Financial Performance - Ascentage Pharma reported a significant increase in revenue, reaching HKD 500 million for the first half of 2025, representing a 25% year-over-year growth[2]. - The company reported a net loss of HKD 100 million for the first half of 2025, a 10% improvement compared to the same period in 2024, indicating progress towards profitability[2]. - The company reported a total comprehensive loss of RMB 591.8 million for the six months ended June 30, 2025, compared to a total comprehensive income of RMB 165.1 million for the same period in 2024[89]. - For the six months ended June 30, 2025, the company's revenue was RMB 233.7 million, a decrease of RMB 590 million or 71.6% compared to RMB 823.7 million for the same period in 2024[90]. - The company reported a net income of $30 million, a 15% increase compared to the same quarter last year[10]. Research and Development - The company has allocated HKD 200 million for R&D in 2025, focusing on the development of new products like APG-5918 and APG-1252[2]. - The company is focused on research and development (R&D) in the field of oncology, particularly targeting diseases like small cell lung cancer (SCLC) and T315I mutations[13]. - R&D expenses rose by RMB 84.5 million (USD 12.7 million) or 19.0% to RMB 528.6 million (USD 73.8 million) for the six months ended June 30, 2025, mainly due to increased external R&D expenses related to ongoing global clinical trials[20]. - The company has a robust internal R&D capability, positioning itself as the only global company with clinical development programs targeting all three known key apoptosis regulators[30]. - The company is developing next-generation cell signaling inhibitors and epigenetic modifiers, including PROTACs targeting traditionally "undruggable" proteins[30]. Product Development and Launches - Ascentage Pharma has advanced its clinical trials for APG-2449, with a projected completion date in Q4 2025, aiming to address unmet medical needs in oncology[1]. - The company has successfully launched its new product, Lisaftoclax, which is expected to contribute approximately HKD 150 million in revenue in the next fiscal year[2]. - New product launches included the introduction of two innovative therapies, which are projected to generate $50 million in revenue within the first year[10]. - The company’s second product, Lisengto® (Lisatrakra), received conditional approval from the NMPA on July 10, 2025, for the treatment of adult CLL/SLL patients who have received prior systemic therapy including BTK inhibitors, marking it as the first Bcl-2 inhibitor approved for this indication in China[27]. - The company is advancing APG-5918 in I phase clinical studies for advanced solid tumors and hematologic malignancies in both China and the U.S.[63]. Market Expansion - Ascentage Pharma is expanding its market presence in Europe, with plans to establish partnerships with at least three major pharmaceutical companies by the end of 2025[1]. - The company is expanding its market presence in Europe, with plans to enter three new countries by mid-2024[11]. - The company is conducting multiple global Phase III clinical trials for lisatoclax in combination with AZA for newly diagnosed high-risk MDS and AML patients, with ongoing patient recruitment[50]. - The company plans to accelerate the market penetration of Lishengtuo® (Lisatrag) as the first Bcl-2 inhibitor conditionally approved for CLL/SLL treatment in China[72]. - The company is expanding its market presence with ongoing clinical trials in multiple countries, including the U.S. and China[45]. Strategic Partnerships and Collaborations - The company is exploring potential mergers and acquisitions to enhance its product pipeline, with a budget of HKD 300 million earmarked for this purpose in 2025[1]. - The company has established collaborations with leading biotech and pharmaceutical companies, including clinical partnerships with AstraZeneca, Merck, and Pfizer[31]. - The company has established a partnership with a leading pharmaceutical firm to co-develop a new drug, which is anticipated to enter clinical trials in Q1 2024[12]. - The company has entered into an exclusive option agreement with Takeda Pharmaceuticals for global development and commercialization rights outside of certain regions[26]. - The company plans to actively seek strategic partnerships with global biotech and pharmaceutical companies to capitalize on commercialization opportunities in the global drug market[129]. Financial Guidance and Projections - Future guidance suggests a revenue target of HKD 1 billion for the full year 2025, reflecting a 40% increase from 2024[2]. - The company provided guidance for Q4 2023, expecting revenue to be between $160 million and $170 million, indicating a potential growth of 20% to 30%[12]. - The company plans to use approximately 40% of the net proceeds from the 2025 placement for commercialization efforts, 35% for global clinical development, and 25% for infrastructure and operational funding[85]. Shareholder Information - The company has agreed to issue and allocate 24,307,322 shares to Takeda Pharmaceuticals under the securities purchase agreement[14]. - The share purchase price is set at HKD 24.09850, equivalent to approximately USD 3.08549 per share[14]. - Major shareholders collectively hold 17.38% of the company's shares, with Li Ju-Yun and Gao Sharon Xia each holding 60,665,461 shares[137]. - The company has a total of 6,787,587 unlisted warrants that can be exercised for new shares[14]. - The total number of issued shares is 348,999,320[136]. Clinical Trials and Efficacy - The company is conducting a Phase III clinical trial (POLARIS-2) for Nairike® (Aoralbatin) in CML patients, and has entered into an exclusive option agreement with Takeda Pharmaceuticals for global development and commercialization rights outside of certain regions[26]. - The ongoing clinical trials for Oreba include single-agent therapy for TKI-resistant CML-CP patients, with breakthrough therapy designation expected in 2025[35]. - Nairike® demonstrated high complete response (CR) rates and complete molecular response (CMR) rates in studies presented at the EHA 2025, indicating strong clinical efficacy for Ph+ ALL treatment[41]. - The overall response rate (ORR) for patients with R/R AML/MDS who are resistant to venetoclax and treated with lisatoclax is 31.8%, indicating significant anti-tumor activity[48]. - APG-2449, a novel oral FAK inhibitor, has shown preliminary clinical benefits and good safety in patients with NSCLC who are resistant to second-generation ALK TKIs[51]. Operational and Administrative Updates - The company employed 605 full-time employees as of June 30, 2025, with 421 (69.6%) in R&D roles[122]. - The employee retention rate over the past two years exceeded 82%, supporting the continuous development of the company's knowledge base[123]. - The company has established a global R&D center and industrialization base in Suzhou, which became operational in late 2021 and Q4 2022, respectively[77]. - The company has leased a facility of approximately 50,000 square feet in Taizhou, Jiangsu Province, for R&D and production to support clinical trials[79]. - The company has not engaged in any significant acquisitions or disposals during the reporting period[111].

[Corporate Information](index=3&type=section&id=Corporate%20Information) [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) This section lists the company's executive and independent non-executive directors, along with the composition of its key committees - The Board's executive directors include Chairman Mr Chen Qiyuan and CEO Mr Qi Mingzhi, with independent non-executive directors including Mr Yeung Hok Chi, Ms Yim Ka Man, and Professor Cheung Man Chun (appointed on May 20, 2025)[5](index=5&type=chunk) - The Audit Committee is chaired by Ms Yim Ka Man[5](index=5&type=chunk) [Legal Advisors, Auditor and Registered Office](index=3&type=section&id=Legal%20Advisors%2C%20Auditor%20and%20Registered%20Office) This section provides details on the company's legal advisors, auditor, and various office locations - The company's auditor is PricewaterhouseCoopers[6](index=6&type=chunk) - The company's registered office is in the Cayman Islands, with its headquarters and principal place of business in Shenzhen, China[6](index=6&type=chunk) [Share and Banking Information](index=4&type=section&id=Share%20and%20Banking%20Information) This section outlines the company's share registrars, principal bankers, website, stock code, and listing date - The company's stock code is 1769, and its listing date was June 21, 2019[7](index=7&type=chunk) - Principal bankers include China Merchants Bank Co, Ltd, Industrial Bank Co, Ltd, and Agricultural Bank of China Limited[7](index=7&type=chunk) [Company Profile](index=5&type=section&id=Company%20Profile) [Business and Development Strategy](index=5&type=section&id=Business%20and%20Development%20Strategy) The company is a leading private education provider in Southern China, focusing on diversified growth through new ventures and AI technology - As a leading private education service provider in Southern China, the company offers small-class general education courses and after-school care services[9](index=9&type=chunk) - The group has launched educational tourism and international courses to broaden its revenue base for long-term growth[9](index=9&type=chunk) - The company plans to leverage AI technology to enhance service quality and operational efficiency, driving diversified development[9](index=9&type=chunk) [Financial Highlights](index=6&type=section&id=Financial%20Highlights) [Key Financial Data for Interim 2025](index=6&type=section&id=Key%20Financial%20Data%20for%20Interim%202025) The company's revenue grew, but gross profit and net profit attributable to owners declined in the first half of 2025 Key Financial Metrics | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Change (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 439,393 | 399,113 | 40,280 | 10.1% | | Gross Profit | 150,558 | 177,138 | (26,580) | (15.0)% | | Profit for the period attributable to owners of the Company | 62,933 | 82,652 | (19,719) | (23.9)% | | Adjusted profit for the period attributable to owners of the Company | 81,312 | 93,542 | (12,230) | (13.1)% | | Basic earnings per share (RMB cents) | 11.42 | 15.21 | (3.79) | (24.9)% | | Diluted earnings per share (RMB cents) | 11.18 | 14.76 | (3.58) | (24.2)% | | Adjusted basic earnings per share (RMB cents) | 14.75 | 17.21 | (2.46) | (14.3)% | | Adjusted diluted earnings per share (RMB cents) | 14.45 | 16.71 | (2.26) | (13.5)% | - Adjusted profit attributable to owners of the Company is defined as profit adjusted for items not reflecting operational performance, such as share-based compensation expenses[11](index=11&type=chunk)[12](index=12&type=chunk) [Chairman's Statement](index=7&type=section&id=Chairman's%20Statement) [Performance Overview](index=7&type=section&id=Performance%20Overview) The group achieved revenue growth, but profitability was negatively impacted by costs associated with new learning centers - For the six months ended June 30, 2025, the group recorded an **operating profit of RMB77.4 million**[14](index=14&type=chunk) - Revenue **grew by 10.1%** to RMB439.4 million, and tutoring class hours increased from 4,564,252 to 4,944,498[14](index=14&type=chunk) - New learning centers in Guangzhou offered low-priced trial courses, leading to relatively low revenue while costs increased significantly, negatively impacting gross and net profit[15](index=15&type=chunk) - Excluding share-based compensation, **adjusted net profit attributable to owners of the Company was RMB81.3 million**, a decrease of 13.1% year-on-year[16](index=16&type=chunk) [Future Prospects and Development Strategy](index=7&type=section&id=Future%20Prospects%20and%20Development%20Strategy) The group will continue to pursue diversified development, strengthen its "Lexue" brand, and leverage AI to enhance operational efficiency - The group launched educational tourism and international courses in July 2023 to broaden its revenue base[17](index=17&type=chunk) - The company will further strengthen the development of quality education under the "Lexue" brand, covering arts, sports, and various cultural and scientific literacy programs[17](index=17&type=chunk) - Future strategies include promoting comprehensive diversification, actively seeking new business opportunities, and utilizing AI to improve service quality and operational efficiency[18](index=18&type=chunk) [Appreciation](index=8&type=section&id=Appreciation) The Chairman extends gratitude to all stakeholders and reaffirms the commitment to enhancing business development and shareholder returns - The Chairman expresses gratitude to students, parents, management, employees, shareholders, and partners[19](index=19&type=chunk) - The company is committed to strengthening its business development to deliver greater returns to shareholders[19](index=19&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Review](index=9&type=section&id=Financial%20Review) This section details the group's financial performance in H1 2025, highlighting revenue growth alongside declining profitability - **Revenue increased by 10.1%** to RMB439.4 million, driven by growth in student enrollments, class hours, and tuition fees[22](index=22&type=chunk) - **Cost of sales rose by 30.1%** to RMB288.8 million, primarily due to increased teacher compensation and amortization of right-of-use assets[23](index=23&type=chunk) - **Gross profit decreased by 15.0%** to RMB150.6 million, with the gross profit margin falling from 44.4% to 34.3%, mainly due to costs from new learning centers[24](index=24&type=chunk) - **Profit for the period attributable to owners of the Company decreased by 23.9%** to RMB62.9 million[33](index=33&type=chunk) [Revenue](index=9&type=section&id=Revenue) Revenue grew by 10.1% in H1 2025, driven by increases in both non-academic and tutorial course segments Revenue by Category | Revenue Category | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Non-academic quality courses and others | 387,660 | 366,525 | 5.8% | | Tutorial courses | 51,733 | 32,588 | 58.7% | | **Total** | **439,393** | **399,113** | **10.1%** | Key Operating Metrics | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Student enrollments | 200,788 | 184,405 | 8.9% | | Tutoring class hours | 4,944,498 | 4,564,252 | 8.3% | - The increase in revenue was primarily due to higher total student enrollments, tutoring class hours, and tuition fees per class hour[22](index=22&type=chunk) [Cost of Sales](index=9&type=section&id=Cost%20of%20Sales) Cost of sales increased significantly by 30.1%, mainly driven by higher teacher compensation and asset amortization from network expansion - **Cost of sales increased by 30.1%** from RMB222.0 million to RMB288.8 million[23](index=23&type=chunk) - The increase was mainly due to higher teacher compensation and amortization of right-of-use assets resulting from an expanded network of learning centers[23](index=23&type=chunk) [Gross Profit and Gross Profit Margin](index=10&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit and margin declined due to the high initial costs and limited revenue from newly opened learning centers - **Gross profit decreased by 15.0%** from RMB177.1 million to RMB150.6 million[24](index=24&type=chunk) - The **gross profit margin fell from 44.4% to 34.3%**[24](index=24&type=chunk) - The decrease was primarily due to limited revenue and significant costs, such as rent and salaries, associated with newly opened learning centers[24](index=24&type=chunk) [Selling Expenses](index=10&type=section&id=Selling%20Expenses) Selling expenses remained stable at RMB6.5 million, primarily related to student activities - Selling expenses increased slightly by 0.2% to RMB6.5 million, mainly related to student activities[25](index=25&type=chunk) [Administrative Expenses](index=10&type=section&id=Administrative%20Expenses) Administrative expenses rose by 14.6% to support the group's business growth - **Administrative expenses increased by 14.6%** from RMB56.2 million to RMB64.4 million[26](index=26&type=chunk) - The increase was mainly due to higher expenses for administrative staff, in line with the group's business growth[26](index=26&type=chunk) [Research and Development Expenses](index=10&type=section&id=Research%20and%20Development%20Expenses) R&D expenses saw a slight decrease, with spending focused on personnel, materials, and course development - **R&D expenses decreased slightly by 2.6%** from RMB10.6 million to RMB10.5 million[27](index=27&type=chunk) - These expenses were primarily for R&D personnel, development of teaching materials and course products, and market research for quality-oriented courses[27](index=27&type=chunk) [Other Income](index=10&type=section&id=Other%20Income) Other income decreased by 13.9% due to lower finance income, partially offset by increased government grants - **Other income decreased by 13.9%** from RMB6.5 million to RMB5.6 million[28](index=28&type=chunk) - The decrease was mainly due to a **RMB2.5 million reduction in finance income**, partially offset by a RMB1.3 million increase in government grants[28](index=28&type=chunk) [Other Gains — Net](index=10&type=section&id=Other%20Gains%20%E2%80%94%20Net) Net other gains decreased by 21.8%, primarily due to losses on asset disposals and reduced lease modifications - **Net other gains decreased by 21.8%** from RMB3.5 million to RMB2.7 million[29](index=29&type=chunk) - The decrease was mainly due to a **net loss on disposal of property, plant and equipment of RMB0.9 million** and a RMB0.7 million reduction in lease modifications[29](index=29&type=chunk) [Finance Costs](index=10&type=section&id=Finance%20Costs) Finance costs decreased by 11.6% as a result of lower interest expenses on lease liabilities - **Finance costs decreased by 11.6%** from RMB4.8 million to RMB4.3 million[30](index=30&type=chunk) - The decrease was primarily due to lower interest expenses on lease liabilities[30](index=30&type=chunk) [Profit Before Income Tax](index=10&type=section&id=Profit%20Before%20Income%20Tax) The group's profit before income tax declined by 33.8% due to the combined effects of rising costs and lower other income - **Profit before income tax decreased by 33.8%** from RMB109.0 million to RMB72.2 million[31](index=31&type=chunk) [Income Tax Expense](index=11&type=section&id=Income%20Tax%20Expense) Income tax expense fell sharply by 65.1% due to a reduction in taxable profit - **Income tax expense decreased by 65.1%** from RMB26.8 million to RMB9.3 million[32](index=32&type=chunk) - The decrease was primarily due to lower taxable profit[32](index=32&type=chunk) [Profit for the period attributable to owners of the Company](index=11&type=section&id=Profit%20for%20the%20period%20attributable%20to%20owners%20of%20the%20Company) Net profit attributable to company owners decreased by 23.9% in H1 2025 - **Profit for the period attributable to owners of the Company decreased by 23.9%** from RMB82.7 million to RMB62.9 million[33](index=33&type=chunk) [Non-IFRS Measures](index=11&type=section&id=Non-IFRS%20Measures) This section presents adjusted profit metrics to provide additional insight into the group's financial performance by excluding non-operational items - The company uses adjusted profit and adjusted earnings per share as additional financial measures to evaluate group performance[34](index=34&type=chunk) - These measures exclude the impact of items management believes do not reflect the group's underlying performance, such as share-based compensation expenses[34](index=34&type=chunk) [Adjusted profit for the period attributable to owners of the Company](index=11&type=section&id=Adjusted%20profit%20for%20the%20period%20attributable%20to%20owners%20of%20the%20Company) Adjusted profit attributable to owners decreased by 13.1% in H1 2025, primarily due to increased share-based compensation expenses Reconciliation of Adjusted Profit | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company | 62,933 | 82,652 | (23.9)% | | Add: Share-based compensation expenses | 18,379 | 10,890 | 68.8% | | **Adjusted profit for the period attributable to owners of the Company** | **81,312** | **93,542** | **(13.1)%** | - Share-based compensation expenses are non-cash expenditures and are not directly related to the group's operating performance[34](index=34&type=chunk) [Adjusted Earnings Per Share](index=12&type=section&id=Adjusted%20Earnings%20Per%20Share) Adjusted basic and diluted earnings per share both declined compared to the same period last year Adjusted EPS | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Adjusted basic earnings per share (in RMB cents per share) | 14.75 | 17.21 | | Adjusted diluted earnings per share (in RMB cents per share) | 14.45 | 16.71 | - Adjusted basic earnings per share is calculated by dividing the adjusted profit attributable to owners of the Company by the weighted average number of ordinary shares in issue[35](index=35&type=chunk) - Adjusted diluted earnings per share considers the dilutive effect of potential ordinary shares from share options[37](index=37&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=13&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The group's equity increased, but cash reserves decreased while the gearing ratio improved significantly - As of June 30, 2025, the group's **total equity was RMB717.2 million** (December 31, 2024: RMB634.8 million)[40](index=40&type=chunk) - **Cash and cash equivalents decreased by 30.9%** to RMB269.9 million from RMB390.7 million on December 31, 2024, mainly due to property purchases and bank loan repayments[40](index=40&type=chunk) - **Net current assets stood at RMB187.5 million** (December 31, 2024: RMB75.8 million)[40](index=40&type=chunk) - The **gearing ratio improved to 1.7%** as of June 30, 2025, down from 6.3% on December 31, 2024[40](index=40&type=chunk) [Treasury Management Policy](index=14&type=section&id=Treasury%20Management%20Policy) The group invests surplus cash in low-risk, short-term financial products to generate income under a structured management framework - The treasury management policy aims to generate income by investing surplus cash reserves in low-risk financial products[41](index=41&type=chunk) - Investments include low-risk products from trust companies and commercial banks, money market instruments, and debt instruments[41](index=41&type=chunk) - Investment decisions are authorized by the Chairman of the Board, with the treasury department handling execution, monitoring, and monthly cash flow reviews[41](index=41&type=chunk) [Foreign Exchange Risk](index=14&type=section&id=Foreign%20Exchange%20Risk) The group's foreign exchange risk is minimal as most transactions are denominated in RMB, and no hedging policy is currently in place - Most of the group's revenue and expenses are denominated in RMB, and cash balances are held in RMB and HKD[42](index=42&type=chunk) - The group currently does not have a foreign currency hedging policy but will continue to monitor foreign exchange risk[42](index=42&type=chunk) [Material Acquisitions and Disposals and Significant Investments](index=14&type=section&id=Material%20Acquisitions%20and%20Disposals%20and%20Significant%20Investments) No material acquisitions, disposals, or investments were made during the period, but the group remains focused on future growth opportunities - For the six months ended June 30, 2025, the company made no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures[43](index=43&type=chunk) - The group will actively seek investment opportunities to broaden its revenue base and enhance future financial performance[43](index=43&type=chunk) - The Board is confident in the company's future growth prospects[43](index=43&type=chunk) [Dividend](index=15&type=section&id=Dividend) The Board has not recommended the payment of an interim dividend for the period - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[46](index=46&type=chunk) [Contingent Liabilities](index=15&type=section&id=Contingent%20Liabilities) The group had no significant contingent liabilities as of the reporting date - As of June 30, 2025, the group had no material contingent liabilities, guarantees, or pending material litigation or claims[47](index=47&type=chunk) [Pledge of Assets](index=15&type=section&id=Pledge%20of%20Assets) The group had no significant assets pledged as of the reporting date - As of June 30, 2025, and December 31, 2024, the group had no significant pledge of assets[48](index=48&type=chunk) [Employees and Remuneration Policy](index=15&type=section&id=Employees%20and%20Remuneration%20Policy) The group's employee count increased, and its remuneration policy