemic and regional risks[174](index=174&type=chunk) - As of the end of the reporting period, all indicators for the Group's large exposure risks complied with regulatory requirements[174](index=174&type=chunk) [Climate and Environmental Risk Management](index=38&type=section&id=%E6%B0%94%E5%80%99%E5%92%8C%E7%8E%AF%E5%A2%83%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) The Group actively supported "carbon peak and carbon neutrality" goals, integrating climate and environmental risks into its comprehensive risk management, enhancing carbon data management, and advancing climate risk scenario analysis and stress testing - The Group actively supports the "carbon peak and carbon neutrality" goals, promoting the further integration of climate and environmental risks into its comprehensive risk management system[175](index=175&type=chunk) - Established an investment and financing client carbon emission measurement system, completing the latest round of measurement and for the first time including retail assets like mortgages and auto loans[175](index=175&type=chunk) - Steadily advanced climate risk scenario analysis and stress testing, deepening research into asset portfolio transformation plans[175](index=175&type=chunk) [Outlook](index=39&type=section&id=%E5%B1%95%E6%9C%9B) The Group will continue to serve the real economy and maintain financial stability, focusing on the "Five Key Initiatives," strengthening its Shanghai "home-field" advantage, advancing digitalization, optimizing business structure, enhancing client engagement, and effectively controlling risks - The Group will continue to deeply practice the political and people-centric nature of financial work, serving as the main force for the real economy and the ballast for financial stability[177](index=177&type=chunk) - Future key tasks include: thoroughly implementing the "Five Key Initiatives" to continuously build business characteristics; vigorously consolidating the Shanghai "home-field" advantage; continuously promoting digital construction to empower transformational development[177](index=177&type=chunk)[178](index=178&type=chunk) - Dynamically optimizing and adjusting business structure, maintaining efforts to serve the real economy, improving quality and efficiency, and promoting coordinated volume-price development and structural optimization of asset-liability businesses[178](index=178&type=chunk) - Advancing the client base enhancement project, improving client operation and management systems and mechanisms, deepening online-offline integration, and strengthening G-B-C collaborative development[179](index=179&type=chunk) - Upholding the bottom line and effectively preventing risks, strengthening integrated and penetrative Group management, and effectively controlling risks in key areas such as real estate and local government debt[179](index=179&type=chunk) [Other Disclosures](index=40&type=section&id=%E5%85%B6%E4%BB%96%E6%8A%AB%E9%9C%B2%E4%BA%8B%E9%A1%B9) The Group implemented its "Quality Improvement, Efficiency Enhancement, and High Returns" action plan, continuously boosting investor returns through serving the real economy, strategic execution, leveraging Shanghai's advantages, risk control, and stable cash dividends - The Group formulated the "Bank of Communications Valuation Enhancement Plan and 'Quality Improvement, Efficiency Enhancement, and High Returns' Action Plan" to continuously enhance investor returns through high-quality development[180](index=180&type=chunk) - As of the end of the reporting period, the Group's customer loan balance was **RMB 9.00 trillion**, a **5.18%** increase from year-end[180](index=180&type=chunk) - Loan balances in the three major regions (Yangtze River Delta, Greater Bay Area, Beijing-Tianjin-Hebei) grew **5.57%** from year-end, **0.39 percentage points** higher than the Group's average loan growth[180](index=180&type=chunk) - The Group's main asset quality indicators continued to improve, solidifying its asset quality foundation[181](index=181&type=chunk) - The Group completed its 2024 interim and annual dividends, maintaining a dividend payout ratio of over **30%** of net profit attributable to parent company shareholders for **13 consecutive years**[182](index=182&type=chunk) [Corporate Governance](index=41&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%20(一级)) The Group continuously enhanced its corporate governance, completing a private placement of A-shares to supplement capital, and maintaining a stable dividend policy for 13 consecutive years - The Group strictly adheres to laws and regulations such as the "Company Law," "Securities Law," and "Commercial Bank Law," continuously enhancing its corporate governance level[217](index=217&type=chunk) - In June 2025, the Group completed a private placement of **14,101,057,578 A-shares**, increasing total share capital from **74,262,726,645 shares** to **88,363,784,223 shares**[185](index=185&type=chunk) - The 2025 semi-annual profit distribution plan is a cash dividend of **RMB 1.563 per 10 shares** (tax inclusive), totaling **RMB 13.811 billion**, representing **30.0%** of the net profit attributable to parent company shareholders for the first half of 2025[219](index=219&type=chunk) - The Group highly values the continuity and stability of its dividend policy, maintaining a dividend payout ratio of over **30%** of net profit attributable to parent company shareholders for **13 consecutive years**[182](index=182&type=chunk) [Share Changes and Shareholder Information](index=41&type=section&id=%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E5%8F%8A%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) The Group completed a private placement of **14.101 billion A-shares**, increasing total share capital to **88.364 billion shares**, which diluted EPS and NAV per share, with the Ministry of Finance remaining the largest shareholder - As of the end of the reporting period, the Bank's total ordinary shares were **88,363,784,223 shares**, with A-shares accounting for **60.38%** and H-shares for **39.62%**[183](index=183&type=chunk) - In June 2025, the Bank completed a private placement of **14,101,057,578 A-shares**, raising net proceeds of approximately **RMB 119.941 billion** to supplement Common Equity Tier 1 capital[185](index=185&type=chunk)[273](index=273&type=chunk) - This share change resulted in an increase in the Bank's total share capital and net assets, with a dilutive effect on earnings per share and net asset per share[186](index=186&type=chunk) - As of the end of the reporting period, the total number of ordinary shareholders was **263,071**[189](index=189&type=chunk) - The Ministry of Finance is the Bank's controlling shareholder, with a shareholding ratio of **35.02%**[195](index=195&type=chunk)[196](index=196&type=chunk) - The Hongkong and Shanghai Banking Corporation Limited is the second largest shareholder, with a shareholding ratio of **16.00%**[196](index=196&type=chunk) - National Council for Social Security Fund is the third largest shareholder, with a shareholding ratio of **13.77%**[197](index=197&type=chunk) [Corporate Governance](index=46&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%20(二级)) The Group's corporate governance includes dividend distribution, issuance of green, tech innovation, and TLAC non-capital bonds, and redemption of Tier 2 capital bonds, with **95,267 employees** and a consistent A-rating for information disclosure - As of the end of the reporting period, the total number of preferred shareholders was **67**[204](index=204&type=chunk) - The 2025 semi-annual profit distribution plan is a cash dividend of **RMB 1.563 per 10 shares** (tax inclusive), totaling **RMB 13.811 billion**, representing **30.0%** of the net profit attributable to parent company shareholders for the first half of 2025[219](index=219&type=chunk) - In April 2025, **RMB 30 billion** in green financial bonds were issued; in May, **RMB 20 billion** in technology innovation bonds were issued; in June, **RMB 40 billion** in Total Loss-Absorbing Capacity (TLAC) non-capital bonds were issued[215](index=215&type=chunk) - In May 2025, **RMB 40 billion** of 2020 Tier 2 capital bonds were redeemed; in June, **RMB 30 billion** of 2022 special financial bonds for small and micro enterprise loans matured and were repaid[215](index=215&type=chunk) - As of the end of the reporting period, the Group had a total of **95,267 employees**[229](index=229&type=chunk) - The Bank has been rated an **A-class company** for information disclosure by the Shanghai Stock Exchange for **eleven consecutive years**[234](index=234&type=chunk) [Environmental and Social Responsibility](index=53&type=section&id=%E7%8E%AF%E5%A2%83%E5%92%8C%E7%A4%BE%E4%BC%9A%E8%B4%A3%E4%BB%BB) The Group actively promoted green finance, with green loan balances exceeding **RMB 870 billion**, and fulfilled social responsibilities by resolving **164,400 financial consumer complaints** with a **100%** resolution rate, while supporting rural revitalization - The Group's "14th Five-Year Plan" designates green as the foundation for all business operations, aiming for green loan balances of no less than **RMB 800 billion** by the end of the "14th Five-Year Plan" period[237](index=237&type=chunk)[239](index=239&type=chunk) - As of the end of the reporting period, green loan balances of domestic banking institutions exceeded **RMB 870 billion**[243](index=243&type=chunk) - Underwrote **RMB 7.291 billion** in green bonds and transition bonds[243](index=243&type=chunk) - BoCom Financial Building won the **Gold Award** in the "2024 Shanghai Existing Building Green Low-Carbon Renovation Assessment"[250](index=250&type=chunk) - In the first half, the Bank handled **164,400 financial consumer complaints**, with a **100%** resolution rate[253](index=253&type=chunk) - Agricultural loan balances were **RMB 761.314 billion**, an increase of **RMB 17.165 billion** from year-end, a **2.31%** growth[255](index=255&type=chunk) [Significant Matters](index=57&type=section&id=%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) The Group reported no material litigation or administrative penalties, disclosed related party loan agreements totaling **USD 12.95 billion**, and confirmed that **RMB 119.941 billion** in raised funds were used to supplement Common Equity Tier 1 capital - During the reporting period, the Group had no litigation or arbitration matters with a significant impact on its operations; pending litigation and arbitration involved approximately **RMB 1.083 billion**[257](index=257&type=chunk) - During the reporting period, the Bank and its directors, supervisors, and senior management were not subject to any significant administrative penalties or investigations[258](index=258&type=chunk) - Signed loan agreements with BoCom Management, BoCom Development, and Ronggang United totaling **USD 5.85 billion**, **USD 4.1 billion**, and **USD 3 billion** respectively[268](index=268&type=chunk) - As of the end of the reporting period, the Bank's loan balance with related natural persons was **RMB 116,700**, and the total credit card overdraft limit was **RMB 8.9559 million**[265](index=265&type=chunk) - Net proceeds of approximately **RMB 119.941 billion** were used to supplement the Bank's Common Equity Tier 1 capital[273](index=273&type=chunk) - All commitments made by the Bank's shareholders and other relevant parties during or continuing into the reporting period were strictly fulfilled[274](index=274&type=chunk) - China Tobacco and Shuangwei Investment participated in the Bank's A-share issuance as strategic investors and signed strategic cooperation agreements with the Bank[275](index=275&type=chunk) [Institutional Directory](index=61&type=section&id=%E6%9C%BA%E6%9E%84%E5%90%8D%E5%BD%95) This section lists the Group's domestic provincial and direct branches, overseas banking institutions across major international financial centers, and key subsidiaries involved in diverse financial services - Domestic provincial and direct branches are categorized by region: Yangtze River Delta, Pearl River Delta, Bohai Rim Region, Central Region, Western Region, and Northeast Region, with specific addresses listed[277](index=277&type=chunk) - Overseas banking institutions include branches and representative offices in Hong Kong, New York, London, Singapore, Tokyo, Frankfurt, Macau, Ho Chi Minh City, Sydney, Taipei, Luxembourg, Brazil, and other locations[278](index=278&type=chunk) - Key subsidiaries include BoCom Schroders Fund Management, BoCom International Trust, BoCom Financial Leasing, BoCom Wealth Management, BoComm Life Insurance, BoCom Financial Asset Investment, BoCom International Holdings, and China BoCom Insurance[279](index=279&type=chunk) [Financial Statements and Others](index=63&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E5%8F%8A%E5%85%B6%E4%BB%96) This section includes the interim financial review report, unaudited condensed consolidated financial statements, detailed notes, and supplementary financial information, providing a comprehensive view of the Group's financial position and performance - The interim financial information is unaudited, prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting and the disclosure requirements of the Hong Kong Listing Rules[284](index=284&type=chunk) - The notes to the financial statements provide detailed disclosures on significant accounting policies, financial risk management, detailed income and expense items, asset and liability composition, changes in share capital, related party transactions, and segment information[281](index=281&type=chunk) - Supplementary financial information includes currency concentration, international claims, overdue and restructured assets, and loan distribution information[282](index=282&type=chunk) [Review Report on Interim Financial Information](index=64&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%96%99%E7%9A%84%E5%AE%A1%E9%98%85%E6%8A%A5%E5%91%8A) KPMG's review report on the 2025 interim financial information, conducted under International Review Standard 2410, found no material non-compliance with IAS 34, though it does not constitute an audit opinion - The review was conducted in accordance with International Standard on Review Engagements 2410[285](index=285&type=chunk) - The scope of the review is less than that of an audit, and therefore no audit opinion is expressed[285](index=285&type=chunk) - Based on the review, nothing has come to the attention of the reviewers that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 – Interim Financial Reporting[286](index=286&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=65&type=section&id=%E6%9C%AA%E7%BB%8F%E5%AE%A1%E8%AE%A1%E7%9A%84%E7%AE%80%E8%A6%81%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section presents the Group's unaudited condensed consolidated financial statements for H1 2025, including the income statement, balance sheet, statement of changes in equity, and cash flow statement, providing an overview of financial performance and position Unaudited Condensed Consolidated Income Statement and Other Comprehensive Income (For the six months ended June 30, 2025) | Item | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Net Interest Income | 85,247 | 84,234 | | Net Fee and Commission Income | 20,458 | 21,000 | | Net Operating Income | 133,498 | 132,550 | | Credit Impairment Losses | (32,814) | (33,021) | | Profit Before Tax | 46,910 | 47,678 | | Net Profit for the Period | 46,455 | 45,825 | | Net Profit Attributable to Parent Company Shareholders | 46,016 | 45,287 | Unaudited Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Item | 2025 Jun 30 (RMB million) | 2024 Dec 31 (RMB million) | | :--- | :--- | :--- | | Total Assets | 15,435,405 | 14,900,717 | | Customer Loans | 8,777,937 | 8,351,131 | | Total Liabilities | 14,130,635 | 13,745,120 | | Customer Deposits | 9,171,358 | 8,800,335 | | Total Equity Attributable to Parent Company Shareholders | 1,293,989 | 1,144,306 | | Share Capital | 88,364 | 74,263 | Unaudited Condensed Consolidated Cash Flow Statement (For the six months ended June 30, 2025) | Item | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 53,479 | (222,442) | | Net Cash Flow from Investing Activities | (102,296) | 98,042 | | Net Cash Flow from Financing Activities | 100,143 | (4,196) | | Net Change in Cash and Cash Equivalents | 52,282 | (129,677) | | Cash and Cash Equivalents at End of Period | 214,232 | 145,784 | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=72&type=section&id=%E6%9C%AA%E7%BB%8F%E5%AE%A1%E8%AE%A1%E7%9A%84%E4%B8%AD%E6%9C%9F%E7%AE%80%E8%A6%81%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) This section provides detailed notes to the unaudited condensed consolidated financial statements, covering accounting policies, financial risk management, income/expense details, balance sheet items, equity changes, dividends, and related party transactions - The principal accounting policies and methods of computation used in these interim condensed consolidated financial statements are consistent with those adopted in the Group's 2024 annual consolidated financial statements[304](index=304&type=chunk) - The Group's main financial risks include credit risk, liquidity risk, market risk, and operational risk[313](index=313&type=chunk) - In the first half of 2025, net interest income was **RMB 85.247 billion**, a year-on-year increase of **1.20%**[416](index=416&type=chunk) - In the first half of 2025, net fee and commission income was **RMB 20.458 billion**, a year-on-year decrease of **2.58%**[417](index=417&type=chunk) - As of June 30, 2025, total customer loans were **RMB 8.998499 trillion**, with credit loans accounting for **39.81%** and mortgage loans for **30.79%**[108](index=108&type=chunk)[459](index=459&type=chunk) - As of June 30, 2025, total customer deposits were **RMB 9.171358 trillion**, including corporate demand deposits of **RMB 1.869774 trillion** and individual time deposits of **RMB 2.961890 trillion**[121](index=121&type=chunk)[495](index=495&type=chunk) - As of June 30, 2025, share capital was **RMB 88.364 billion**, and capital reserve was **RMB 217.261 billion**, primarily due to the completion of a private placement of **14.101 billion A-shares** in June 2025[127](index=127&type=chunk)[511](index=511&type=chunk)[513](index=513&type=chunk) - In the first half of 2025, dividends declared to ordinary shareholders were **RMB 14.630 billion**, and interest declared to perpetual bondholders was **RMB 1.685 billion**[537](index=537&type=chunk)[539](index=539&type=chunk) [Unaudited Supplementary Financial Information](index=147&type=section&id=%E6%9C%AA%E7%BB%8F%E5%AE%A1%E8%AE%A1%E7%9A%84%E8%A1%A5%E5%85%85%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%96%99) This section provides unaudited supplementary financial information for H1 2025, including currency concentration, international claims, overdue and restructured assets, and loan distribution, detailing the Group's risk exposure and asset quality - As of June 30, 2025, the Group's net (short)/long positions were **(USD 127,125 million)**, **HKD 89,554 million**, and **(6,322 million other currencies)**, totaling **(43,893 million)**[599](index=599&type=chunk) - As of June 30, 2025, total international claims were **RMB 1.541238 trillion**, with the Asia-Pacific region accounting for the largest share at **RMB 1.434962 trillion**[603](index=603&type=chunk) - As of June 30, 2025, overdue customer loan balance was **RMB 127.102 billion**, with an overdue ratio of **1.41%**[604](index=604&type=chunk) - As of June 30, 2025, total restructured loans were **RMB 74.994 billion**, of which restructured loans overdue for more than three months amounted to **RMB 11.267 billion**[605](index=605&type=chunk) - As of June 30, 2025, total impaired customer loans were **RMB 115.018 billion**, including corporate loans of **RMB 77.180 billion** and personal loans of **RMB 37.838 billion**[606](index=606&type=chunk)[611](index=611&type=chunk)

[Company Profile](index=4&type=section&id=Company%20Profile) This section provides an overview of the company's fundamental information and key service providers [Company Basic Information](index=4&type=section&id=Company%20Basic%20Information) This section provides fundamental information about Zoomlion Heavy Industry Science and Technology Co., Ltd., covering company details, listing information, and key service providers - The company's Chinese name is 中聯重科股份有限公司, and its English name is **Zoomlion Heavy Industry Science and Technology Co., Ltd.**[10](index=10&type=chunk) - The legal representative is Zhan Chunxin, and the company secretary is Yang Duzhi[10](index=10&type=chunk) - The company's A-shares (stock code 000157) are listed on the Shenzhen Stock Exchange, and its H-shares (stock code 1157) are listed on The Stock Exchange of Hong Kong Limited[10](index=10&type=chunk) - The domestic auditor is KPMG Huazhen LLP, and the international auditor is KPMG[11](index=11&type=chunk) [Summary of Accounting Data and Financial Indicators](index=6&type=section&id=Summary%20of%20Accounting%20Data%20and%20Financial%20Indicators) This section summarizes the company's key financial data and indicators prepared under both CAS and IFRS, highlighting performance and financial position [Key Financial Data and Indicators Prepared Under China Accounting Standards for Business Enterprises (CAS)](index=6&type=section&id=Key%20Financial%20Data%20and%20Indicators%20Prepared%20Under%20China%20Accounting%20Standards%20for%20Business%20Enterprises%20%28CAS%29) This section presents the company's key financial data and indicators prepared under CAS for the six months ended June 30, 2025, showing year-on-year growth in revenue, net profit, and operating cash flow Key Financial Data and Indicators (CAS, for the Six Months Ended June 30, 2025) | Indicator | Current Period (RMB) | Prior Period (RMB) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 24,854,631,984.97 | 24,535,498,960.57 | 1.30% | | Net Profit Attributable to Shareholders | 2,764,778,602.90 | 2,288,046,921.87 | 20.84% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) | 1,925,167,888.20 | 1,479,991,356.91 | 30.08% | | Net Cash Flow from Operating Activities | 1,751,780,276.34 | 824,534,396.52 | 112.46% | | Basic Earnings Per Share (RMB/share) | 0.32 | 0.28 | 14.29% | | Diluted Earnings Per Share (RMB/share) | 0.32 | 0.27 | 18.52% | | Weighted Average Return on Net Assets | 4.95% | 3.98% | 0.97% | | **Balance Sheet (Period-end):** | | | | | Total Assets | 129,233,271,831.95 | 123,745,691,290.43 | 4.43% | | Net Assets Attributable to Shareholders | 57,142,847,169.34 | 57,137,084,576.40 | 0.01% | [Key Financial Data and Indicators Prepared Under International Financial Reporting Standards (IFRS)](index=7&type=section&id=Key%20Financial%20Data%20and%20Indicators%20Prepared%20Under%20International%20Financial%20Reporting%20Standards%20%28IFRS%29) This section presents the company's profit distribution, earnings per share, and financial position prepared under IFRS for the six months ended June 30, 2025, indicating increased profit and comprehensive income but a slight rise in gearing ratio Profit Distribution and Earnings Per Share (IFRS, for the Six Months Ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company | 2,753 | 2,281 | | Profit Attributable to Non-controlling Interests | 135 | 254 | | Profit for the Period | 2,888 | 2,535 | | Basic EPS (RMB) | 0.32 | 0.28 | | Diluted EPS (RMB) | 0.32 | 0.27 | Total Comprehensive Income (IFRS, for the Six Months Ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Profit for the Period | 2,888 | 2,535 | | Other Comprehensive Income for the Period | 25 | (515) | | Total Comprehensive Income for the Period | 2,913 | 2,020 | | Total Comprehensive Income Attributable to Equity Holders of the Company | 2,778 | 1,766 | Assets and Liabilities (IFRS, as of June 30, 2025) | Indicator | As of June 30, 2025 (RMB million) | As of Dec 31, 2024 (RMB million) | | :--- | :--- | :--- | | Total Assets | 129,196 | 123,712 | | Net Assets | 59,340 | 59,802 | | Gearing Ratio | 54.07% | 51.66% | [Differences Between Unaudited Interim Financial Reports Prepared Under CAS and IFRS](index=10&type=section&id=Differences%20Between%20Unaudited%20Interim%20Financial%20Reports%20Prepared%20Under%20CAS%20and%20IFRS) This section reconciles the differences in net profit and net assets attributable to shareholders between CAS and IFRS, primarily due to M&A costs and safety production reserve provisions Reconciliation of Net Profit and Net Assets Differences Between CAS and IFRS (RMB) | Item | Net Profit Attributable to Shareholders (Current Period) | Net Profit Attributable to Shareholders (Prior Period) | Net Assets Attributable to Shareholders (Period-end) | Net Assets Attributable to Shareholders (Period-start) | | :--- | :--- | :--- | :--- | :--- | | Under CAS | 2,764,778,602.90 | 2,288,046,921.87 | 57,142,847,169.34 | 57,137,084,576.40 | | Adjustments and Amounts Under IFRS: | | | | | | －M&A costs from prior year business combinations | | | -36,528,600.00 | -36,528,600.00 | | －Excess of safety production reserve provision over utilization for the period | -11,267,149.85 | -8,657,200.95 | | | | Under IFRS | 2,753,511,453.05 | 2,279,389,720.92 | 57,106,318,569.34 | 57,100,555,976.40 | [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the company's business operations, financial performance, and strategic initiatives, including global expansion and digital transformation [Business Review](index=11&type=section&id=Business%20Review) This section reviews the company's business development under its 'related diversification, globalization, and digitalization' strategy, covering market performance, global expansion, digital transformation, intelligent manufacturing, and technological innovation, with revenue and net profit growth - The company adheres to the core philosophy of 'operating with internet thinking and developing products with ultimate thinking,' continuously focusing on the three strategic transformations: 'related diversification, globalization, and digitalization'[22](index=22&type=chunk) - During the reporting period, the company achieved revenue of **RMB 24.855 billion**, a year-on-year increase of **1.30%**; net profit attributable to the parent company was **RMB 2.753 billion**, a year-on-year increase of **20.69%**[22](index=22&type=chunk) [Accelerating Industrial Ladder Construction and Promoting Coordinated Development Across Segments](index=11&type=section&id=Accelerating%20Industrial%20Ladder%20Construction%20and%20Promoting%20Coordinated%20Development%20Across%20Segments) The company accelerates industrial diversification, maintaining strong market positions in traditional segments while rapidly growing emerging industries, with significant export increases across product lines - The overall export sales of the three traditional advantageous product lines—concrete machinery, engineering hoisting machinery, and building hoisting machinery—increased by **over 13% year-on-year**[24](index=24&type=chunk) - Export sales of earthmoving machinery increased by **over 33% year-on-year**, leading the industry in growth rate[25](index=25&type=chunk) - Aerial work machinery holds the **number one global market share** in ultra-high straight boom products and high-meter curved boom product ZA32J[26](index=26&type=chunk) - Mining machinery production capacity increased **3 times** compared to the beginning of the year, with overseas sales growing by **over 29% year-on-year**[28](index=28&type=chunk) - The company has newly developed **3 humanoid robots**, with dozens entering factory operation pilots, accelerating industrialization[29](index=29&type=chunk) - Sales of emergency equipment increased by **over 54% year-on-year**, and export sales of foundation construction increased by **over 85% year-on-year**[30](index=30&type=chunk) [Globalization Strategy Drives In-depth Breakthroughs in Global Markets](index=15&type=section&id=Globalization%20Strategy%20Drives%20In-depth%20Breakthroughs%20in%20Global%20Markets) The company's globalization strategy drives significant overseas revenue growth, particularly in Africa, by enhancing its direct sales system and expanding global R&D and manufacturing bases - In the first half of the year, the company's overseas revenue continued to grow, with a year-on-year increase of **over 14%**, and the African region saw an increase of **over 179%**[31](index=31&type=chunk) - Deepening the 'air hub + ground force + air force' end-to-end model, leveraging AI technology to optimize business process efficiency[31](index=31&type=chunk) - Globally, **over 30 primary business air hubs** and **over 430 secondary and tertiary outlets** have been established, with products covering **over 170 countries and regions**[32](index=32&type=chunk) - Continuously advancing the expansion and upgrade of overseas R&D and manufacturing bases, including the expansion of the Wilbert factory in Germany and the construction of a new aerial work platform factory in Hungary[32](index=32&type=chunk) [Accelerating Digital Transformation to Reshape Business Ecosystem with Digital Engine](index=17&type=section&id=Accelerating%20Digital%20Transformation%20to%20Reshape%20Business%20Ecosystem%20with%20Digital%20Engine) The company accelerates digital transformation to empower efficient overseas operations, refine production, sales, and inventory management, and reshape its 'demand-driven, lean supply' operating model - Digitalization empowers efficient overseas business operations, with full application of global marketing and service business process diagnostic tools and performance management platforms, and the deepened spare parts order dispatch management system now covers **9 product lines** in **over 30 countries and regions**[33](index=33&type=chunk) - Digitalization empowers refined production, sales, and inventory control, creating a full-chain digital monitoring system from 'business opportunity insight to value realization,' integrating AI and other cutting-edge technologies to reshape the 'demand-driven, lean supply' operating model[33](index=33&type=chunk) [Intelligent Manufacturing Industrial Cluster Gradually Takes Shape, Continuously Leading High-Quality Industry Development](index=18&type=section&id=Intelligent%20Manufacturing%20Industrial%20Cluster%20Gradually%20Takes%20Shape%2C%20Continuously%20Leading%20High-Quality%20Industry%20Development) The company's intelligent manufacturing industrial cluster is expanding, with 17 smart factories and over 370 smart production lines globally, leveraging AI and big data to enhance efficiency and product quality - The company has cumulatively built and put into operation **17 smart factories** and **over 370 smart production lines** globally, with **4 major host machine smart factories** and key component centers in Zoomlion Smart Industrial City fully operational[34](index=34&type=chunk) - Over **270 industry-leading complete process intelligent manufacturing technologies** independently developed by the company, with nearly **250 key technologies** implemented on smart production lines[34](index=34&type=chunk) - Deep integration of AI Agent, big data, digital twin, and other technologies drives self-perception, self-decision, and self-optimization collaboration across the entire business chain, leading to a **15% increase in production efficiency** and a **20% increase in warehouse physical management efficiency**[36](index=36&type=chunk) - Intelligent fault diagnosis based on AI and intelligent control technology improves fault response efficiency by **40%** and diagnostic accuracy by **18%**[37](index=37&type=chunk) [Technological Innovation Drives Global Competitiveness, "Three Transformations" Technology Forges New Productive Forces](index=20&type=section&id=Technological%20Innovation%20Drives%20Global%20Competitiveness%2C%20%22Three%20Transformations%22%20Technology%20Forges%20New%20Productive%20Forces) The company drives high-quality development through technological innovation, launching new products globally, focusing on 'digitalization, intelligence, and green' technologies, and expanding its intellectual property footprint - In the first half of the year, **141 new products** were launched in overseas markets, with **338 products** obtaining international certifications, and the overseas market coverage of leading construction and mining machinery products increased by nearly **10%**[38](index=38&type=chunk) - There are **1,755 R&D projects** underway, with nearly **300 projects** focusing on new technologies for the 'Three Transformations'; **206 new host products** were launched concurrently, including **20 new energy products**[38](index=38&type=chunk) - New energy host machines are fully expanding, with **20 new energy products** launched in the first half of the year; the electrification penetration rate of mixer trucks increased from **36.6% in 2024 to 74%**, and wide-body trucks from **2.8% to 33%**[40](index=40&type=chunk) - Full-speed entry into the hydrogen energy sector, with the rollout of a new generation of hydrogen liquid-driven piston compressors, and the development of 2-10Nm3 flow-channel PEM electrolyzers and a **300kW fuel cell power station**[41](index=41&type=chunk) - **683 new patent applications** were filed, and **555 patents** were granted; cumulative patents for 'Three Transformations' new technologies reached **5,974**, with **974 PCT applications** and national phase entries overseas[43](index=43&type=chunk) [Continuous Improvement in Operational Management Quality and Efficiency](index=24&type=section&id=Continuous%20Improvement%20in%20Operational%20Management%20Quality%20and%20Efficiency) The company continuously improves operational management quality and efficiency by strengthening risk control, supply chain, inventory management, service localization, and global human resources development - Comprehensively strengthening risk control, establishing an end-to-end risk control system combining prevention and mitigation, achieving terminal overdue monitoring down to each customer, order, and equipment[45](index=45&type=chunk) - Strengthening supply chain system construction, promoting centralized procurement integration for bulk general materials, accelerating digital transformation, with plans for full company coverage in the second half of the year[45](index=45&type=chunk) - Strengthening the full-process inventory management system, completing the first phase of the production, sales, and inventory digital monitoring platform launch, resulting in a **significant reduction in the company's inventory scale**[45](index=45&type=chunk) - Deepening the development of ultimate service capabilities, accelerating service localization, with a service localization rate reaching **54%**[46](index=46&type=chunk) - Tackling the empowerment of a globalized human resource system, optimizing organizational structure, targeted talent acquisition, and building a team with 'high recognition, high standards, and high quality'[46](index=46&type=chunk) [Financial Performance and Condition Analysis](index=26&type=section&id=Financial%20Performance%20and%20Condition%20Analysis) This section analyzes the company's revenue, profit, cash flow, and capital expenditures, reporting growth in revenue and net profit, and a significant increase in operating cash flow - During the reporting period, the company achieved revenue of **RMB 24.855 billion**, a year-on-year increase of **1.30%**; net profit attributable to the parent company was **RMB 2.753 billion**, a year-on-year increase of **20.69%**[47](index=47&type=chunk) - For the six months ended June 30, 2025, net cash generated from operating activities was **RMB 1.603 billion**, an increase of **RMB 927 million** (or **137.13%**) compared to RMB 676 million in the same period last year[49](index=49&type=chunk) - Net cash used in investing activities was **RMB 3.848 billion**, primarily for the acquisition of property, plant and equipment, right-of-use assets, and intangible assets totaling **RMB 2.565 billion**, and prepayments for equity in subsidiaries of **RMB 1.628 billion**[50](index=50&type=chunk) - Net cash generated from financing activities was **RMB 1.246 billion**, mainly due to a net increase in bank and other borrowings of **RMB 2.703 billion**[51](index=51&type=chunk) [Employees](index=27&type=section&id=Employees) As of June 30, 2025, the company had 34,572 employees, with no significant changes in headcount, remuneration, or policies compared to the 2024 annual report - As of June 30, 2025, the company had a total of **34,572 employees**[52](index=52&type=chunk) - During the reporting period, there were no significant changes in the group's employee numbers, remuneration, or remuneration policies compared to those disclosed in the 2024 annual report[53](index=53&type=chunk) [Dividends](index=27&type=section&id=Dividends) The Board proposed an interim dividend of RMB 0.2 per share, totaling RMB 1.73 billion, for the six months ended June 30, 2025, subject to shareholder approval - According to the Board's proposal on August 29, 2025, the company's interim dividend for the six months ended June 30, 2025, is **RMB 0.2 per share**, totaling **RMB 1.73 billion**[54](index=54&type=chunk) - This proposal is subject to approval by the company's shareholders at an extraordinary general meeting[54](index=54&type=chunk) [Carry-forward of Proceeds from Equity Securities Issued in Previous Fiscal Years](index=28&type=section&id=Carry-forward%20of%20Proceeds%20from%20Equity%20Securities%20Issued%20in%20Previous%20Fiscal%20Years) As of June 30, 2025, RMB 116.09 million of the net proceeds from the 2021 non-public A-share offering remained unutilized, primarily for smart manufacturing projects, expected to be fully used by H2 2025 - On February 5, 2021, the company privately issued A-shares, raising a total of **RMB 5.199 billion**, with net proceeds of **RMB 5.146 billion**[55](index=55&type=chunk) - As of June 30, 2025, a total of **RMB 116.09 million** of the net proceeds remained unutilized[55](index=55&type=chunk) Unutilized Proceeds from Equity Securities (as of June 30, 2025) | No. | Purpose | Proposed Allocation of Net Proceeds (RMB million) | Unutilized Amount as of June 30, 2025 (RMB million) | Expected Completion Time | | :--- | :--- | :--- | :--- | :--- | | 1 | Excavating Machinery Intelligent Manufacturing Project | 2,400.00 | 57.67 | 2025年下半年 | | 3 | Key Components Intelligent Manufacturing Project | 1,300.00 | 58.42 | 2025年下半年 | [Corporate Governance](index=29&type=section&id=Corporate%20Governance) This section outlines the company's corporate governance practices, adherence to regulatory requirements, and internal control systems, including compliance with the Corporate Governance Code [Overview of Corporate Governance](index=29&type=section&id=Overview%20of%20Corporate%20Governance) The company adheres to relevant regulations, continuously improves its corporate governance structure and internal controls, and generally complies with the Corporate Governance Code, with the exception of the combined roles of Chairman and Chief Executive Officer - The company strictly adheres to the requirements of China's Company Law, China's Securities Law, and relevant regulations from the China Securities Regulatory Commission and the Hong Kong Stock Exchange, continuously improving its corporate governance structure, standardizing operations, and strengthening internal control systems[58](index=58&type=chunk) - During the reporting period, the company complied with all applicable code provisions in Part 2 of the Corporate Governance Code, with the sole exception that the roles of Chairman and Chief Executive Officer are not separate, as Dr. Zhan Chunxin holds both positions concurrently[59](index=59&type=chunk) - The company made specific inquiries to all directors and supervisors, who confirmed full compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period[60](index=60&type=chunk) - The company's Audit Committee, in conjunction with management, discussed the accounting standards and practices adopted by the company and reviewed this report[61](index=61&type=chunk) [Share Changes and Shareholder Information](index=30&type=section&id=Share%20Changes%20and%20Shareholder%20Information) This section details changes in the company's share capital and shareholder structure, including share repurchases and the interests of substantial shareholders [Share Changes](index=30&type=section&id=Share%20Changes) During the reporting period, the company's unrestricted shares decreased by 29,457,000 due to H-share repurchases and cancellations, leading to a corresponding reduction in total shares Share Changes (Unit: Shares) | Item | Quantity Before Change | Change (+, -) | Quantity After Change | | :--- | :--- | :--- | :--- | | I. Restricted Shares | 25,610,325 | – | 25,610,325 | | II. Unrestricted Shares | 8,652,381,911 | -29,457,000 | 8,622,924,911 | | A-shares | 7,070,417,363 | – | 7,070,417,363 | | H-shares | 1,581,964,548 | -29,457,000 | 1,552,507,548 | | III. Total Shares | 8,677,992,236 | -29,457,000 | 8,648,5

2025 INTERIM REPORT 中期報告 INTERIM REPORT 2025 中期報告 This interim report, in both English and Chinese versions, is available on the Company's website at www.maoye.cn. Shareholders may at any time change their choice of language(s) (either English only or Chinese only or both languages) of the corporate communications of the Company (including but not limited to annual reports, interim reports and circulars) by sending reasonable prior notice in writing to the share registrar of the Company in Hong Kong, Tricor ...