remains market-competitive and performance-based - As of June 30, 2025, the group employed **3,085 employees** (December 31, 2024: 2,973 employees)[49](index=49&type=chunk) - The remuneration policy is aligned with market practices and is determined based on individual performance and experience to ensure competitiveness[49](index=49&type=chunk) [Interim Condensed Consolidated Financial Statements](index=16&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Comprehensive Income](index=16&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The group's profit for the period was RMB62,823 thousand, with basic earnings per share at 11.42 RMB cents Statement of Comprehensive Income | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Revenue | 439,393 | 399,113 | | Cost of sales | (288,835) | (221,975) | | Gross profit | 150,558 | 177,138 | | Operating profit | 77,434 | 113,819 | | Profit before income tax | 72,160 | 109,003 | | Profit for the period | 62,823 | 82,255 | | Profit attributable to owners of the Company | 62,933 | 82,652 | | Basic earnings per share (RMB cents) | 11.42 | 15.21 | | Diluted earnings per share (RMB cents) | 11.18 | 14.76 | [Interim Condensed Consolidated Balance Sheet](index=17&type=section&id=Interim%20Condensed%20Consolidated%20Balance%20Sheet) The group's total assets stood at RMB1,300,355 thousand, with total equity at RMB717,194 thousand as of June 30, 2025 Balance Sheet Summary | Indicator | June 30, 2025 (RMB'000) | Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | | **Assets** | | | | Total non-current assets | 738,019 | 771,384 | | Total current assets | 562,336 | 556,041 | | **Total assets** | **1,300,355** | **1,327,425** | | **Equity** | | | | Capital and reserves attributable to owners of the Company | 717,571 | 635,110 | | Non-controlling interests | (377) | (267) | | **Total equity** | **717,194** | **634,843** | | **Liabilities** | | | | Total non-current liabilities | 208,282 | 212,315 | | Total current liabilities | 374,879 | 480,267 | | **Total liabilities** | **583,161** | **692,582** | | **Total equity and liabilities** | **1,300,355** | **1,327,425** | [Interim Condensed Consolidated Statement of Changes in Equity](index=19&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity attributable to owners increased, driven by profit for the period and share-based payments Statement of Changes in Equity | Indicator | Balance at Jan 1, 2025 (RMB'000) | Profit for the period (RMB'000) | Purchase of shares for employee share scheme (RMB'000) | Share-based payments (RMB'000) | Balance at June 30, 2025 (RMB'000) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total attributable to owners of the Company | 635,110 | 62,933 | (2,630) | 22,158 | 717,571 | | Non-controlling interests | (267) | (110) | — | — | (377) | | **Total equity** | **634,843** | **62,823** | **(2,630)** | **22,158** | **717,194** | - Profit for the period was **RMB62,933 thousand**, and share-based payments amounted to **RMB22,158 thousand**[57](index=57&type=chunk) - The purchase of shares for the employee share scheme resulted in a decrease of **RMB2,630 thousand**[57](index=57&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=21&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) The group experienced a net decrease in cash due to significant outflows from investing and financing activities Statement of Cash Flows | Cash Flow Category | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Net cash generated from operating activities | 33,557 | 41,699 | | Net cash used in investing activities | (75,834) | (1,830) | | Net cash used in financing activities | (78,442) | (19,681) | | Net (decrease)/increase in cash and cash equivalents | (120,719) | 20,188 | | Cash and cash equivalents at end of period | 269,938 | 276,163 | - Net cash used in investing activities increased significantly to **RMB(75,834) thousand**, mainly due to payments for property, plant and equipment, land use rights, and intangible assets[60](index=60&type=chunk) - Net cash used in financing activities increased to **RMB(78,442) thousand**, primarily due to repayment of borrowings and lease payments[60](index=60&type=chunk) [Notes to the Interim Financial Information](index=22&type=section&id=Notes%20to%20the%20Interim%20Financial%20Information) [General Information](index=22&type=section&id=General%20Information) The company is an investment holding company incorporated in the Cayman Islands, primarily engaged in private education services in China - Sike Education Group is an investment holding company incorporated in the Cayman Islands, primarily engaged in providing private education services in China[63](index=63&type=chunk) - Mr Chen Qiyuan is the ultimate controlling shareholder of the Company[64](index=64&type=chunk) - The Company's ordinary shares were listed on The Stock Exchange of Hong Kong Limited on June 21, 2019[65](index=65&type=chunk) [Basis of Preparation](index=22&type=section&id=Basis%20of%20Preparation) The interim financial information is prepared in accordance with IAS 34 and should be read with the 2024 annual financial statements - This interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting"[67](index=67&type=chunk) - This information should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024, prepared in accordance with IFRS[67](index=67&type=chunk) - The directors believe the group has sufficient funding for its obligations over the next twelve months, thus adopting the going concern basis[68](index=68&type=chunk) [Accounting Policies](index=23&type=section&id=Accounting%20Policies) The accounting policies applied are consistent with the 2024 annual financial statements, with no material impact from new standards adopted - The accounting policies applied are consistent with those of the annual financial statements for the year 2024, except for the adoption of new and amended standards[69](index=69&type=chunk) - The adoption of new and amended standards and interpretations did not have a significant impact on the interim financial information[71](index=71&type=chunk) - Certain new accounting standards and interpretations have been issued but are not yet effective and are not expected to have a material impact on the group[73](index=73&type=chunk) [Estimates](index=24&type=section&id=Estimates) The preparation of interim financial information requires management to make judgments and estimates, with actual results potentially differing - The preparation of interim financial information requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and reported amounts[74](index=74&type=chunk) - Actual results may differ from these estimates[74](index=74&type=chunk) - The significant judgments made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the 2024 financial statements[74](index=74&type=chunk) [Financial Risk Management](index=24&type=section&id=Financial%20Risk%20Management) The group manages various financial risks, including market, credit, and liquidity risks, through a comprehensive risk management program - The group's activities are exposed to various financial risks: market risk, credit risk, and liquidity risk[75](index=75&type=chunk) - The group manages liquidity risk by maintaining sufficient cash and bank balances and investing in low-to-medium risk, short-term financial products[77](index=77&type=chunk)[41](index=41&type=chunk) - Fair value estimation is analyzed using a hierarchy of Level 1 (quoted prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[81](index=81&type=chunk) [Financial risk factors](index=24&type=section&id=Financial%20risk%20factors) The group's activities expose it to market, credit, and liquidity risks, with risk management policies remaining unchanged since year-end 2024 - The group's activities are exposed to market risk (including foreign exchange and interest rate risk), credit risk, and liquidity risk[75](index=75&type=chunk) - The group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects[75](index=75&type=chunk) - There have been no significant changes in the risk management function or any risk management policies since December 31, 2024[76](index=76&type=chunk) [Liquidity risk](index=24&type=section&id=Liquidity%20risk) The group manages liquidity risk by maintaining sufficient cash reserves and banking facilities, with no significant exposure identified - The group manages liquidity risk by holding sufficient cash and bank balances and mitigates it further by maintaining cash reserves and utilizing banking facilities[77](index=77&type=chunk) - The directors believe that the group does not have any significant liquidity risk[77](index=77&type=chunk) Contractual Maturities of Financial Liabilities | Liability Category | Total at June 30, 2025 (RMB'000) | Total at Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade payables | 1,632 | 3,723 | | Other payables | 10,668 | 23,117 | | Borrowings | 12,055 | 40,415 | | Lease liabilities | 353,153 | 349,038 | | **Total** | **377,508** | **416,293** | [Fair value estimation](index=26&type=section&id=Fair%20value%20estimation) The group's financial instruments are measured at fair value using a three-level hierarchy, with no changes in valuation techniques during the period - Fair value estimates are categorized into three levels: Level 1 (quoted prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[81](index=81&type=chunk) Financial Assets at Fair Value | Asset Category | Total at June 30, 2025 (RMB'000) | Total at Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Wealth management products | 113,762 | 96,299 | | Listed equity investments in Mainland China | 4,123 | 5,220 | | Unlisted equity investments in Mainland China | 53,811 | 54,168 | | **Total** | **171,696** | **155,687** | - The valuation of Level 3 instruments, primarily financial assets at FVTPL, is estimated using various valuation methods by referencing quotes from financial institutions and market approaches[84](index=84&type=chunk) [Revenue and Segment Information](index=28&type=section&id=Revenue%20and%20Segment%20Information) The group's revenue is primarily derived from non-academic courses in Guangdong, China, operating as a single private education segment Revenue by Category | Revenue Category | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Non-academic quality courses and others | 387,660 | 366,525 | | Tutorial courses | 51,733 | 32,588 | | **Total** | **439,393** | **399,113** | - The group's primary market is in Guangdong Province, China, where the majority of its revenue and operating profit are generated[87](index=87&type=chunk) - The group operates and manages its business as a single operating segment of private education services[87](index=87&type=chunk) [Other Income](index=29&type=section&id=Other%20Income) Other income decreased due to lower finance income, which was partially offset by an increase in government grants Other Income Breakdown | Income Category | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Sub-letting – net | 78 | 166 | | Rental income from operating leases | 1,543 | 1,226 | | Finance income | 2,186 | 4,645 | | Government grants | 1,752 | 419 | | **Total** | **5,559** | **6,456** | - The decrease in other income was mainly due to a **RMB2.5 million reduction in finance income**, partially offset by a RMB1.3 million increase in government grants[28](index=28&type=chunk) [Other Gains — Net](index=29&type=section&id=Other%20Gains%20%E2%80%94%20Net) Net other gains declined, primarily driven by a net loss on the disposal of assets and reduced gains from lease modifications Other Gains Breakdown | Gain Category | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Fair value gains on financial assets at FVTPL | 3,161 | 3,491 | | Lease modifications | 858 | 1,601 | | (Loss)/gain on disposal of property, plant and equipment, net | (933) | 41 | | Loss on deposits | (832) | (361) | | Fair value loss on investment properties | — | (620) | | **Total** | **2,733** | **3,493** | - The decrease was mainly due to a **net loss on disposal of property, plant and equipment of RMB0.9 million** and a RMB0.7 million reduction in lease modifications[29](index=29&type=chunk) [Expenses by Nature](index=30&type=section&id=Expenses%20by%20Nature) Total expenses increased significantly, with employee benefit expenses and depreciation and amortization being the primary drivers Expenses by Nature | Expense Category | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Employee benefit expenses | 273,288 | 219,650 | | Depreciation and amortization | 56,639 | 36,153 | | Property management expenses | 8,064 | 6,372 | | Teaching materials | 5,672 | 5,346 | | Advertising and exhibition expenses | 4,719 | 4,247 | | **Total** | **370,251** | **295,243** | - The year-on-year increase in employee benefit expenses reflects the group's business growth and staff expansion[26](index=26&type=chunk)[49](index=49&type=chunk) - Depreciation and amortization expenses increased significantly, mainly due to higher amortization of right-of-use assets from the expansion of the learning center network[23](index=23&type=chunk)[105](index=105&type=chunk) [Finance Costs](index=30&type=section&id=Finance%20Costs) Finance costs decreased due to lower interest expenses on lease liabilities Finance Costs Breakdown | Finance Cost Category | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Interest expense on borrowings | 400 | 350 | | Interest expense on lease liabilities | 3,855 | 4,466 | | **Total** | **4,255** | **4,816** | - The decrease in finance costs was primarily due to lower interest expenses on lease liabilities[30](index=30&type=chunk) [Income Tax Expense](index=31&type=section&id=Income%20Tax%20Expense) Income tax expense decreased substantially due to lower taxable profit and preferential tax policies Income Tax Breakdown | Income Tax Category | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Current tax | 16,390 | 28,961 | | Deferred income tax | (7,053) | (2,213) | | **Income tax expense** | **9,337** | **26,748** | - The decrease in income tax expense was mainly due to lower taxable profit[32](index=32&type=chunk) - Shenzhen Fengye qualified as a "High and New Technology Enterprise," enjoying a preferential 15% corporate income tax rate from 2023 to 2025[96](index=96&type=chunk) - Enterprises conducting R&D activities are eligible for a super deduction of 200% on qualified R&D expenses[97](index=97&type=chunk) [Earnings Per Share](index=32&type=section&id=Earnings%20Per%20Share) Both basic and diluted earnings per share decreased compared to the prior year period Earnings Per Share Calculation | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (in RMB'000) | 62,933 | 82,652 | | Weighted average number of ordinary shares in issue ('000 shares) | 551,171 | 543,391 | | Basic earnings per share (in RMB cents per share) | 11.42 | 15.21 | | Diluted earnings per share (in RMB cents per share) | 11.18 | 14.76 | - Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares in issue[99](index=99&type=chunk) - Diluted earnings per share is adjusted for the dilutive effect of potential ordinary shares from share options[101](index=101&type=chunk) [Property, Plant and Equipment](index=34&type=section&id=Property%2C%20Plant%20and%20Equipment) The carrying amount of property, plant and equipment decreased slightly due to depreciation and transfers to right-of-use assets PP&E Movement | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | At beginning of period | 110,746 | 55,781 | | Additions | 23,581 | 31,745 | | Transfer to right-of-use assets | (12,456) | — | | Depreciation charge | (14,856) | (8,080) | | **At end of period** | **105,992** | **83,471** | [Right-of-use Assets and Leases](index=34&type=section&id=Right-of-use%20Assets%20and%20Leases) The group's right-of-use assets and lease liabilities are primarily related to properties and land use rights Right-of-use Assets and Lease Liabilities | Indicator | June 30, 2025 (RMB'000) | Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Right-of-use assets | 370,203 | 351,831 | | Lease liabilities | 289,991 | 286,992 | Lease-related Expenses | Expense Category | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Depreciation charge of right-of-use assets | 41,610 | 27,874 | | Finance cost on leases | 3,855 | 4,466 | - For the six months ended June 30, 2025, the cash outflow for lease financing activities was **RMB47,383 thousand**[106](index=106&type=chunk) [Investment Properties](index=35&type=section&id=Investment%20Properties) The fair value of investment properties remained stable, with valuations based on recent market transactions Investment Property Movement | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | At beginning of period | 100,885 | 81,335 | | Additions | — | 29,163 | | Transfer to property, plant and equipment | — | (4,083) | | Transfer to land use rights | — | (11,427) | | Revaluation loss recognised in other gains – net | — | (620) | | **At end of period** | **100,885** | **94,368** | - Investment properties are stated at fair value and measured using significant unobservable inputs (Level 3)[108](index=108&type=chunk) - Investment properties are leased to tenants under operating leases with rentals payable monthly[109](index=109&type=chunk) [Intangible Assets](index=36&type=section&id=Intangible%20Assets) The group's intangible assets primarily consist of goodwill and computer software Intangible Assets Breakdown | Asset Category | Goodwill (RMB'000) | Computer software (RMB'000) | Total (RMB'000) | | :--- | :--- | :--- | :--- | | Net book value at June 30, 2025 | 9,032 | 1,586 | 10,618 | | Net book value at June 30, 2024 | 9,032 | 2,370 | 11,402 | - For the six months ended June 30, 2025, amortization and impairment charges amounted to **RMB174 thousand**[110](index=110&type=chunk) [Prepayments and Other Receivables](index=37&type=section&id=Prepayments%20and%20Other%20Receivables) Prepayments and other receivables include both non-current and current portions, mainly related to property purchases and employee advances Prepayments and Other Receivables Breakdown | Category | June 30, 2025 (RMB'000) | Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | | **Included in non-current assets** | | | | Prepayments for purchase of properties | 37,510 | — | | Rental deposits | 19,652 | 19,328 | | Loans to employees | 1,141 | 3,218 | | **Subtotal** | **62,179** | **28,826** | | **Included in current assets** | | | | Receivables from employees – exercise of share options | 28,835 | 29,752 | | Cash advances to employees | 21,088 | 1,511 | | Other receivables | 4,941 | 5,033 | | **Subtotal** | **69,468** | **51,822** | - Loans to employees are unsecured, interest-free, and mainly for personal property purchases[111](index=111&type=chunk) - Cash advances to employees are primarily made in the normal course of business[111](index=111&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=38&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) The group's FVTPL financial assets increased, comprising unlisted and listed equity investments and wealth management products FVTPL Financial Assets | Asset Category | June 30, 2025 (RMB'000) | Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | | **Non-current assets** | | | | Unlisted equity investments in Mainland China | 53,811 | 54,168 | | **Current assets** | | | | Listed equity investments in Mainland China | 4,123 | 5,220 | | Wealth management products | 113,762 | 96,299 | | **Total** | **171,696** | **155,687** | Movement of FVTPL Financial Assets | Movement | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | At beginning of period | 155,687 | 149,420 | | Additions | 19,600 | 634,897 | | Fair value gains | 3,161 | 3,491 | | Disposals | (6,752) | (663,052) | | **At end of period** | **171,696** | **124,756** | - The group holds investments in several funds managed by general partners, participating as a limited partner, which are classified as financial assets at FVTPL[112](index=112&type=chunk) [Bank Balances and Cash](index=39&type=section&id=Bank%20Balances%20and%20Cash) Cash and cash equivalents decreased, with the majority held in RMB and including a small amount of restricted cash Bank Balances and Cash | Indicator | June 30, 2025 (RMB'000) | Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Cash and bank deposits | 272,240 | 392,379 | | Less: Restricted cash | (2,302) | (1,702) | | **Total** | **269,938** | **390,677** | - The group's cash and bank balances are mainly denominated in RMB and HKD[113](index=113&type=chunk) - As of June 30, 2025, restricted deposits held in banks amounted to **RMB2,302 thousand**[114](index=114&type=chunk) [Share Capital](index=40&type=section&id=Share%20Capital) The company's issued share capital consists of 564,869,050 ordinary shares Share Capital Details | Indicator | Number of authorised ordinary shares | Par value of authorised ordinary shares (USD) | Number of issued ordinary shares | Par value of issued ordinary shares (USD) | | :--- | :--- | :--- | :--- | :--- | | At June 30, 2025 | 1,000,000,000 | 1,000,000 | 564,869,050 | 564,869 | | At Jan 1, 2024 | 1,000,000,000 | 1,000,000 | 555,700,000 | 555,700 | - The par value of issued ordinary shares is equivalent to **RMB3,840,311 thousand**[115](index=115&type=chunk) [Shares Held for Employee Share Scheme](index=40&type=section&id=Shares%20Held%20for%20Employee%20Share%20Scheme) The group holds shares for its employee share scheme, with additional shares acquired during the period Shares Held for Employee Share Scheme | Indicator | At June 30, 2025 (Shares) | At Dec 31, 2024 (Shares) | At June 30, 2025 (RMB'000) | At Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | :--- | :--- | | Shares held for employee share scheme | 12,652,000 | 11,952,000 | 30,938 | 28,308 | - During the six months ended June 30, 2025, the group acquired a total of **700,000 shares** for a total consideration of **RMB2,630 thousand** through its trustee, Kastle Limited[116](index=116&type=chunk) - These shares are held by the trustee for granting share awards under the company's employee share award scheme[116](index=116&type=chunk) [Repurchased Shares](index=41&type=section&id=Repurchased%20Shares) The company holds repurchased shares that have not yet been cancelled, which is expected to enhance earnings per share Repurchased Shares | Indicator | At June 30, 2025 (Shares) | At Dec 31, 2024 (Shares) | At June 30, 2025 (RMB'000) | At Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | :--- | :--- | | Repurchased shares | 1,088,000 | 1,088,000 | 2,366 | 2,366 | - As of June 30, 2025, a total of **1,088,000 shares** repurchased by the company had not yet been cancelled[140](index=140&type=chunk) - The directors believe the repurchase will enhance earnings per share and net assets per share attributable to shareholders[140](index=140&type=chunk) [Share-based Payments](index=41&type=section&id=Share-based%20Payments) This section details the company's share option and share award schemes, including movements and recognized expenses - The Share Option Scheme was terminated on February 27, 2024, but options granted prior to termination remain valid[118](index=118&type=chunk)[147](index=147&type=chunk) - The Share Scheme was adopted on February 27, 2024, to provide long-term incentives to employees[121](index=121&type=chunk) - For the six months ended June 30, 2025, the total share option expense recognized in the consolidated statement of comprehensive income was approximately **RMB22,158 thousand**[125](index=125&type=chunk) [Share Option Scheme](index=41&type=section&id=Share%20Option%20Scheme) The Share Option Scheme was terminated in 2024, but previously granted options remain outstanding and exercisable Share Option Movement | Indicator | At June 30, 2025 (No. of options) | At June 30, 2024 (No. of options) | | :--- | :--- | :--- | | At 1 January | 18,615,950 | 27,785,000 | | At 30 June | 18,615,950 | 27,785,000 | | Vested and exercisable at 30 June | 9,169,050 | 9,169,050 | - The Share Option Scheme was terminated on February 27, 2024, and no further options will be granted under it[147](index=147&type=chunk) - Vested options are exercisable for two years from the vesting date, and all outstanding options will lapse after April 15, 2028[120](index=120&type=chunk) [Share Scheme](index=42&type=section&id=Share%20Scheme) The Share Scheme, adopted in 2024, provides long-term incentives with options valued using a binomial model Share Scheme Movement | Indicator | At June 30, 2025 (No. of options) | | :--- | :--- | | At 1 January | 33,324,000 | | At 30 June | 33,324,000 | | Vested and exercisable at 30 June | 8,335,500 | - The value of options is calculated using the binomial valuation model, with key inputs including share price, exercise price, volatility, expected life, and risk-free