[Company Information](index=3&type=section&id=Company%20Information) This chapter outlines Guotai Junan International Holdings Limited's board members, committee structures, company secretary, registered office, auditor, share registrar, and investor relations contacts - The Board of Directors comprises Executive Directors Dr. Yan Feng (Chairman) and Ms. Qi Haiying, Non-executive Directors Ms. Yu Xuping, Mr. Dong Boyang, Mr. Han Zhida (resigned), and Mr. Zou Hua (appointed), along with Independent Non-executive Directors Dr. Fu Tingmei, Professor Chan Ka Keung, and Mr. Liu Chung Man[3](index=3&type=chunk) - Membership and chair positions for the Audit, Remuneration, Nomination, Risk, and ESG Committees are detailed, including records of director changes[3](index=3&type=chunk) - The Company Secretary is Ms. Fung Ching Yiu, the registered office is at 27/F, Low Block, Grand Millennium Plaza, 181 Queen's Road Central, Hong Kong, and the auditor is KPMG[4](index=4&type=chunk) [Financial Highlights](index=4&type=section&id=Financial%20Highlights) This chapter provides an overview of Guotai Junan International Holdings Limited's key financial data for the six months ended June 30, 2025, showing significant growth in revenue and profit, along with substantial increases in payout ratio and return on shareholders' equity Key Financial Data for the 6 Months Ended June 30 | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,825,044 | 2,170,922 | 30% | | – Commission and fee income | 541,145 | 358,511 | 51% | | – Interest income | 1,195,970 | 1,095,004 | 9% | | – Net trading and investment income | 1,087,929 | 717,407 | 52% | | Profit attributable to ordinary equity holders | 550,089 | 194,937 | 182% | | Dividends | 475,950 | 114,576 | 315% | | Payout ratio | 87% | 59% | 28 percentage points | | Return on shareholders' equity (annualized) | 7.3% | 2.6% | 4.7 percentage points | | Basic earnings per share (HK cents) | 5.77 | 2.04 | 183% | | Diluted earnings per share (HK cents) | 5.77 | 2.04 | 183% | | Dividend per share (HK cents) | 5.00 | 1.20 | 317% | Financial Position (Period-end) | Metric | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Total assets | 122,005,130 | 130,173,149 | (6%) | | Shareholders' equity | 15,434,464 | 14,914,657 | 3% | | Number of shares issued | 9,518,994,707 | 9,539,503,707 | (0.2%) | | Equity per ordinary share (HK$) | 1.62 | 1.56 | 4% | - Revenue increased by **30% year-on-year to HK$2.825 billion**, and profit attributable to ordinary equity holders surged by **182% year-on-year to HK$550 million**[9](index=9&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This chapter provides an in-depth analysis of the company's operating performance and financial position in the first half of 2025, along with an outlook on future markets and corporate strategy, covering market review, business segment development, revenue and cost analysis, balance sheet overview, capital structure, and risk management [I. Market Review](index=5&type=section&id=I.%20Market%20Review) In the first half of 2025, the global economy experienced continued volatility due to geopolitical and tariff policies, while China's economy operated steadily, mainland support policies boosted capital market recovery, and the Hong Kong market significantly rebounded, with the Hang Seng Index and Hang Seng Tech Index leading performance, and a substantial increase in average daily turnover and IPO fundraising in Hong Kong stocks - In the first half of 2025, the Hang Seng Index cumulatively rose by **23%**, and the Hang Seng Tech Index increased by **22%**, leading among major global stock indices[10](index=10&type=chunk) - The average daily turnover of Hong Kong stocks reached **HK$240.2 billion**, a **118% year-on-year increase**[10](index=10&type=chunk) - The Hong Kong Main Board completed **44 initial public offerings**, raising approximately **HK$107.1 billion**, a **7-fold year-on-year increase**, surpassing the full-year scale of 2024[10](index=10&type=chunk) - The primary market for Chinese offshore USD bonds saw a significant rebound in issuance volume compared to 2024, with the secondary market recovering, as the high-yield bond total return index rose by **6%** and the investment-grade bond total return index increased by **4%**[10](index=10&type=chunk) [II. Operating Performance Review](index=5&type=section&id=II.%20Operating%20Performance%20Review) The Group achieved leapfrog growth in revenue and profit in the first half of 2025, with revenue reaching HK$2.825 billion, a 30% year-on-year increase, and profit attributable to ordinary equity holders at HK$550 million, surging by 182% year-on-year, primarily driven by the synergistic development and innovation of core businesses such as wealth management, corporate finance, and investment management [Business Development](index=6&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%E7%B6%93%E7%87%9F%E7%99%BC%E5%B1%95) The Group achieved diversified development and innovation in wealth management, corporate finance, and institutional business, making significant progress in virtual asset services, bond underwriting, and ESG green finance, while continuously optimizing customer services and digital transformation - Wealth management commission income significantly increased by **56% year-on-year to HK$279 million**, benefiting from diversified products and services, and the enhancement of Cross-boundary Wealth Management Connect 2.0 services[12](index=12&type=chunk) - The Group has established comprehensive service capabilities for digital asset-related businesses, including the offering, issuance, distribution, and trading services for virtual asset-related products[13](index=13&type=chunk) - Corporate finance placement, underwriting, and sub-underwriting commission income significantly increased by **85% year-on-year to HK$165 million**[13](index=13&type=chunk) - In the first half, the Group participated in **150 bond issuance underwritings**, a **33% year-on-year increase**, with a total issuance size of approximately **HK$258.8 billion**, a **38% year-on-year increase**, ranking first in the market for the number and amount of Chinese offshore bond lead underwritings[15](index=15&type=chunk) - In equity business, the Group assisted CATL in completing its Hong Kong IPO and helped **18 companies** submit listing applications to the HKEX Main Board[16](index=16&type=chunk) - Hong Kong stock derivative trading volume grew significantly, with financial product business reaching **HK$41.74 billion**, a **4% increase** from the end of 2024[18](index=18&type=chunk) - Completed **47 ESG bond issuances**, with a financing scale of approximately **HK$102.7 billion**, ranking first among Chinese securities firms for lead underwriting amount of Chinese offshore ESG bonds[18](index=18&type=chunk) - Achieved operational carbon neutrality for the third consecutive year, offsetting **609.29 tonnes of CO2 equivalent** of Scope 1 and Scope 2 greenhouse gas emissions for 2024[18](index=18&type=chunk) [Performance Analysis](index=8&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%E6%A5%AD%E7%B8%BE%E5%88%86%E6%9E%90) The Group's revenue structure is diversified, with growth in commission and fee income, interest income, and net trading and investment income, particularly strong performance in corporate finance and investment management segments, though total costs increased due to higher finance costs Revenue by Nature Analysis | Revenue Type | 2025 H1 (HK$ hundred million) | 2024 H1 (HK$ hundred million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Commission and fee income | 5.41 | 3.59 | 51% | | Interest income | 11.96 | 10.95 | 9% | | Net trading and investment income | 10.88 | 7.17 | 52% | - Brokerage business income significantly increased by **46% to HK$323 million**, while placement, underwriting, and sub-underwriting commission income surged by **85% year-on-year to HK$165 million**[19](index=19&type=chunk) - Interest income from other financial institutions soared by **159% to HK$304 million**, and interest income from fixed income securities significantly increased by **76% to HK$309 million**[20](index=20&type=chunk) - Net trading income from fixed income securities, non-consolidated investment funds, derivatives, and equity investments dramatically increased by **246% to HK$531 million**[20](index=20&type=chunk) Revenue by Segment Analysis | Segment | 2025 H1 (HK$ hundred million) | 2024 H1 (HK$ hundred million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Wealth Management | 9.13 | 9.77 | (7%) | | Institutional Investor Services | 8.28 | 8.63 | (4%) | | Corporate Finance Services | 2.02 | 1.20 | 69% | | Investment Management | 8.83 | 2.11 | 317% | - Total costs increased by **10% year-on-year to HK$2.132 billion**, primarily due to higher finance costs, as well as increased client manager commissions and staff costs commensurate with business growth[23](index=23&type=chunk) [III. Financial Position Analysis](index=10&type=section&id=III.%20Financial%20Position%20Analysis) The Group's total assets and liabilities decreased in the first half of 2025, but shareholders' equity grew steadily, maintaining healthy financial ratios and ample liquidity through optimized balance sheet structure and market risk control [Balance Sheet Overview](index=10&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8%E6%A6%82%E6%B3%81) The Group's total assets and liabilities both decreased, but shareholders' equity increased, with continuous optimization of the balance sheet structure, ample liquidity reserves, and effective control over market risks and financing costs Balance Sheet Overview | Metric | As of June 30, 2025 (HK$ hundred million) | As of December 31, 2024 (HK$ hundred million) | Change | | :--- | :--- | :--- | :--- | | Total assets | 1,220.1 | 1,301.7 | (6%) | | Total liabilities | 1,064.6 | 1,151.5 | (8%) | | Total equity | 155.5 | 150.3 | 3% | - Total assets decreased primarily due to the Group's appropriate reduction in fixed income securities holdings in response to market conditions[24](index=24&type=chunk) - The decrease in total liabilities was mainly due to the Group's reduction in fixed income securities holdings, leading to a fall in repurchase agreement obligations[26](index=26&type=chunk) Financial Ratios | Ratio | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Nominal leverage ratio | 7.04 times | 7.77 times | | Leverage ratio excluding financial products held on behalf of clients | 4.36 times | 5.09 times | | Debt-to-equity ratio | 0.87 times | 1.10 times | | Current ratio | 1.13 times | 1.15 times | [Capital Commitments, Other Commitments, and Contingent Liabilities](index=11&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94%E3%80%81%E5%85%B6%E4%BB%96%E6%89%BF%E6%93%94%E5%8F%8A%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) At the end of the reporting period, the Group had capital commitments of approximately HK$10.1 million for system upgrades and property renovations, but no contingent liabilities or underwriting commitments - The Group had capital commitments of approximately **HK$10,097,000** for system upgrades and property renovations, which were contracted but not yet provided for as of June 30, 2025[211](index=211&type=chunk) - As of June 30, 2025, the Group had no contingent liabilities or underwriting commitments[27](index=27&type=chunk)[215](index=215&type=chunk) [Liquidity and Financial Resources](index=11&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The Group's liquid assets and cash and cash equivalents decreased, but operating cash flow remained strong, and it successfully renewed its Medium Term Note Programme and issued new USD notes after the reporting period, ensuring sufficient financial resources - As of June 30, 2025, the Group's liquid assets were **HK$111.91 billion**, a **9% decrease** from the end of 2024[28](index=28&type=chunk) - Cash and cash equivalents balance was **HK$5.89 billion**, with a net cash outflow of **HK$1.31 billion** (compared to an inflow of HK$4.67 billion in the first half of 2024)[28](index=28&type=chunk) - The Company successfully renewed its Medium Term Note Programme with a limit of **HK$35 billion** and, through its subsidiaries, holds a Guaranteed Structured Note Programme with a limit of **US$15 billion**[28](index=28&type=chunk) - As of June 30, 2025, outstanding Medium Term Notes and Structured Notes were **HK$6.6 billion** and **US$4.9 billion**, respectively[28](index=28&type=chunk) - Subsequent to the reporting period, the Company issued notes totaling **US$500 million** in July 2025[29](index=29&type=chunk) [Significant Acquisitions and Disposals](index=12&type=section&id=%EF%BC%88%E5%9B%9B%EF%BC%89%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) For the six months ended June 30, 2025, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures[33](index=33&type=chunk) [Material Investments Held](index=12&type=section&id=%EF%BC%88%E4%BA%94%EF%BC%89%E6%89%80%E6%8C%81%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) As of June 30, 2025, the Group did not hold any material investments exceeding 5% of its total assets - As of June 30, 2025, the Group did not hold any material investments exceeding **5%** of its total assets[34](index=34&type=chunk) [Capital Structure and Regulatory Capital](index=12&type=section&id=%EF%BC%88%E5%85%AD%EF%BC%89%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B%E5%8F%8A%E7%9B%A3%E7%AE%A1%E8%B3%87%E6%9C%AC) The Company repurchased and cancelled 23 million shares during the reporting period, issued 2.5 million new shares due to share option exercises, and continuously monitors its capital structure to ensure compliance with capital requirements of regulatory bodies like the SFC - For the six months ended June 30, 2025, the Company repurchased **20,055,000 shares** on the Stock Exchange for a total consideration of **HK$21,988,689**, and cancelled a total of **23,009,000 repurchased shares**[35](index=35&type=chunk)[59](index=59&type=chunk) - The Company allotted and issued a total of **2,500,000 new shares** upon the exercise of share options under the Share Option Scheme[35](index=35&type=chunk) - As of June 30, 2025, the total number of issued shares was **9,518,994,707**[35](index=35&type=chunk) - All licensed subsidiaries of the Group have complied with their respective applicable capital requirements[35](index=35&type=chunk) [Foreign Exchange Risk](index=12&type=section&id=%EF%BC%88%E4%B8%83%EF%BC%89%E5%A4%96%E5%BD%99%E9%A2%A8%E9%9A%AA) The Group's foreign exchange risk primarily arises from leveraged foreign exchange trading and brokerage business, but it hedges client positions through back-to-back transactions and faces lower foreign exchange risk due to the HKD-USD peg, taking appropriate hedging measures for RMB or other currency fluctuations - The Group's foreign exchange risk primarily arises from its leveraged foreign exchange trading and brokerage business, as well as its transactions denominated in currencies other than HKD[36](index=36&type=chunk) - The Group hedges most client positions' exchange rate fluctuations through back-to-back transactions with external counterparties and strictly monitors its positions[36](index=36&type=chunk) - Due to the HKD-USD peg, the Group does not face significant foreign exchange risk and will take appropriate hedging measures for RMB or other currency exchange rate fluctuations[36](index=36&type=chunk) [IV. Outlook](index=13&type=section&id=IV.%20Outlook) Looking ahead to the second half of 2025, the global economy faces uncertainties, but deepening capital market connectivity between mainland China and Hong Kong, along with proactive Hong Kong government policies, will drive growth momentum. The Group will adhere to its "seeking progress while maintaining stability" strategy, optimize its revenue structure, strengthen core businesses, accelerate digital transformation, and build a "one-stop digital financial service platform" to seize Web3.0 opportunities - In the second half of 2025, geopolitical competition, tariff negotiations, and US Federal Reserve monetary policy are uncertain factors that will pose challenges to the global economy[37](index=37&type=chunk) - China continues to introduce supportive policies, capital market connectivity between mainland China and Hong Kong is deepening, and the Hong Kong government actively promotes the development of the digital asset industry, anticipating continued positive momentum in the Hong Kong capital market in the second half[37](index=37&type=chunk) - The Group will adhere to its overall strategy of "seeking progress while maintaining stability, promoting stability through progress, and pragmatic advancement" to optimize its revenue structure and drive high-quality sustainable development[38](index=38&type=chunk) - In wealth management, the Group will focus on "product iteration + experience upgrade + market expansion" as core drivers, continuously expanding its product matrix, optimizing Cross-boundary Wealth Management Connect 2.0 services, and accelerating digital transformation[38](index=38&type=chunk) - In digital asset business, the Group will continue to optimize related trading services, strengthen product design capabilities, and build a "one-stop digital financial service platform" to help clients seize new wealth growth opportunities in the Web3.0 era[38](index=38&type=chunk) [V. Human Capital and Remuneration Policy](index=13&type=section&id=V.%20Human%20Capital%20and%20Remuneration%20Policy) The Group is committed to providing employees with competitive remuneration and comprehensive training and development opportunities; as of June 30, 2025, it had 642 employees in Hong Kong, Singapore, and Macau, with salaries reviewed annually and discretionary bonuses based on performance - As of June 30, 2025, the Group had **642 employees** in Hong Kong, Singapore, and Macau[39](index=39&type=chunk) - The company offers competitive remuneration, with salaries reviewed annually and discretionary bonuses based on Group and individual performance[39](index=39&type=chunk) - Other benefits include a Mandatory Provident Fund Scheme and medical and dental insurance, along with training courses in financial knowledge, compliance, and leadership management[39](index=39&type=chunk) [Other Information](index=14&type=section&id=Other%20Information) This chapter discloses dividend declarations, share transfer registration arrangements, directors' and substantial shareholders' interests in shares, details of the share option scheme, Listing Rules disclosures, corporate governance and model code compliance, share repurchase activities, changes in directors' information, Audit Committee work, and updates to the non-competition undertaking [Dividends](index=14&type=section&id=Dividends) The Board has declared an interim dividend of HK$0.05 per share for the six months ended June 30, 2025, with a payout ratio of 87%, payable on September 30, 2025 - The Board has declared an interim dividend of **HK$0.05 per share** for the six months ended June 30, 2025 (2024: HK$0.012 per share)[40](index=40&type=chunk) - The interim dividend, with a payout ratio of **87%**, will be paid on September 30, 2025, to shareholders on the register of members as of September 15, 2025[40](index=40&type=chunk) [Closure of Register of Members](index=14&type=section&id=Closure%20of%20Register%20of%20Members) To determine eligibility for the interim dividend, the Company will suspend share transfer registration on September 15, 2025, with all relevant documents to be submitted to the share registrar by 4:30 p.m. on September 12, 2025 - The Company will suspend share transfer registration on **Friday, September 15, 2025**, to determine shareholders' entitlement to the interim dividend[41](index=41&type=chunk) - To qualify for the interim dividend, all duly completed transfer documents, together with the relevant share certificates, must be lodged with the Company's share registrar by **4:30 p.m. on Friday, September 12, 2025**[41](index=41&type=chunk) [Directors' and Chief Executive's Interests in Shares and Underlying Shares of the Company or Associated Corporations](index=14&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company%20or%20Associated%20Corporations) This chapter discloses the long positions in the Company's shares and underlying shares held by directors and the chief executive as of June 30, 2025, with Dr. Yan Feng holding 0.74% and Ms. Qi Haiying holding 0.09% of the shares Directors' Long Positions in Shares and Underlying Shares of the Company | Director Name | Capacity | Number of Shares | Number of Underlying Shares related to Share Options | Total | Percentage of Issued Shares (1) | | :--- | :--- | :--- | :--- | :--- | :--- | | Yan Feng | Personal Interest | 68,546,955 | 2,300,000 | 70,846,955 | 0.74% | | Qi Haiying | Personal Interest | 6,012,000 | 2,300,000 | 8,312,000 | 0.09% | | Fu Tingmei | Personal Interest | 1,512,096 | – | 1,512,096 | 0.02% | - The percentage is calculated based on **9,518,994,707 shares** issued as of June 30, 2025[42](index=42&type=chunk) - Save as disclosed above, no other director or chief executive of the Company had any other interests or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations[43](index=43&type=chunk) [Share-Based Remuneration Schemes](index=15&type=section&id=Share-Based%20Remuneration%20Schemes) The Company has a share option scheme designed to incentivize employees; although the scheme expired in 2020, granted options remain exercisable. As of June 30, 2025, 15.8 million share options remained unexercised, representing approximately 0.20% of issued shares [Share Option Scheme](index=15&type=section&id=Share%20Option%20Scheme) The Share Option Scheme was adopted in 2010 and expired in 2020, but granted options remain exercisable for 10 years. The scheme has grant limits, exercise prices determined by the Board, and 2.5 million options were exercised during the reporting period - The Share Option Scheme was adopted on **June 19, 2010**, and expired on **June 19, 2020**, after which no further options may be granted, but options already granted remain exercisable for a period of **10 years** from their respective grant dates[45](index=45&type=chunk) - The Share Option Scheme aims to provide individuals working for the Group's benefit with an opportunity to acquire equity in the Company, thereby incentivizing them to work for the Group's interests[45](index=45&type=chunk) - The maximum number of options that can be granted to any participant is **1%** of the total issued shares, while for substantial shareholders or independent non-executive directors, the limit is **0.1%** or a total value of **HK$5 million**[46](index=46&type=chunk) - The exercise price of the share options is determined by the Board, being at least the higher of the closing price on the offer date or the average closing price for the five trading days immediately preceding the offer date[48](index=48&type=chunk) - As of August 27, 2025, the total number of shares issuable under unexercised share options granted under the Share Option Scheme was **7,850,000 shares**, representing approximately **0.08%** of the issued shares[50](index=50&type=chunk) Movements in Share Options for the 6 Months Ended June 30, 2025 | Participant Name | As of January 1, 2025 | Granted during the period | Exercised during the period | Cancelled during the period | Lapsed during the period | As of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Directors Subtotal | 4,600,000 | – | – | – | – | 4,600,000 | | Employees Subtotal | 14,000,000 | – | (2,500,000) | – | (300,000) | 11,200,000 | | **Total** | **18,600,000** | **–** | **(2,500,000)** | **–** | **(300,000)** | **15,800,000** | - During the period ended June 30, 2025, **2,500,000 share options** were exercised, resulting in the issuance of **2,500,000 shares** for a total cash consideration of **HK$3,841,000**[210](index=210&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=17&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, Guotai Junan Financial Holdings and its parent company, Guotai Haitong, were the Company's substantial shareholders, each beneficially owning or deemed to own 74.01% of the share interests Substantial Shareholders' Long Positions in Shares and Underlying Shares | Shareholder Name | Capacity | Number of Shares (Long Position) | Percentage of Issued Shares (2) | | :--- | :--- | :--- | :--- | | Guotai Junan Financial Holdings | Beneficial Owner | 7,044,877,066 | 74.01% | | Guotai Haitong (1) | Interest in Controlled Corporation | 7,044,877,066 | 74.01% | - Guotai Junan Financial Holdings is a wholly-owned subsidiary of Guotai Haitong, thus Guotai Haitong is deemed to have an interest in these shares[54](index=54&type=chunk) - The percentage is calculated based on the **9,518,994,707 shares** issued as of June 30, 2025[55](index=55&type=chunk) [Disclosure Pursuant to Rule 13.21 of the Listing Rules](index=17&type=section&id=Disclosure%20Pursuant%20to%20Rule%2013.21%20of%20the%20Listing%20Rules) The Company's committed revolving loan agreements with banks contain a default clause stating that if Guotai Haitong ceases to be the single largest legal and beneficial owner or no longer controls the Company, it will constitute an event of default - The Company has entered into committed revolving loan agreements with certain banks in Hong Kong, with an aggregate limit of **HK$1.6 billion** and **HK$2.15 billion**[56](index=56&type=chunk) - Under the loan agreements, if Guotai Haitong ceases to be the single largest legal and beneficial owner of the Company's shares, directly or indirectly, or ceases to control the Company, it will constitute an event of default[56](index=56&type=chunk) - In the event of default, lenders may cancel commitments, declare loans immediately due, or demand repayment[56](index=56&type=chunk) [Compliance with Corporate Governance Code](index=18&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company has adopted all principles and code provisions of the Corporate Governance Code and confirmed full compliance during the period from January 1, 2025, to June 30, 2025 - The Company has adopted all principles and code provisions of the Corporate Governance Code as its own corporate governance code[57](index=57&type=chunk) - During the period from January 1, 2025, to June 30, 2025, the Company complied with all code provisions set out in the Corporate Governance Code[57](index=57&type=chunk) [Compliance with Model Code](index=18&type=section&id=Compliance%20with%20Model%20Code) The Company has adopted the Model Code for securities transactions by directors and confirmed that all directors fully complied with its required standards during the period from January 1, 2025, to June 30, 2025 - The Company has adopted the Model Code for securities transactions by its directors[58](index=58&type=chunk) - Following specific enquiries by the Company, all directors confirmed their full compliance with the required standards set out in the Model Code during the period from January 1, 2025, to June 30, 2025[58](index=58&type=chunk) [Repurchase, Sale or Redemption of the Company's Listed Securities](index=18&type=section&id=Repurchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, the Company repurchased a total of 20,055,000 shares on the Stock Exchange for HK$21,988,689 and fully cancelled a total of 23,009,000 repurchased shares - For the six months ended June 30, 2025, the Company repurchased a total of **20,055,000 shares** on the Stock Exchange for a total consideration of **HK$21,988,689**[59](index=59&type=chunk) - During the period, a total of **23,009,000 repurchased shares** (including 2,954,000 shares repurchased but not yet cancelled as of December 31, 2024) were fully cancelled[59](index=59&type=chunk) Details of Shares Repurchased During the Period | Month | Number of Shares Repurchased | Highest Price Paid Per Share (HK$) | Lowest Price Paid Per Share (HK$) | Total Consideration (including transaction costs) (HK$) | | :--- | :--- | :--- | :--- | :--- | | January 2025 | 500,000 | 1.06 | 1.04 | 543,823 | | March 2025 | 1,000,000 | 1.11 | 1.05 | 1,079,749 | | April 2025 | 4,500,000 | 1.08 | 0.86 | 4,403,012 | | May 2025 | 8,640,000 | 1.16 | 1.02 | 9,519,281 | | June 2025 | 5,415,000 | 1.22 | 1.11 | 6,442,824 | [Changes in Directors' Information](index=18&type=section&id=Changes%20in%20Directors'%20Information) Mr. Liu Chung Man was appointed as an independent non-executive director of Pola Pharma Co., Ltd. on March 14, 2025, and PGG Wrightson Limited on July 1, 2025, respectively - Mr. Liu Chung Man was appointed as an independent non-executive director of Pola Pharma Co., Ltd. (stock code: 2592.HK) on **March 14, 2025**[61](index=61&type=chunk) - Mr. Liu Chung Man was appointed as an independent director of PGG Wrightson Limited (stock code: PGW.NZ) on **July 1, 2025**[61](index=61&type=chunk) [Audit Committee](index=19&type=section&id=Audit%20Committee) The Audit Committee, comprising four directors including three independent non-executive directors and one non-executive director, is responsible for reviewing accounting principles, internal controls, and financial reporting matters, and has reviewed this interim report - The Audit Committee comprises Mr. Liu Chung Man (Chairman), Dr. Fu Tingmei, Professor Chan Ka Keung (Independent Non-executive Directors), and Mr. Dong Boyang (Non-executive Director)[63](index=63&type=chunk) - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and discussed internal controls and financial reporting matters, including the unaudited condensed consolidated interim financial information and this interim report for the six months ended June 30, 2025[63](index=63&type=chunk) - KPMG, the Group's external auditor, has reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[63](index=63&type=chunk) [Non-Competition Undertaking](index=19&type=section&id=Non-Competition%20Undertaking) Guotai Haitong and its subsidiaries have provided a non-competition undertaking to the Company, committing to resolve any potential competition issues with the Group within five years after the merger completion on March 14, 2025, through asset restructuring and business integration - Guotai Haitong and its two wholly-owned subsidiaries entered into a non-competition undertaking deed with the Company on **June 19, 2010**, undertaking not to compete with the Group in brokerage business in Hong Kong and/or any other jurisdiction (excluding mainland China)[64](index=64&type=chunk) - On **November 21, 2024**, Guotai Haitong issued a non-competition undertaking letter to the Company, committing to resolve any competition issues with the Group within **five years** from the completion of the merger, through methods compliant with applicable laws, regulations, and relevant regulatory authorities[64](index=64&type=chunk) - The aforementioned merger was completed on **March 14, 2025**[64](index=64&type=chunk) [Review Report on Interim Financial Report](index=21&type=section&id=Review%20Report%20on%20Interim%20Financial%20Report) KPMG reviewed Guotai Junan International Holdings Limited's interim financial report for the six months ended June 30, 2025, concluding that they found no matters leading them to believe the report was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 - KPMG has reviewed the interim financial report contained on pages 40 to 97, which complies with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[66](index=66&type=chunk)[69](index=69&type=chunk) - The scope of review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, and therefore no audit opinion is expressed[68](index=68&type=chunk)[70](index=70&type=chunk) - Based on the review, nothing has come to their attention that causes them to believe that the interim financial report as of June 30, 2025, is not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[71](index=71&type=chunk)[72](index=72&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=23&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This consolidated statement of profit or loss and other comprehensive income presents Guotai Junan International Holdings Limited's financial performance for the six months ended June 30, 2025, showing a profit for the period of HK$551 million and total comprehensive income of HK$730 million, a significant increase from the prior year Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 2,825,044 | 2,170,922 | | Operating profit | 1,860,551 | 1,340,338 | | Profit before taxation | 636,798 | 197,309 | | Profit for the period | 551,410 | 196,772 | | Total comprehensive income for the period | 729,901 | 184,223 | | Profit attributable to owners of the Company | 550,089 | 194,937 | | Basic earnings per share (HK cents) | 5.77 | 2.04 | - Profit for the period increased by **180% year-on-year**, from **HK$197 million** in 2024 to **HK$551 million** in 2025[74](index=74&type=chunk) - In other comprehensive income, investments at fair value through other comprehensive income generated a gain of **HK$87.943 million**, and foreign currency translation differences generated a gain of **HK$28.346 million**[74](index=74&type=chunk) [Consolidated Statement of Financial Position](index=24&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This consolidated statement of financial position presents Guotai Junan International Holdings Limited's assets, liabilities, and equity as of June 30, 2025, showing a slight decrease in total assets but an increase in shareholders' equity, reflecting a robust financial structure Summary of Consolidated Statement of Financial Position | Metric | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total non-current assets | 10,090,725 | 6,621,189 | | Total current assets | 111,914,405 | 123,551,960 | | Total assets | 122,005,130 | 130,173,149 | | Total current liabilities | (98,797,229) | (107,692,555) | | Total non-current liabilities | (7,659,907) | (7,453,891) | | Total liabilities | (106,457,136) | (115,146,446) | | Total equity | 15,547,994 | 15,026,703 | | Equity attributable to shareholders | 15,434,464 | 14,914,657 | - Total assets decreased by **6%** from **HK$130.17 billion** as of December 31, 2024, to **HK$122.01 billion** as of June 30, 2025[75](index=75&type=chunk) - Shareholders' equity increased by **3%** from **HK$14.915 billion** as of December 31, 2024, to **HK$15.434 billion** as of June 30, 2025[77](index=77&type=chunk) - Net current assets were **HK$13,117,176 thousand**, a decrease from **HK$15,859,405 thousand** at the end of 2024[76](index=76&type=chunk) [Consolidated Statement of Changes in Equity](index=27&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) This consolidated statement of changes in equity details the movements in the components of Guotai Junan International Holdings Limited's equity for the six months ended June 30, 2025, including the impact of total comprehensive income, share repurchases, dividend payments, and share option exercises on shareholders' equity - The balance of equity attributable to shareholders as of January 1, 2025, was **HK$14,914,657 thousand**, increasing to **HK$15,434,464 thousand** as of June 30, 2025[79](index=79&type=chunk) - Total comprehensive income for the period was **HK$728,417 thousand**, attributable to owners of the Company[79](index=79&type=chunk) - Share repurchases during the period reduced equity by **HK$21,988 thousand**, and a final dividend of **HK$190,462 thousand** for 2024 was paid[79](index=79&type=chunk) - The exercise of share options resulted in an increase in share capital of **HK$5,256 thousand** and a decrease in share option reserve of **HK$1,416 thousand**[79](index=79&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=29&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This condensed consolidated statement of cash flows outlines Guotai Junan International Holdings Limited's cash movements for the six months ended June 30, 2025, showing net cash inflow from operating activities but net cash outflow from financing activities, ultimately resulting in a net decrease in cash and cash equivalents Summary of Condensed Consolidated Statement of Cash Flows | Activity Type | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net cash flows from/(used in) operating activities | 3,939,028 | (2,717,608) | | Net cash flows used in investing activities | (8,435) | (23,385) | | Net cash flows (used in)/from financing activities | (5,003,569) | 7,528,838 | | Net (decrease)/increase in cash and cash equivalents | (1,072,976) | 4,787,845 | | Cash and cash equivalents at end of period | 5,617,562 | 11,957,190 | - Operating activities generated a net cash inflow of **HK$3.939 billion**, a significant improvement from the net outflow in the prior year[81](index=81&type=chunk) - Financing activities resulted in a net cash outflow of **HK$5.004 billion**, primarily due to repayment of debt securities and dividend payments[81](index=81&type=chunk) - Cash and cash equivalents at the end of the period were **HK$5.618 billion**, a decrease of **HK$1.073 billion** from the beginning of the period[81](index=81&type=chunk) [Notes to the Interim Financial Report](index=31&type=section&id=Notes%20to%20the%20Interim%20Financial%20Report) This chapter provides detailed notes to the interim financial report, covering general company information, accounting policies, operating segment performance, revenue and cost analysis, balance sheet items, capital structure, related party transactions, and fair value measurements of financial instruments, offering in-depth background and explanations for the financial statements [1. General Information](index=31&type=section&id=1.%20General%20information) The Company was incorporated in Hong Kong on March 8, 2010, and listed on July 8 of the same year, primarily engaged in wealth management, institutional investor services, corporate finance services, investment management, and other businesses, with Guotai Junan Financial Holdings as its direct holding company and Guotai Haitong as its ultimate holding company - The Company was incorporated in Hong Kong on **March 8, 2010**, and its shares were listed on the Main Board of the Stock Exchange on **July 8, 2010**[84](index=84&type=chunk) - The Company is an investment holding company, and its subsidiaries are primarily engaged in wealth management, institutional investor services, corporate finance services, investment management, and other businesses[84](index=84&type=chunk) - The Company's direct holding company is Guotai Junan Financial Holdings, and its ultimate holding company is Guotai Haitong[85](index=85&type=chunk) [2. Basis of preparation and changes in accounting policies](index=31&type=section&id=2.%20Basis%20of%20preparation%20and%20changes%20in%20accounting%20policies) This interim financial report is prepared in accordance with the Listing Rules and Hong Kong Accounting Standard 34, adopting the same accounting policies as the 2024 annual financial statements, and has applied HKAS 21 (Amendment) "Lack of Exchangeability," which has no material impact on this report - This interim financial report is prepared in accordance with the applicable disclosure provisions of the Listing Rules, including compliance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[86](index=86&type=chunk)[89](index=89&type=chunk) - The interim financial report is prepared based on the same accounting policies adopted in the Group's 2024 annual financial statements, except for changes in accounting policies expected to be reflected in the 2025 annual financial statements[87](index=87&type=chunk)[89](index=89&type=chunk) - The Group has applied HKAS 21 (Amendment) "Lack of Exchangeability" issued by the Hong Kong Institute of Certified Public Accountants to this interim financial report for the current accounting period, but it has no material impact on this interim report[98](index=98&type=chunk)[101](index=101&type=chunk) - The interim financial report is unaudited, but KPMG has performed a review in accordance with Hong Kong Standard on Review Engagements 2410[92](index=92&type=chunk)[94](index=94&type=chunk) [3. Operating segment information](index=34&type=section&id=3.%20Operating%20segment%20information) The Group's operating businesses are divided into five segments: wealth management, institutional investor services, corporate finance services, investment management, and others, each independently managed and providing differentiated services, with detailed disclosure of revenue and profit before taxation for each segment during the reporting period - The Group's operating businesses are divided into five segments: wealth management, institutional investor services, corporate finance services, investment management, and "others"[106](index=106&type=chunk) 2025 H1 Segment Revenue and Other Losses | Segment | Commission and Fee Income (HK$ thousand) | Interest Income (HK$ thousand) | Net Trading and Investment Income (HK$ thousand) | Other Losses (HK$ thousand) | Total (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Wealth Management | 278,866 | 569,056 | 64,596 | – | 912,518 | | Institutional Investor Services | 38,175 | 377,974 | 411,590 | – | 827,739 | | Corporate Finance Services | 202,243 | – | – | – | 202,243 | | Investment Management | 21,861 | 248,940 | 611,743 | – | 882,544 | | Other | – | – | – | (56,504) | (56,504) | | **Total** | **541,145** | **1,195,970** | **1,087,929** | **(56,504)** | **2,768,540** | 2025 H1 Segment Profit Before Taxation | Segment | Profit Before Taxation (HK$ thousand) | | :--- | :--- | | Wealth Management | 249,563 | | Institutional Investor Services | 82,417 | | Corporate Finance Services | 38,917 | | Investment Management | 265,901 | | Other | – | | **Total** | **636,798** | [4. Revenue](index=37&type=section&id=4.%20Revenue) The Group's revenue primarily derives from commission and fee income, interest income, and net trading and investment income, with brokerage, placement underwriting, and fixed income securities trading being key growth drivers, while interest income from clients and banks decreased Revenue Details | Revenue Type | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Commission and fee income | 541,145 | 358,511 | | - Brokerage business | 323,171 | 221,717 | | - Placement, underwriting and sub-underwriting commissions | 164,992 | 89,206 | | Interest income | 1,195,970 | 1,095,004 | | - Interest income from customers | 215,588 | 226,052 | | - Interest income from banks | 367,071 | 575,871 | | - Interest from other financial institutions | 303,927 | 117,306 | | - Interest income from fixed income securities | 309,384 | 175,775 | | Net trading and investment income | 1,087,929 | 717,407 | | - Net trading income from fixed income securities, non-consolidated investment funds, derivatives and equity investments | 531,184 | 153,436 | | - Net financial product income | 556,745 | 563,971 | | **Total Revenue** | **2,825,044** | **2,170,922** | - Commission and fee income significantly increased by **51% year-on-year**, primarily driven by growth in brokerage and corporate finance businesses[111](index=111&type=chunk) - Interest income increased by **9% year-on-year**, with significant growth from other financial institutions and fixed income securities offsetting declines from clients and banks[111](index=111&type=chunk) - Net trading and investment income significantly increased by **52% year-on-year**, primarily due to a substantial surge in net trading income from fixed income securities, non-consolidated investment funds, derivatives, and equity investments[111](index=111&type=chunk) [5. Staff costs](index=38&type=section&id=5.%20Staff%20costs) For the six months ended June 30, 2025, the Group's total staff costs amounted to HK$444 million, an increase of approximately 15% from the prior year, primarily comprising salaries, bonuses, and allowances Staff Costs Details | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Salaries, bonuses and allowances | 437,341 | 378,647 | | Pension scheme contributions | 6,912 | 6,808 | | **Total** | **444,253** | **385,455** | - Staff costs (including directors' emoluments) increased by **15.25%** from **HK$385 million** in 2024 to **HK$444 million** in 2025[114](index=114&type=chunk) [6. Finance costs](index=39&type=section&id=6.%20Finance%20costs) For the six months ended June 30, 2025, the Group's total finance costs amounted to HK$1.224 billion, an increase of approximately 7% from the prior year, with repurchase agreements and bank borrowings being the main components Finance Costs Details | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Bank borrowings and overdrafts | 274,885 | 392,702 | | Debt securities in issue | 158,796 | 191,147 | | Securities borrowing | 2,098 | 1,279 | | Repurchase agreements | 697,716 | 468,633 | | Lease liabilities | 1,178 | 455 | | Accounts payable to customers | 10,904 | 27,792 | | Other | 14,651 | 12,213 | | **Total** | **1,223,753** | **1,143,029** | - Finance costs increased by **7.06%** from **HK$1.143 billion** in 2024 to **HK$1.224 billion** in 2025[115](index=115&type=chunk) - Finance costs for repurchase agreements significantly increased by **48.8%**, from **HK$469 million** in 2024 to **HK$698 million** in 2025[115](index=115&type=chunk) [7. Profit before taxation](index=40&type=section&id=7.%20Profit%20before%20taxation) For the six months ended June 30, 2025, the Group's profit before taxation was HK$637 million, a substantial increase from the prior year, primarily influenced by professional and consulting fees, repair and maintenance expenses, goodwill impairment provisions, and net impairment provisions for receivables Profit Before Taxation Deductions/(Additions) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Professional and consulting fees | 52,283 | 39,458 | | Information services expenses | 24,865 | 22,630 | | Repair and maintenance (including system maintenance) | 46,477 | 46,530 | | Marketing, advertising and promotion expenses | 1,274 | 2,787 | | Other commission expenses | 23,020 | 19,565 | | Goodwill impairment provision | 20,473 | – | | Net impairment (reversal)/provision for loans and advances to customers | (4,259) | 21,484 | | Net impairment provision for accounts receivable | 6,578 | 4,949 | | Net impairment provision for other financial assets and loan commitments | 5,383 | 3,243 | | Net impairment (reversal)/provision for financial assets at fair value through other comprehensive income | (2,696) | 5,882 | - Profit before taxation increased by **222.7%** from **HK$197 million** in 2024 to **HK$637 million** in 2025[74](index=74&type=chunk) - A goodwill impairment provision of **HK$20.473 million** was recognized in the first half of 2025, compared to zero in the prior year[117](index=117&type=chunk) - Net impairment for loans and advances to customers shifted from a provision of **HK$21.484 million** in 2024 to a reversal of **HK$4.259 million** in 2025[117](index=117&type=chunk) [8. Income tax expense](index=41&type=section&id=8.%20Income%20tax%20expense) For the six months ended June 30, 2025, the Group's income tax expense was HK$85.388 million, a significant increase from the prior year, primarily due to Hong Kong profits tax and deferred tax, with the temporary mandatory exception for global anti-base erosion rules and Hong Kong minimum top-up tax applied Income Tax Expense Details | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current – Hong Kong expense for the period | 48,133 | 10,203 | | Deferred | 37,255 | (9,336) | | **Total** | **85,388** | **537** | - Income tax expense significantly increased from **HK$0.537 million** in 2024 to **HK$85.388 million** in 2025[119](index=119&type=chunk) - Hong Kong profits tax is provided at a rate of **16.5%**[119](index=119&type=chunk) - The Hong Kong Legislative Council passed legislation to implement global anti-base erosion rules and Hong Kong minimum top-up tax, effective for fiscal years beginning on or after **January 1, 2025**[121](index=121&type=chunk) - The Group has applied the temporary mandatory exception for deferred tax accounting related to top-up tax, recognizing the tax as current tax when incurred[122](index=122&type=chunk) [9. Proposed interim/final dividend](index=42&type=section&id=9.