rate[123](index=123&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) - As of June 30, 2025, a total of **22,228,000 shares** were available for future grants under the scheme mandate limit[154](index=154&type=chunk) [Share Award Scheme](index=44&type=section&id=Share%20Award%20Scheme) The Share Award Scheme, adopted in 2020, is funded by existing shares, with total recognized expenses of RMB22,158 thousand for the period - The Share Award Scheme was adopted on December 28, 2020, and awarded shares are not funded by new shares[125](index=125&type=chunk) - For the six months ended June 30, 2025, the total share option expense recognized in the consolidated statement of comprehensive income was approximately **RMB22,158 thousand**[125](index=125&type=chunk) [Share Premium and Other Reserves](index=44&type=section&id=Share%20Premium%20and%20Other%20Reserves) Other reserves increased during the period, primarily due to share-based payments Share Premium and Other Reserves | Reserve Note | At June 30, 2025 (RMB'000) | At Jan 1, 2024 (RMB'000) | | :--- | :--- | :--- | | Share premium | 107,941 | 82,698 | | Merger reserve | (46,347) | (46,347) | | Capital reserve | 76,709 | 78,056 | | Share-based compensation reserve | 61,197 | 10,448 | | Revaluation surplus | 378 | 378 | | **Total other reserves** | **91,937** | **42,535** | - Share-based payments led to an increase of **RMB22,158 thousand** in other reserves[126](index=126&type=chunk) [Dividend](index=45&type=section&id=Dividend) The Board has not recommended the payment of an interim dividend for the period - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[127](index=127&type=chunk) [Contract Liabilities](index=45&type=section&id=Contract%20Liabilities) Contract liabilities, representing deferred revenue from education services, decreased during the period Contract Liabilities | Indicator | June 30, 2025 (RMB'000) | Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Deferred revenue – education services | 181,941 | 241,092 | - Contract liabilities represent advance consideration received from students for education services, with revenue recognized as services are rendered[128](index=128&type=chunk) [Trade and Other Payables](index=45&type=section&id=Trade%20and%20Other%20Payables) Current trade and other payables decreased, with trade payables primarily related to educational materials Trade and Other Payables | Category | June 30, 2025 (RMB'000) | Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade payables | 1,632 | 3,723 | | Employee benefits payables | 23,685 | 33,773 | | Other tax payables | 12,649 | 13,944 | | Other payables | 10,668 | 23,088 | | **Total** | **48,634** | **74,557** | - Trade payables are mainly related to the purchase of educational books and other teaching aids, with a typical credit period of three months[130](index=130&type=chunk) Ageing Analysis of Trade Payables | Ageing Analysis | June 30, 2025 (RMB'000) | Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Within 3 months | 895 | 1,077 | | 3 to 6 months | 730 | 2,330 | | 6 months to 1 year | 7 | 316 | | **Total** | **1,632** | **3,723** | [Borrowings](index=46&type=section&id=Borrowings) Bank borrowings decreased significantly and are secured by the group's patents Bank Borrowings | Indicator | June 30, 2025 (RMB'000) | Dec 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Bank borrowings | 12,000 | 40,000 | - The effective interest rates on bank borrowings were **3.35% and 3.4%** for the six months ended June 30, 2025 and 2024, respectively[132](index=132&type=chunk) - As of June 30, 2025, bank borrowings of **RMB12,000,000** were secured by the group's patents[133](index=133&type=chunk) [Corporate Governance and Other Information](index=47&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Compliance with the Corporate Governance Code](index=47&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The company has complied with all applicable provisions of the Corporate Governance Code during the period - For the six months ended June 30, 2025, the company has complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules[136](index=136&type=chunk) - The company will continue to review and monitor its corporate governance practices to ensure compliance and maintain high standards[137](index=137&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=47&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) All directors and relevant employees have complied with the required standards for securities transactions - The company has adopted the Model Code as set out in Appendix C3 to the Listing Rules to regulate all securities transactions by its directors and relevant employees[138](index=138&type=chunk) - Following specific enquiry, all directors and relevant employees confirmed their compliance with the Model Code during the six months ended June 30, 2025[138](index=138&type=chunk) [Audit Committee](index=47&type=section&id=Audit%20Committee) The Audit Committee, composed of independent directors, has reviewed the group's financial reporting and internal controls - The Audit Committee's primary duties are to review and supervise the group's financial reporting, risk management, and internal control systems, and to review the fairness of connected transactions[139](index=139&type=chunk) - The Audit Committee comprises three independent non-executive directors: Ms Yim Ka Man (Chairlady), Mr Yeung Hok Chi, and Professor Cheung Man Chun[139](index=139&type=chunk) - The Audit Committee has reviewed the group's unaudited interim condensed consolidated financial statements and this interim report[139](index=139&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=47&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) The trustee of the share award scheme purchased company shares, and previously repurchased shares remain uncancelled - Between January 7 and January 17, 2025, the trustee of the group's share award scheme purchased **700,000 shares** for a total consideration of **HK$2,847,000** (equivalent to RMB2,630,000)[140](index=140&type=chunk) - As of June 30, 2025, a total of **1,088,000 shares** repurchased by the company had not yet been cancelled[140](index=140&type=chunk) - The directors believe the repurchase will enhance earnings per share and net assets per share attributable to shareholders[140](index=140&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=48&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) Key executives hold significant interests in the company's shares, with Mr Chen Qiyuan holding a 38.89% stake through a controlled corporation Directors' Interests in Shares | Name | Capacity/Nature of interest | Number of shares | Approximate percentage of shareholding | | :--- | :--- | :--- | :--- | | Mr Chen Qiyuan | Interest of a controlled corporation | 219,658,000 | 38.89% | | Mr Qi Mingzhi | Beneficial owner | 12,818,000 | 2.27% | - Mr Chen Qiyuan is the sole shareholder of Yuxi International and is therefore deemed to be interested in the shares held by Tiansheng through Yuxi International[141](index=141&type=chunk) - Mr Chen Qiyuan beneficially owns 39% of the registered capital of Shenzhen Sike Culture and Education Technology Development Co, Ltd[142](index=142&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=49&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) Tiansheng and Yuxi International are the substantial shareholders, each holding an approximate 38.89% interest in the company Substantial Shareholders' Interests | Name | Capacity/Nature of interest | Number of shares | Approximate percentage of shareholding | | :--- | :--- | :--- | :--- | | Tiansheng | Beneficial owner | 219,658,000 | 38.89% | | Yuxi International | Interest of a controlled corporation | 219,658,000 | 38.89% | - Tiansheng is owned by Yuxi International, which is wholly owned by Mr Chen Qiyuan, an executive director and controlling shareholder of the Company[143](index=143&type=chunk) [Share Option Scheme](index=49&type=section&id=Share%20Option%20Scheme) The Share Option Scheme was terminated in 2024, but previously granted options remain outstanding and exercisable - The Share Option Scheme was approved and adopted on June 3, 2019, to provide long-term incentives to employees[144](index=144&type=chunk) - The scheme was terminated on February 27, 2024, but any options granted prior to termination remain valid and outstanding[147](index=147&type=chunk) Outstanding Share Options | Category of grantee | Date of grant | Exercise price per share | Outstanding at Jan 1, 2025 (No. of options) | Outstanding at June 30, 2025 (No. of options) | | :--- | :--- | :--- | :--- | :--- | | Employees of the Group | Feb 6, 2023 | HK$1.62 | 18,615,950 | 18,615,950 | - As of June 30, 2025, **9,169,050 share options** were vested and exercisable at an exercise price of HK$1.62 per share[150](index=150&type=chunk) [Share Scheme](index=51&type=section&id=Share%20Scheme) The Share Scheme, adopted in 2024, provides long-term incentives with options valued using a binomial model - The Share Scheme was adopted on February 27, 2024, to provide long-term incentives to employees for long-term shareholder returns[121](index=121&type=chunk)[149](index=149&type=chunk) Outstanding Share Options | Category of grantee | Date of grant | Exercise price per share | Outstanding at Jan 1, 2025 (No. of options) | Outstanding at June 30, 2025 (No. of options) | | :--- | :--- | :--- | :--- | :--- | | Employees of the Group | Feb 28, 2024 | HK$4.48 | 16,671,000 | 16,671,000 | | Employees of the Group | Nov 29, 2024 | HK$5.16 | 16,671,000 | 16,671,000 | - As of June 30, 2025, **8,335,500 options** granted on February 28, 2024, were vested and exercisable[151](index=151&type=chunk) - The value of options is calculated using the binomial valuation model, with key inputs including share price, exercise price, volatility, expected life, and risk-free rate[152](index=152&type=chunk)[153](index=153&type=chunk) [Share Award Scheme](index=53&type=section&id=Share%20Award%20Scheme) The Share Award Scheme is funded by existing shares purchased from the market, with no new awards granted or vested during the period - The Share Award Scheme was approved and adopted by the Board on December 28, 2020, and is funded by existing shares, not new ones[155](index=155&type=chunk) - The trustee has purchased shares in the market and holds **12,652,000 shares** as of the date of this interim report[156](index=156&type=chunk) - No share awards were granted or vested under the Share Award Scheme during the six months ended June 30, 2025[156](index=156&type=chunk) [Structured Contracts](index=53&type=section&id=Structured%20Contracts) The group utilizes structured contracts to control its PRC operating entities due to foreign ownership restrictions in China's education sector - Due to restrictions on the equity structure of the group's business under PRC law, the company uses structured contracts to control its PRC operating entities and derive economic benefits[157](index=157&type=chunk) - Shenzhen Fengye has committed to exercising its equity interest subscription right to acquire the entire equity interest in the PRC operating entities if regulatory restrictions are lifted[158](index=158&type=chunk) - The Foreign Investment Law does not explicitly define contractual arrangements as foreign investment, but future regulations could create uncertainty[160](index=160&type=chunk)[162](index=162&type=chunk) [Background of the Structured Contracts](index=53&type=section&id=Background%20of%20the%20Structured%20Contracts) Structured contracts are used to control PRC operating entities and derive economic benefits due to legal restrictions on foreign ownership - Due to restrictions on the equity structure of the group's business under PRC law, the group cannot convert any PRC operating entity into a Sino-foreign joint venture[157](index=157&type=chunk) - The company uses structured contracts to control the PRC operating entities and derive economic benefits from them[157](index=157&type=chunk) - The structured contracts are designed to achieve the group's business objectives while minimizing potential conflicts with relevant PRC laws and regulations[157](index=157&type=chunk) [Unwinding of the Structured Contracts](index=54&type=section&id=Unwinding%20of%20the%20Structured%20Contracts) The group plans to unwind the structured contracts by acquiring full equity interest if and when PRC regulations permit - Shenzhen Fengye has committed to exercising its equity interest subscription right to acquire the entire equity interest in the PRC operating entities if regulatory restrictions are lifted, thereby unwinding the structured contracts[158](index=158&type=chunk) - As of the date of this interim report, none of the structured contracts had been unwound[158](index=158&type=chunk) [Plan to Comply with the Qualification Requirements](index=54&type=section&id=Plan%20to%20Comply%20with%20the%20Qualification%20Requirements) The group has taken steps to meet qualification requirements, including establishing a presence in Hong Kong, despite current regulatory hurdles in the PRC - It is not yet possible for the relevant education authorities to accept the group's application to convert any PRC operating entity into a Sino-foreign joint venture[159](index=159&type=chunk) - The group is preparing to launch a tutorial center in Hong Kong and has obtained a Certificate of Registration of a School from the Hong Kong Education Bureau[159](index=159&type=chunk) - The company believes the measures taken to comply with the qualification requirements are reasonable and appropriate[159](index=159&type=chunk) [Foreign Investment Law](index=54&type=section&id=Foreign%20Investment%20Law) The Foreign Investment Law does not currently classify contractual arrangements as foreign investment, but future regulations could introduce uncertainty - The Foreign Investment Law, effective January 1, 2020, replaced previous laws but does not explicitly define contractual arrangements as foreign investment[160](index=160&type=chunk) - It is uncertain whether future regulations by the State Council might classify contractual arrangements as a form of foreign investment, which could affect their validity[162](index=162&type=chunk) - There is no guarantee that the structured contracts and the business of the PRC operating entities will not be materially and adversely affected in the future[162](index=162&type=chunk) [Overall Performance and Compliance of the Structured Contracts](index=55&type=section&id=Overall%20Performance%20and%20Compliance%20of%20the%20Structured%20Contracts) The group has ensured effective operation through compliance with the structured contracts, which remain legally enforceable under current PRC law - The group has taken measures to ensure its effective operation through the implementation of and compliance with the structured contracts[163](index=163&type=chunk) - As of the date of this interim report, the company is not aware of any non-performance of the structured contracts or non-compliance with the above measures[163](index=163&type=chunk) - The group's PRC legal counsel has advised that the structured contracts are legally enforceable and do not violate current PRC laws and regulations[163](index=163&type=chunk) [Definitions](index=55&type=section&id=Definitions) [Definitions of Key Terms](index=55&type=section&id=Definitions%20of%20Key%20Terms) This section provides definitions for key terms and abbreviations used throughout the report to ensure consistent understanding - "Board" means the board of Directors[166](index=166&type=chunk) - "Company" refers to Sike Education Group, an exempted company incorporated in the Cayman Islands on February 7, 2018[166](index=166&type=chunk) - "Group" refers to the Company, its subsidiaries, and consolidated affiliated entities[166](index=166&type=chunk) - "Share Option Scheme" refers to the post-IPO share option scheme approved and adopted by the Company on June 3, 2019, and terminated on February 27, 2024[166](index=166&type=chunk) - "Share Scheme" refers to the share scheme adopted by the Company on February 27, 2024[166](index=166&type=chunk)

[Company Information](index=3&type=section&id=公司資料) [Company Profile](index=3&type=section&id=2.1%20公司概况) This section provides fundamental corporate information for Hometown Interactive Technology Co., Ltd., including board members, committee structures, and key contact details - The Board of Directors comprises three executive directors (Mr. Wu Chengze, Mr. Su Bo, Mr. Ding Chunlong) and three independent non-executive directors (Mr. Zhang Yuguo, Mr. Hu Yangyang, Ms. Guo Ying)[6](index=6&type=chunk) - The Audit Committee, Remuneration Committee, and Nomination Committee have been established, with Mr. Hu Yangyang chairing the Audit and Remuneration Committees, and Mr. Wu Chengze chairing the Nomination Committee[6](index=6&type=chunk) - The company's auditor is Deloitte Touche Tohmatsu, and its stock code is **3798**[7](index=7&type=chunk) [Business Overview and Outlook](index=5&type=section&id=業務概覽及展望) [Business Review](index=5&type=section&id=2.1%20业务回顧) Despite commercial adjustments impacting self-developed mobile game revenue, third-party mobile game revenue surged by 123.4% to RMB 196 million, while DAUs and MAUs remained stable, and profit increased by 58.8% due to reduced marketing expenses - The Group's flagship products, including Weile Fishing, Weile Dou Dizhu, and Weile Sichuan Mahjong, launched new seasonal mechanisms and themed visual versions, successfully expanding user and brand reach on Douyin[11](index=11&type=chunk) Key Performance Indicators (Six Months Ended June 30) | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Daily Active Users (DAUs) | 12.31 million | Stable | | Monthly Average Users (MAUs) | 59.78 million | Stable | | Third-Party Mobile Game Revenue | RMB 196 million | N/A (Increased by 123.4%) | | Total Revenue | RMB 726.0 million | RMB 835.7 million | | Sales and Marketing Expenses | RMB 128.6 million | RMB 261.1 million | | Profit for the Period | RMB 53.47 million | RMB 33.67 million | - The Group's Daily Active Users (DAUs) reached **12.31 million** and Monthly Average Users (MAUs) reached **59.78 million**, remaining stable year-on-year and quarter-on-quarter[12](index=12&type=chunk) - The Group's previously deployed multimodal AI agents have entered comprehensive internal testing and multi-business adaptation, enabling automated user profiling, intelligent customer service, and video content distribution[14](index=14&type=chunk) [Business Outlook](index=7&type=section&id=2.2%20业务展望) The Group plans to deepen advanced technology integration with AI, expand user base in regional markets, strengthen product reserves for overseas expansion, and explore new growth opportunities through strategic alliances in H2 2025 - Deepen cutting-edge technology and empower processes: Develop proprietary multimodal AI agents to integrate across business segments, accelerating AI transformation in R&D and operations[15](index=15&type=chunk) - Penetrate regional markets and expand user scale: Focus on advantageous niche segments, precisely meeting localized entertainment demands in domestic second and third-tier markets and areas with lower user penetration through "rule calibration" and "product optimization"[15](index=15&type=chunk) - Strengthen product reserves and expand overseas revenue streams: Accelerate testing and launch of multiple pipeline projects, expedite overseas product launches, and build diversified revenue growth engines[15](index=15&type=chunk) - Expand strategic alliances and discover new growth drivers: Leverage industry experience and Weile brand influence to expand strategic partnership networks, actively exploring new business opportunities through incubation, investment, and acquisitions[15](index=15&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=管理層討論與分析) [Financial Review](index=8&type=section&id=3.1%20财务回顧) The Group's revenue decreased by 13.1% to RMB 726.0 million, primarily due to a 30.6% decline in self-developed mobile game revenue, while profit for the period increased by 58.8% driven by a 50.8% reduction in sales and marketing expenses Revenue Composition and Changes (Six Months Ended June 30) | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | 2025 Share | 2024 Share | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Self-developed Mobile Games | 505,256 | 727,599 | 69.6% | 87.1% | -30.6% | | Third-party Mobile Games | 196,141 | 87,799 | 27.0% | 10.5% | +123.4% | | Advertising Revenue | 24,647 | 20,261 | 3.4% | 2.4% | +21.6% | | **Total Revenue** | **726,044** | **835,659** | **100%** | **100%** | **-13.1%** | Changes in Key Financial Indicators (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Cost of Sales | (407.7) | (422.7) | -3.5% | | Gross Profit | 318.4 | 413.0 | -22.9% | | Gross Profit Margin | 43.8% | 49.4% | -5.6 pp | | Other Income | 13.8 | 20.2 | -31.5% | | Other Gains and Losses | (3.3) (Loss) | 15.7 (Gain) | N/A | | Sales and Marketing Expenses | (128.6) | (261.1) | -50.8% | | Administrative and Other Expenses | (60.4) | (66.6) | -9.4% | | Research and Development Expenses | (35.2) | (57.3) | -38.5% | | Profit Before Income Tax | 62.8 | 40.3 | +55.6% | | Profit Attributable to Owners of the Company | 37.4 | 28.0 | +33.5% | - The decrease in gross profit margin was primarily due to increased new media costs and amortization of intangible assets[19](index=19&type=chunk) - Sales and marketing expenses sharply decreased by **50.8%** to **RMB 128.6 million**, mainly due to reduced promotion and advertising expenses[23](index=23&type=chunk) [Non-IFRS Measure — Adjusted Net Profit](index=10&type=section&id=3.2%20非国际财务报告准则计量%20—%20经调整纯利) The company uses non-IFRS adjusted net profit as an additional financial measure, excluding non-recurring and non-cash items, with adjusted net profit attributable to owners of the company significantly increasing to RMB 74.9 million Adjusted Net Profit Attributable to Owners of the Company (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company | 37,395 | 28,009 | | Add: Share-based Payment Expenses | 3,646 | 13,993 | | Add: Share of Loss of Associates and Joint Ventures | 5,027 | — | | Add: Impairment Loss Recognized on Loans Receivable under ECL Model (Net of Income Tax) | 28,834 | — | | **Adjusted Net Profit Attributable to Owners of the Company** | **74,902** | **42,002** | - Adjusted net profit excludes the impact of non-cash and non-recurring items such as share-based payment expenses, share of losses from associates and joint ventures, and impairment losses on loans receivable[30](index=30&type=chunk) [Liquidity and Capital Resources](index=10&type=section&id=3.3%20流动资金及资本来源) The Group primarily funds operations through cash generated from operating activities, maintaining a prudent financial approach with RMB 827.7 million in cash and cash equivalents and zero gearing ratio - The Group primarily funds its operations with cash generated from operating activities and intends to finance expansion and business operations through internal resources and sustainable organic growth[31](index=31&type=chunk) Cash and Cash Equivalents (Period End) | Indicator | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 827.7 | 755.0 | - As of June 30, 2025, the Group had no short-term or long-term bank borrowings, resulting in a **zero gearing ratio**[33](index=33&type=chunk)[34](index=34&type=chunk) - For the six months ended June 30, 2025, the Group's capital expenditure was approximately **RMB 58.3 million**, a significant decrease from **RMB 216 million** in the prior period, mainly due to reduced expenditures on property, plant, and equipment acquisitions and investments in associates[36](index=36&type=chunk) [Employees and Staff Costs](index=11&type=section&id=3.4%20雇员及员工成本) As of June 30, 2025, the Group had 612 full-time employees, with total staff costs decreasing to RMB 67.3 million due to reduced remuneration and share-based payments, following the termination of the old share option scheme and adoption of a new one - As of June 30, 2025, the Group had **612** full-time employees, with **287** in R&D, **104** in technical support, **117** in marketing, and **104** in operations and general administration[39](index=39&type=chunk) Total Staff Costs (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Total Staff Costs | 67.3 | 99.8 | | Year-on-Year Change | -32.6% | N/A | - The company resolved to terminate the share option scheme on April 2, 2025, and adopted the 2025 Share Scheme at the Annual General Meeting on June 17, 2025[40](index=40&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=13&type=section&id=簡明綜合財務報表審閱報告) [Review Conclusion](index=13&type=section&id=4.1%20审阅结论) Deloitte Touche Tohmatsu reviewed the condensed