%20Proposed%20interim/final%20dividend) The Board has declared an interim dividend of HK$0.05 per share for the period ended June 30, 2025, totaling approximately HK$476 million, and paid a final dividend of HK$0.02 per share for 2024 on June 17, 2025 - The Board has declared an interim dividend of approximately **HK$475,950,000** or **HK$0.05 per share** for the period ended June 30, 2025 (2024: HK$114,576,000 or HK$0.012 per share)[124](index=124&type=chunk) - The interim dividend declared after the reporting date has not been recognized as a liability in the interim financial report at the end of the reporting period[124](index=124&type=chunk) - The Board proposed a final dividend of **HK$0.02 per share** for the year ended December 31, 2024, on March 26, 2025, and paid approximately **HK$190,462,000** on June 17, 2025[125](index=125&type=chunk) [10. Earnings per Share attributable to ordinary equity holders of the parent](index=42&type=section&id=10.%20Earnings%20per%20Share%20attributable%20to%20ordinary%20equity%20holders%20of%20the%20parent) For the period ended June 30, 2025, the Company's basic earnings per share were 5.77 HK cents, and diluted earnings per share were also 5.77 HK cents, as the anti-dilutive effect of share options resulted in diluted earnings being the same as basic earnings - For the period ended June 30, 2025, basic earnings per share were **5.77 HK cents** (2024: 2.04 HK cents)[126](index=126&type=chunk) - Basic earnings per share are calculated based on the profit attributable to ordinary equity holders of the parent of **HK$550,089,000** and the weighted average number of issued shares of **9,529,767,207** during the period[126](index=126&type=chunk) - As the effect of unexercised share options is anti-dilutive to the presented basic earnings per share, no adjustment was made for dilution to the basic earnings per share, and diluted earnings per share were also **5.77 HK cents**[128](index=128&type=chunk)[130](index=130&type=chunk) [11. Loans and advances to customers](index=43&type=section&id=11.%20Loans%20and%20advances%20to%20customers) As of June 30, 2025, the Group's total loans and advances to customers amounted to HK$8.334 billion, primarily comprising margin loans, term loans, and IPO loans, with margin loans secured by pledged securities Details of Loans and Advances to Customers | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Margin loans | 10,075,962 | 9,628,032 | | Term loans to customers | 235,365 | 235,365 | | IPO loans | 135,490 | – | | Less: Impairment provisions | (2,112,737) | (2,116,996) | | **Total** | **8,334,080** | **7,746,401** | - Margin loans are secured by relevant pledged securities, bear interest by reference to the Hong Kong Prime Rate, and are repayable on demand[134](index=134&type=chunk)[137](index=137&type=chunk) - As of June 30, 2025, the total value of pledged securities as collateral for margin loans was approximately **HK$41.802 billion** (December 31, 2024: HK$39.512 billion)[135](index=135&type=chunk)[137](index=137&type=chunk) - The Group also provides term loans to customers, with interest rates determined by reference to the customer's creditworthiness and the quality and value of collateral[136](index=136&type=chunk)[138](index=138&type=chunk) [12. Accounts receivable](index=44&type=section&id=12.%20Accounts%20receivable) As of June 30, 2025, the Group's total accounts receivable amounted to HK$12.858 billion, primarily from brokerage, securities lending, and corporate finance businesses, with impairment provisions of HK$82.739 million recognized Carrying Amount Details of Accounts Receivable | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Accounts receivable from brokerage business | 11,645,765 | 9,907,164 | | Accounts receivable from securities lending business | 1,039,844 | 1,098,216 | | Accounts receivable from corporate finance, asset management and other businesses | 254,906 | 167,080 | | Less: Impairment provisions | (82,739) | (76,090) | | **Total** | **12,857,776** | **11,096,370** | - Among accounts receivable from brokerage business, receivables from the Stock Exchange and other clearing houses increased from **HK$2.296 billion** as of December 31, 2024, to **HK$5.044 billion** as of June 30, 2025[141](index=141&type=chunk) - The aging analysis of accounts receivable from corporate clients, investment funds, and others shows that the amount not yet overdue is **HK$156 million**, and the amount overdue for more than three months is **HK$70.274 million**[149](index=149&type=chunk) - For accounts receivable from corporate clients, investment funds, and others, a simplified approach using a provision matrix is adopted, with provision rates calculated based on days overdue and similar loss patterns[150](index=150&type=chunk)[151](index=151&type=chunk) [13. Financial assets at fair value](index=48&type=section&id=13.%20Financial%20assets%20at%20fair%20value) As of June 30, 2025, the Group's total financial assets measured at fair value amounted to HK$73.254 billion, primarily comprising financial assets held for trading and investment, and financial products, with most being current assets and some pledged to secure liabilities Details of Financial Assets at Fair Value Through Profit or Loss | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current financial assets | 8,980,656 | 5,602,967 | | Current financial assets | 55,022,503 | 64,722,825 | | **Total** | **64,003,159** | **70,325,792** | Details of Financial Assets at Fair Value Through Other Comprehensive Income | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current financial assets | 7,292,989 | 8,985,272 | | **Total** | **7,292,989** | **8,985,272** | - The financial products held by the Group are primarily purchased due to client investment needs and serve as hedging instruments for structured notes or derivatives[155](index=155&type=chunk)[156](index=156&type=chunk) - As of June 30, 2025, the total amount of pledged trading assets, financial investments, and cash was **HK$881 million**, securing liabilities of **HK$818 million**[160](index=160&type=chunk) [14. Derivative financial instruments](index=51&type=section&id=14.%20Derivative%20financial%20instruments) As of June 30, 2025, the Group's derivative financial instruments had a total notional amount of HK$128.958 billion, fair value assets of HK$1.958 billion, and liabilities of HK$2.044 billion, primarily comprising commodity, currency, interest rate, and equity derivatives, with ISDA master netting agreements in place with counterparties Fair Value and Notional Amounts of Derivative Financial Instruments (As of June 30, 2025) | Derivative Instrument Type | Notional Amount (HK$ thousand) | Fair Value Assets (HK$ thousand) | Fair Value Liabilities (HK$ thousand) | | :--- | :--- | :--- | :--- | | Non-current | 16,886,796 | 420,754 | (206,153) | | Current | 112,071,419 | 1,537,498 | (1,837,830) | | **Total** | **128,958,215** | **1,958,252** | **(2,043,983)** | - The Group has entered into ISDA master netting agreements or similar agreements with most derivative counterparties, granting the right to offset cash collateral[167](index=167&type=chunk) - As of June 30, 2025, cash collateral paid and received from relevant counterparties amounted to **HK$1.926 billion** and **HK$4.065 billion**, respectively[167](index=167&type=chunk) [15. Receivables from reverse repurchase agreements](index=53&type=section&id=15.%20Receivables%20from%20reverse%20repurchase%20agreements) As of June 30, 2025, the Group's receivables from reverse repurchase agreements amounted to HK$8.275 billion, a decrease from the end of 2024, with the fair value of collateral received for outstanding receivables being HK$8.378 billion - As of June 30, 2025, outstanding amounts paid for reverse repurchase agreements were **HK$8,275,117,000** (December 31, 2024: HK$9,982,509,000)[169](index=169&type=chunk)[171](index=171&type=chunk) - The fair value of collateral received for outstanding receivables was **HK$8,378,188,000** (December 31, 2024: HK$9,963,680,000)[170](index=170&type=chunk)[171](index=171&type=chunk) - Receivables from reverse repurchase agreements arise when the Group purchases securities with a simultaneous agreement to resell them at a specified future date and price[168](index=168&type=chunk)[171](index=171&type=chunk) [16. Accounts payable](index=54&type=section&id=16.%20Accounts%20payable) As of June 30, 2025, the Group's total accounts payable amounted to HK$21.756 billion, primarily from brokerage clients, brokers and dealers, and the Stock Exchange, with most payables due on demand and interest-free except for amounts due to clients Accounts Payable Details | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Accounts payable from brokerage business | 21,010,107 | 18,777,066 | | Accounts payable from securities lending business | 79,948 | 49,618 | | Accounts payable from corporate finance, asset management and other businesses | 655,536 | 888,120 | | **Total** | **21,755,591** | **19,714,804** | - Amounts due to customers include **HK$12.46 billion** deposited in trust accounts with authorized financial institutions, and **HK$97 million** with Hong Kong Futures Exchange Limited and other futures brokers[174](index=174&type=chunk) - Most accounts payable are repayable on demand, except for certain amounts due to customers which are margins received from customers for trading activities in the ordinary course of business[176](index=176&type=chunk) - Except for amounts due to customers, accounts payable are interest-free[175](index=175&type=chunk)[176](index=176&type=chunk) [17. Interest-bearing borrowings](index=55&type=section&id=17.%20Interest-bearing%20borrowings) As of June 30, 2025, the Group's total interest-bearing borrowings amounted to HK$6.783 billion, primarily composed of unsecured bank borrowings and lease liabilities, with most denominated in USD and bank borrowings bearing interest at SOFR plus a spread Interest-Bearing Borrowings Details | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current lease liabilities | 26,040 | 20,889 | | Current lease liabilities | 20,559 | 35,378 | | Current unsecured bank borrowings | 6,736,735 | 5,900,533 | | **Total** | **6,783,334** | **5,956,800** | Interest-Bearing Borrowings by Currency | Currency | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | HKD | 1,831,498 | 40,195 | | USD | 4,867,000 | 5,861,443 | | Other currencies | 84,836 | 55,162 | | **Total** | **6,783,334** | **5,956,800** | - The Group's bank borrowings all bear interest at the Secured Overnight Financing Rate (SOFR) plus a spread[177](index=177&type=chunk)[179](index=179&type=chunk) - The Group's lease liabilities bear interest at a weighted average annual rate of **4.65%**[179](index=179&type=chunk) [18. Debt securities in issue](index=56&type=section&id=18.%20Debt%20securities%20in%20issue) As of June 30, 2025, the Group's total debt securities in issue amounted to HK$44.826 billion, primarily comprising unsecured medium-term notes accounted for at amortized cost and structured notes designated at fair value through profit or loss, with most denominated in USD, and no defaults on principal or interest during the reporting period Details of Debt Securities in Issue | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current at amortized cost | – | 3,125,610 | | Non-current designated at fair value through profit or loss | 7,419,518 | 3,988,001 | | Current at amortized cost | 6,730,066 | 7,463,994 | | Current designated at fair value through profit or loss | 30,676,433 | 33,780,647 | | **Total** | **44,826,017** | **48,358,252** | Debt Securities in Issue by Currency | Currency | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | USD | 37,668,591 | 42,213,898 | | HKD | 2,642,145 | 1,132,354 | | RMB | 4,169,740 | 2,982,139 | | Other currencies | 345,541 | 329,861 | | **Total** | **44,826,017** | **48,358,252** | - The current portion of unsecured notes in issue is redeemable on demand or has an original maturity of less than one year[182](index=182&type=chunk)[184](index=184&type=chunk) - The Group had no defaults on principal or interest or any other unfulfilled obligations for the six months ended June 30, 2025[182](index=182&type=chunk)[184](index=184&type=chunk) [19. Financial liabilities at fair value through profit or loss](index=58&type=section&id=19.%20Financial%20liabilities%20at%20fair%20value%20through%20profit%20or%20loss) As of June 30, 2025, the Group's total financial liabilities at fair value through profit or loss amounted to HK$4.208 billion, primarily comprising listed equity and debt securities held for trading, as well as financial products designated at fair value through profit or loss and third-party interests in consolidated investment funds Details of Financial Liabilities at Fair Value Through Profit or Loss | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Financial liabilities held for trading | 2,576,563 | 1,807,541 | | Financial liabilities designated at fair value through profit or loss | 1,631,012 | 1,314,544 | | **Total** | **4,207,575** | **3,122,085** | - Among financial liabilities held for trading, listed equity securities amounted to **HK$887 million**, and listed debt securities amounted to **HK$1.689 billion**[187](index=187&type=chunk) - Financial liabilities designated at fair value through profit or loss include financial products of **HK$1.494 billion** and third-party interests in consolidated investment funds of **HK$137 million**[187](index=187&type=chunk) - During the period, the amount of change in the fair value of financial liabilities at fair value through profit or loss attributable to changes in their own credit risk was not significant[188](index=188&type=chunk) [20. Oblig

[Corporate Information](index=2&type=section&id=Corporate%20Information) [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) This section outlines the composition of the company's Board of Directors, including executive, non-executive, and independent non-executive directors, as well as members of the Audit and Remuneration and Nomination Committees - The Chairman of the Board is **Sun Jie**, and the Vice Chairman and Managing Director is **Chang Feng**[5](index=5&type=chunk) - The Chairman of the Audit Committee is **Chen Qichang**, and the Chairman of the Remuneration and Nomination Committee is **Qiu Hongsheng**[5](index=5&type=chunk) [Company Details and Contacts](index=3&type=section&id=Company%20Details%20and%20Contacts) This section provides essential company information, including registered and principal Hong Kong offices, investor relations contacts, stock code, principal bankers, share registrar, independent auditor, and legal advisors - The company's stock code is **00085**[7](index=7&type=chunk)[9](index=9&type=chunk) - The independent auditor is **Mazars CPA Limited**[8](index=8&type=chunk)[9](index=9&type=chunk) - Investor relations contact number is **(852) 2598 9088**, and the website is **www.cecht.com.cn**[7](index=7&type=chunk)[8](index=8&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group experienced a significant decline in both revenue and profit attributable to equity holders, reflecting challenging market conditions Key Data from Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Metric | 2025 (HK$'000) | 2024 (HK$'000) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,112,346 | 1,360,635 | -18.2% | | Cost of sales | (698,249) | (793,267) | -12.0% | | Gross profit | 414,097 | 567,368 | -27.0% | | Operating profit | 151,391 | 354,569 | -57.3% | | Profit before taxation | 145,586 | 343,015 | -57.5% | | Profit for the period | 140,108 | 308,772 | -54.6% | | Profit attributable to equity holders of the Company | 138,560 | 309,545 | -55.2% | | Basic earnings per share (HK cents) | 6.83 | 15.25 | -55.2% | [Condensed Consolidated Statement of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the period significantly decreased, primarily due to lower profit for the period, despite a positive shift in exchange differences Key Data from Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Profit for the period | 140,108 | 308,772 | | Exchange differences on translation of financial statements | 31,568 | (12,116) | | Exchange differences on translation of the Company's financial statements | 8,032 | (3,528) | | Total comprehensive income for the period | 179,708 | 293,128 | | Total comprehensive income attributable to equity holders of the Company | 178,160 | 294,066 | [Condensed Consolidated Statement of Financial Position](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly increased, cash and cash equivalents significantly rose, while total equity remained stable and total liabilities saw a minor increase Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Total assets | 4,232,865 | 4,174,001 | | Non-current assets | 944,204 | 1,067,587 | | Current assets | 3,288,661 | 3,106,414 | | Inventories | 833,025 | 847,662 | | Trade and other receivables (current) | 695,140 | 525,949 | | Cash and cash equivalents | 1,027,579 | 743,036 | | Total equity | 2,468,046 | 2,471,026 | | Total liabilities | 1,764,819 | 1,702,975 | | Non-current liabilities | 70,106 | 160,170 | | Current liabilities | 1,694,713 | 1,542,805 | [Condensed Consolidated Statement of Changes in Equity](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity slightly decreased during the period, mainly due to the dividend distribution at the end of 2024, partially offset by total comprehensive income for the period Overview of Changes in Equity (For the six months ended June 30) | Metric | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Total equity at January 1 | 2,471,026 | 2,146,221 | | Total comprehensive income | 179,708 | 293,128 | | Dividends for the year ended December 31 | (182,688) | (213,137) | | Total equity at June 30 | 2,468,046 | 2,226,212 | [Condensed Consolidated Statement of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) The Group's net increase in cash and cash equivalents was primarily driven by a significant rise in cash flows from investing activities, despite a decrease in cash flows from operating activities Key Data from Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Net cash flows from operating activities | 25,505 | 146,006 | | Net cash flows from investing activities | 282,863 | 134,059 | | Net cash flows used in financing activities | (11,237) | (22,057) | | Net increase in cash and cash equivalents | 297,131 | 258,008 | | Cash and cash equivalents at end of period | 1,027,579 | 1,375,327 | - Net cash flows from investing activities significantly increased, primarily due to a **HK$298,810 thousand decrease in fixed deposits and restricted cash**[23](index=23&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=12&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [1 Basis of preparation](index=12&type=section&id=1%20Basis%20of%20preparation) These condensed consolidated interim financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, using the historical cost convention, with no significant impact from new accounting standards adoption - The financial statements comply with HKAS 34 'Interim Financial Reporting' and the disclosure requirements of Appendix D2 of the Listing Rules[26](index=26&type=chunk)[31](index=31&type=chunk) - Prepared using the historical cost convention, with modifications for investment properties measured at fair value[28](index=28&type=chunk)[32](index=32&type=chunk) - The adoption of new or revised HKFRSs had no significant impact on the Group's results and financial position[30](index=30&type=chunk)[33](index=33&type=chunk) [3 Fair value estimation](index=13&type=section&id=3%20Fair%20value%20estimation) The Group's investment properties, primarily Beijing office buildings and parking spaces, are measured at fair value (Level 3), with their total value slightly increasing due to exchange differences, despite a small loss from fair value changes during the period Fair Value Changes of Investment Properties (HK$'000) | Metric | June 30, 2025 | January 1, 2025 | | :--- | :--- | :--- | | Total investment properties | 42,706 | 42,177 | | Exchange differences | 650 | - | | Fair value changes | (121) | - | - Office buildings are valued using the direct comparison approach, while parking spaces are valued using the income approach[36](index=36&type=chunk) [4 Revenue and segment information](index=14&type=section&id=4%20Revenue%20and%20segment%20information) The Group's revenue primarily derives from integrated circuit product sales and services, with almost all revenue and non-current assets concentrated in mainland China, thus reported as a single operating segment Revenue Sources (For the six months ended June 30) | Revenue Source | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Sales of integrated circuit products and provision of services | 1,112,346 | 1,360,635 | - The majority of the Group's revenue is from the sale of goods, recognized when control of the goods is transferred to customers[39](index=39&type=chunk)[42](index=42&type=chunk) - The Group's operations are managed as a single segment, with nearly **100% of revenue** and over **90% of non-current assets** located in mainland China[41](index=41&type=chunk)[44](index=44&type=chunk) [5 Other income – net](index=15&type=section&id=5%20Other%20income%20%E2%80%93%20net) Net other income decreased this period, mainly due to a significant reduction in government grants and a loss from fair value changes of investment properties Other Income – Net (For the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Government grants from ordinary activities | 16,539 | 36,650 | | Fair value changes of investment properties | (121) | (5,352) | | Interest income | 18,617 | 19,652 | | Rental income | 1,223 | – | | Others | 238 | 1,377 | | **Total** | **36,496** | **52,327** | [6 Finance costs – net](index=15&type=section&id=6%20Finance%20costs%20%E2%80%93%20net) Net finance costs decreased this period, primarily due to lower interest expenses on borrowings and interest expenses arising from deposits received Finance Costs – Net (For the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Interest expense on borrowings | 7,389 | 9,774 | | Interest expense on lease liabilities | 699 | 943 | | Interest expense arising from deposits received | 3,873 | 8,813 | | Interest income from cash and cash equivalents | (2,723) | (4,337) | | Interest income arising from deposits paid | (3,542) | (4,265) | | **Finance costs – net** | **5,696** | **10,928** | [7 Profit before taxation](index=16&type=section&id=7%20Profit%20before%20taxation) Profit before taxation was significantly impacted by increased employee benefit expenses, R&D costs, depreciation, and amortization, despite a reversal of inventory provisions Deductions from Profit Before Taxation (For the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 10,962 | 6,525 | | Depreciation of right-of-use assets | 11,475 | 11,515 | | Amortisation of intangible assets | 23,071 | 18,854 | | Inventories (reversal of provision)/provision | (9,132) | 10,288 | | Employee benefit expenses | 187,575 | 162,506 | - Research and development costs recognized as expenses and included in administrative expenses amounted to **HK$222,909 thousand** (2024: HK$183,250 thousand), primarily comprising employee costs and material costs[55](index=55&type=chunk) [8 Taxation](index=16&type=section&id=8%20Taxation) Total taxation for the period significantly decreased, mainly due to reduced PRC corporate income tax and lower withholding income tax on undistributed profits, with some subsidiaries benefiting from preferential tax rates Taxation Components (For the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | PRC corporate income tax | (5,594) | 22,442 | | Deferred taxation | 11,072 | 11,801 | | Withholding income tax on undistributed profits | 4,793 | 11,435 | | **Total taxation** | **5,478** | **34,243** | - Huada Electronic and Huahong enjoy preferential tax rates of **10%** and **15%** respectively, qualifying as 'integrated circuit design enterprises within national planning layout' and 'high-tech enterprises'[62](index=62&type=chunk) [9 Dividend](index=17&type=section&id=9%20Dividend) The Board of Directors resolved not to declare any dividend for the six months