consolidated financial statements for the six months ended June 30, 2025, finding no material non-compliance with IAS 34 - Auditor Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements[42](index=42&type=chunk) - The scope of review is substantially less than an audit conducted in accordance with International Standards on Auditing, thus no audit opinion is expressed[43](index=43&type=chunk) - Based on the review, the auditor found no matters that cause them to believe the condensed consolidated financial statements are not prepared in all material respects in accordance with International Accounting Standard 34[44](index=44&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=14&type=section&id=簡明綜合損益及其他全面收益表) [Profit or Loss Performance](index=14&type=section&id=5.1%20损益表现) The Group's revenue decreased by 13.1% to RMB 726.0 million, while gross profit declined by 22.9% to RMB 318.4 million, but profit for the period and total comprehensive income increased by 58.8% to RMB 53.5 million Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Six Months Ended June 30) | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 726,044 | 835,659 | -13.1% | | Cost of Sales | (407,692) | (422,691) | -3.5% | | Gross Profit | 318,352 | 412,968 | -22.9% | | Other Income | 13,837 | 20,203 | -31.5% | | Other Gains and Losses | (3,263) | 15,667 | N/A (from gain to loss) | | Sales and Marketing Expenses | (128,556) | (261,129) | -50.8% | | Administrative and Other Expenses | (60,424) | (66,637) | -9.4% | | Research and Development Expenses | (35,224) | (57,253) | -38.5% | | Profit Before Income Tax | 62,778 | 40,334 | +55.6% | | Income Tax Expense | (9,309) | (6,664) | +39.7% | | Profit and Total Comprehensive Income for the Period | 53,469 | 33,670 | +58.8% | | Profit for the Period Attributable to Owners of the Company | 37,395 | 28,009 | +33.5% | | Basic Earnings Per Share (RMB cents) | 3.05 | 2.23 | +36.8% | | Diluted Earnings Per Share (RMB cents) | 3.05 | 2.23 | +36.8% | [Condensed Consolidated Statement of Financial Position](index=15&type=section&id=簡明綜合財務狀況表) [Assets, Liabilities and Equity](index=15&type=section&id=6.1%20资产、负债及权益) As of June 30, 2025, total assets increased to RMB 2,225.7 million, with non-current assets at RMB 450.9 million and current assets at RMB 1,774.8 million, while total equity rose to RMB 1,976.0 million Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Non-current Assets** | | | | | Property, Plant and Equipment | 54,979 | 64,813 | -15.2% | | Intangible Assets | 18,265 | 33,807 | -46.0% | | Investments in Associates | 52,015 | 54,920 | -5.4% | | Deferred Tax Assets | 75,675 | 65,933 | +14.8% | | Loans Receivable | 70,102 | 44,000 | +59.3% | | **Current Assets** | | | | | Trade Receivables | 88,353 | 94,413 | -6.5% | | Financial Assets at FVTPL | 446,057 | 393,726 | +13.3% | | Prepayments, Other Receivables and Deposits | 86,790 | 182,882 | -52.6% | | Cash and Cash Equivalents | 827,676 | 755,032 | +9.6% | | **Current Liabilities** | | | | | Trade and Other Payables | 89,344 | 55,114 | +62.1% | | Deferred Revenue | 111,809 | 147,105 | -24.0% | | **Non-current Liabilities** | | | | | Deferred Tax Liabilities | 1,721 | 3,786 | -54.5% | | **Total Equity** | **1,976,023** | **1,916,152** | **+3.1%** | - Intangible assets and property, plant, and equipment within non-current assets decreased, while loans receivable and deferred tax assets increased[48](index=48&type=chunk) - Prepayments, other receivables, and deposits within current assets significantly decreased, while financial assets at fair value through profit or loss and cash and cash equivalents increased[48](index=48&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=17&type=section&id=簡明綜合權益變動表) [Analysis of Changes in Equity](index=17&type=section&id=7.1%20权益变动分析) Equity attributable to owners of the company increased to RMB 1,921.1 million, driven by profit for the period and share-based payment expenses, partially offset by share repurchases, while non-controlling interests also significantly increased Changes in Equity Attributable to Owners of the Company (Six Months Ended June 30) | Item | January 1, 2025 (RMB thousands) | June 30, 2025 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 1,882,060 | 1,921,057 | +38,997 | | Non-controlling Interests | 34,092 | 54,966 | +20,874 | | **Total Equity** | **1,916,152** | **1,976,023** | **+59,871** | - Profit and total comprehensive income for the period amounted to **RMB 53,469 thousand**, with **RMB 37,395 thousand** attributable to owners of the company and **RMB 16,074 thousand** to non-controlling interests[51](index=51&type=chunk) - Share-based payment expenses of **RMB 3,646 thousand** were recognized under the 2025 Share Award Scheme[51](index=51&type=chunk) - The company paid **RMB 2,044 thousand** for share repurchases, acquiring a total of **1,786,000** shares[51](index=51&type=chunk)[54](index=54&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=19&type=section&id=簡明綜合現金流量表) [Cash Flow Analysis](index=19&type=section&id=8.1%20现金流量分析) Net cash from operating activities significantly increased to RMB 210.8 million, while net cash used in investing activities decreased to RMB 132.2 million, leading to an increase in period-end cash and cash equivalents to RMB 827.7 million Condensed Consolidated Statement of Cash Flows (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Net Cash From Operating Activities | 210,779 | 12,162 | +198,617 | | Net Cash Used In Investing Activities | (132,175) | (309,147) | +176,972 | | Net Cash Used In Financing Activities | (6,111) | (16,926) | +10,815 | | Net Increase (Decrease) In Cash and Cash Equivalents | 72,493 | (313,911) | +386,404 | | Cash and Cash Equivalents at End of Period | 827,676 | 1,028,691 | -201,015 | - Net cash from operating activities significantly increased, primarily due to a decrease of **RMB 6,057 thousand** in trade receivables and a decrease of **RMB 77,555 thousand** in other deposits, prepayments, and other receivables[56](index=56&type=chunk) - Net cash used in investing activities decreased, mainly due to reduced investments in financial assets at fair value through profit or loss and increased proceeds from the disposal of financial assets at fair value through other comprehensive income[56](index=56&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=21&type=section&id=簡明綜合財務報表附注) [General Information and Basis of Preparation](index=21&type=section&id=9.1%20一般资料及编制基准) Hometown Interactive Technology Co., Ltd. is an investment holding company incorporated in the Cayman Islands, primarily engaged in mobile game development, publishing, and operation in China, with financial statements presented in RMB and prepared under IAS 34 - The company is an investment holding company primarily engaged in the development, publishing, and operation of mobile games in China[59](index=59&type=chunk) - The condensed consolidated financial statements are presented in RMB and prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Listing Rules of the Stock Exchange[60](index=60&type=chunk)[61](index=61&type=chunk) [Accounting Policies](index=21&type=section&id=9.2%20会计政策) The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies consistent with the prior year, and the adoption of revised IFRS had no material impact on the Group's financial position or performance - The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies consistent with the prior year's financial statements[62](index=62&type=chunk) - The revised IFRS accounting standards were first adopted in this interim period but had no material impact on the financial position and performance[64](index=64&type=chunk) [Revenue and Segment Information](index=22&type=section&id=9.3%20收益及分部资料) The Group's revenue is primarily derived from self-developed mobile games (69.6%), third-party mobile games (27.0%), and advertising (3.4%), all managed under a single operating segment focused on mobile game development and operation - Revenue primarily stems from the sale of virtual tokens in self-developed mobile games, third-party mobile game publishing, and online advertising arrangements[16](index=16&type=chunk)[65](index=65&type=chunk) - The Group's operating activities are conducted by a single operating segment focused on mobile game development and operation[65](index=65&type=chunk) Revenue Composition (Six Months Ended June 30) | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | 2025 Share | 2024 Share | | :--- | :--- | :--- | :--- | :--- | | Self-developed Mobile Games | 505,256 | 727,599 | 69.6% | 87.1% | | Third-party Mobile Games | 196,141 | 87,799 | 27.0% | 10.5% | | Advertising Revenue | 24,647 | 20,261 | 3.4% | 2.4% | | **Total** | **726,044** | **835,659** | **100%** | **100%** | [Other Income](index=23&type=section&id=9.4%20其他收入) Other income decreased by 46.0% to RMB 13.8 million, primarily due to a reduction in interest income Other Income Composition (Six Months Ended June 30) | Income Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest Income | 10,581 | 16,661 | | Government Grants | 2,026 | 2,065 | | Others | 1,230 | 1,477 | | **Total** | **13,837** | **20,203** | - The decrease in interest income was the primary reason for the decline in other income[20](index=20&type=chunk)[68](index=68&type=chunk) - Government grants primarily refer to various industry-specific subsidies compensating for R&D costs and incentivizing technological innovation, with no unfulfilled conditions[68](index=68&type=chunk) [Other Gains and Losses](index=24&type=section&id=9.5%20其他收益及亏损) Other gains and losses shifted from a gain of RMB 15.7 million to a loss of RMB 3.3 million, primarily due to a RMB 10.4 million loss from derecognizing receivables upon disposal of an associate Other Gains and Losses (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair Value Change in Financial Assets at FVTPL | 5,682 | 4,458 | | Gain on Disposal of Subsidiaries and Associates | 1,502 | 315 | | Loss on Derecognition of Receivables from Disposal of an Associate | (10,351) | — | | Gain on Asset Disposal Transactions | — | 8,632 | | **Total** | **(3,263)** | **15,667** | - A loss of **RMB 10,351 thousand** from derecognizing receivables upon the disposal of an associate was the primary reason for the shift from other gains to losses[21](index=21&type=chunk)[69](index=69&type=chunk) [Dividends](index=24&type=section&id=9.6%20股息) No dividends were declared or paid during the current interim period, while a final dividend of HK$0.10 per share (RMB 0.09) totaling RMB 117.2 million was paid in the prior interim period - No dividends were declared or paid for the six months ended June 30, 2025[70](index=70&type=chunk) - In the prior interim period, a final dividend totaling approximately **RMB 117,226 thousand** was paid[70](index=70&type=chunk) [Income Tax Expense](index=25&type=section&id=9.7%20所得税开支) Income tax expense increased by 39.7% to RMB 9.3 million due to higher profit before tax, while the effective tax rate decreased to 14.8%, with certain Chinese subsidiaries benefiting from tax exemptions, reduced rates, or R&D super deductions Income Tax Expense Analysis (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current Tax — PRC Enterprise Income Tax | 19,542 | 21,835 | | Under (Over) Provision in Prior Years | 1,574 | (3,580) | | Deferred Tax | (11,807) | (11,591) | | **Total** | **9,309** | **6,664** | - The Group's effective tax rate decreased from **16.5%** in the prior period to **14.8%** in the current period[27](index=27&type=chunk) - Certain PRC subsidiaries (e.g., Yaoshitang Xiamen, Jilin Haiqi, Yaoshitang Shenzhen) enjoy enterprise income tax exemptions, reduced tax rates, or preferential high-tech enterprise tax rates of **15%**[73](index=73&type=chunk) - Enterprises engaged in R&D activities are entitled to claim **200%** of their R&D expenses incurred during the year as deductible expenses (super deduction)[74](index=74&type=chunk) [Profit for the Period](index=26&type=section&id=9.8%20期内溢利) Profit for the period is calculated after deducting various expenses, with total staff costs decreasing by 32.6% to RMB 67.3 million due to reduced remuneration and share-based payments Key Expense Items for the Period (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Commissions and Fees Charged by Distribution Channels and Payment Providers | 203,693 | 288,031 | | Depreciation of Property, Plant and Equipment | 12,611 | 8,007 | | Amortization of Intangible Assets | 16,133 | 470 | | Impairment Loss under Expected Credit Loss Model | 34,275 | 6,285 | | Total Staff Costs | 67,310 | 99,847 | - Total staff costs decreased by **32.6%**, primarily due to year-on-year reductions in salaries and other in-kind benefits, retirement benefit costs, and share-based payment expenses[75](index=75&type=chunk) - Impairment losses under the expected credit loss model significantly increased, mainly reflected in other receivables and loans receivable[75](index=75&type=chunk) [Earnings Per Share](index=27&type=section&id=9.9%20每股盈利) Basic and diluted earnings per share attributable to owners of the company increased to RMB 3.05 cents, up from RMB 2.23 cents in the prior period, despite a slight decrease in the weighted average number of ordinary shares Earnings Per Share (Six Months Ended June 30) | Indicator | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic Earnings Per Share | 3.05 | 2.23 | | Diluted Earnings Per Share | 3.05 | 2.23 | | Weighted Average Number of Ordinary Shares | 1,226,335,488 | 1,254,914,473 | - Share awards in the current and prior interim periods had no impact on diluted earnings per share[76](index=76&type=chunk) [Property, Plant and Equipment, Intangible Assets and Right-of-Use Assets](index=27&type=section&id=9.10%20物业、厂房及设备、无形资产及使用权资产) Capital expenditure for the interim period significantly decreased to RMB 58.3 million, primarily due to reduced acquisitions of property, plant, and equipment, and investments in associates - Expenditure on purchasing game publishing copyrights for the interim period was **RMB 591 thousand**, a significant decrease from **RMB 5,298 thousand** in the prior period[77](index=77&type=chunk) - Expenditure on purchasing furniture and equipment, vehicles, and renovations for leased properties was **RMB 3,708 thousand**, a decrease from **RMB 9,861 thousand** in the prior period[77](index=77&type=chunk) - The Group incurred a loss of **RMB 868 thousand** from the disposal of certain equipment[77](index=77&type=chunk) [Investments in Associates](index=28&type=section&id=9.11%20于联营公司的投资) Investments in associates totaled RMB 52.0 million, with new investments and disposals occurring, and a RMB 10.4 million loss from derecognizing receivables due to revised repayment terms with a related entity Investments in Associates (Period End) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of Investments in Associates | 58,538 | 61,100 | | Share of Post-acquisition Results (Net of Dividends Received) | (6,523) | (6,180) | | **Total** | **52,015** | **54,920** | - During the interim period, the Group invested in two new associates primarily engaged in game development, with a total consideration of **RMB 850 thousand**[79](index=79&type=chunk) - Interests in Chongqing Huangjiu and Guangzhou Yaoshiyang were disposed of for considerations of **RMB 6,000 thousand** and **RMB 212 thousand**, respectively[80](index=80&type=chunk) - A supplementary agreement was signed with an entity controlled by Mr. Luo Wei, revising the repayment date for outstanding consideration, resulting in a loss of **RMB 10,351 thousand** from derecognizing receivables from the disposal of an associate[82](index=82&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=29&type=section&id=9.12%20按公平值计量且其变动计入损益的金融资产) Financial assets at FVTPL totaled RMB 472.8 million, comprising non-current unlisted securities and current listed securities, with a significant decrease in structured deposits offset by increased investments in private equity funds and money market funds Financial Assets at Fair Value Through Profit or Loss (Period End) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-current Unlisted Securities (Partnership Investments) | 26,766 | 31,243 | | Current Listed Securities Held for Trading (SSE Equity Securities) | — | 25,696 | | Current Unlisted Securities Held for Trading (Private Equity Funds) | 276,879 | 129,269 | | Current Unlisted Securities Held for Trading (Money Market Funds) | 148,752 | 106,461 | | Current Unlisted Securities Held for Trading (Structured Deposits) | 20,426 | 132,300 | | **Total** | **472,823** | **424,969** | - Structured deposits significantly decreased, while investments in private equity funds and money market funds increased[84](index=84&type=chunk) - The fair value of investments is based on the partnership management team's estimated fair value of equity and equity-related investments, market quotations, fund management company's estimated net asset value, or recent transaction prices[86](index=86&type=chunk) [Trade Receivables](index=30&type=section&id=9.13%20贸易应收款项) Trade receivables decreased to RMB 88.4 million, with a credit period of 0 to 90 days, and overdue receivables of RMB 3.9 million are not considered in default due to debtor history Aging Analysis of Trade Receivables (Period End) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 30 days | 71,402 | 77,594 | | 31 to 60 days | 9,594 | 11,494 | | 61 to 90 days | 1,573 | 2,469 | | 91 to 180 days | 1,876 | 284 | | Over 180 days | 3,911 | 2,572 | | **Total** | **88,356** | **94,413** | - Trade receivables consist of amounts due from distribution channels, payment providers, and advertising agencies[87](index=87&type=chunk) - As of June 30, 2025, the carrying amount of receivables totaling **RMB 5,787 thousand** included in the Group's trade receivables balance was overdue[87](index=87&type=chunk) [Prepayments, Other Receivables and Deposits](index=31&type=section&id=9.14%20预付款项、其他应收款项及按金) Prepayments, other receivables, and deposits significantly decreased to RMB 94.9 million, mainly due to reductions in joint venture commission prepayments and advertising prepayments, while credit loss provisions substantially increased to RMB 13.0 million Prepayments, Other Receivables and Deposits (Period End) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Joint Venture Commission Prepayments | 12,349 | 71,356 | | R&D Expense Prepayments | 14,365 | 15,040 | | Advertising and Promotion Expense Prepayments | 11,886 | 43,793 | | Loans to Employees | 14,270 | 21,139 | | **Total (Net of Credit Loss Provision)** | **94,876** | **192,455** | - Credit loss provision significantly increased to **RMB 12,998 thousand**, primarily for other receivables related to joint venture commissions paid to Chengdu Weiying, which faces significant financial difficulties[88](index=88&type=chunk) [Loans Receivable](index=32&type=section&id=9.15%20应收贷款) Loans receivable increased to RMB 177.6 million, including loans to third parties and associates/joint ventures, with credit loss provisions rising to RMB 81.3 million due to additional impairment losses on loans to Chengdu Weiying Loans Receivable (Period End) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Fixed-rate Loans Receivable — Loans to Third Parties | 152,933 | 135,312 | | Fixed-rate Loans Receivable — Loans to Associates and Joint Ventures | 106,012 | 73,102 | | Less: Credit Loss Provision | (81,311) | (60,011) | | **Total** | **177,634** | **148,403** | - An additional credit loss provision of **RMB 21,300 thousand** was recognized for loans to Chengdu Weiying due to its significant financial difficulties[89](index=89&type=chunk) - Short-term loans to a listed game operator had their payment terms revised, with a portion settled before August 1, 2025[89](index=89&type=chunk) [Deferred Tax Assets/Liabilities](index=33&type=section&id=9.16%20递延税项资产╱负债) Net deferred tax assets increased to RMB 74.0 million, primarily due to higher deferred tax assets recognized for tax losses, deductible excess expenditures, and impairment losses, with RMB 69.3 million of unused tax losses recognized Deferred Tax Assets/Liabilities (Period End) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Deferred Tax Assets | 75,675 | 65,933 | | Deferred Tax Liabilities | (1,721) | (3,786) | | **Net** | **73,954** | **62,147** | - As of the end of the interim period, the Group had **RMB 97,827 thousand** in unused tax losses available to offset future profits, of which approximately **RMB 69,303 thousand** was recognized as deferred tax assets[92](index=92&type=chunk) - As of the end of the interim period, the Group had **RMB 465,288 thousand** in remaining deductible temporary differences related to advertising expenses, of which approximately **RMB 308,896 thousand** was recognized as deferred tax assets[93](index=93&type=chunk) [Trade and Other Payables](index=35&type=section&id=9.17%20贸易及其他应付款项) Trade and other payables significantly increased to RMB 89.3 million, primarily due to the emergence of trade payables of RMB 37.0 million, while other payables slightly decreased Trade and Other Payables (Period End) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Payables | 36,986 | — | | Other Payables | 52,358 | 55,114 | | **Total** | **89,344** | **55,114** | - The aging analysis of trade payables shows that amounts overdue by more than 90 days totaled **RMB 21,799 thousand**[95](index=95&type=chunk) [Deferred Revenue](index=35&type=section&id=9.18%20递延收益) Deferred revenue, representing unearned service fees from prepaid virtual tokens for self-developed mobile games, decreased to RMB 111.8 million from RMB 147.1 million at the beginning of the period Deferred Revenue (Period End) | Item | January 1, 2025 (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | | Virtual Tokens | 147,105 | 111,809 | - Proceeds from sales during the period amounted to **RMB 469,960 thousand**, with revenue recognized during the period totaling **RMB 505,256 thousand**[97](index=97&type=chunk) [Share Capital](index=36&type=section&id=9.19%20股本) The company's authorized share capital is 10 billion ordinary shares of US$0.000005 each, with issued and fully paid share capital remaining unchanged at 1,283,403,500 shares, totaling RMB 42 thousand in par value - The authorized share capital consists of **10,000,000,000** ordinary shares with a par value of **US$0.000005** each[98](index=98&type=chunk) - The issued and fully paid share capital comprises **1,283,403,500** shares, with a total par value of **RMB 42 thousand**[98](index=98&type=chunk) [Share-based Payment Transactions](index=36&type=section&id=9.20%20以股份为基础付款的交易) The Group implemented share option and award schemes to incentivize employees, with the share option scheme terminated on April 2, 2025, and a new 2025 Share Scheme adopted on June 17, 2025 - The share option scheme was terminated on April 2, 2025, with no outstanding share options under the scheme as of June 30, 2025[104](index=104&type=chunk)[135](index=135&type=chunk) - As compensation for the cancellation of unexercised share options, the company granted a total of **26,803,500** compensatory share awards, vesting in tranches with performance conditions[105](index=105&type=chunk)[106](index=106&type=chunk) - Under the 2025 Share Award Scheme, a total of **3,624,487** share awards were granted to **6** grantees on April 2, 2025, vesting on the grant date, with share-based payment expenses of **RMB 3,646 thousand** recognized[111](index=111&type=chunk) [Fair Value Measurement of Financial Instruments](index=43&type=section&id=9.21%20金融工具的公平值计量) The Group measures financial instruments at fair value using market observable data and valuation techniques across three levels, with a RMB 1,145 thousand loss recorded from fair value changes in private equity funds and a 10% interest in a partnership - Fair value measurement inputs are categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[112](index=112&type=chunk) - Financial assets at fair value through profit or loss include unlisted securities (partnership investments), private equity funds, money market funds, and structured deposits[114](index=114&type=chunk)[115](index=115&type=chunk) - As of June 30, 2025, a loss of **RMB 1,145 thousand** was recorded from fair value changes related to private equity funds and a **10%** interest in a partnership[115](index=115&type=chunk) [Related Party Transactions](index=47&type=section&id=9.22%20关联方交易) The Group engaged in various related party transactions with associates and joint ventures, including receiving and providing R&D, advertising, and operational services, asset disposals, and significant amounts of receivables and payables, in addition to key management personnel compensation Services Received from Associates and Joint Ventures (Six