ended June 30, 2025 - The Board of Directors resolved not to declare any dividend for the six months ended June 30, 2025 (2024: nil)[59](index=59&type=chunk)[61](index=61&type=chunk) [10 Basic earnings per share](index=18&type=section&id=10%20Basic%20earnings%20per%20share) Basic earnings per share significantly decreased due to lower profit attributable to equity holders of the Company, and no diluted earnings per share were presented as there were no potential dilutive ordinary shares Basic Earnings Per Share Calculation (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period attributable to equity holders of the Company (HK$'000) | 138,560 | 309,545 | | Weighted average number of ordinary shares in issue | 2,029,872,000 | 2,029,872,000 | | Basic earnings per share (HK cents) | 6.83 | 15.25 | - No diluted earnings per share were disclosed as the Company had no outstanding potential dilutive ordinary shares[66](index=66&type=chunk)[68](index=68&type=chunk) [11 Property, plant and equipment](index=18&type=section&id=11%20Property,%20plant%20and%20equipment) Additions to property, plant and equipment significantly decreased during the period compared to the same period last year Additions to Property, Plant and Equipment (For the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Additions to property, plant and equipment | 7,538 | 17,827 | [12 Trade and other receivables](index=19&type=section&id=12%20Trade%20and%20other%20receivables) The Group's trade receivables, net of impairment loss provisions, significantly increased, with the largest increase observed in receivables aged 61 to 180 days Ageing Analysis of Trade Receivables (HK$'000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 30 days | 160,636 | 120,825 | | 31 to 60 days | 44,221 | 117,591 | | 61 to 180 days | 306,032 | 108,846 | | Over 180 days and within 1 year | 831 | 93 | | Over 1 year | 1,116 | 2,811 | | **Total** | **512,836** | **350,166** | - The majority of the Group's sales are on credit terms of **30 to 180 days**[70](index=70&type=chunk) [13 Trade and other payables](index=19&type=section&id=13%20Trade%20and%20other%20payables) The Group's total trade payables increased, with a significant rise in payables aged over 60 days Ageing Analysis of Trade Payables (HK$'000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 30 days | 138,781 | 182,969 | | 31 to 60 days | 54,102 | 130,117 | | Over 60 days | 367,716 | 103,783 | | **Total** | **560,599** | **416,869** | [14 Contingent liabilities](index=20&type=section&id=14%20Contingent%20liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[74](index=74&type=chunk)[75](index=75&type=chunk) [15 Related party transactions and balances](index=20&type=section&id=15%20Related%20party%20transactions%20and%20balances) The Group engaged in several significant related party transactions and maintained balances with its ultimate holding company, China Electronics Corporation, and its commonly controlled entities, mostly unsecured and interest-free, except for cash and deposits and borrowings Significant Transactions with China Electronics Corporation and its Controlled Entities (For the six months ended June 30, HK$'000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Sales of products and services | 116,309 | 143,033 | | Purchases of products and services | 98,719 | 88,047 | | Interest income | 7,004 | 7,217 | | Interest expense | 7,184 | 9,150 | | Property management fees | 3,837 | 3,443 | | Maximum daily balance of financial assistance provided to the Group | 68,993 | 31,918 | | Maximum daily balance of deposits placed by the Group | 737,933 | 742,709 | Significant Balances with China Electronics Corporation and its Controlled Entities (HK$'000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 26,932 | 29,107 | | Cash and deposits | 697,208 | 734,653 | | Trade payables | 109,167 | 86,710 | | Shareholder loans | 318,000 | 313,161 | | Entrusted loans from ultimate holding company | 65,841 | 64,859 | - Related party borrowings are unsecured and bear interest at a weighted average annual rate of **3.8%**[83](index=83&type=chunk) - Key management personnel remuneration increased to **HK$2,971 thousand** (2024: HK$1,358 thousand)[87](index=87&type=chunk) [Report on Review of Interim Financial Statements](index=23&type=section&id=Report%20on%20Review%20of%20Interim%20Financial%20Statements) Independent auditor Mazars CPA Limited reviewed the Group's condensed consolidated interim financial statements, concluding they were prepared in all material respects in accordance with HKAS 34 - The review was performed by **Mazars CPA Limited**[97](index=97&type=chunk) - The review concluded that the condensed consolidated interim financial statements are prepared in all material respects in accordance with HKAS 34[94](index=94&type=chunk)[96](index=96&type=chunk) - The scope of a review is substantially less than an audit, thus no audit opinion was expressed[93](index=93&type=chunk)[95](index=95&type=chunk) [Management Discussion and Analysis](index=25&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=25&type=section&id=Business%20Review) The Group faced severe challenges in the smart card and security chip market in H1 2025, leading to significant declines in revenue and profit, yet increased R&D investment and achieved growth in secure master control chips and identification products Performance Overview (For the six months ended June 30) | Metric | 2025 (HK$ Million) | 2024 (HK$ Million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,112.3 | 1,360.6 | -18.2% | | Profit attributable to equity holders of the Company | 138.6 | 309.5 | -55.2% | | Basic earnings per share (HK cents) | 6.83 | 15.25 | -55.2% | - Global smart card and security chip market demand was sluggish, with intense domestic and international competition leading to significant product price drops[100](index=100&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk)[106](index=106&type=chunk) - Sales volume of secure master control chips and identification products significantly increased year-on-year, while sales of secure SE chips, financial card chips, and third-generation social security card chips decreased[100](index=100&type=chunk)[102](index=102&type=chunk) - Research and development costs increased by **14.3%** to **HK$222.9 million** (2024: HK$183.3 million), accounting for **20.0% of revenue** (2024: 13.5%)[107](index=107&type=chunk)[110](index=110&type=chunk) - Looking ahead, market demand is expected to remain challenging, but increasing security needs for smart devices and eSIM application promotion will bring new opportunities, prompting the Group to actively expand its customer base to consolidate market position[108](index=108&type=chunk)[111](index=111&type=chunk) - The Board of Directors resolved not to declare any dividend for the six months ended June 30, 2025[109](index=109&type=chunk)[112](index=112&type=chunk) [Financial Review](index=28&type=section&id=Financial%20Review) The Group maintains a prudent treasury policy, meeting working capital needs primarily through internal resources and borrowings, ending the period with increased cash and cash equivalents, a net cash position, and no pledged assets, significant capital commitments, or contingent liabilities Financial Position Overview (HK$ Million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | 1,027.6 | 743.0 | | Bank and other borrowings | 383.8 | 378.0 | | Undrawn committed borrowing facilities | 955.5 | - | - **94.5%** of cash and cash equivalents are denominated in RMB[113](index=113&type=chunk)[116](index=116&type=chunk) - All bank and other borrowings are due within one year, unsecured, and bear fixed interest rates[114](index=114&type=chunk)[116](index=116&type=chunk) - The Group was in a net cash position as of June 30, 2025, and December 31, 2024[118](index=118&type=chunk)[123](index=123&type=chunk) - The Group has not pledged any assets for its borrowings, nor does it have any significant unfulfilled capital commitments or contingent liabilities[115](index=115&type=chunk)[117](index=117&type=chunk)[119](index=119&type=chunk)[123](index=123&type=chunk) [Employee and Remuneration Policies](index=29&type=section&id=Employee%20and%20Remuneration%20Policies) As of June 30, 2025, the Group employed approximately 450 staff, mostly in mainland China, implementing stringent recruitment, performance evaluation, and performance-based remuneration policies, alongside multi-level training programs - As of June 30, 2025, the Group employed approximately **450 staff**, mostly working in mainland China[120](index=120&type=chunk)[124](index=124&type=chunk) - Employee benefit expenses for the period amounted to **HK$187.6 million**[120](index=120&type=chunk)[124](index=124&type=chunk) - Remuneration policy is generally in line with industry practice, determined by performance and experience, regularly reviewed, with bonuses linked to Group and individual performance[121](index=121&type=chunk)[124](index=124&type=chunk) - Employee training is structured into company-level, department-level, and individual levels, focusing on general applicability, professional knowledge, and skill enhancement[122](index=122&type=chunk)[124](index=124&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=30&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, only Executive Director Mr. Chang Feng held a small interest in the Company's ordinary shares, with no other directors or chief executives having declarable interests or short positions - Executive Director Mr. Chang Feng beneficially held a long position interest in **28,000 ordinary shares** of the Company, representing **0.01%** of the issued share capital[125](index=125&type=chunk)[127](index=127&type=chunk) - Save as disclosed above, no other directors or chief executive had any interests or short positions required to be recorded in the register[125](index=125&type=chunk)[127](index=127&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=30&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) For the six months ended June 30, 2025, neither the Company, its holding company, nor any of its subsidiaries entered into any arrangements enabling directors or their close associates to acquire benefits by purchasing shares or debentures of the Company or other bodies corporate - The Company had not entered into any arrangements enabling directors or their close associates to acquire benefits by purchasing shares or debentures[126](index=126&type=chunk)[128](index=128&type=chunk) [Shareholders with Notifiable Interests](index=31&type=section&id=Shareholders%20with%20Notifiable%20Interests) As of June 30, 2025, several entities held **5% or more** of the Company's issued share capital, with Huada Semiconductor Co., Ltd. and its ultimate parent China Electronics Corporation being significant shareholders Shareholders with Notifiable Interests (As of June 30, 2025) | Name of Interest Holder | Capacity | Number of Shares Held or Attributable | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | China Electronics Corporation (BVI) Holdings Company Limited | Beneficial owner | 812,500,000 | 40.03% | | Huada Semiconductor Co., Ltd. | Beneficial owner and interest in corporations controlled by Huada Semiconductor | 1,206,180,000 | 59.42% | | China Electronics Corporation Limited | Interest in corporations controlled by China Electronics | 1,206,180,000 | 59.42% | | China Electronics Corporation | Interest in corporations controlled by China Electronics Corporation | 1,206,180,000 | 59.42% | - All disclosed interests represent long positions in the Company's shares[131](index=131&type=chunk)[135](index=135&type=chunk) [Purchase, Sale or Redemption of Securities](index=32&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's securities - Neither the Company nor any of its subsidiaries repurchased or sold any of the Company's securities, nor did the Company redeem any of its securities[132](index=132&type=chunk)[136](index=136&type=chunk) [Corporate Governance Code](index=32&type=section&id=Corporate%20Governance%20Code) The Company is committed to best corporate governance practices and confirmed compliance with all applicable code provisions of the Corporate Governance Code for the six months ended June 30, 2025 - The Company complied with all applicable code provisions of the Corporate Governance Code for the six months ended June 30, 2025[133](index=133&type=chunk)[137](index=137&type=chunk) [The Model Code for Securities Transactions by Directors](index=32&type=section&id=The%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) All directors confirmed compliance with the required standards set out in the Model Code for Securities Transactions by Directors for the six months ended June 30, 2025 - All directors confirmed compliance with the required standards set out in the Model Code for Securities Transactions by Directors[134](index=134&type=chunk)[138](index=138&type=chunk) [Audit Committee](index=33&type=section&id=Audit%20Committee) The Audit Committee under the Board of Directors reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025 - The Audit Committee reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025[139](index=139&type=chunk)[141](index=141&type=chunk) [Changes in Directors' Particulars](index=33&type=section&id=Changes%20in%20Directors'%20Particulars) Ms. Huang Yaping was appointed as an independent director of Shenzhen Qianfenyi Intelligent Technology Co., Ltd. in May 2025 - Ms. Huang Yaping was appointed as an independent director of Shenzhen Qianfenyi Intelligent Technology Co., Ltd. in May 2025[140](index=140&type=chunk)[142](index=142&type=chunk)

Revenue and Profitability - Revenue for the six months ended June 30, 2025, reached RMB 647.4 million, a significant increase of 864% compared to RMB 67.1 million in the same period of 2024[4] - Gross profit for the same period was RMB 27.6 million, up 458% from RMB 4.9 million year-over-year[4] - Profit before tax surged to RMB 52.8 million, representing a 454% increase from RMB 9.5 million in the prior year[4] - The Group recorded revenue of approximately RMB 647.4 million, representing a significant increase of approximately 864.8% compared to RMB 67.1 million for the corresponding period last year[20] - The total comprehensive income for the period was RMB 51,468,000, compared to RMB 5,366,000 in 2024, marking an increase of 861%[116] - For the six months ended June 30, 2025, the profit attributable to the owners of the Company was RMB 51,469,000, a significant increase from RMB 5,366,000 in the same period of 2024, representing a growth of approximately 861%[174] Business Segments - The pre-owned e-commerce business generated approximately RMB 625.7 million in revenue, becoming the largest source of revenue and profit for the company[14] - The traditional advertising business saw a decline, while the pre-owned e-commerce sector experienced rapid growth due to changing consumer attitudes[12] - The advertisement segment generated revenue of RMB 21,714,000, down from RMB 67,144,000 in 2024, indicating a decline of approximately 67.7%[138] - The pre-owned e-commerce segment reported revenue of RMB 625,670,000, with no revenue reported in the previous year, marking a substantial growth[138] Expenses and Costs - Selling and marketing expenses increased by 350% to approximately RMB 4.5 million, up from RMB 1.0 million in the corresponding period, mainly due to expenses from the pre-owned e-commerce business[23] - Administrative expenses rose by 109.1% to approximately RMB 11.5 million, compared to RMB 5.5 million in the corresponding period, also driven by the pre-owned e-commerce business[24] - Finance costs increased by 70.4% to approximately RMB 4.6 million, up from RMB 2.7 million in the corresponding period, primarily due to interest expenses from convertible bonds issued[25] - Total staff costs for the six months ended June 30, 2025, amounted to RMB 10,680,000, a significant rise from RMB 1,980,000 in 2024, marking an increase of approximately 438%[172] Financial Position - As of June 30, 2025, the company's cash and cash equivalents increased to approximately RMB110.6 million from RMB34.0 million as of December 31, 2024[52][59] - The total assets of the group rose to approximately RMB745.1 million as of June 30, 2025, compared to RMB459.2 million as of December 31, 2024[52][59] - The company's gearing ratio increased significantly from approximately 53.3% as of December 31, 2024, to approximately 97.2% as of June 30, 2025, primarily due to the increase in convertible bonds[53][60] - Trade receivables as of June 30, 2025, were RMB 286,690,000, up from RMB 222,884,000 as of December 31, 2024, representing an increase of about 28.7%[183] - Total liabilities as of June 30, 2025, were RMB 503,531,000, up from RMB 305,389,000 as of December 31, 2024, representing an increase of approximately 64.7%[146] Capital Management - The company successfully issued and placed convertible bonds with an aggregate principal amount of HK$256,630,000, representing approximately 17.63% of the total number of issued shares as of the announcement date[47] - The initial conversion price for the convertible bonds is set at HK$2.60, which may be adjusted[46] - The issuance of convertible bonds generated net proceeds of RMB 233,723,000 during the period[121] - The Group's total borrowings as of June 30, 2025, amounted to RMB 33,371,000, a decrease of approximately 59% from RMB 81,971,000 as of December 31, 2024[195] Strategic Initiatives - The company launched the "Fenhao Cloud AI Assistant" in March 2025, integrating AI capabilities into its services to enhance transaction efficiency[15] - The AI-driven decision-making engine aims to provide intelligent services across the entire transaction chain, enhancing competitiveness in the market[16] - The Group aims to offset weaknesses in the advertising business with high growth in the pre-owned e-commerce business in the short term[80] - The Group plans to implement cost restructuring and achieve efficiency gains through supply chain optimization and AI technology in the mid-term[80] - The long-term goal is to establish a triangular framework of "Technology + Supply Chain + Finance" to become a benchmark enterprise in the circular economy[80] Compliance and Governance - The Company has complied with the Corporate Governance Code for the six months ended June 30, 2025[83] - The Audit Committee confirmed compliance with all applicable accounting principles and standards for the interim results[109] - The Company has confirmed compliance with the Model Code for Securities Transactions by Directors during the six months ended June 30, 2025[84] Employee and Shareholder Information - As of June 30, 2025, the Group employed a total of 112 full-time employees, an increase of 83 employees compared to 29 full-time employees as of June 30, 2024[69][72] - Ms. Li Ye holds 64,000,000 shares, representing an interest of 11.43% in the Company[101] - Mr. Sang Kangqiao holds 140,000,000 shares, representing an interest of 25.00% in the Company[101] - The Company adopted the Share Option Scheme on October 22, 2019, to motivate eligible participants and maintain business relationships[88]

目錄 | 公司資料 | 2 | | --- | --- | | 財務摘要 | 3 | | 管理層討論及分析 | 4 | | 簡明綜合損益及其他全面收益表 | 16 | | 簡明綜合財務狀況表 | 18 | | 簡明綜合權益變動表 | 20 | | 簡明綜合現金流量表 | 21 | | 簡明綜合財務報表附註 | 22 | | 其他資料 | 41 | 公司資料 董事會及委員會 執行董事 郭建新先生 （主席） 郭漢鋒先生 陸克先生 段惠元先生 馬曉玲女士 非執行董事 王昕先生 獨立非執行董事 張照東先生 潘翼鵬先生 馬有恒先生 審核委員會 潘翼鵬先生 （主席） 張照東先生 馬有恒先生 薪酬委員會 張照東先生 （主席） 潘翼鵬先生 段惠元先生 提名委員會 郭建新先生 （主席） 潘翼鵬先生 張照東先生 馬曉玲女士（於2025年6月3日獲委任） 馬有恒先生（於2025年6月3日獲委任） 公司秘書 王金徹先生 授權代表 郭漢鋒先生 王金徹先生 核數師 蘇亞文舜會計師事務所有限公司 有關香港法例之法律顧問 蕭鎮邦律師行 註冊辦事處 Cricket Square, Hutchins Drive P.O. Box 2681 Gr ...

[Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) [Overview](index=3&type=section&id=Overview) The Group is a supplier of hydrogenated benzene-based chemicals and energy products in Henan Province, sourcing raw materials from the coking industry and actively expanding its hydrogen energy business in response to national "dual carbon" goals - The Group is a supplier of hydrogenated benzene-based chemicals and energy products in Henan Province, primarily obtaining raw materials (crude benzene and coke oven gas) from the upstream coking industry[7](index=7&type=chunk) - In response to the Chinese government's encouragement of circular economy development and "dual carbon" goals, the Group is expanding its energy business to include hydrogen, commencing hydrogen refueling station operations in Q4 2023[7](index=7&type=chunk) - In H1 2025, the Group's revenue primarily derived from hydrogenated benzene-based chemicals, energy products (liquefied natural gas and coal gas), and trading (LNG, hydrogen, and refined oil products)[8](index=8&type=chunk) [Financial Summary](index=4&type=section&id=Financial%20Summary) In H1 2025, the Group experienced significant declines in revenue, gross profit, and profit for the period, resulting in a basic loss per share, substantial drops in gross profit margin and net profit margin, and reductions in total assets and total equity 2025 H1 vs 2024 H1 Financial Summary | Indicator | 2025 H1 (RMB million) | 2024 H1 (RMB million) | Change (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,442.2 | 1,602.1 | (159.9) | -10.0% | | Gross Profit | 22.5 | 71.8 | (49.3) | -68.7% | | (Loss) Profit for the Period | (9.3) | 44.9 | (54.2) | -120.7% | | Basic (Loss) Earnings Per Share (RMB) | (0.02) | 0.03 | (0.05) | -166.7% | | Gross Profit Margin | 1.6% | 4.5% | (2.9%) | -64.4% | | Net (Loss) Profit Margin | (0.6%) | 2.8% | (3.4%) | -121.4% | 2025 June 30 vs 2024 December 31 Balance Sheet Summary | Indicator | 2025 June 30 (RMB million) | 2024 December 31 (RMB million) | Change (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total Assets | 1,605.2 | 1,676.4 | (71.2) | -4.2% | | Total Equity | 1,059.4 | 1,091.6 | (32.2) | -2.9% | [Factors Affecting the Group's Operating Results and Financial Position](index=5&type=section&id=Factors%20Affecting%20the%20Group%27s%20Operating%20Results%20and%20Financial%20Position) The Group's operating results are influenced by China's overall economic conditions, downstream industry demand, raw material and product price fluctuations, production capacity and sales stability, and financing costs, with hydrogenated benzene-based chemicals and LNG prices particularly sensitive to oil and global LNG price movements - China's overall economic conditions affect product market prices, demand, and raw material prices, with an economic downturn potentially leading to lower product selling prices and requiring adjustments to procurement and sales strategies[11](index=11&type=chunk) - Sales of hydrogenated benzene-based chemicals and LNG primarily depend on domestic chemical industry consumption, with their prices influenced by crude oil prices and global LNG price fluctuations[12](index=12&type=chunk) - Fluctuations in raw material prices (crude benzene and coke oven gas) and changes in the price spread between products and raw materials are major risks, affected by upstream coal prices and macroeconomic conditions[13](index=13&type=chunk) Average Prices of Major Products and Raw Materials (RMB/tonne or cubic meter) | Product/Raw Material | 2025 H1 Average Selling Price | 2024 Average Selling Price | 2025 H1 Average Purchase Price | 2024 Average Purchase Price | | :--- | :--- | :--- | :--- | :--- | | Hydrogenated Benzene-based Chemicals | 5,668.57 | 6,734.73 | - | - | | Pure Benzene | 6,103.05 | 7,270.64 | - | - | | Toluene | - | 6,395.48 | - | - | | Coal Gas | 0.84 | 0.83 | - | - | | LNG | 3,993.39 | 4,197.57 | - | - | | Crude Benzene | - | - | 5,118.52 | 6,294.04 | | Coke Oven Gas | - | - | 0.62 | 0.60 | - In H1 2025, hydrogenated benzene-based chemicals production capacity was approximately **400,000 tonnes/year**, LNG production facility capacity was approximately **72,000 tonnes/year**, and hydrogen production capacity was approximately **317 million cubic meters/year**, with stable capacity utilization and product sales[20](index=20&type=chunk) - As of June 30, 2025, interest-bearing borrowings amounted to approximately **RMB 365.8 million**, with financing costs of approximately **RMB 7.9 million**, accounting for approximately **0.55% of total revenue**[21](index=21&type=chunk) [Key Developments](index=8&type=section&id=Key%20Developments) In H1 2025, the Group continued to invest in production efficiency, safety, and environmental protection, actively expanding its hydrogen refueling station business with two new stations, significantly increasing hydrogen sales volume and serviced vehicles - Investment of approximately **RMB 1.2 million** for the construction of a sulfur-containing wastewater stripping tower to save treatment costs and stabilize production[22](index=22&type=chunk) - During the period, **5 hydrogen refueling stations** were in operation, with the addition of Jiyuan Huling Hydrogen Refueling Station and Dengfeng Guojiawa Hydrogen Refueling Station[23](index=23&type=chunk)[24](index=24&type=chunk) Hydrogen Sales Volume at Hydrogen Refueling Stations (tonnes) | Hydrogen Refueling Station | 2025 H1 Sales Volume (tonnes) | 2024 H1 Sales Volume (tonnes) | | :--- | :--- | :--- | | Jiyuan Nanerhuan Hydrogen Refueling Station | 322 | 167 | | Zhengzhou Huagong Road Hydrogen Refueling Station | 179 | 63 | | Gongyi Heluo Hydrogen Refueling Station | 103 | 20 | | Jiyuan Huling Hydrogen Refueling Station | 133 | - | | Dengfeng Guojiawa Hydrogen Refueling Station | 73 | - | - The new policy for hydrogen-powered vehicles to enjoy free highway tolls promoted rapid growth in hydrogen-powered tractor transportation business[23](index=23&type=chunk) [Operating Results](index=9&type=section&id=Operating%20Results) In H1 2025, the Group's overall operating performance significantly declined, turning from profit to loss, with revenue decreasing by 10.0%, gross profit by 68.7%, and pre-tax profit shifting from profit to loss, primarily due to falling average selling prices of hydrogenated benzene-based chemicals, reduced government subsidies and large-denomination deposit interest income, asset disposal losses, and a decline in joint venture performance Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousand) | Indicator | 2025 H1 | 2024 H1 | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,442,220 | 1,602,071 | (159,851) | | Cost of Sales | (1,419,722) | (1,530,294) | 110,572 | | Gross Profit | 22,498 | 71,777 | (49,279) | | Other Income | 5,183 | 16,188 | (11,005) | | Other Gains and Losses | (2,384) | 3,201 | (5,585) | | Selling and Distribution Expenses | (6,920) | (7,556) | 636 | | Administrative Expenses | (20,829) | (21,780) | 951 | | Finance Costs | (7,938) | (8,088) | 150 | | Share of Results of a Joint Venture | (351) | 1,190 | (1,541) | | (Loss) Profit Before Tax | (10,741) | 54,932 | (65,673) | | Income Tax Credit (Expense) | 1,439 | (10,050) | 11,489 | | (Loss) Profit for the Period | (9,302) | 44,882 | (54,184) | | Total Comprehensive (Expense) Income for the Period | (9,332) | 45,108 | (54,440) | | Basic (Loss) Earnings Per Share (RMB) | (0.02) | 0.03 | (0.05) | - Revenue decreased by **10.0% year-on-year** to **RMB 1.4422 billion**, primarily due to an approximately **18.3% drop in the average tax-inclusive price of hydrogenated benzene-based chemicals**, despite a **10.6% increase in sales volume**[28](index=28&type=chunk) - Gross profit margin declined from **4.5% to 1.6%**, mainly because the decrease in hydrogenated benzene-based chemicals raw material purchase prices was less than the decrease in selling prices[28](index=28&type=chunk) - Other income decreased by **RMB 11.005 million**, primarily due to a **RMB 6.6 million reduction in government subsidies** and a **RMB 4.1 million reduction in interest income from large-denomination deposits**[29](index=29&type=chunk) - Other gains and losses shifted from a gain of **RMB 3.201 million** to a loss of **RMB 2.384 million**, mainly affected by asset disposal losses, fair value changes in bills receivable, and reduced exchange gains[30](index=30&type=chunk) - Share of results of a joint venture turned from a profit of **RMB 1.19 million** to a loss of **RMB 0.351 million**, primarily due to decreased sales volume and average selling price of Jinjiang Refining & Chemical[34](index=34&type=chunk) Business Segment Performance (RMB thousand) | Segment | 2025 Revenue | 2024 Revenue | 2025 Performance | 2024 Performance | 2025 Gross Profit Margin | 2024 Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Hydrogenated Benzene-based Chemicals | 1,110,256 | 1,229,506 | (17,993) | 15,790 | (1.6%) | 1.3% | | Energy Products | 282,881 | 303,937 | 36,083 | 46,323 | 12.8% | 15.2% | | Trading | 46,773 | 63,421 | 3,141 | 5,507 | 6.7% | 8.7% | - Hydrogenated benzene-based chemicals segment revenue decreased by **9.7%**, and gross profit margin fell from **1.3% to -1.6%**, mainly because the average selling price decline was greater than the raw material purchase price decline[37](index=37&type=chunk) - Energy products segment revenue decreased by **6.9%**, and gross profit margin declined, primarily due to increased LNG production costs and a smaller increase in coal gas selling prices compared to raw materials[38](index=38&type=chunk) - Trading segment revenue decreased by **26.2%**, and gross profit margin fell from **8.7% to 6.7%**, mainly due to a significant drop in sales volume of diesel and gasoline at refueling stations[38](index=38&type=chunk) [Financial Position](index=13&type=section&id=Financial%20Position) The Group maintained good liquidity in H1 2025, but net cash from operating activities significantly decreased, total bank borrowings increased, the gearing ratio rose, and both return on equity and return on assets turned negative, with no significant off-balance sheet arrangements and the transfer of certain financial assets to settle payables or raise cash - In H1 2025, the Group's funds primarily came from product sales, shareholders' equity, and bank borrowings, with directors confirming no liquidity issues[39](index=39&type=chunk) Condensed Consolidated Cash Flow Statement Excerpts (RMB thousand) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 42,950 | 104,201 | | Net Cash (Used in) Investing Activities | (21,132) | (67,741) | | Net Cash from Financing Activities | 461 | 46,321 | | Net Increase in Cash and Cash Equivalents | 22,279 | 82,781 | | Cash and Cash Equivalents at End of Period | 158,905 | 388,221 | - Net cash from operating activities significantly decreased, primarily attributable to a reduction in operating cash flow before working capital changes, partially offset by a decrease in inventories and an increase in contract liabilities[41](index=41&type=chunk) - Net cash used in investing activities decreased, mainly due to reduced purchases of property, plant, and equipment, partially offset by interest received on bank deposits and dividends from a joint venture[42](index=42&type=chunk) - Net cash from financing activities significantly decreased, primarily due to increased bank borrowings being offset by repayment of bank loans, dividend payments, and interest expenses[43](index=43&type=chunk) Bank Borrowings (RMB thousand) | Category | 2025 June 30 | 2024 December 31 | Increase/(Decrease) | | :--- | :--- | :--- | :--- | | Total Bank Borrowings | 365,843 | 334,040 | 31,803 | | Secured | 120,343 | 148,040 | (27,697) | | Unsecured | 245,500 | 186,000 | 59,500 | | Fixed-rate Borrowings | 59,800 | 65,000 | (5,200) | | Floating-rate Borrowings | 306,043 | 269,040 | 37,003 | | Amount Repayable within One Year | (276,404) | (231,395) | (45,009) | | Amount Repayable after One Year | 89,439 | 102,645 | (13,206) | - As of June 30, 2025, the Group obtained total bank credit facilities of approximately **RMB 630.1 million**, of which approximately **RMB 254.3 million** remained unutilized[47](index=47&type=chunk) - As of June 30, 2025, the total carrying amount of the Group's pledged assets was approximately **RMB 31.1 million**, used as collateral for bank credit facilities[49](index=49&type=chunk) Key Financial Ratios | Indicator | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Gearing Ratio | 34.5% | 30.6% | | Return on Equity (Annualized) | -4.1% | -1.6% | | Return on Assets (Annualized) | -2.5% | 0.7% | - The gearing ratio increased to **34.5%**, primarily due to an increase in total interest-bearing bank borrowings[52](index=52&type=chunk) - Return on equity decreased to **-4.1%**, mainly due to an increase in loss for the period attributable to owners of the Company[54](index=54&type=chunk) - Return on assets decreased to **-2.5%**, primarily due to total comprehensive income for the period turning from income to expense[56](index=56&type=chunk) - The Group has no significant off-balance sheet arrangements and has transferred bills receivable to settle payables or raise cash, with a maximum exposure of **RMB 256.451 million**[57](index=57&type=chunk)[58](index=58&type=chunk) [Market Risks](index=18&type=section&id=Market%20Risks) The Group faces various market risks including commodity price fluctuations, interest rate volatility, credit concentration, and liquidity management, with management striving to mitigate risks through regular operational and financial activities and continuous monitoring to ensure risks are controllable - The Group faces commodity price risk from fluctuations in raw material prices (crude benzene and coke oven gas) and product market prices, which are influenced by chemical industry demand, macroeconomic conditions, and upstream coal prices[62](index=62&type=chunk) - The Group is exposed to cash flow interest rate risk related to floating-rate borrowings, with fixed-rate borrowings of approximately **RMB 59.8 million**, and management will consider hedging when necessary[63](index=63&type=chunk) - Credit risk is primarily concentrated in trade receivables and amounts due from shareholders and related parties, with the top five outstanding balances accounting for over **95.4%**[64](index=64&type=chunk) - Liquidity risk is managed by monitoring and maintaining adequate levels of cash and cash equivalents to meet debt maturities and cash flow fluctuations[65](index=65&type=chunk) [No Material Adverse Changes](index=19&type=section&id=No%20Material%20Adverse%20Changes) The Directors confirm that there have been no material adverse changes in the Group's financial or trading position from June 30, 2025, up to the date of this report - There have been no material adverse changes in the Group's financial or trading position from June 30, 2025, up to the date of this report[66](index=66&type=chunk) [Dividends](index=19&type=section&id=Dividends) The Board of Directors resolved not to declare an interim dividend for H1 2025, primarily based on current period performance and financial position considerations - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025[68](index=68&type=chunk) - Dividend distribution requires consideration of distributable reserves, liquidity levels, future commitments, and Chinese legal requirements[67](index=67&type=chunk) [Pension Schemes](index=19&type=section&id=Pension%20Schemes) The Group participates in defined contribution retirement benefit schemes for its employees in China and the Mandatory Provident Fund Scheme for its employees in Hong Kong, making contributions as required - The Group's employees in China participate in defined contribution retirement benefit schemes organized by the Chinese government, contributing a certain percentage of employees' monthly salaries[69](index=69&type=chunk) - Hong Kong employees participate in the Mandatory Provident Fund Scheme, with the Group contributing HKD 1,500 or 5% of the relevant monthly salary (whichever is lower) each month[69](index=69&type=chunk) [Use of Proceeds from Listing](index=20&type=section&id=Use%20of%20Proceeds%20from%20Listing) The net proceeds from the Company's listing were approximately RMB 228.91 million, of which RMB 10.216 million was utilized for working capital and general corporate purposes as of June 30, 2025, with the remaining funds planned for hydrogen refueling facilities, investments/acquisitions, and working capital - Net proceeds from the listing were approximately **RMB 228.91 million**[70](index=70&type=chunk)[71](index=71&type=chunk) Planned vs Actual Use of Net Proceeds from Listing (RMB thousand) | Business Purpose Disclosed in Prospectus | Planned Use of Net Proceeds | Actual Use of Net Proceeds from Jan 1 to Jun 30, 2025 | Unutilized Net Proceeds as of Jun 30, 2025 | Estimated Timeframe for Use | | :--- | :--- | :--- | :--- | :--- | | Refueling Stations with Hydrogen Refueling Facilities | 194,574 | 0 | 194,574 | 2025-2027 | | Investment and/or Acquisition of Upstream and Downstream Participants | 11,445 | 0 | 11,445 | 2025-2027 | | Working Capital and Other General Corporate Purposes | 22,891 | 10,216 | 12,674 | 2025-2027 | | **Total** | **228,910** | **10,216** | **218,693** | | [Corporate Governance and Other Information](index=20&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Corporate Governance Philosophy](index=20&type=section&id=Corporate%20Governance%20Philosophy) The Company is committed to being a socially responsible enterprise, balancing economic and social benefits, and adhering to a prudent and efficient corporate governance philosophy, continuously improving its internal control system through internal and third-party audits - The Company adheres to combining economic and social benefits, committed to technological progress in the industry and fulfilling social responsibilities[72](index=72&type=chunk) - Upholding a prudent and efficient corporate governance philosophy, focusing on shareholder interests, and improving the internal control system through internal and third-party audits[72](index=72&type=chunk) [Corporate Governance Code and Articles of Association](index=21&type=section&id=Corporate%20Governance%20Code%20and%20Articles%20of%20Association) The Company has formulated its Articles of Association and adopted the Corporate Governance Code in Appendix C1 of the Listing Rules to regulate its organization and conduct, adopting revised Articles of Association on January 22, 2025, and has complied with the Code provisions except for not having a dividend policy - The Company formulated its Articles of Association in accordance with the PRC Company Law and other relevant laws and regulations, governing its organization, conduct, and shareholder rights and obligations[73](index=73&type=chunk) - Adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and established Nomination, Remuneration and Appraisal, and Audit Committees to achieve good corporate governance[73](index=73&type=chunk) - For the six months ended June 30, 2025, the Company has complied with all code provisions under the Listing Rules and the Code, except for not having a dividend policy in accordance with Code Provision F.1.1[74](index=74&type=chunk) - The Company adopted the revised Articles of Association on January 22, 2025[74](index=74&type=chunk) [Directors' Securities Transactions](index=21&type=section&id=Directors%27%20Securities%20Transactions) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers and confirmed that all Directors and Supervisors complied with the Model Code during the reporting period - The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[75](index=75&type=chunk) - Following specific enquiries, all Directors and Supervisors confirmed compliance with the Model Code for the six months ended June 30, 2025[75](index=75&type=chunk) [Board of Directors and Supervisory Committee](index=22&type=section&id=Board%20of%20Directors%20and%20Supervisory%20Committee) The Company's Board of Directors comprises eight directors, including two executive directors, three non-executive directors, and three independent non-executive directors, while the Supervisory Committee consists of three supervisors, with some changes in director appointments during the reporting period - The first session of the Board of Directors consists of eight directors, including two executive directors, three non-executive directors, and three independent non-executive directors, serving a three-year term until July 28, 2026[76](index=76&type=chunk) - The first session of the Supervisory Committee consists of three supervisors, serving a three-year term[76](index=76&type=chunk) - Ms. Huang Xinqi resigned as an independent non-executive director of Duoxiangyun Holdings Limited effective June 27, 2025, and was appointed as an independent non-executive director of RemeGen Co., Ltd. effective June 30, 2025[76](index=76&type=chunk)[77](index=77&type=chunk) - Mr. Wang Lijie was appointed as an executive director of Henan Jinma Energy Company Limited effective June 16, 2025[78](index=78&type=chunk) - Mr. Rao Zhaohui resigned as Chairman and executive director of Henan Jinma Energy Company Limited effective June 16, 2025, and was appointed as a non-executive director effective September 5, 2025[78](index=78&type=chunk) [Interests of Directors, Supervisors and Chief Executive in Securities](index=23&type=section&id=Interests%20of%20Directors%2C%20Supervisors%20and%20Chief%20Executive%20in%20Securities) As of June 30, 2025, no Director, Supervisor, or Chief Executive held disclosable interests in the Company's shares, however, non-executive directors Mr. Rao Zhaohui and Mr. Wang Lijie held interests in the associated corporation Henan Jinma Energy Company Limited - As of June 30, 2025, no Director, Supervisor, or Chief Executive had any interests or short positions in the shares, underlying shares, or debentures of the Company that were required to be recorded in the register or notified to the Company[79](index=79&type=chunk) Directors' Interests in Henan Jinma Energy Company Limited | Name | Nature of Interest | Class of Shares | Number of Shares Held | Approximate Percentage | | :--- | :--- | :--- | :--- | :--- | | Mr. Rao Zhaohui | Interest in controlled corporation | H Shares | 162,000,000 (L) | 30.26% | | Mr. Rao Zhaohui | Beneficial owner | H Shares | 2,681,000 (L) | 0.50% | | Mr. Wang Lijie | Interest in controlled corporation | H Shares | 42,900,000 (L) | 8.01% | [Interests of Directors and Supervisors in Transactions, Arrangements or Contracts](index=24&type=section&id=Interests%20of%20Directors%20and%20Supervisors%20in%20Transactions%2C%20Arrangements%20or%20Contracts) During the reporting period, no Director, Supervisor, or their associated entities were involved in or held significant interests in any transactions, arrangements, or contracts material to the Group's business - During the reporting period or as of June 30, 2025, no Director or Supervisor, or any entity connected with such Director or Supervisor, was a party to, or had a material direct or indirect interest in, any transaction, arrangement, or contract to which the Company, its holding company, or any of its subsidiaries or fellow subsidiaries was a party and which was significant to the Group's business[83](index=83&type=chunk) [Arrangement to Purchase Shares or Debentures](index=24&type=section&id=Arrangement%20to%20Purchase%20Shares%20or%20Debentures) During the reporting period, neither the Company, its holding company, nor any of its subsidiaries or fellow subsidiaries made any arrangements to enable Directors to acquire rights through the purchase of shares or debentures - At no time during the reporting period did the Company, its holding company, or any of its subsidiaries or fellow subsidiaries make any arrangements to enable Directors to acquire rights through the purchase of shares or debentures of the Company or any other body corporate[84](index=84&type=chunk) [Major Shareholders' Interests in Securities](index=24&type=section&id=Major%20Shareholders%27%20Interests%20in%20Securities) As of June 30, 2025, Jinma Energy was the Company's major shareholder, holding approximately 75% of the Company's equity directly and indirectly Major Shareholders' Interests in the Company's Securities | Name/Designation | Nature of Interest | Class of Shares | Number of Shares Held | Approximate Percentage | | :--- | :--- | :--- | :--- | :--- | | Jinma Energy | Beneficial owner | H Shares | 713,380,000 (L) | 74.65% | | Jinma Energy | Interest in controlled corporation | H Shares | 3,350,000 (L) | 0.35% | - Jinma Energy indirectly holds interests in the Company through its wholly-owned subsidiary, Shanghai Jinma Energy Co., Ltd[92](index=92&type=chunk) [Sufficiency of Public Float](index=25&type=section&id=Sufficiency%20of%20Public%20Float) Since the listing date and up to the date of this report, the Company has maintained a sufficient public float as required by the Listing Rules - Since the listing date and up to the date of this report, the Company has maintained a sufficient public float as required by the Listing Rules[88](index=88&type=chunk) [Purchase, Sale and Redemption of the Company's Securities](index=25&type=section&id=Purchase%2C%20Sale%20and%20Redemption%20of%20the%20Company%27s%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[89](index=89&type=chunk) [Employees and Remuneration Policy](index=25&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 397 employees, with employee costs of approximately RMB 21.58 million, a decrease year-on-year; the Company has a Remuneration and Appraisal Committee, provides social insurance and housing provident fund for employees according to regulations, and implements annual training programs - As of June 30, 2025, the Group had a total of **397 employees**, with employee costs of approximately **RMB 21.58 million**, a decrease from **RMB 23.98 million** in the same period last year[90](index=90&type=chunk) - The Remuneration and Appraisal Committee is responsible for recommending remuneration packages for Directors and senior management, reviewing remuneration policies based on the Group's operating performance, individual performance, and market practices[90](index=90&type=chunk) - The Group makes full contributions to social insurance (including pension schemes, medical insurance, work injury insurance, unemployment insurance, and maternity insurance) and housing provident funds for all employees[90](index=90&type=chunk) - Management formulates annual training programs covering management, finance, safety, environmental protection, equipment, and processes, committed to employees' personal growth[91](index=91&type=chunk) [Independent Auditor's Report](index=26&type=section&id=Independent%20Auditor%27s%20Report) [Introduction](index=26&type=section&id=Introduction) Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements of Henan Jinyuan Hydrogenated Chemicals Co., Ltd. and its subsidiaries for the six months ended June 30, 2025, prepared in accordance with International Accounting Standard 34 and the Listing Rules - Deloitte Touche Tohmatsu has reviewed the Company's condensed consolidated financial statements for the six months ended June 30, 2025[96](index=96&type=chunk) - The condensed consolidated financial statements were prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the relevant requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[96](index=96&type=chunk) [Scope of Review](index=27&type=section&id=Scope%20of%20Review) The review was conducted in accordance with International Standard on Review Engagements 2410, primarily involving inquiries, analytical procedures, and other review procedures, with a scope smaller than an audit, thus no audit opinion was expressed - The review was conducted in accordance with International Standard on Review Engagements 2410 issued by the International Auditing and Assurance Standards Board[97](index=97&type=chunk) - The scope of a review is substantially less than an audit conducted in accordance with International Standards on Auditing, therefore, it does not provide assurance that all significant matters that might be identified in an audit would be identified, and no audit opinion was expressed[97](index=97&type=chunk) [Conclusion](index=27&type=section&id=Conclusion) Based on the review, the auditor believes that the condensed consolidated financial statements have been prepared in all material respects in accordance with International Accounting Standard 34 - Based on the review, nothing has come to the auditor's attention