Months Ended June 30) | Service Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | R&D Services | 33,379 | 11,794 | | Advertising and Promotion Services | 55,814 | 62,748 | | New Media Costs | 20,819 | 31,013 | | **Total** | **110,592** | **134,340** | Amounts Due from Associates and Joint Ventures (Period End) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Loans to Associates and Joint Ventures | 106,012 | 73,102 | | Advertising and Promotion Expense Prepayments | 10,294 | 17,109 | | R&D Expense Prepayments | 9,929 | 14,816 | | **Total** | **126,435** | **115,887** | Key Management Personnel Remuneration (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Salaries, Bonuses, Allowances and Benefits in Kind | 5,514 | 3,275 | | Share-based Payments | 3,646 | 5,052 | | **Total** | **9,160** | **8,327** | [Capital Commitments](index=50&type=section&id=9.23%20资本承担) The Group's capital commitments totaled RMB 70.0 million, primarily for committed capital contributions to financial assets at fair value through profit or loss, a slight decrease from the prior period Capital Commitments (Period End) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Committed Capital Contributions — Financial Assets at FVTPL | 70,000 | 70,000 | | Committed Capital Contributions — Investments in Associates | — | 2,800 | | **Total** | **70,000** | **72,800** | [Other Information](index=51&type=section&id=其他资料) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=51&type=section&id=10.1%20董事及最高行政人员于股份、相关股份及债权证的权益及淡仓) As of June 30, 2025, several directors and the chief executive held interests in the company's shares, with Mr. Wu Chengze holding approximately 33.80% through controlled corporations and a discretionary trust Directors' and Chief Executive's Shareholdings (June 30, 2025) | Name | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Wu Chengze | Interest in controlled corporation and founder of discretionary trust | 433,842,000 | 33.80% | | Mr. Su Bo | Interest in controlled corporation, beneficial owner and spouse's interest | 68,112,838 | 5.31% | | Mr. Ding Chunlong | Interest in controlled corporation and beneficial owner | 80,018,138 | 6.23% | | Ms. Cui Wei | Beneficial owner | 4,513,462 | 0.35% | - Mr. Wu Chengze, Mr. Su Bo, and Mr. Ding Chunlong hold shares in the company through controlled corporations[125](index=125&type=chunk) - Mr. Wu Chengze also holds shares through a discretionary trust, and Mr. Su Bo's spouse's interests are included[125](index=125&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=53&type=section&id=10.2%20主要股东于股份及相关股份的权益及淡仓) As of June 30, 2025, key shareholders, excluding directors, held significant interests in the company's shares, including Futu Trust Company Limited, Co-challengers Growth Limited, and Evergreen Homeland Holdings Limited Substantial Shareholders' Shareholdings (June 30, 2025) | Name/Entity | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Futu Trust Company Limited | Trustee/Custodian | 67,146,853 | 5.23% | | Co-challengers Growth Limited | Beneficial owner | 70,840,000 | 5.52% | | Xiamen Challenger Venture Capital Partnership | Interest in controlled corporation | 70,840,000 | 5.52% | | Mr. Jiang Mingkuan | Interest in controlled corporation | 96,671,201 | 7.53% | | Evergreen Homeland Holdings Limited | Beneficial owner | 383,736,000 | 29.90% | | Men Geng Network Limited | Beneficial owner | 67,895,424 | 5.29% | - Co-challengers Growth Limited is wholly owned by Xiamen Challenger, which is ultimately controlled by Mr. Li Bo[131](index=131&type=chunk) - Evergreen Homeland Holdings Limited is 99% owned by Lumiere Vision Holdings Limited, which is wholly owned by Trident Trust Company (Cayman) Limited[131](index=131&type=chunk) [Share Incentive Schemes](index=55&type=section&id=10.3%20股份激励计划) The company's share option scheme was terminated on April 2, 2025, while the 2019 Share Award Scheme involves existing shares for employee incentives, and the 2025 Share Scheme, adopted on June 17, 2025, authorizes up to 128,340,350 shares for further incentives - The share option scheme, aimed at incentivizing eligible persons, was terminated on April 2, 2025, with an authorized limit of **10%** of the total issued shares on the listing date[135](index=135&type=chunk)[132](index=132&type=chunk) - The 2019 Share Award Scheme aims to encourage selected participants to hold shares, retain personnel within the Group, and provide additional incentives to achieve performance targets, involving only existing company shares without issuing new ones[137](index=137&type=chunk)[138](index=138&type=chunk) - The 2025 Share Scheme, adopted on June 17, 2025, authorizes the issuance of up to **128,340,350** shares (**10%** of total issued shares on adoption date), with a sub-limit for service providers (approximately **1%**)[150](index=150&type=chunk)[151](index=151&type=chunk) - For the six months ended June 30, 2025, no share awards or share options were granted, vested, exercised, cancelled, or lapsed under the 2025 Share Scheme[154](index=154&type=chunk) [Interim Dividend](index=63&type=section&id=10.4%20中期股息) The Board of Directors does not declare any interim dividend for the six months ended June 30, 2025 - The Board of Directors does not declare any interim dividend for the six months ended June 30, 2025[155](index=155&type=chunk) [Purchase, Sale and Redemption of the Company's Listed Securities](index=63&type=section&id=10.5%20购买、出售及赎回本公司上市证券) The independent trustee of the Share Award Scheme repurchased 1,786,000 shares for RMB 2,044 thousand for future awards, while the company held no treasury shares and made no other purchases, sales, or redemptions of its listed securities - Futu Securities International (Hong Kong) Limited, the independent trustee of the Share Award Scheme, repurchased **1,786,000** shares for a total consideration of approximately **RMB 2,044 thousand** for future use under the scheme[156](index=156&type=chunk) - The company held no treasury shares as of June 30, 2025[157](index=157&type=chunk) [Contractual Arrangements](index=63&type=section&id=10.6%20合约安排) The Group entered into new contractual arrangements through Yutai Shenzhen to establish a new structure for non-card game businesses operating in foreign ownership-restricted sectors, ensuring economic benefits and effective control over Hometown Future's operations - The Group entered into new contractual arrangements to establish a new contractual structure for companies engaged in businesses with foreign ownership restrictions within the non-card game segment[158](index=158&type=chunk) - This framework enables the Group to recognize and receive economic benefits from Hometown Future's business and operations, and allows the company to effectively control and, within the limits of PRC law, acquire Jilin Yutai's equity interest in Hometown Future or Hometown Future's assets[158](index=158&type=chunk) [Compliance with Corporate Governance Code](index=64&type=section&id=10.7%20遵守企业管治守则) The company consistently complied with the Corporate Governance Code provisions in Appendix C1 of the Listing Rules for the six months ended June 30, 2025, maintaining high standards of corporate governance - The company consistently complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025[159](index=159&type=chunk) [Compliance with Standard Code for Securities Transactions by Directors](index=64&type=section&id=10.8%20遵守董事进行证券交易的标准守则) The company adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance throughout the reporting period - The company adopted the "Standard Code for Securities Transactions by Directors of Listed Issuers" as its code of conduct for directors' securities transactions, as set out in Appendix C3 of the Listing Rules[161](index=161&type=chunk) - All directors confirmed compliance with the Standard Code throughout the reporting period[161](index=161&type=chunk) [Audit Committee](index=64&type=section&id=10.9%20审核委员会) The Audit Committee, composed of three independent non-executive directors chaired by Mr. Hu Yangyang, reviewed the unaudited consolidated interim results and confirmed compliance with accounting principles and adequate disclosure - The Audit Committee reviewed the company's unaudited consolidated interim results for the reporting period, confirming compliance with applicable accounting principles, standards, and requirements, and adequate disclosure[162](index=162&type=chunk) - The Audit Committee comprises three independent non-executive directors: Mr. Hu Yangyang (Chairman), Mr. Zhang Yuguo, and Ms. Guo Ying[162](index=162&type=chunk) [Events After Reporting Period](index=64&type=section&id=10.10%20报告期后事项) No significant events impacting the Group occurred between the end of the reporting period (June 30, 2025) and the date of this interim report - No events with significant impact on the Group occurred from the end of the reporting period (June 30, 2025) to the date of this interim report[164](index=164&type=chunk)

[Disclaimer](index=1&type=section&id=Disclaimer) This section contains the disclaimer statement for the financial report [Company Information and Announcement](index=1&type=section&id=Company%20Information%20and%20Announcement) This section provides key information regarding the company and its financial results announcement - Tai Ping Carpets International Limited announced its consolidated financial statements for the year ended June 30, 2025[3](index=3&type=chunk) [Consolidated Income Statement](index=1&type=section&id=Consolidated%20Income%20Statement) This section presents the consolidated income statement, detailing the company's financial performance for the reporting period Consolidated Income Statement Key Data | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 658,809 | 640,215 | | Gross Profit | 401,649 | 395,013 | | Operating Profit | 50,981 | 45,557 | | Profit Before Income Tax | 53,144 | 47,788 | | Profit for the Year Attributable to Owners of the Company | 43,780 | 42,113 | | Basic/Diluted Earnings Per Share (HK Cents) | 20.63 | 19.85 | [Consolidated Statement of Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) This section outlines the consolidated statement of comprehensive income, including profit for the year and other comprehensive income Consolidated Statement of Comprehensive Income Key Data | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Profit for the Year | 43,780 | 42,113 | | Other Comprehensive Income (Net of Tax) | 6,382 | 3,086 | | Total Comprehensive Income for the Year Attributable to Owners of the Company | 50,162 | 45,199 | [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This section provides the consolidated statement of financial position, detailing the company's assets, liabilities, and equity Consolidated Statement of Financial Position Key Data | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total Assets | 874,295 | 832,566 | | Total Equity | 479,640 | 454,940 | | Total Liabilities | 394,655 | 377,626 | | Net Current Assets | 151,399 | 130,391 | [Notes to the Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes supporting the consolidated financial statements [1. Basis of Preparation](index=5&type=section&id=1.%20Basis%20of%20Preparation) The consolidated financial statements are prepared in accordance with HKFRS and the Hong Kong Companies Ordinance, using the historical cost convention with fair value adjustments for financial assets and liabilities - The consolidated financial statements are prepared in accordance with all applicable Hong Kong Financial Reporting Standards (HKFRS) and the disclosure requirements of the Hong Kong Companies Ordinance (Cap. 622)[8](index=8&type=chunk) - The financial statements are prepared under the historical cost convention, modified for the revaluation of financial assets and liabilities measured at fair value through profit or loss[8](index=8&type=chunk) [2. Changes in Accounting Policies](index=5&type=section&id=2.%20Changes%20in%20Accounting%20Policies) New and revised accounting standards adopted from July 1, 2024, had no significant impact, though HKFRS 18 is expected to alter financial statement presentation and disclosure - New and revised standards mandatorily adopted for the financial year beginning July 1, 2024, had no significant impact on the Group[9](index=9&type=chunk) Accounting Standards Issued But Not Yet Effective | Standard Name | Effective Date (for the Group) | | :--- | :--- | | HKAS 21 The Effects of Changes in Foreign Exchange Rates (Amendments) | July 1, 2025 | | HKFRS 7 Financial Instruments: Disclosures (Amendments) | July 1, 2026 | | HKFRS 9 Financial Instruments (Amendments) | July 1, 2026 | | HKFRS 18 Presentation and Disclosure in Financial Statements (New Standard) | July 1, 2027 | - The adoption of these standards is not expected to have a significant impact on the consolidated financial statements, except for HKFRS 18, which is anticipated to change the presentation and disclosure of the Group's consolidated financial statements[10](index=10&type=chunk) [3. Revenue and Segment Information](index=5&type=section&id=3.%20Revenue%20and%20Segment%20Information) Management assesses operating segment performance by region (Asia, EMEA, Americas), with total revenue of HK$658,809 thousand for the year ended June 30, 2025, showing strong growth in Asia - The Board assesses performance by the following geographical regions: Asia, Europe, Middle East and Africa (EMEA), and Americas[11](index=11&type=chunk) Segment Revenue and Results (Year Ended June 30, 2025) | Metric | Asia (HK$ Thousand) | EMEA (HK$ Thousand) | Americas (HK$ Thousand) | Group Total (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Revenue from External Customers | 160,205 | 245,533 | 253,071 | 658,809 | | Segment Gross Profit | 107,537 | 148,050 | 147,309 | 402,896 | | Segment Results | 51,808 | 35,720 | 17,566 | 105,094 | Segment Revenue and Results (Year Ended June 30, 2024) | Metric | Asia (HK$ Thousand) | EMEA (HK$ Thousand) | Americas (HK$ Thousand) | Group Total (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Revenue from External Customers | 136,072 | 264,374 | 239,769 | 640,215 | | Segment Gross Profit | 93,285 | 162,824 | 141,423 | 397,532 | | Segment Results | 41,527 | 44,241 | 19,802 | 105,570 | [4. Expenses](index=8&type=section&id=4.%20Expenses) This section details the Group's key expenses, including raw materials, depreciation, employee benefits, and provisions for inventories and trade receivables, with employee benefits increasing year-on-year Key Expense Items | Expense Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Raw Materials and Consumables Used | 45,956 | 49,823 | | Amortization of Intangible Assets | 1,775 | 2,533 | | Depreciation of Property, Plant and Equipment | 16,628 | 15,428 | | Employee Benefit Expenses | 224,433 | 214,251 | | Provision for Inventories - Net | 5,260 | 7,414 | | Impairment (Reversal)/Provision for Trade Receivables - Net | (1,171) | 1,190 | [5. Other Income/(Losses) - Net](index=8&type=section&id=5.%20Other%20Income%2F(Losses)%20-%20Net) The Group's other income net for the year ended June 30, 2025, was HK$4,020 thousand, a turnaround from a loss, primarily due to improved exchange gains Other Income/(Losses) - Net | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Rental Income | 3,113 | 3,245 | | Net Exchange Gain/(Loss) | 339 | (681) | | Impairment Loss on Property, Plant and Equipment | (912) | – | | Loss on Derecognition of Right-of-Use Assets | – | (6,420) | | Total Other Income/(Losses) - Net | 4,020 | (2,450) | [6. Income Tax Expense](index=9&type=section&id=6.%20Income%20Tax%20Expense) The Group's income tax expense for the year ended June 30, 2025, was HK$9,364 thousand, significantly increasing due to higher current income tax in Hong Kong and overseas Income Tax Expense Details | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Current Income Tax - Hong Kong | 2,266 | 117 | | Current Income Tax - Overseas | 6,149 | 4,549 | | Underprovision in Prior Years | 310 | 1,147 | | Deferred Income Tax Expense/(Credit) | 639 | (138) | | Total Income Tax Expense | 9,364 | 5,675 | - Hong Kong profits tax is calculated at a rate of **16.5%**, while overseas profits tax is calculated based on the prevailing tax rates in the jurisdictions where the businesses operate[17](index=17&type=chunk) [7. Earnings Per Share](index=9&type=section&id=7.%20Earnings%20Per%20Share) The Group's basic earnings per share for the year ended June 30, 2025, increased to HK 20.63 cents, with no dilutive potential ordinary shares outstanding Earnings Per Share Calculation | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (HK$ Thousand) | 43,780 | 42,113 | | Weighted Average Number of Ordinary Shares in Issue (Thousand Shares) | 212,187 | 212,187 | | Basic Earnings Per Share (HK Cents) | 20.63 | 19.85 | - The Group had no outstanding potential dilutive ordinary shares[20](index=20&type=chunk) [8. Trade and Other Receivables](index=10&type=section&id=8.%20Trade%20and%20Other%20Receivables) The Group's net trade and other receivables decreased to HK$82,665 thousand as of June 30, 2025, with a reduction in impairment provision and most receivables aged within 30 days Trade and Other Receivables Details | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade Receivables - Net | 54,451 | 72,030 | | Prepayments | 11,842 | 10,235 | | Other Receivables | 18,883 | 18,773 | | Total Current Portion | 82,665 | 97,437 | Trade Receivables Ageing Analysis (by Invoice Date) | Ageing | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 30 Days | 41,984 | 41,627 | | 31 to 60 Days | 7,368 | 12,447 | | 61 to 90 Days | 2,272 | 10,735 | | 91 to 365 Days | 2,607 | 9,708 | | Over 365 Days | 7,115 | 5,262 | | Total | 61,346 | 79,779 | Movement in Impairment Provision for Trade Receivables | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | As at July 1 | 7,749 | 6,657 | | Impairment (Reversal)/Provision for Trade Receivables - Net | (1,171) | 1,190 | | As at June 30 | 6,895 | 7,749 | [9. Trade and Other Payables](index=11&type=section&id=9.%20Trade%20and%20Other%20Payables) The Group's total trade and other payables slightly decreased to HK$163,988 thousand as of June 30, 2025, with accrued expenses being the largest component and most trade payables aged within 30 days Trade and Other Payables Details | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade Payables | 33,879 | 33,503 | | Accrued Expenses | 100,506 | 97,651 | | Other Payables | 29,603 | 38,472 | | Total | 163,988 | 169,626 | Trade Payables Ageing Analysis (by Invoice Date) | Ageing | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 30 Days | 24,226 | 24,335 | | 31 to 60 Days | 7,146 | 6,805 | | 61 to 90 Days | 2,253 | 822 | | Over 90 Days | 254 | 1,541 | | Total | 33,879 | 33,503 | [10. Contract Liabilities - Deposits Received](index=11&type=section&id=10.%20Contract%20Liabilities%20-%20Deposits%20Received) The Group's contract liabilities primarily consist of deposits received, which increased by approximately HK$358,544 thousand and decreased by HK$354,179 thousand due to revenue recognition during the year Contract Liabilities Movement | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Increase in Deposits Received | 358,544 | 350,600 | | Decrease due to Revenue Recognition | 354,179 | 348,202 | [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the Group's financial performance, operational highlights, and future outlook [Business Review](index=12&type=section&id=Business%20Review) Despite macroeconomic and political uncertainties, the Group achieved revenue growth and improved profitability for the year ended June 30, 2025, driven by strong performance in Asia and Americas - Macroeconomic and political uncertainties created a challenging trading environment, with new tariffs from the US government posing significant challenges[24](index=24&type=chunk) Key Financial Performance | Metric | 2025 (HK$) | 2024 (HK$) | Change | | :--- | :--- | :--- | :--- | | Total Turnover | ~659,000,000 | ~640,000,000 | +3% | | Gross Profit Margin | 61% | 62% | -1% | | Profit Before Income Tax | ~53,000,000 | ~48,000,000 | +11% | | Net Profit Attributable to Equity Holders | ~44,000,000 | ~42,000,000 | +4% | - Revenue in Asia recorded the highest increase at **18%**; Americas revenue grew by **6%**; while EMEA revenue decreased by **7%**[24](index=24&type=chunk) - Operating expenses were slightly higher than the previous year, including a one-off loss of approximately **HK$6 million** from the derecognition of right-of-use assets due to the sublease of the New York showroom[28](index=28&type=chunk) [Carpet Business](index=14&type=section&id=Carpet%20Business) Carpet business revenue grew by 3% year-on-year, with Asia showing the highest increase driven by hotel projects, while Americas slowed and EMEA declined due to ongoing conflicts Carpet Business Revenue and Gross Profit Margin | Metric | 2025 (HK$) | 2024 (HK$) | Change | | :--- | :--- | :--- | :--- | | Carpet Business Revenue | ~645,000,000 | ~625,000,000 | +3% | | Overall Gross Profit Margin | 62% | 63% | -1% | - Sales in Asia recorded the highest increase of **17%**, primarily driven by several significant hotel projects[29](index=29&type=chunk) - Americas revenue increased by **6%**, but growth slowed in the second half due to economic uncertainties in the region[29](index=29&type=chunk) - EMEA revenue decreased by **7%** due to ongoing conflicts in Ukraine and the Middle East[29](index=29&type=chunk) [Manufacturing Operations](index=14&type=section&id=Manufacturing%20Operations) The Xiamen workshop performed strongly due to productivity gains, while the US carpet manufacturing expansion is on track to enhance service capabilities and vertical integration, with continued investment in innovation and ethical sourcing - The craft workshop in Xiamen, China, continued its strong performance, driven by enhanced productivity, improved material utilization, and increased operational efficiency[31](index=31&type=chunk) - The expansion of US carpet manufacturing operations within the Premier Yarn Dyers (PYD) facility in Georgia is on schedule, which upon completion will significantly enhance the ability to serve the US market and strengthen the vertically integrated business model[31](index=31&type=chunk) - Environmental protection and ethical sourcing remain core tenets of manufacturing operations[31](index=31&type=chunk) Manufacturing Operations Total Headcount | Year | Total Headcount | | :--- | :--- | | June 30, 2025 | 574 | | June 30, 2024 | 571 | [Human Resources](index=14&type=section&id=Human%20Resources) Total employee headcount slightly increased to 753 by June 2025, with a focus on organizational stability, talent retention, and performance-based compensation aligned with market trends Total Employees | Year | Total Employees | | :--- | :--- | | End of June 2025 | 753 | | June 30, 2024 | 740 | - During the year, the primary human resources objective was to maintain organizational stability and retain talent in response to ongoing changes[34](index=34&type=chunk) - Employee compensation is determined by job nature and market trends, with rewards based on performance[33](index=33&type=chunk) [Information Technology](index=15&type=section&id=Information%20Technology) The Group initiated a new CRM system development to enhance customer engagement and data-driven decisions, while continuously improving its core ERP system and upgrading the US manufacturing ERP for future central supply chain management - Development of a new Customer Relationship Management (CRM) system was initiated to enhance customer engagement, support data-driven decision-making, and improve digital marketing prioritization effectiveness[35](index=35&type=chunk) - Ongoing improvements were rolled out to support the company's core ERP system, focusing on automating sales processes and optimizing integration with client-side applications[35](index=35&type=chunk) - The ERP system at the US manufacturing facility is currently being upgraded to support capacity expansion, strengthen process control, and enhance operational efficiency, ultimately integrating with the Xiamen craft workshop's ERP system for a central supply chain management solution[35](index=35&type=chunk) [Design and Marketing](index=15&type=section&id=Design%20and%20Marketing) House of Tai Ping strengthened its brand image by launching new creative collections and participating in international design events, promoting through digital channels, and planning an eighth flagship showroom in New York - House of Tai Ping continued to lead in creativity by launching new collections under its brands, including Nakashima Edition, Lemontecarlo, The Flow Pavilion, Paysages Collection, Horror Vacui, and The Biophilic Program (woven purely from natural, renewable, undyed