that causes them to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34[98](index=98&type=chunk) [Interim Results](index=27&type=section&id=Interim%20Results) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=28&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group recorded a loss for the period of RMB 9.302 million, compared to a profit of RMB 44.882 million in the prior year, primarily affected by decreased revenue, reduced gross profit, and other income and gains/losses Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousand) | Indicator | 2025 June 30 | 2024 June 30 | | :--- | :--- | :--- | | Revenue | 1,442,220 | 1,602,071 | | Gross Profit | 22,498 | 71,777 | | (Loss) Profit Before Tax | (10,741) | 54,932 | | (Loss) Profit for the Period | (9,302) | 44,882 | | Total Comprehensive (Expense) Income for the Period | (9,332) | 45,108 | | (Loss) Profit for the Period Attributable to Owners of the Company | (20,231) | 30,233 | | Basic (Loss) Earnings Per Share (RMB) | (0.02) | 0.03 | [Condensed Consolidated Statement of Financial Position](index=29&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were RMB 1.6052 billion and total equity was RMB 1.0594 billion, both decreasing from December 31, 2024, with net current assets of RMB 119.0 million Condensed Consolidated Statement of Financial Position (RMB thousand) | Indicator | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Non-current Assets | 1,053,645 | 1,085,713 | | Current Assets | 551,593 | 590,685 | | Current Liabilities | 432,544 | 456,779 | | Net Current Assets | 119,049 | 133,906 | | Total Assets Less Current Liabilities | 1,172,694 | 1,219,619 | | Total Equity | 1,059,368 | 1,091,550 | | Non-current Liabilities | 113,326 | 128,069 | [Condensed Consolidated Statement of Changes in Equity](index=31&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, equity attributable to owners of the Company was RMB 965.1 million, a decrease from the beginning of the period, with total comprehensive expense for the period of RMB 20.261 million and dividends of RMB 22.85 million distributed to non-controlling interests Condensed Consolidated Statement of Changes in Equity (RMB thousand) | Indicator | As of Jan 1, 2025 | Total Comprehensive (Expense) Income for the Period | Dividends Recognized as Distribution | Transfer | As of Jun 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 985,373 | (20,261) | - | - | 965,112 | | Non-controlling Interests | 106,177 | 10,929 | (22,850) | - | 94,256 | | **Total** | **1,091,550** | **(9,332)** | **(22,850)** | **-** | **1,059,368** | - Capital reserve primarily includes reserves arising from pre-listing company reorganization and share premium from H-share issuance[107](index=107&type=chunk) - Statutory surplus reserve fund requires **10% of after-tax profit** to be transferred to this fund in accordance with Chinese law[107](index=107&type=chunk) - Special reserve, established according to regulations issued by the Ministry of Finance and the Ministry of Emergency Management, is used for improving safety production environments and facilities and is not distributable to shareholders[107](index=107&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=32&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities was RMB 42.95 million, net cash used in investing activities was RMB 21.132 million, and net cash from financing activities was RMB 0.461 million, with cash and cash equivalents at the end of the period totaling RMB 158.905 million Condensed Consolidated Statement of Cash Flows (RMB thousand) | Indicator | 2025 June 30 | 2024 June 30 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 42,950 | 104,201 | | Net Cash Used in Investing Activities | (21,132) | (67,741) | | Net Cash from Financing Activities | 461 | 46,321 | | Net Increase in Cash and Cash Equivalents | 22,279 | 82,781 | | Cash and Cash Equivalents at End of Period | 158,905 | 388,221 | [Notes to the Condensed Consolidated Financial Statements](index=34&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details key financial information including the basis of preparation, significant accounting policies, revenue and segment information, other income, other gains and losses, finance costs, profit before tax, income tax, dividends, earnings per share, property, plant and equipment, deferred tax, receivables, borrowings, payables, transfer of financial assets, fair value measurement of financial instruments, and related party transactions - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and the Listing Rules of the Hong Kong Stock Exchange, with accounting policies consistent with the 2024 annual consolidated financial statements[111](index=111&type=chunk)[112](index=112&type=chunk) Revenue from Contracts with Customers (RMB thousand) | Segment | 2025 H1 Total | 2024 H1 Total | | :--- | :--- | :--- | | Hydrogenated Benzene-based Chemicals | 1,110,256 | 1,229,506 | | Energy Products | 343,353 | 362,937 | | Trading | 84,046 | 93,070 | | Other Services | 3,817 | 5,245 | | **Total Revenue from Contracts with Customers** | **1,541,472** | **1,690,758** | | Offsetting | (99,252) | (88,687) | | **Consolidated Revenue** | **1,442,220** | **1,602,071** | - Revenue is recognized when control of the product is transferred, i.e., when products are delivered to the specified location or when customers purchase goods; credit terms for some long-term customers are within 60 days, while other customers require prepayment[122](index=122&type=chunk) - The Group's operating segments include sales of hydrogenated benzene-based chemicals, energy products, trading, and other services[123](index=123&type=chunk) Segment Revenue and Results (RMB thousand) | Segment | 2025 H1 External Sales | 2025 H1 Segment Results | 2024 H1 External Sales | 2024 H1 Segment Results | | :--- | :--- | :--- | :--- | :--- | | Derivative Chemicals | 1,110,256 | (17,993) | 1,229,506 | 15,790 | | Energy Products | 282,881 | 36,083 | 303,937 | 46,323 | | Trading | 46,773 | 3,141 | 63,421 | 5,507 | | Other Services | 2,310 | 1,915 | 5,207 | 4,378 | | **Total** | **1,442,220** | **23,146** | **1,602,071** | **71,998** | - All revenue from external customers and non-current assets are located in China[127](index=127&type=chunk) Other Income (RMB thousand) | Item | 2025 June 30 | 2024 June 30 | | :--- | :--- | :--- | | Interest Income from Bank Deposits | 2,058 | 7,193 | | Government Subsidies | 507 | 7,103 | | **Total** | **5,183** | **16,188** | Other Gains and Losses (RMB thousand) | Item | 2025 June 30 | 2024 June 30 | | :--- | :--- | :--- | | Fair Value (Loss) of Bills Receivable at Fair Value Through Other Comprehensive Income | (1,303) | (2,184) | | (Loss) Gain on Disposal/Write-off of Property, Plant and Equipment | (1,599) | 2 | | Net Foreign Exchange (Loss) Gain | (146) | 4,839 | | **Total** | **(2,384)** | **3,201** | Finance Costs (RMB thousand) | Item | 2025 June 30 | 2024 June 30 | | :--- | :--- | :--- | | Interest Expense on Bank Borrowings | 7,836 | 7,984 | | Interest Expense on Lease Liabilities | 102 | 104 | | **Total** | **7,938** | **8,088** | Components of (Loss) Profit Before Tax (RMB thousand) | Item | 2025 June 30 | 2024 June 30 | | :--- | :--- | :--- | | Total Staff Costs | 21,579 | 23,984 | | Capitalized in Inventories | (14,070) | (14,649) | | **Staff Costs Recognized as Expense** | **7,509** | **9,335** | | Total Depreciation and Amortization | 40,309 | 40,041 | | Capitalized in Inventories | (34,984) | (34,516) | | **Depreciation and Amortization Recognized as Expense** | **5,325** | **5,525** | | Cost of Inventories Recognized as Expense | 1,419,074 | 1,530,073 | Income Tax (Credit) Expense (RMB thousand) | Item | 2025 June 30 | 2024 June 30 | | :--- | :--- | :--- | | PRC Enterprise Income Tax - Current Tax | 6,160 | 10,181 | | Deferred Tax | (7,899) | (1,093) | | **Total** | **(1,439)** | **10,050** | - No dividends were declared during this interim period, nor did the Directors recommend any dividend declaration[134](index=134&type=chunk)[135](index=135&type=chunk) - Basic loss per share was **RMB 0.02**, with a weighted average number of ordinary shares of **955.64 million**, and no dilutive effect[136](index=136&type=chunk) - Construction costs of **RMB 5.362 million** were incurred during this interim period, primarily for hydrogen refueling station construction, and ancillary equipment with a total carrying amount of **RMB 2.13 million** was disposed of or written off, resulting in a loss of **RMB 1.599 million**[137](index=137&type=chunk) Deferred Tax Assets/Liabilities (RMB thousand) | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Deferred Tax Assets | 27,540 | 19,726 | | Deferred Tax Liabilities | (1,450) | (1,545) | | **Total** | **26,090** | **18,181** | - The Group has unutilized tax losses of **RMB 136.036 million** available to offset future profits, with deferred tax assets of **RMB 27.709 million** recognized[138](index=138&type=chunk) Trade and Other Receivables (RMB thousand) | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Trade Receivables - Customer Contracts | 7,288 | 7,792 | | Prepayments to Suppliers | 15,612 | 12,293 | | **Total** | **29,303** | **30,722** | - Amounts due from shareholders were **RMB 0.338 million**, from parent company Jinma Energy, with an aging within 90 days[143](index=143&type=chunk) Amounts Due from Related Parties (RMB thousand) | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Xinyang Steel Jingang Energy Co., Ltd. | 23,411 | 23,411 | | Henan Bohai Chemical Co., Ltd. | 343 | - | | **Total** | **23,754** | **23,411** | Borrowings (RMB thousand) | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Total Bank Borrowings | 365,843 | 334,040 | | Fixed-rate Borrowings Effective Annual Interest Rate | 3.40%-4.10% | 3.50%-4.10% | | Floating-rate Borrowings Effective Annual Interest Rate | 3.00%-5.40% | 3.41%-5.60% | Trade and Other Payables (RMB thousand) | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Trade Payables | 7,394 | 13,881 | | Bills Payable | - | 5,000 | | Consideration Payable for Property, Plant and Equipment | 94,478 | 114,510 | | **Total** | **118,138** | **193,106** | - Amounts due to shareholders were **RMB 2.862 million**, from Jinma Energy, with an aging within 90 days[152](index=152&type=chunk)[153](index=153&type=chunk) Endorsed and Discounted Bills Receivable with Recourse Not Yet Recovered (RMB thousand) | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Endorsed Bills to Settle Payables | 74,048 | 72,285 | | Discounted Bills to Raise Cash | 182,403 | 174,508 | | **Total** | **256,451** | **246,793** | - The fair value of bills receivable at fair value through other comprehensive income was **RMB 41.479 million**, valued using discounted cash flow techniques[157](index=157&type=chunk) Related Party Transactions (RMB thousand) | Transaction Type | Related Party | 2025 June 30 | 2024 June 30 | | :--- | :--- | :--- | :--- | | Sales of Products and Services to Related Parties | Jinma Energy | 4,255 | 8,362 | | | Bohai Chemical | 7,560 | 18,240 | | | Jinjiang Refining & Chemical | 44,198 | 52,407 | | Purchases of Raw Materials and Services from Related Parties | Jinma Energy | 86,886 | 149,338 | | | Jinma Middle East | 178,429 | 183,666 | | | Jinjiang Refining & Chemical | 5,098 | 10,773 | Key Management Personnel Remuneration (RMB thousand) | Item | 2025 June 30 | 2024 June 30 | | :--- | :--- | :--- | | Salaries and Allowances | 875 | 578 | | Performance-related Bonuses | 15 | 530 | | Retirement Benefits | 74 | 66 | | **Total** | **964** | **1,174** | [Company Information](index=51&type=section&id=Company%20Information) [Basic Company Information](index=52&type=section&id=Basic%20Company%20Information) The Company, Henan Jinyuan Hydrogenated Chemicals Co., Ltd., with stock code 2502, is listed on the Hong Kong Stock Exchange, with its registered office in Jiyuan City, Henan Province, China, and its principal place of business in Hong Kong located in Quarry Bay - Company Name: Henan Jinyuan Hydrogenated Chemicals Co., Ltd[165](index=165&type=chunk) - Stock Code: **2502**, H shares listed on The Stock Exchange of Hong Kong Limited[165](index=165&type=chunk) - Registered Office and Principal Place of Business in China: South of Xiyihuan Road, Jiyuan City, Henan Province, China[165](index=165&type=chunk) - Principal Place of Business in Hong Kong: 17th Floor, One Island East, Taikoo Place, 18 Westlands Road, Quarry Bay, Hong Kong[165](index=165&type=chunk) [Board of Directors Members](index=52&type=section&id=Board%20of%20Directors%20Members) The Board of Directors comprises Executive Directors Mr. Wang Zengguang (General Manager) and Mr. Qiao Erwei (Deputy General Manager and Company Secretary), Non-executive Directors Mr. Rao Zhaohui (Chairman), Mr. Wang Kaibao (Vice Chairman), and Mr. Wang Lijie, and Independent Non-executive Directors Ms. Huang Xinqi, Mr. Di Zhigang, and Ms. Liang Shanying - Executive Directors: Mr. Wang Zengguang (General Manager), Mr. Qiao Erwei (Deputy General Manager and Company Secretary)[165](index=165&type=chunk) - Non-executive Directors: Mr. Rao Zhaohui (Chairman), Mr. Wang Kaibao (Vice Chairman), Mr. Wang Lijie[165](index=165&type=chunk) - Independent Non-executive Directors: Ms. Huang Xinqi, Mr. Di Zhigang, Ms. Liang Shanying[165](index=165&type=chunk) [Supervisory Committee Members](index=52&type=section&id=Supervisory%20Committee%20Members) The Supervisory Committee members include Mr. Huang Ziliang (Chairman), Mr. Wu Zhiqiang, and Mr. Li Hebao - Supervisors: Mr. Huang Ziliang (Chairman), Mr. Wu Zhiqiang, Mr. Li Hebao[165](index=165&type=chunk) [Committee Members](index=52&type=section&id=Committee%20Members) Ms. Huang Xinqi chairs the Audit Committee, Mr. Di Zhigang chairs the Remuneration and Appraisal Committee, Ms. Liang Shanying chairs the Nomination Committee, and Mr. Wang Kaibao chairs the Strategy Committee - Audit Committee Chairman: Ms. Huang Xinqi (Independent Non-executive Director)[165](index=165&type=chunk) - Remuneration and Appraisal Committee Chairman: Mr. Di Zhigang[166](index=166&type=chunk) - Nomination Committee Chairman: Ms. Liang Shanying[166](index=166&type=chunk) - Strategy Committee Chairman: Mr. Wang Kaibao[166](index=166&type=chunk) [Company Secretary and Authorized Representatives](index=53&type=section&id=Company%20Secretary%20and%20Authorized%20Representatives) Ms. Li Kunying serves as the Company Secretary, and Mr. Wang Zengguang and Ms. Li Kunying are the Authorized Representatives - Company Secretary: Ms. Li Kunying[166](index=166&type=chunk) - Authorized Representatives: Mr. Wang Zengguang, Ms. Li Kunying[166](index=166&type=chunk) [Auditor](index=53&type=section&id=Auditor) The Company's auditor is Deloitte Touche Tohmatsu - Auditor: Deloitte Touche Tohmatsu[166](index=166&type=chunk) [Legal Advisers](index=53&type=section&id=Legal%20Advisers) The PRC legal adviser is Shanghai Panming Law Firm, and the Hong Kong legal adviser is Reed Smith Richards Butler LLP - PRC Legal Adviser: Shanghai Panming Law Firm[166](index=166&type=chunk) - Hong Kong Legal Adviser: Reed Smith Richards Butler LLP[166](index=166&type=chunk) [H Share Registrar](index=53&type=section&id=H%20Share%20Registrar) The H Share Registrar is Hong Kong Registrars Limited - H Share Registrar: Hong Kong Registrars Limited[166](index=166&type=chunk) [Principal Banks](index=54&type=section&id=Principal%20Banks) The Group's principal banks include branches of Industrial and Commercial Bank of China, Bank of China, Shanghai Pudong Development Bank, CITIC Bank, Guangfa Bank, Zhongyuan Bank, and China Merchants Bank in China, as well as Bank of China (Hong Kong) Limited - Principal Banks include Industrial and Commercial Bank of China Jiyuan Branch, Bank of China Jiyuan Branch, Shanghai Pudong Development Bank Zhengzhou Branch, CITIC Bank Zhengzhou Branch, Guangfa Bank Zhengzhou Shangdu Road Sub-branch, Zhongyuan Bank Jiyuan Branch, Bank of China (Hong Kong) Limited Metroplaza Branch, and China Merchants Bank Zhengzhou Branch[167](index=167&type=chunk) [Definitions](index=54&type=section&id=Definitions) [General Terms](index=55&type=section&id=General%20Terms) This section defines general terms commonly used in the report, such as "Board," "China," "Code," and "Company," to ensure clear understanding of the report content - "Board" refers to the Board of Directors of the Company[169](index=169&type=chunk) - "China" refers to the People's Republic of China, excluding Taiwan, the Macao Special Administrative Region of China, and the Hong Kong Special Administrative Region[169](index=169&type=chunk) - "Company" or "the Company" refers to Henan Jinyuan Hydrogenated Chemicals Co., Ltd[169](index=169&type=chunk) - "Hong Kong Stock Exchange" or "the Stock Exchange" refers to The Stock Exchange of Hong Kong Limited[169](index=169&type=chunk) [Technical Terms](index=56&type=section&id=Technical%20Terms) This section explains financial and technical terms used in the report, such as the calculation methods for "Basic Loss Per Share," "Current Ratio," "Gearing Ratio," "Return on Assets," and "Return on Equity" - "Basic Loss Per Share" is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the year[171](index=171&type=chunk) - "Current Ratio" is calculated by dividing total current assets by total current liabilities[171](index=171&type=chunk) - "Gearing Ratio" is calculated by dividing total interest-bearing bank borrowings by total equity[171](index=171&type=chunk) - "Return on Assets" is calculated by dividing profit and total comprehensive income by average total assets[171](index=171&type=chunk) - "Return on Equity" is calculated by dividing profit attributable to owners of the Company by average equity attributable to owners of the Company[171](index=171&type=chunk) [Company Abbreviations](index=57&type=section&id=Company%20Abbreviations) This section lists the abbreviations and full names of companies mentioned in the report for clear identification by readers - "Jinma Energy" refers to Henan Jinma Energy Company Limited[172](index=172&type=chunk) - "Jinma Group" refers to Jinma Energy and its subsidiaries (excluding the Group)[172](index=172&type=chunk) - "Jinjiang Refining & Chemical" refers to Henan Jinjiang Refining & Chemical Co., Ltd[172](index=172&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2025, increased to HK$76,587,000, up 4.2% from HK$73,307,000 in 2024[5] - Gross profit rose to HK$20,395,000, representing a 24.5% increase compared to HK$16,382,000 in the previous year[5] - Other income and gains significantly improved to HK$26,133,000 from a loss of HK$10,922,000 in 2024[5] - Loss before tax decreased to HK$30,312,000, down 49.8% from HK$60,342,000 in the same period last year[5] - Loss for the period was HK$29,312,000, a reduction of 49.1% compared to HK$57,579,000 in 2024[6] - Total comprehensive loss for the period was HK$23,016,000, down from HK$69,439,000 in the previous year[6] - Basic and diluted loss per share attributable to ordinary equity holders of the parent was HK(0.48) cents, improved from HK(0.93) cents in 2024[7] Assets and Liabilities - Total non-current assets decreased from HK$1,398,050,000 as of December 31, 2024, to HK$1,342,849,000 as of June 30, 2025, representing a decline of approximately 4.0%[8] - Current assets increased from HK$552,116,000 as of December 31, 2024, to HK$576,273,000 as of June 30, 2025, reflecting an increase of about 4.4%[8] - Net current assets improved from HK$414,105,000 as of December 31, 2024, to HK$448,646,000 as of June 30, 2025, indicating a growth of approximately 8.3%[8] - Total current liabilities decreased from HK$138,011,000 as of December 31, 2024, to HK$127,627,000 as of June 30, 2025, a reduction of about 7.5%[8] - Total non-current liabilities remained relatively stable, with a slight increase from HK$71,729,000 as of December 31, 2024, to HK$71,807,000 as of June 30, 2025[9] - Net assets decreased from HK$1,740,426,000 as of December 31, 2024, to HK$1,719,688,000 as of June 30, 2025, a decline of approximately 1.2%[9] Cash Flow and Investments - Net cash flows generated from operating activities amounted to HK$12,556,000, a significant improvement from a cash outflow of HK$36,938,000 in the same period of 2024[14] - Cash flows from investing activities generated HK$24,865,000, compared to a cash outflow of HK$11,995,000 in 2024, indicating a positive shift in investment performance[15] - The company reported a net increase in cash and cash equivalents of HK$38,161,000, contrasting with a decrease of HK$51,711,000 in the previous year[17] - Cash and cash equivalents at the end of the period stood at HK$117,168,000, up from HK$100,998,000 in 2024[17] Revenue Sources - For the six months ended June 30, 2025, the Group's revenue from contracts with customers was approximately HK$76,587,000, an increase of 4% from HK$73,307,000 for the same period in 2024[31] - Revenue from the sale of goods was HK$69,608,000, up from HK$68,078,000, while revenue from rendering services increased to HK$6,979,000 from HK$5,229,000[32] - 100% of the Group's revenue during the period was generated from customers in Mainland China, with over 92% of non-current assets located in the same region[27] Geriatric Care Business - As of June 30, 2025, the Group operated six geriatric care institutions with a total of 1,243 beds, including 955 beds for medical care services, achieving an average occupancy rate of over 70%[177] - Revenue from geriatric care institutions reached RMB 26.42 million in the first half of 2025, representing a year-on-year increase of 22% compared to RMB 21.64 million in the first half of 2024[177] - The average occupancy rate of the Group's geriatric care institutions was 73% in the first half of 2025, compared to 56% in the first half of 2024[180] - The Group's nursing institutions maintained full occupancy throughout the year, indicating strong recognition from customers and government[176] Share Options and Capital - The company has a share capital of HK$1,211,754,000 as of June 30, 2025, unchanged from December 31, 2024[100] - The 2013 share option scheme has expired as of May 23, 2023, with 146,500,000 share options lapsed and HK$51,934,000 transferred to accumulated losses during the period[101] - The total number of share options granted to directors and substantial shareholders amounts to 60,000,000, with 20,000,000 lapsing during the period[112] - The total number of share options exercised during the period was zero, indicating a potential lack of liquidity or market confidence[111] Financial Assets and Liabilities - The fair value of financial assets measured at fair value as of June 30, 2025, totals HK$165,886,000, with HK$47,209,000 classified as Level 1 and HK$113,675,000 as Level 2[140] - The Group's total financial assets at fair value through profit or loss amount to HK$141,641,000 as of June 30, 2025[140] - The total fair value of financial assets at fair value through profit or loss included HK$118,441,000 in bank wealth management products classified as Level 2[144] Management and Governance - Compensation for key management personnel for the six months ended June 30, 2025, totaled HK$4,513,000, an increase from HK$2,267,000 in the same period of 2024[130] - Performance-related bonuses for key management personnel for the six months ended June 30, 2025, were HK$2,100,000, compared to none in the same period of 2024[130] Contingent Liabilities and Commitments - As of June 30, 2025, the Group had no significant contingent liabilities[123] - The Group's capital commitments as of June 30, 2025, include contracted but not provided for amounts of HK$15,156,000, down from HK$75,822,000 as of December 31, 2024[127]

Contents 目錄 | Corporate Information | 公司資料 | 2 | | --- | --- | --- | | Corporate Profile | 公司簡介 | 5 | | Chairman's Statement | 主席報告 | 7 | | Financial Highlights | 財務摘要 | 12 | | Management Discussion and Analysis | 管理層討論與分析 | 14 | | Disclosure of Interests | 權益披露 | 78 | | Corporate Governance and Other Information | 企業管治及其他資料 | 94 | | Condensed Consolidated Statement of Profit or Loss and | 簡明綜合損益及其他全面 | | | Other Comprehensive Income | 收益表 | 96 | | Condensed Consolidated Statement of Financial Position | 簡明 ...