materials)[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) - Tai Ping continued its active participation in top international design events held in Milan, Paris, Monaco, and Las Vegas[25](index=25&type=chunk) - Promotion is conducted through social media, the company website, and e-commerce store, which now features advanced search functions and over **2,500 designs**[38](index=38&type=chunk) - A new flagship showroom is planned to open in New York in the first quarter of 2026, which will be Tai Ping's **eighth** flagship showroom[25](index=25&type=chunk)[38](index=38&type=chunk) [Non-Carpet Business](index=16&type=section&id=Non-Carpet%20Business) The company's non-carpet business primarily involves Premier Yarn Dyers (PYD) in the US, accounting for approximately 2% of total sales, with plans for further investment to support carpet manufacturing expansion - The non-carpet business primarily consists of PYD, a subsidiary engaged in yarn dyeing operations in the US, accounting for approximately **2%** of total sales[39](index=39&type=chunk) - Further investment is planned to update facilities and equipment to support the expansion of carpet manufacturing operations[39](index=39&type=chunk) [Liquidity and Financial Resources](index=16&type=section&id=Liquidity%20and%20Financial%20Resources) This section details the Group's liquidity position and financial resources, including cash and bank balances, and notes the absence of unsecured bank borrowings Cash and Bank Balances | Metric | June 30, 2025 (HK$) | June 30, 2024 (HK$) | | :--- | :--- | :--- | | Total Cash and Bank Balances and Short-Term Deposits | ~300,000,000 | ~263,000,000 | - The Group had no unsecured bank borrowings (June 30, 2024: nil)[40](index=40&type=chunk) [Dividends](index=17&type=section&id=Dividends) This section outlines the company's dividend policy, including the absence of interim dividends and the proposed final dividend for the year - The Company did not pay any interim dividend (2024: nil)[41](index=41&type=chunk) Proposed Final Dividend | Year | Dividend Per Share (HK Cents) | Total Amount (HK$ Thousand) | | :--- | :--- | :--- | | 2025 | 12 | ~25,462 | | 2024 | 12 | ~25,462 | - The final dividend will be paid on or about December 30, 2025, subject to shareholders' approval at the Annual General Meeting on December 5, 2025[41](index=41&type=chunk) [Shareholder Information](index=17&type=section&id=Shareholder%20Information) This section provides essential information for shareholders, including details on the suspension of the share register and share transaction activities [Suspension of Share Register](index=17&type=section&id=Suspension%20of%20Share%20Register) The company will suspend share transfer registration for two periods to determine shareholder eligibility for the Annual General Meeting and final dividend entitlement - To determine shareholders' eligibility to attend and vote at the Annual General Meeting, the register of members will be closed from Tuesday, December 2, 2025, to Friday, December 5, 2025[42](index=42&type=chunk) - To determine entitlement to the proposed final dividend for the year ended June 30, 2025, the register of members will be closed from Thursday, December 11, 2025, to Monday, December 15, 2025[43](index=43&type=chunk) [Purchase, Sale or Redemption of Company's Shares](index=17&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Company%27s%20Shares) Neither the company nor its subsidiaries redeemed, purchased, or sold any of the company's shares during the year - The Company did not redeem any of its shares during the year, nor did the Company or any of its subsidiaries purchase or sell any of the Company's shares during the year[44](index=44&type=chunk) [Corporate Governance](index=17&type=section&id=Corporate%20Governance) This section details the company's adherence to corporate governance principles, including compliance with the HKEX Listing Rules' Corporate Governance Code - The Company complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the year ended June 30, 2025[45](index=45&type=chunk) - The Company's directors do not have a fixed term of office, but the Articles of Association require every director to retire by rotation at least once every three years, which is consistent with code provision B.2.2 of the Corporate Governance Code[45](index=45&type=chunk) [Standard Code for Securities Transactions](index=18&type=section&id=Standard%20Code%20for%20Securities%20Transactions) This section confirms the company's adoption of a code of conduct for directors' securities transactions, which is as stringent as the Listing Rules' Standard Code - The Company's code of conduct governing directors' dealings in the Company's securities (the 'Tai Ping Code') is no less exacting than the Standard Code for Securities Transactions by Directors of Listed Issuers (the 'Standard Code') set out in Appendix C3 to the Listing Rules[46](index=46&type=chunk) - All directors confirmed compliance with the required standards set out in the Standard Code and the Tai Ping Code for the year ended June 30, 2025[46](index=46&type=chunk) [Audit Committee](index=18&type=section&id=Audit%20Committee) The Audit Committee, comprising independent non-executive and non-executive directors, oversees external auditors, financial reporting, risk management, and internal controls - The Audit Committee comprises two independent non-executive directors (Mr. Nicholas James Debnam as Chairman and Ms. Wing Ka Shun) and one non-executive director (Mr. Ying Hou Wing)[47](index=47&type=chunk) - Its primary responsibilities include overseeing the relationship with external auditors, reviewing financial information, supervising financial reporting systems, risk management, and internal control systems[47](index=47&type=chunk) - During the year, the Audit Committee held **four meetings** with management and representatives of the external auditors to review interim and annual reports, audit plans and scope, and discuss related matters[47](index=47&type=chunk) [Review of Consolidated Financial Statements](index=18&type=section&id=Review%20of%20Consolidated%20Financial%20Statements) The Audit Committee reviewed the preliminary financial figures, finding no discrepancies with the audited consolidated financial statements, and directors confirmed their responsibility for preparation and the company's going concern ability - The financial figures in the preliminary announcement were reviewed by the Audit Committee and compared by KPMG with the amounts in the audited consolidated financial statements, revealing no discrepancies[48](index=48&type=chunk) - The directors confirmed their responsibility for preparing the Company's consolidated financial statements and stated that they found no events or circumstances that would cast significant doubt on the Company's ability to continue as a going concern[48](index=48&type=chunk) - KPMG's work on the preliminary announcement does not constitute an audit, review, or other assurance engagement conducted in accordance with standards issued by the Hong Kong Institute of Certified Public Accountants[48](index=48&type=chunk) [Publication of Results Announcement and Annual Report](index=19&type=section&id=Publication%20of%20Results%20Announcement%20and%20Annual%20Report) This section informs stakeholders about the publication of the results announcement on the HKEX and company websites, and the upcoming dispatch of the annual report - This announcement is published on the HKEX website (www.hkexnews.hk) and the Company's website (www.taipingcarpets.com)[49](index=49&type=chunk) - The Company's 2024/25 Annual Report, containing information required by the Listing Rules, will be dispatched to shareholders and published on the aforementioned websites in due course[49](index=49&type=chunk) [Board of Directors](index=19&type=section&id=Board%20of%20Directors) This section lists the members of the Board of Directors, including the Chairman, CEO, non-executive, and independent non-executive directors - The Board of Directors includes Mr. Guy Hugh Whalley as Chairman and Non-Executive Director, Mr. Edward Clive Wen as Chief Executive Officer and Executive Director, along with several other Non-Executive Directors and Independent Non-Executive Directors[50](index=50&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或 因倚賴該等內容而引致的任何損失承擔任何責任。 7Road Holdings Limited 茲提述第七大道控股有限公司（「本公司」，連同其附屬公司統稱為「本集團」） (i)於二零二零年六月三十日刊發的截至二零一九年十二月三十一日止年度的 年報（「二零一九年年報」）；(ii)於二零二一年九月九日刊發的截至二零二零年 十二月三十一日止年度的年報（「二零二零年年報」）；及(iii)於二零二二年三月 二十五日刊發的截至二零二一年十二月三十一日止年度的年報（「二零二一年 年報」）（「該等年報」）。除另有界定者外，本公告所用詞彙與該等年報所界定者 具有相同涵義。 除該等年報所載資料外，董事會謹此就(i)二零一九年年報所載綜合財務報表附 註10；(ii)二零二零年年報所載綜合財務報表附註11；及(iii)二零二一年年報所 載綜合財務報表附註11所披露的有關支付予董事及最高行政人員的酬金提供 下列補充資料。 下述額外資料概不影響該等年報所載的其他資料，且除本公告所 ...

Financial Performance - For the six months ended June 30, 2025, the company reported revenue of RMB 9,323,190,000, an increase of 11.6% compared to RMB 8,349,840,000 for the same period in 2024[18] - Gross profit for the same period was RMB 617,887,000, down 17.6% from RMB 749,735,000 in 2024[18] - The company recorded a profit before tax of RMB 291,345,000, a decrease of 29.0% from RMB 409,728,000 in the previous year[18] - Net profit for the period was RMB 270,005,000, down 28.7% from RMB 378,718,000 in 2024[18] - Basic earnings per share decreased to RMB 0.64 from RMB 0.90, reflecting a decline of 28.9%[18] - Total comprehensive income for the period was RMB 270,471,000, down from RMB 379,011,000 in the previous year[19] - The group’s total revenue for the twelve months ended June 30, 2025, was RMB 19,827,991,000, compared to RMB 17,875,690,000 for the twelve months ended June 30, 2024, reflecting a year-on-year growth of 10.9%[40] - Profit attributable to the company's owners decreased by 28.4% to approximately RMB 270.9 million, with a net profit margin of 2.9%, down from 4.5% in the first half of 2024[98] Revenue Breakdown - Revenue from the sale of aluminum profiles reached RMB 9,042,335,000, up 11.9% from RMB 8,083,355,000 in the previous year[35] - The group’s revenue from industrial aluminum profiles was RMB 1,569,883,000 for the six months ended June 30, 2025, compared to RMB 1,388,461,000 in 2024, representing a growth of 13.0%[38] - The group’s revenue from construction aluminum profiles was RMB 7,472,452,000 for the six months ended June 30, 2025, an increase of 11.6% from RMB 6,694,894,000 in the previous year[38] - The sales volume reached 407,224 tons, reflecting a growth of 12.5% from 362,049 tons in the previous year[76] - Sales of construction aluminum profiles rose by 11.6% to about RMB 7,472.5 million, with a sales volume increase of 14.7% to approximately 332,315 tons in the first half of 2025[82] - Industrial aluminum profiles revenue grew by 13.1% to around RMB 1,569.9 million, with a sales volume increase of 8.4% to approximately 74,909 tons in the first half of 2025[83] Costs and Expenses - The cost of goods sold for the six months ending June 30, 2025, was RMB 8,284,362,000, compared to RMB 7,204,869,000 for the same period in 2024, representing an increase of approximately 15%[47] - The group reported a total employee cost of RMB 594,928,000 for the six months ending June 30, 2025, compared to RMB 555,630,000 for the same period in 2024, reflecting an increase of approximately 7%[47] - Research and development costs for the six months ending June 30, 2025, amounted to RMB 420,941,000, up from RMB 395,236,000 in the previous year, indicating a growth of about 6.5%[48] - Distribution costs decreased by 18.1% to approximately RMB 146.7 million, representing 1.6% of revenue, down from 2.1% in the previous year[96] - The group’s financial costs for the six months ended June 30, 2025, amounted to RMB 45,091,000, down from RMB 51,477,000 in the same period of 2024[41] Assets and Liabilities - Non-current assets increased from RMB 4,528,390 thousand in December 2024 to RMB 4,997,831 thousand in June 2025, reflecting a growth of 10%[21] - Current assets rose from RMB 10,014,050 thousand in December 2024 to RMB 11,017,812 thousand in June 2025, an increase of 10%[21] - Total liabilities increased from RMB 6,246,072 thousand in December 2024 to RMB 7,765,307 thousand in June 2025, representing a growth of 24%[21] - The company’s total equity increased from RMB 5,907,460 thousand in December 2024 to RMB 5,932,420 thousand in June 2025, a slight increase of 0.4%[23] - Trade receivables and notes receivable, net of credit loss provisions, totaled RMB 5,117,289,000 as of June 30, 2025, an increase from RMB 4,939,460,000 at the end of 2024[54] - The group’s financial liabilities measured at amortized cost totaled RMB 6,099,192,000 as of June 30, 2025, up from RMB 5,195,134,000 as of December 31, 2024[59] Cash Flow - The net cash generated from operating activities was RMB 680,409 thousand for the six months ended June 30, 2025, compared to RMB 680,595 thousand for the same period in 2024[26] - The company reported a net cash outflow from investing activities of RMB 969,001 thousand for the six months ended June 30, 2025, compared to RMB 505,189 thousand in the previous year[27] - Financing activities generated a net cash inflow of RMB 264,899 thousand for the six months ended June 30, 2025, compared to a net cash outflow of RMB 140,915 thousand in 2024[27] - The total cash and cash equivalents as of June 30, 2025, were approximately RMB 2,701.5 million, a decrease from RMB 2,726.1 million as of December 31, 2024[118] Market Strategy and Outlook - The company plans to focus on expanding its market presence and enhancing product development in the upcoming quarters[11] - The management indicated ongoing efforts in cost control and operational efficiency to mitigate the impact of rising costs[11] - The company is focusing on high-end and green technology breakthroughs, particularly in the application of recycled aluminum, to drive innovation and respond to new market challenges[84] - The company is actively expanding its overseas production bases, with a 180,000-ton capacity project in Vietnam underway and an Australian project entering trial production, enhancing local service capabilities[79] - The company anticipates a gradual improvement in the real estate market due to policy support, which is expected to alleviate downward pressure on the aluminum profile industry[84] Corporate Governance - The company has adopted the corporate governance code and has complied with all provisions during the first half of 2025[141] - The audit committee consists of three independent non-executive directors and one non-executive director, ensuring oversight of financial reporting and internal controls[145] - The audit committee is chaired by a member with appropriate professional qualifications in financial matters[145] - The company has confirmed compliance with the standards for securities trading by directors during the first half of 2025[142]

[Financial Summary](index=1&type=section&id=Financial%20Summary) The Group achieved strong financial performance in FY2025, with growth in turnover, revenue, operating profit, and profit attributable to shareholders, alongside increased earnings per share and total dividends per share Financial Highlights | Indicator | 2025 (HKD Million) | 2024 (HKD Million) | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Turnover | 27,001 | 25,786 | 5% | | Revenue | 24,443 | 22,526 | 9% | | Operating Profit | 3,746 | 2,940 | 27% | | Profit Attributable to Company Shareholders | 4,031 | 3,581 | 13% | | Earnings Per Share (HKD) | 12.39 | 11.01 | 13% | | Total Dividends Per Share (HKD) | 3.50 | 3.20 | 9% | | Equity Per Share Attributable to Company Shareholders (HKD) | 208.83 | 186.46 | 12% | [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) The Group's FY2025 consolidated financial statements show significant growth in profit for the year and total comprehensive income, with a robust balance sheet reflecting increases in non-current and net current assets [Consolidated Income Statement](index=2&type=section&id=Consolidated%20Income%20Statement) The Group's FY2025 revenue grew 9% to HKD 24.443 billion, operating profit surged 27% to HKD 3.746 billion, and profit attributable to company shareholders increased 13% to HKD 4.031 billion, primarily driven by a significant rise in net other income Key Income Statement Figures | Indicator | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Turnover | 27,000,595 | 25,785,664 | +5% | | Revenue | 24,443,169 | 22,525,792 | +9% | | Cost of Sales | (14,704,370) | (13,248,232) | +11% | | Net Other Income | 1,747,204 | 1,090,203 | +60% | | Operating Profit | 3,745,980 | 2,939,947 | +27% | | Profit Attributable to Company Shareholders | 4,030,678 | 3,580,943 | +13% | | Basic Earnings Per Share | 12.39 | 11.01 | +13% | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's FY2025 total comprehensive income significantly increased to HKD 9.864 billion, primarily driven by positive changes in fair value reserves for equity investments and foreign exchange differences from overseas financial statements Key Comprehensive Income Figures | Indicator | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Profit for the Year | 4,597,995 | 3,666,910 | +25% | | Equity investments at fair value through other comprehensive income – net change in fair value reserve | 977,769 | (610,902) | From Negative to Positive | | Exchange differences arising on translation of financial statements of overseas subsidiaries, associates and joint ventures | 4,549,679 | (163,617) | From Negative to Positive | | Total Comprehensive Income for the Year | 9,863,596 | 3,116,011 | +216% | | Total Comprehensive Income Attributable to Company Shareholders | 8,172,730 | 3,005,744 | +172% | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets rose to HKD 146.559 billion and net assets to HKD 86.736 billion, with significant growth in both non-current and net current assets, reflecting an expanded asset base and improved liquidity Key Statement of Financial Position Figures | Indicator | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 97,715,113 | 88,292,614 | +10.7% | | Current Assets | 48,844,616 | 47,195,367 | +3.5% | | Current Liabilities | (18,201,228) | (21,980,178) | -17.2% | | Net Current Assets | 30,643,388 | 25,215,189 | +21.5% | | Net Assets | 86,735,630 | 79,053,442 | +9.7% | | Total Equity Attributable to Company Shareholders | 68,715,318 | 61,355,090 | +12.0% | [Notes to the Financial Statements](index=5&type=section&id=Notes%20to%20the%20Financial%20Statements) The notes to the financial statements detail the Group's accounting policies, segment performance, revenue composition, costs and expenses, taxation, dividends, and receivables and payables, providing deeper context for understanding its performance and financial position [Accounting Policies and Basis of Preparation](index=5&type=section&id=Accounting%20Policies%20and%20Basis%20of%20Preparation) The Group's financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, primarily on a historical cost basis, with certain investment properties and financial instruments measured at revalued amounts or fair value, using USD as the functional currency and HKD figures for presentation only - Financial statements are prepared in accordance with all applicable Hong Kong Financial Reporting Standards, complying with the Hong Kong Companies Ordinance and the Listing Rules of the Stock Exchange[6](index=6&type=chunk) - Except for investment properties measured at revalued amounts and certain financial instruments at fair value, the financial statements are prepared on a historical cost basis[7](index=7&type=chunk) - The Group's consolidated financial statements are presented in USD, with HKD figures translated at the year-end applicable exchange rate for presentation purposes only[8](index=8&type=chunk) [Amendments to Accounting Policies](index=6&type=section&id=Amendments%20to%20Accounting%20Policies) During the current accounting period, the Group first adopted several amendments to Hong Kong Financial Reporting Standards issued by the HKICPA, including revisions to liability classification, lease liabilities in sale and leaseback transactions, and disclosures for cash flow statements and financial instruments - The Group has adopted amendments to HKAS 1 regarding the classification of liabilities as current or non-current and non-current liabilities with covenants[10](index=10&type=chunk) - The Group has adopted amendments to HKFRS 16 regarding lease liabilities in sale and leaseback transactions[10](index=10&type=chunk) - The Group has adopted amendments to HKAS 7 regarding cash flow statements and HKFRS 7 regarding financial instrument disclosures[10](index=10&type=chunk) [Segment Reporting](index=7&type=section&id=Segment%20Reporting) The Group operates four reportable segments: Proprietary Investments, Property Development and Investment, Hotels and Leisure, and Financial Services, along with other businesses, each independently managed and contributing significantly to FY2025 revenue and operating profit [Segment Business Activities and Operations](index=7&type=section&id=Segment%20Business%20Activities%20and%20Operations) The Group's four core business segments include Proprietary Investments (trading and strategic investments in global financial markets), Property Development and Investment (residential and commercial property development and leasing in Singapore, China, Malaysia, and Hong Kong), Hotels and Leisure (hotel management and gaming operations in the UK and Spain), and Financial Services (commercial banking, insurance, fund management, etc.) Segment Business Activities and Operations Overview | Segment | Business Activities | Operations | | :--- | :--- | :--- | | Proprietary Investments | Debt, equity and direct investments, treasury operations, investment advisory and management services | Subsidiaries and joint ventures | | Property Development and Investment | Development of residential and commercial properties in Singapore, China, Malaysia and Hong Kong, holding properties for rental income | Subsidiaries, associates and joint ventures | | Hotels and Leisure | Owning, leasing or managing hotels, operating gaming and leisure businesses in the UK and Spain | Subsidiaries | | Financial Services | Commercial and retail banking, Islamic banking, investment banking, insurance, fund management, etc | Associates | [Reported Segment Revenue and Profit/Loss](index=8&type=section&id=Reported%20Segment%20Revenue%20and%20Profit%2FLoss) In FY2025, Proprietary Investments, Property Development and Investment, Hotels and Leisure, and Financial Services segments all achieved positive operating profit, with Proprietary Investments contributing the most, while Property Development and Investment saw a decrease in profit before tax Reported Segment Revenue and Profit/Loss (2025) | Segment | 2025 Turnover (HKD Thousand) | 2025 Revenue from External Customers (HKD Thousand) | 2025 Reported Segment Operating Profit (HKD Thousand) | 2025 Profit Before Tax (HKD Thousand) | | :--- | :--- | :--- | :--- | :--- | | Proprietary Investments | 788,243 | 1,230,817 | 2,645,274 | 2,403,247 | | Property Development and Investment | 11,178,508 | 11,178,508 | 1,509,354 | 258,379 | | Hotels and Leisure | 11,595,359 | 11,595,359 | 1,690,159 | 1,102,951 | | Financial Services | - | - | - | 1,485,364 | | Other | 438,485 | 438,485 | 58,442 | 9,953 | | **Total** | **27,000,595** | **24,443,169** | **5,903,229** | **5,259,894** | Reported Segment Revenue and Profit/Loss (2024) | Segment | 2024 Turnover (HKD Thousand) | 2024 Revenue from External Customers (HKD Thousand) | 2024 Reported Segment Operating Profit (HKD Thousand) | 2024 Profit Before Tax (HKD Thousand) | | :--- | :--- | :--- | :--- | :--- | | Proprietary Investments | 4,448,504 | 1,188,632 | 2,119,904 | 1,849,986 | | Property Development and Investment | 10,385,021 | 10,385,021 | 1,735,206 | 437,992 | | Hotels and Leisure | 10,427,094 | 10,427,094 | 1,189,593 | 593,379 | | Financial Services | - | - | - | 1,350,391 | | Other | 525,045 | 525,045 | 239,299 | 183,771 | | **Total** | **25,785,664** | **22,525,792** | **5,284,002** | **4,415,519** | [Reconciliation of Reported Segment Revenue, Finance Costs, and Interest Income](index=10&type=section&id=Reconciliation%20of%20Reported%20Segment%20Revenue%2C%20Finance%20Costs%2C%20and%20Interest%20Income) The Group performed inter-segment eliminations for revenue, finance costs, and interest income to derive consolidated figures, ensuring accuracy in the financial statements Reconciliation of Segment and Consolidated Figures | Indicator | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Reported Segment Revenue | 24,537,799 | 22,631,070 | | Elimination of Inter-segment Revenue | (94,630) | (105,278) | | **Consolidated Revenue** | **24,443,169** | **22,525,792** | | Reported Finance Costs | 2,157,249 | 2,344,055 | | Elimination of Inter-segment Finance Costs | (68,702) | (80,556) | | **Consolidated Finance Costs** | **2,088,547** | **2,263,499** | | Reported Interest Income | 672,096 | 683,267 | | Elimination of Inter-segment Interest Income | (68,702) | (80,556) | | **Consolidated Interest Income** | **603,394** | **602,711** | [Turnover and Revenue](index=11&type=section&id=Turnover%20and%20Revenue) The Group's FY2025 turnover increased 5% to HKD 27.001 billion and revenue grew 9% to HKD 24.443 billion, primarily driven by increased revenue from hotels and leisure, property sales, and rental income from properties - The Company's principal activities are investment holding and investment management, while its subsidiaries' principal activities include proprietary investments, property development and investment, and hotels and leisure[16](index=16&type=chunk) Revenue Breakdown | Revenue Category | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue from Property Sales | 9,292,401 | 8,796,385 | +5.6% | | Revenue from Hotels and Leisure | 11,573,481 | 10,412,804 | +11.1% | | Interest Income | 603,394 | 602,711 | +0.1% | | Dividend Income | 857,777 | 806,214 | +6.4% | | Rental Income from Properties | 1,559,082 | 1,283,313 | +21.5% | | Revenue from Goods Sold | 438,359 | 524,967 | -16.5% | | Other | 118,675 | 99,398 | +19.4% | | **Total Revenue** | **24,443,169** | **22,525,792** | **+8.5%** | | Proceeds from Disposal of Securities Investments | 2,557,426 | 3,259,872 | -21.5% | | **Total Turnover** | **27,000,595** | **25,785,664** | **+4.7%** | [Net Other Income](index=11&type=section&id=Net%20Other%20Income) The Group's FY2025 net other income surged 60% to HKD 1.747 billion, primarily due to a significant increase in realized and unrealized net gains from trading financial assets and a shift from loss to gain in derivative financial instruments Net Other Income Breakdown | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Realized and Unrealized Net Gains from Trading Financial Assets | 1,476,965 | 999,379 | +47.8% | | Realized and Unrealized Net Gains / (Losses) from Derivative Financial Instruments | 14,067 | (69,880) | From Loss to Gain | | Other Exchange Gains | 154,854 | 87,653 | +76.7% | | Gain / (Loss) on Disposal of Subsidiaries | 66,811 | (3,365) | From Loss to Gain | | Gain on Derecognition of Lease Liabilities Related to Lease Termination | 100,101 | - | New | | **Total** | **1,747,204** | **1,090,203** | **+60.3%** | [Profit Before Tax for the Year](index=12&type=section&id=Profit%20Before%20Tax%20for%20the%20Year) The Group's FY2025 profit before tax was HKD 5.260 billion, influenced by decreased finance costs, increased staff costs, and changes in other items such as depreciation, amortization, and impairment losses [Finance Costs](index=12&type=section&id=Finance%20Costs) The Group's total borrowing costs in FY2025 decreased 10.7% year-on-year to HKD 2.165 billion, with reduced capitalized borrowing costs leading to a 7.7% year-on-year decrease in consolidated finance costs to HKD 2.089 billion Finance Costs Breakdown | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Interest on Bank Loans and Other Borrowings | 1,624,660 | 1,928,730 | -15.8% | | Interest on Lease Liabilities | 440,172 | 393,499 | +11.9% | | Other Borrowing Costs | 99,984 | 100,646 | -0.7% | | **Total Borrowing Costs** | **2,164,816** | **2,422,875** | **-10.7%** | | Less: Total Borrowing Costs Capitalized | (76,269) | (159,376) | -52.1% | | **Consolidated Finance Costs** | **2,088,547** | **2,263,499** | **-7.7%** | - Borrowing costs were capitalized at annual interest rates ranging from **2.62% to 5.08%** (2024: 3.88% to 5.08%)[19](index=19&type=chunk) [Staff Costs](index=12&type=section&id=Staff%20Costs) The Group's total staff costs in FY2025 increased 14.8% to HKD 4.242 billion, primarily due to higher salaries, wages, other benefits, defined contribution retirement scheme contributions, and social security expenses Staff Costs Breakdown | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Salaries, Wages and Other Benefits | 3,796,250 | 3,315,056 | +14.5% | | Contributions to Defined Contribution Retirement Schemes | 127,120 | 115,976 | +9.6% | | Social Security Costs | 286,355 | 229,281 | +24.9% | | **Total** | **4,242,294** | **3,695,265** | **+14.8%** | [Other Items](index=13&type=section&id=Other%20Items) The Group's other items in FY2025 include depreciation, amortization, impairment losses, and net rental income; net impairment losses increased, mainly due to goodwill impairment and higher provisions for properties under development, though some impairment losses on right-of-use assets, other properties, and intangible assets were reversed [Depreciation and Amortization](index=13&type=section&id=Depreciation%20and%20Amortization) The Group's total depreciation expenses in FY2025 amounted to HKD 843 million and amortization expenses to HKD 1.816 billion, both increasing from the previous year, reflecting asset utilization and intangible asset consumption Depreciation and Amortization Breakdown | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Depreciation of Other Property, Plant and Equipment | 531,246 | 467,166 | +13.7% | | Depreciation of Right-of-Use Assets | 311,302 | 256,392 | +21.4% | | Amortization of Customer Relationships, Licenses and Brands | 12,324 | 15,781 | -21.9% | | Amortization of Gaming Licenses and Brands | 447 | 515 | -13.2% | | Amortization of Bass Strait Oil and Gas Concession | 33,998 | 44,112 | -22.9% | | Amortization of Other Intangible Assets | 134,829 | 202,223 | -33.3% | [Impairment Losses](index=13&type=section&id=Impairment%20Losses) The Group's net impairment losses in FY2025 totaled HKD 1.609 billion, primarily comprising HKD 92.3 million for goodwill impairment and HKD 900.9 million for provisions for foreseeable losses on properties under development and held for sale, while some casino asset impairments were reversed Impairment Losses Breakdown | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Net Impairment Loss Recognized on Other Property, Plant and Equipment | 35,937 | 25,800 | +39.3% | | Net Impairment Loss Recognized on Intangible Assets | 2,630 | 18,171 | -85.5% | | Net Impairment Loss Recognized on Right-of-Use Assets | (738) | 31,126 | From Positive to Negative | | Net Impairment Loss Recognized on Goodwill | 92,251 | - | New | | Net Impairment and Provision for Foreseeable Losses on Properties Under Development and Held for Sale | 900,880 | 847,562 | +6.3% | - The Group conducted impairment tests on right-of-use assets, other properties, and intangible assets of certain casinos, recognizing impairment expenses, but also reversed impairments for some assets due to better-than-expected performance[22](index=22&type=chunk)[23](index=23&type=chunk) - Goodwill impairment loss of **HKD 92.3 million** and intangible asset impairment loss of **HKD 18.3 million** were recognized for Manuka Health New Zealand Limited, primarily based on value-in-use estimates[24](index=24&type=chunk) [Net Rental Income](index=13&type=section&id=Net%20Rental%20Income) The Group's total rental income from investment properties in FY2025 increased 21.5% to HKD 1.559 billion, and after deducting direct expenses, net rental income grew 26.1% to HKD 1.202 billion Net Rental Income Breakdown | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Total Rental Income from Investment Properties | (1,559,082) | (1,283,313) | +21.5% | | Less: Direct Expenses | 357,561 | 330,630 | +8.1% | | **Net Rental Income** | **(1,201,521)** | **(952,683)** | **+26.1%** | [Taxation](index=16&type=section&id=Taxation) The Group's total taxation in FY2025 decreased 11.5% year-on-year to HKD 662 million, mainly due to changes in overseas current tax and deferred tax, and the first-time recognition of Pillar Two income tax of HKD 13.3 million Taxation Breakdown | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Current Tax - Hong Kong Profits Tax | - | 1,304 | -100% | | Current Tax - Overseas | 151,871 | 236,855 | -35.8% | | Pillar Two Income Tax | 13,298 | - | New | | Deferred Tax | 510,028 | 510,450 | -0.1% | | **Total Taxation** | **661,899** | **748,609** | **-11.5%** | - The Group has retrospectively applied amendments to HKAS 12, not recognizing deferred tax arising from Pillar Two model rules, but has recognized a supplementary tax liability of **HKD 13.298 million**[27](index=27&type=chunk)[28](index=28&type=chunk) [Dividends](index=17&type=section&id=Dividends) The Group proposes a final dividend of HKD 2.90 per share for FY2025, bringing the total annual dividend to HKD 3.50 per share, a 9.4% increase from the previous year Dividend Information | Dividend Type | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Interim Dividend (Per Share) | 0.60 HKD | 0.50 HKD | +20% | | Proposed Final Dividend (Per Share) | 2.90 HKD | 2.70 HKD | +7.4% | | **Total Dividends Payable / Paid for the Year** | **1,151,384** | **1,050,730** | **+9.6%** | - Proposed final dividend of **HKD 954 million**, calculated based on 329,051,373 ordinary shares in issue, payable on December 3, 2025, subject to approval at the Annual General Meeting[29](index=29&type=chunk)[36](index=36&type=chunk) [Earnings Per Share](index=17&type=section&id=Earnings%20Per%20Share) The Group's basic earnings per share for FY2025 was HKD 12.39, a 13% increase from the previous year, consistent with diluted earnings per share due to no potential dilutive ordinary shares during the year Earnings Per Share Figures | Indicator | 2025 (HKD) | 2024 (HKD) | Change | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share | 12.39 | 11.01 | +13% | | Diluted Earnings Per Share | 12.39 | 11.01 | +13% | - Basic earnings per share is calculated based on profit attributable to company shareholders of **HKD 4.031 billion** and a weighted average of **325,224,511** ordinary shares in issue during the year[31](index=31&type=chunk) - There were no potential dilutive ordinary shares outstanding during the year, thus diluted earnings per share is equal to basic earnings per share[32](index=32&type=chunk) [Trade and Other Receivables](index=18&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, the Group's total trade and other receivables increased to HKD 3.038 billion, with trade receivables surging 59.2% to HKD 1.907 billion, primarily concentrated within one month Trade and Other Receivables Breakdown | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Trade Receivables | 1,906,988 | 1,197,902 | +59.2% | | Other Receivables, Deposits and Prepayments | 1,036,094 | 832,764 | +24.4% | | Interest Receivables | 68,827 | 87,005 | -20.9% | | **Total** | **3,037,908** | **2,143,510** | **+41.7%** | Trade Receivables Ageing Analysis | Trade Receivables Ageing | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Within One Month | 1,829,707 | 1,049,122 | | One to Three Months | 54,564 | 83,546 | | Over Three Months | 22,717 | 65,234 | [Trade and Other Payables](index=19&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables increased to HKD 5.999 billion, with trade payables growing 26.8% to HKD 1.161 billion and a significant increase in derivative financial instrument payables Trade and Other Payables Breakdown | Item | 2025 (HKD Thousand) | 2024 (HKD Thousand) | Change | | :--- | :--- | :--- | :--- | | Trade Payables | 1,161,425 | 915,748 | +26.8% | | Other Payables and Accrued Operating Expenses | 4,455,999 | 4,618,735 | -3.5% | | Derivative Financial Instruments (at Fair Value) | 241,351 | 44,744 | +439.4% | | Amounts Due to Fellow Subsidiaries | 136,964 | 98,750 | +38.7% | | **Total** | **5,999,052** | **5,681,358** | **+5.6%** | Trade Payables Ageing Analysis | Trade Payables Ageing | 2025 (HKD Thousand) | 2024 (HKD Thousand) | | :--- | :--- | :--- | | Within One Month | 614,023 | 304,307 | | One to Three Months | 462,537 | 525,170 | | Over Three Months | 84,865 | 86,271 | [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) The Management Discussion and Analysis section reviews the Group's FY2025 financial performance and segment results, outlining its financial position, risk management strategies, and future outlook, highlighting overall growth, strong core business performance, and a robust capital structure and liquidity [Financial Performance](index=20&type=section&id=Financial%20Performance) The Group's FY2025 consolidated profit attributable to shareholders increased 13% to HKD 4.031 billion, profit before tax grew 19% to HKD 5.260 billion, and revenue rose 9% to HKD 24.4 billion, primarily driven by strong performance in the Hotels and Leisure and Property Development and Investment segments - The Group recorded audited consolidated profit attributable to shareholders of **HKD 4.0307 billion**, an increase of **13%** from the previous year[37](index=37&type=chunk) - Basic earnings per share was **HKD 12.39**, compared to **HKD 11.01** last year[37](index=37&type=chunk) - The Group's audited consolidated profit before tax increased **19%** to **HKD 5.2599 billion**[37](index=37&type=chunk) - The Group's revenue increased **9%** to **HKD 24.4 billion**, primarily due to revenue growth in the Hotels and Leisure and Property Development and Investment segments[37](index=37&type=chunk) [Business Review](index=20&type=section&id=Business%20Review) The Group's business segments showed varied performance in FY2025: Proprietary Investments benefited from trading gains and dividend income, Property Development and Investment saw strong performance in Singapore but challenges in China, Hotels and Leisure continued to grow and optimize operations, Financial Services delivered steady results, while other businesses declined [Proprietary Investments](index=20&type=section&id=Proprietary%20Investments) In FY2025, the Proprietary Investments segment recorded a profit before tax of HKD 2.403 billion, primarily driven by realized and unrealized gains from trading financial assets and dividend income, with the Group focusing on fundamentally sound quality companies despite market volatility - The Proprietary Investments segment recorded a profit before tax of **HKD 2.4033 billion**, primarily due to realized and unrealized gains from trading financial assets and dividend income[38](index=38&type=chunk) - The investment strategy prioritizes capital allocation to fundamentally sound quality companies to mitigate short-term volatility caused by macroeconomic factors[38](index=38&type=chunk)[39](index=39&type=chunk) [Treasury Division](index=21&type=section&id=Treasury%20Division) The Group's Treasury Division maintained a cautious approach, effectively controlling net interest expenses and foreign exchange risks despite ongoing market volatility - The Group's Treasury Division maintained a cautious approach, with net interest expenses and foreign exchange risks remaining under control[40](index=40&type=chunk) [Property Development and Investment](index=21&type=section&id=Property%20Development%20and%20Investment) GuocoLand's FY2025 revenue increased 5% to HKD 11.386 billion, primarily driven by strong residential sales in Singapore and higher rental income from investment properties, though China property development faced challenges and recognized provisions for foreseeable losses - GuocoLand's revenue increased **5%** to **SGD 1.9164 billion** (approximately **HKD 11.386 billion**), primarily due to sustained growth in property development and property investment businesses[41](index=41&type=chunk) - Most Singapore residential development projects were sold and recognized in phases, and some residential units in the Chongqing, China project were delivered, but China property development recognized a provision for foreseeable losses of **SGD 81.8 million** (approximately **HKD 486 million**)[41](index=41&type=chunk) - Investment property revenue increased **22%** to **SGD 281.1 million** (approximately **HKD 1.6701 billion**), mainly from increased rental income from Guoco Tower and Guoco Midtown in Singapore[41](index=41&type=chunk) - Overall profit attributable to shareholders decreased **17%** to **SGD 107.1 million** (approximately **HKD 636.3 million**), primarily as Singapore's growth was offset by losses in China[43](index=43&type=chunk) [Hotels and Leisure](index=22&type=section&id=Hotels%20and%20Leisure) The Hotels and Leisure segment performed strongly, with The Clermont Hotel Group achieving post-tax profit growth despite London market challenges by optimizing operations through scale strategy and cost control; The Rank Group Plc saw gaming net revenue grow 8% and operating profit surge 128%, benefiting from continuous technology investment and cross-channel brand growth [The Clermont Hotel Group (CHG)](index=22&type=section&id=The%20Clermont%20Hotel%20Group%20(CHG)) CHG recorded a post-tax profit of GBP 43.8 million (approximately HKD 447.6 million) in FY2025; despite challenges in the London hotel market, CHG outperformed by increasing room occupancy, controlling costs, and investing in infrastructure and IT - CHG recorded a post-tax profit of **GBP 43.8 million** (approximately **HKD 447.6 million**), compared to **GBP 39.2 million** (approximately **HKD 385.9 million**) last year[46](index=46&type=chunk) - CHG successfully managed price pressures and drove strong revenue growth by implementing a scale strategy to increase room occupancy, while offsetting rising labor and energy costs through cost control[46](index=46&type=chunk) - CHG has increased investments in hotel infrastructure and IT projects, introducing new revenue management and procurement systems, and boosting investment in automation and AI technologies[46](index=46&type=chunk)[47](index=47&type=chunk) [The Rank Group Plc (Rank)](index=23&type=section&id=The%20Rank%20Group%20Plc%20(Rank)) Rank Group's FY2025 gaming net revenue increased 8% to GBP 795.4 million (approximately HKD 8.129 billion), and operating profit surged 128% to GBP 67 million (approximately HKD 684.7 million), driven by growth across business units, continuous technology investment, and strong cross-channel brand performance - Rank's gaming net revenue increased **8%** to **GBP 795.4 million** (approximately **HKD 8.1291 billion**), and operating profit increased **128%** to **GBP 67 million** (approximately **HKD 684.7 million**)[49](index=49&type=chunk) - Grosvenor and Mecca cross-channel brands saw gaming net revenue grow **22%** and **11%** respectively, benefiting from continuous technology investment to provide seamless and customized cross-channel experiences[49](index=49&type=chunk) - With the introduction of casino law reforms, Grosvenor's business will benefit from increased gaming machine allocations and the launch of sports betting operations[50](index=50&type=chunk) [Financial Services](index=24&type=section&id=Financial%20Services) Hong Leong Financial Group's FY2025 profit before tax increased 4% to HKD 10.978 billion, primarily driven by increased contributions from its banking and insurance segments, though the capital group's contribution declined - Hong Leong Financial Group's profit before tax was **MYR 6.1027 billion** (approximately **HKD 10.9783 billion**), an increase of **4%** from the previous year[51](index=51&type=chunk) - Hong Leong Banking Group's profit before tax increased **4%** to **MYR 5.3603 billion** (approximately **HKD 9.6428 billion**), primarily due to higher revenue and increased impairment loss reversals[51](index=51&type=chunk) - HLA Holdings Group's profit before tax increased **10%** to **MYR 667.2 million** (approximately **HKD 1.2002 billion**), primarily due to improved insurance services performance[52](index=52&type=chunk) - Hong Leong Capital Group's profit before tax decreased **36%** to **MYR 78.5 million** (approximately **HKD 141.2 million**), primarily due to lower contributions across all business segments[52](index=52&type=chunk) [Other Businesses](index=24&type=section&id=Other%20Businesses) Manuka Health New Zealand Limited's performance declined due to the loss of a major client and ongoing price pressure, yet maintained high gross margins; Bass Strait oil and gas operations saw a slight improvement, benefiting from increased hydrocarbon extraction - Manuka Health New Zealand Limited's performance declined from the previous year, primarily due to the loss of a major client and ongoing price pressure in core international markets[53](index=53&type=chunk) - Bass Strait oil and gas operations recorded a slight improvement in performance, primarily due to increased hydrocarbon extraction[53](index=53&type=chunk) [Discussion of Group Financial Position](index=25&type=section&id=Discussion%20of%20Group%20Financial%20Position) The Group maintains a robust financial position with continuous growth in total equity and net assets, controlled net debt levels, ample liquidity, and undrawn borrowing facilities, while managing market risks through interest rate and foreign exchange contracts [Capital Management](index=25&type=section&id=Capital%20Management) As of June 30, 2025, the consolidated total equity attributable to company shareholders was HKD 68.7 billion, net debt was HKD 13.7 billion, and the equity-to-debt ratio was 83:17, indicating a robust capital structure - Consolidated total equity attributable to company shareholders was **HKD 68.7 billion**[54](index=54&type=chunk) - Net debt was **HKD 13.7 billion** (total bank and other borrowings less cash and short-term funds and trading financial assets)[54](index=54&type=chunk) - The equity-to-debt ratio was **83:17**[54](index=54&type=chunk) [Liquidity and Financial Resources](index=25&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's total cash and short-term funds and trading financial assets were primarily denominated in USD, HKD, and SGD, with total bank and other borrowings of HKD 39.3 billion and approximately HKD 13.7 billion in undrawn borrowing facilities - Total cash and short-term funds and trading financial assets were primarily denominated in **USD (37%)**, **HKD (25%)**, and **SGD (14%)**[55](index=55&type=chunk) - Total bank and other borrowings amounted to **HKD 39.3 billion**, primarily denominated in **SGD (76%)**[55](index=55&type=chunk) - The Group had committed but undrawn borrowing facilities of approximately **HKD 13.7 billion**[56](index=56&type=chunk) [Interest Rate Risk](index=25&type=section&id=Interest%20Rate%20Risk) The Group manages interest rate risk by reducing overall debt costs and exposure to interest rate fluctuations, with approximately 79% of bank and other borrowings at floating rates, and utilizes interest rate contracts as appropriate - The Group manages interest rate risk by reducing overall debt costs and exposure to interest rate fluctuations, utilizing interest rate contracts as appropriate[57](index=57&type=chunk) - Approximately **79%** of bank and other borrowings were at floating rates, and **21%** at fixed rates[57](index=57&type=chunk) - The notional amount of outstanding interest rate contracts was **HKD 3.9 billion**[57](index=57&type=chunk) [Foreign Exchange Risk](index=25&type=section&id=Foreign%20Exchange%20Risk) The Group periodically enters into foreign exchange contracts (primarily OTC derivatives) for hedging foreign exchange risk and investment purposes, with total outstanding foreign exchange contracts amounting to HKD 4 billion as of June 30, 2025 - The Group periodically enters into foreign exchange contracts, primarily for hedging foreign exchange risk and investment purposes[58](index=58&type=chunk) - The total notional amount of outstanding foreign exchange contracts was **HKD 4 billion**, used to hedge foreign currency equity investments[59](index=59&type=chunk) [Equity Price Risk](index=25&type=section&id=Equity%20Price%20Risk) The Group maintains an investment portfolio primarily consisting of publicly listed equities and adheres to asset allocation limits to manage equity price risk - The Group maintains an investment portfolio primarily consisting of publicly listed equities and adheres to asset allocation limits[60](index=60&type=chunk) [Other Information](index=26&type=section&id=Other%20Information) The Other Information section covers the Group's human resources, future outlook, securities transactions, corporate governance compliance, financial data review, and share transfer registration arrangements, providing supplementary information on the Group's operations and governance [Human Resources and Training](index=26&type=section&id=Human%20Resources%20and%20Training) The Group employs approximately 10,900 staff, committed to continuous training for capability enhancement, and regularly reviews remuneration policies, incentivizing employees through bonuses, awards, and share incentive schemes to align their interests with shareholders - The Group employs approximately **10,900** staff and is committed to providing continuous training programs[61](index=61&type=chunk) - Employee remuneration policies are regularly reviewed, with bonuses and other awards linked to the Group's financial performance and individual employee performance[61](index=61&type=chunk) - The Group has a share incentive scheme to grant share options and/or free shares to eligible employees, aligning their long-term interests with those of shareholders[61](index=61&type=chunk) [Group Outlook](index=26&type=section&id=Group%20Outlook) The Group anticipates continued global economic uncertainty and volatility, but its diversified portfolio across regions and industries mitigates risks. It will maintain a robust balance sheet, invest in its businesses, and adopt prudent cost and capital management strategies, closely monitoring market changes to ensure resilience - The global economic environment is expected to remain uncertain and volatile, but the Group's diversified portfolio across regions and industries can mitigate some risks[62](index=62&type=chunk) - The Group will maintain a robust balance sheet, continuously support and invest in its businesses, and remain vigilant for new investment opportunities[62](index=62&type=chunk) - The management team adopts a prudent approach to navigate complex situations, implementing cautious cost and capital management, and enhancing efficiency[62](index=62&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=26&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the year 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 year ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[63](index=63&type=chunk) [Compliance with Corporate Governance Code](index=26&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company has complied with all applicable provisions of the Corporate Governance Code in Appendix C1 of the Hong Kong Stock Exchange Listing Rules throughout the year - The Company has complied with all applicable provisions of the HKEX Code throughout the year[64](index=64&type=chunk) [Review of Financial Information](index=27&type=section&id=Review%20of%20Financial%20Information) The Board's Audit and Risk Management Committee has reviewed the Company's adopted accounting principles and practices, discussed financial reporting matters with auditors and management, and the financial information in the annual results announcement has been agreed with external auditor KPMG - The Board's Audit and Risk Management Committee has reviewed the Company's adopted accounting principles and practices and discussed financial reporting matters with the auditors and management[65](index=65&type=chunk) - The financial information in the annual results announcement has been agreed with the Group's external auditor KPMG, consistent with the amounts in the audited financial statements[65](index=65&type=chunk) [Suspension of Share Transfer Registration](index=27&type=section&id=Suspension%20of%20Share%20Transfer%20Registration) To ascertain shareholders' entitlement to attend and vote at the Annual General Meeting, share transfer registration will be suspended from November 11 to 14, 2025; for entitlement to the proposed final dividend, it will be suspended on November 21, 2025 - To ascertain shareholders' entitlement to attend and vote at the Annual General Meeting, share transfer registration will be suspended from November 11 to 14, 2025[66](index=66&type=chunk) - To ascertain shareholders' entitlement to the proposed final dividend, share transfer registration will be suspended on November 21, 2025[66](index=66&type=chunk) [By Order of the Board](index=27&type=section&id=By%20Order%20of%20the%20Board) The announcement was issued by Company Secretary Lo Sze Man on September 19, 2025, listing the Board members including the Executive Chairman, Executive Director and Chief Executive Officer, Non-Executive Director, and Independent Non-Executive Directors - The announcement was issued by Company Secretary Lo Sze Man on September 19, 2025[67](index=67&type=chunk) - Board members include Executive Chairman Mr. Kwek Leng Hai, Executive Director and Chief Executive Officer Mr. Christian K. NOTHHAFT, Non-Executive Director Mr. Kwek Leng San, and Independent Non-Executive Directors Mr. Wong Ka Chun, Mr. Paul J. BROUGH, and Ms. Ng Lai Sha[67](index=67&type=chunk)

Revenue Performance - The company reported revenue of RMB 313.2 million for the six months ended June 30, 2025, a decrease of 17.6% compared to RMB 379.9 million in the same period of 2024[14]. - Revenue from diagnostic outsourcing services was RMB 118.5 million, down 34.0% from RMB 179.6 million in 2024, primarily due to industry policy impacts and intensified market competition[15]. - The revenue from diagnostic testing services provided to medical alliances was RMB 180.3 million, a slight decrease of 1.1% from RMB 182.3 million in 2024[14]. - The group recorded revenue of RMB 180.3 million from diagnostic testing services provided to medical alliances, remaining stable compared to the same period in 2024, and this segment accounted for 57.6% of total revenue, an increase of approximately 9.6% year-on-year[16]. - Revenue from diagnostic testing services for non-medical institutions was RMB 14.4 million, down 20.3% year-on-year, affected by external market conditions and increased competition[41]. - The decline in overall revenue was influenced by factors such as centralized procurement, healthcare cost control, and intensified industry competition[15]. - The group recorded revenue of RMB 313.2 million for diagnostic testing services, a decrease of 17.6% compared to the same period last year[27]. - Revenue for the six months ended June 30, 2025, was RMB 313,217 thousand, a decrease of 17.6% compared to RMB 379,943 thousand for the same period in 2024[128]. Profitability and Losses - The gross profit for the period was RMB 106.4 million, representing a decrease of 17.0% from RMB 128.2 million in the previous year[14]. - The company recorded a loss before tax of RMB 55.4 million, a significant improvement of 58.0% compared to a loss of RMB 131.8 million in 2024[14]. - The loss attributable to owners of the company was RMB 55.3 million, down 56.1% from RMB 126.1 million in the same period last year[14]. - Basic and diluted loss per share was RMB 0.09, a decrease of 57.1% compared to RMB 0.21 in 2024[14]. - The net loss for the group narrowed to RMB 55.4 million, compared to a net loss of RMB 126.1 million in the same period of 2024, primarily due to improved operational and management capabilities, cost control, and reduced financial costs[16]. - The net loss attributable to shareholders for the six months ending June 30, 2025, was RMB 55,340,000, a significant improvement from a net loss of RMB 126,129,000 in the same period of 2024[179]. Cost Management - The cost of revenue was RMB 206.8 million, down 17.8% from RMB 251.7 million in the previous year[14]. - Gross profit decreased by 17.0% to RMB 106.4 million, while the overall gross margin slightly increased from 33.7% to 34.0% due to operational cost optimization[43]. - Sales expenses decreased by 41.0% from RMB 89.9 million for the six months ended June 30, 2024, to RMB 53.1 million for the six months ended June 30, 2025, due to enhanced operational and management capabilities[46]. - Administrative expenses decreased by 21.5% from RMB 99.7 million for the six months ended June 30, 2024, to RMB 78.3 million for the six months ended June 30, 2025, attributed to reduced share-based payment expenses and improved management processes[47]. - Financial asset impairment losses decreased from RMB 52.4 million for the six months ended June 30, 2024, to RMB 8.4 million for the six months ended June 30, 2025, reflecting a reduction in provisions by RMB 44.0 million[48]. - The net financial costs decreased from RMB 24.3 million for the six months ended June 30, 2024, to RMB 15.1 million for the six months ended June 30, 2025, due to optimized debt structure and improved fund management[50]. Strategic Initiatives - The company is actively optimizing its customer structure to provide better services to high-quality clients, which has led to a reduction in revenue in the short term[15]. - The group has provided multi-scenario solutions to nearly 450 medical alliances, enhancing service capabilities and promoting tiered medical service development[28]. - The group aims to cover 50% of tertiary hospitals and 30% of secondary hospitals with intelligent clinical decision support applications by 2027[25]. - The group aims to continue technological innovation and collaboration with industry partners to provide high-cost performance clinical diagnostic solutions[32]. - The implementation of the "one horizontal and one vertical" strategy has strengthened clinical empowerment and operational efficiency[26]. Market Trends and Opportunities - The healthcare industry in China is experiencing high-quality development driven by policy deepening and technological innovation, with a focus on quality, efficiency, and innovation[18]. - The third-party medical testing industry is expected to benefit from the expansion of medical alliances, creating a market space worth hundreds of billions, particularly in emerging fields like molecular diagnostics and genetic testing[20]. - The precision medicine market is in a golden development period, supported by favorable policies and rapid technological advancements, with significant growth potential in the industry[22]. - The development of Laboratory Developed Tests (LDT) is crucial for the clinical transformation of precision medicine, driven by increasing clinical demand for precise diagnostics[23]. Financial Position - Total assets as of June 30, 2025, were RMB 3,060,414 thousand, down from RMB 3,228,336 thousand at the end of 2024[132]. - Total liabilities decreased to RMB 1,957,927 thousand as of June 30, 2025, from RMB 2,078,459 thousand at the end of 2024[132]. - The company’s total equity attributable to shareholders as of June 30, 2025, included a share premium of RMB 610,349,000, unchanged from the previous period[200]. - The company’s total issued ordinary shares remained at 621,250,500 as of June 30, 2025, consistent with the previous year, with no new shares issued during the period[200]. - The company’s cash position showed a decline in bank cash from RMB 1,577,652,000 as of December 31, 2024, to RMB 1,345,889,000 as of June 30, 2025, reflecting a decrease of approximately 14.7%[199]. Employee and Governance - Total employee count decreased to 1,146 as of June 30, 2025, down from 1,459 a year earlier, with total salary costs amounting to RMB 124.6 million for the six months ended June 30, 2025[87]. - The company has adopted a restricted share unit plan to attract and retain key personnel since November 23, 2022[87]. - The company continues to adhere to the corporate governance code and has established a performance evaluation mechanism for restricted share units based on qualitative and quantitative indicators[109]. - The company has confirmed compliance with the standard code for securities trading by all directors during the reporting period[114].

遠洋服務控股有限公司 Sino-Ocean Service Holding Limited (於開曼群島註冊成立的有限公司) 股份代號:06677.HK 中期報告 | 目錄 | | | | | --- | --- | --- | --- | | 公司概覽 | ��� | 管理層討論與分析 | ��� | | 地理覆蓋範圍 | ��� | 投資者關係報告 | ��� | | 公司資料 | ��� | 可持續發展報告 | ��� | | 財務及運營摘要 | ��� | 權益披露 | ��� | | 主席報告 | ��� | 企業管治及其他資料 | ��� | | 中期簡明綜合財務報表 審閱報告 | ��� | | --- | --- | | 中期簡明綜合全面收益表 | ��� | | 中期簡明綜合財務狀況表 | ��� | | 中期簡明綜合權益變動表 | ��� | | 中期簡明綜合現金流量表 | ��� | | --- | --- | | 中期簡明綜合財務報表附註 | ��� | | 詞彙 | ��� | 2025年中期報告·遠洋服務控股有限公司 公司概覽 公司概覽 我們是一家綜合性物業管理服務商，在中國擁有廣 ...

Company Information [Board of Directors and Corporate Structure](index=3&type=section&id=Board%20of%20Directors%20and%20Corporate%20Structure) The company's board, comprising executive, non-executive, and independent directors, ensures sound corporate governance through its audit, remuneration, and nomination committees - Board members include Mr. Yang Aihua, Mr. Yang Hansong, Ms. Gao Kun, Mr. Zhao Hongliang (new Executive Director), Mr. Rob Huting, Ms. Yang Chuyu (Non-executive Directors), and Mr. Wang Jianping, Ms. Li Mochou, Mr. Yan Jun (Independent Non-executive Directors)[5](index=5&type=chunk) - Ms. Li Mochou chairs the Audit Committee, Mr. Wang Jianping chairs the Remuneration Committee, and Mr. Yang Hansong chairs the Nomination Committee[5](index=5&type=chunk) [Registration and Operating Locations](index=3&type=section&id=Registration%20and%20Operating%20Locations) Registered in Cayman Islands, the company operates from Shanghai, China, with a Hong Kong office; Ernst & Young is its auditor - The company's registered office is in the Cayman Islands, and its principal place of business and head office in China are located at 6/F, Kailong Center, No. 2251 Zhenbei Road, Putuo District, Shanghai[5](index=5&type=chunk) - The principal place of business in Hong Kong is located at Room 1917, 19/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay[5](index=5&type=chunk) - The auditor is Ernst & Young, and legal advisors include Paul Hastings (Hong Kong) and Maples and Calder (Hong Kong)[5](index=5&type=chunk)[6](index=6&type=chunk) [Listing Information](index=4&type=section&id=Listing%20Information) The company's stock code is 2443, and it was listed on the Main Board of the Stock Exchange on May 31, 2024 - The company's stock code is **2443**, with a listing date of **May 31, 2024**[7](index=7&type=chunk) - The company's website is www.autostreets.com[7](index=7&type=chunk) Financial and Operational Summary [Financial Performance Overview](index=5&type=section&id=Financial%20Performance%20Overview) For the six months ended June 30, 2025, revenue decreased by 25.9% to RMB 141.8 million, gross profit declined by 27.9%, but profit for the period turned from loss to profit, increasing by 109.0% Financial Performance for the Six Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 141,846 | 191,309 | (25.9) | | Gross Profit | 89,209 | 123,701 | (27.9) | | Gross Margin (%) | 62.9 | 64.7 | (1.8) percentage points | | Profit/(Loss) for the Period | 12,791 | (142,231) | 109.0 | [Operational Performance Overview](index=5&type=section&id=Operational%20Performance%20Overview) For the six months ended June 30, 2025, the number of used cars traded and serviced by the company decreased by 8.0% year-on-year to 174,520 vehicles Operational Performance for the Six Months Ended June 30 | Metric | 2025 (vehicles) | 2024 (vehicles) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Number of used cars traded and serviced | 174,520 | 189,591 | (8.0) | Management Discussion and Analysis [Industry and Business Review](index=6&type=section&id=Industry%20and%20Business%20Review) China's auto market saw record production and sales in the first half, but the EV-driven price war led to lower transaction prices for new and used cars, slowing used car transaction volume growth; the company responded by expanding key account business, increasing EV collaborations, optimizing auction networks, and enhancing appraiser professionalism - In the first half of 2025, China's auto production and sales both exceeded **15 million vehicles** for the first time, with domestic sales growing by **11.7%** year-on-year, including a **35.5% increase in new energy passenger vehicles** and a **1.8% decrease in fuel vehicles**[9](index=9&type=chunk) - National cumulative used car transaction volume reached **9.5701 million vehicles**, a year-on-year increase of **1.99%**, with significantly slowed growth primarily due to insufficient demand and new car price wars[9](index=9&type=chunk) - In the first half, the company signed cooperation agreements with over **twenty auto dealer groups**, including national top 100 groups and top 100 new energy dealers, becoming an auction cooperation platform for resource vehicles from several major domestic leading brand manufacturers[11](index=11&type=chunk) - As of the end of June 2025, the company had cumulatively established **82 auction centers and service outlets**, covering **329 cities** nationwide, with over **92%** of its in-house professional appraiser team employees obtaining the "Advanced Used Car Appraisal and Evaluation Specialist Certificate" qualification[12](index=12&type=chunk) [Performance by Business Segment](index=8&type=section&id=Performance%20by%20Business%20Segment) Affected by continuous new car price declines and industry downturn, the company's used car auction, value-added services, and buy-and-sell arrangement businesses experienced declines in both transaction volume and revenue, with exhibition business revenue falling to zero; the company maintained transaction rates through marketing policies, but per-vehicle revenue was impacted Key Operating Data by Business Segment | Business Segment | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | :--- | | **Used Car Auction Business** | Number of transactions (vehicles) | 74,411 | 79,439 | -6.3% | | | Average revenue per vehicle (RMB) | 1,264 | 1,678 | -24.7% | | **Used Car Value-Added Services** | Number of used cars serviced (vehicles) | 89,545 | 100,921 | -11.3% | | | Average revenue per vehicle (RMB) | 318 | 302 | +5.3% | | **Used Car Buy-and-Sell Arrangement** | Number of consumer trade-in transactions (vehicles) | 6,502 | 9,231 | -29.6% | | | Average revenue per vehicle (RMB) | 2,081 | 1,985 | +4.8% | - The transaction success rate for used car auction business increased from **45.6%** in H1 2024 to **47.2%** in H1 2025, but listing volume and transaction volume decreased by **9.4%** and **6.3%** respectively[18](index=18&type=chunk) - Exhibition business revenue decreased from **RMB 0.7 million** in H1 2024 to **zero** in H1 2025, primarily due to partners reducing marketing expenditures[21](index=21&type=chunk) [Outlook](index=9&type=section&id=Outlook) The company is committed to reshaping China's used car transaction process, planning to expand its auction network, broaden supply and buyer channels, diversify services, strengthen cooperation with new energy vehicle OEMs, enhance digital products and services, and explore strategic cooperation and acquisition opportunities - The company will expand and optimize its auction network, upgrading service facilities to strengthen management and improve service quality[23](index=23&type=chunk) - The company will strengthen cooperation with new energy vehicle OEMs and manufacturers to enhance appraisal, inspection, and transaction capabilities for new energy used cars[23](index=23&type=chunk) - The company will enhance digital products and services, establish an integrated platform for used car data and appraisal/inspection, and explore potential strategic cooperation and acquisition opportunities[23](index=23&type=chunk) [Material Events After Reporting Period](index=10&type=section&id=Material%20Events%20After%20Reporting%20Period) As of the date of this interim report, no events with a material impact on the company and its subsidiaries have occurred after the reporting period - Except as disclosed in this interim report, no events that could have a material impact on the company and its subsidiaries have occurred from the end of the reporting period to the date of this interim report[24](index=24&type=chunk) [Financial Analysis](index=10&type=section&id=Financial%20Analysis) Total company revenue decreased by 25.9% year-on-year, primarily due to reduced revenue from used car auction, value-added services, and buy-and-sell arrangement businesses; cost of sales, selling and distribution expenses, and administrative expenses all decreased, leading to lower gross profit and gross margin; profit for the period turned from a loss in the prior year to a profit, mainly benefiting from no fair value change impact and listing expense expenditures Revenue Breakdown by Business Segment | Business Segment | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Used car auction commissions and service fees | 94,051 | 66.3 | 133,309 | 69.7 | -29.4 | | Used car value-added services | 28,456 | 20.1 | 33,179 | 17.3 | -14.2 | | Used car buy-and-sell arrangement | 13,534 | 9.5 | 18,326 | 9.6 | -26.1 | | Exhibition business | – | – | 721 | 0.4 | -100.0 | | Other services | 5,805 | 4.1 | 5,774 | 3.0 | +0.5 | | **Total** | **141,846** | **100.0** | **191,309** | **100.0** | **-25.9** | - Cost of sales decreased by **22.1%** year-on-year to **RMB 52.6 million**, primarily due to reduced labor costs, professional service costs, and intermediary costs as business transaction volume declined[30](index=30&type=chunk) - Administrative expenses decreased by **45.5%** year-on-year to **RMB 42.1 million**, mainly due to no listing expenses in H1 2025 and a decrease in salaries and benefits expenses resulting from a reduction in employee numbers[33](index=33&type=chunk) - Profit for the period improved by **109.0%** from a loss of **RMB 142.2 million** in H1 2024 to a profit of **RMB 12.8 million** in H1 2025, primarily attributable to no fair value change impact and listing expense expenditures[38](index=38&type=chunk)[39](index=39&type=chunk)[41](index=41&type=chunk) [Capital Management and Liquidity](index=12&type=section&id=Capital%20Management%20and%20Liquidity) The company's capital management objective is to safeguard its ability to continue as a going concern and maintain a sound capital ratio; as of June 30, 2025, cash and cash equivalents remained stable, borrowings slightly decreased, and the debt-to-asset ratio remained stable - As of June 30, 2025, cash and cash equivalents were **RMB 1,046.8 million**, a slight increase from **RMB 1,046.6 million** as of December 31, 2024[43](index=43&type=chunk) - Outstanding borrowings were **RMB 126.2 million**, a **3% decrease** from **RMB 129.5 million** as of December 31, 2024[44](index=44&type=chunk) - The debt-to-asset ratio was **23.8%**, remaining stable compared to **25.0%** as of December 31, 2024[45](index=45&type=chunk) [Investments, Acquisitions, and Asset Pledges](index=13&type=section&id=Investments%2C%20Acquisitions%2C%20and%20Asset%20Pledges) During the reporting period, the company made no material investments, acquisitions, or disposals of subsidiaries, pledged no assets, and currently has no other significant future plans for investments and capital assets - During the reporting period, the company made or held no material investments, nor any material acquisitions and/or disposals of subsidiaries[46](index=46&type=chunk)[47](index=47&type=chunk) - As of June 30, 2025, the Group had no assets pledged[48](index=48&type=chunk) - As of the date of this interim report, the company had no other significant plans for investments and capital assets[49](index=49&type=chunk) [Employees and Risk Management](index=13&type=section&id=Employees%20and%20Risk%20Management) The company's employee count decreased, but it offers competitive remuneration and training; the company's primary business is denominated in RMB, foreign currency risk is not material, and investment risk is managed through low-risk financial products - As of June 30, 2025, the company had **622 employees**, a decrease from **686** as of December 31, 2024[50](index=50&type=chunk) - Total employee benefit expenses (including directors' remuneration) were **RMB 38.2 million**, a decrease from **RMB 56.6 million** in H1 2024[50](index=50&type=chunk) - The company's primary business is conducted in RMB, with most assets and liabilities denominated in RMB, and currently considers foreign currency risk not material[52](index=52&type=chunk) - The company invests in low-risk financial products offered by licensed financial institutions and adopts internal policies and guidelines to manage investment risk[52](index=52&type=chunk) Corporate Governance and Other Information [Changes in Directors and Key Executives and Their Interests](index=14&type=section&id=Changes%20in%20Directors%20and%20Key%20Executives%20and%20Their%20Interests) Mr. Zhao Hongliang was appointed as an Executive Director, and Ms. Zhu Yi resigned as a Non-executive Director; several directors and key executives hold company shares through controlled corporations, with Mr. Yang Aihua holding the largest proportion - Mr. Zhao Hongliang was appointed as an Executive Director on **May 28, 2025**, and Ms. Zhu Yi resigned as a Non-executive Director on the same day[53](index=53&type=chunk) Interests of Directors and Key Executives in the Company's Shares (As of June 30, 2025) | Name | Position | Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Yang Aihua | Executive Director | Interest in controlled corporation | 100,000,000 | 12.01% | | Yang Hansong | Executive Director and Chairman | Interest in controlled corporation | 45,000,000 | 5.40% | | Gao Kun | Executive Director, CFO and Joint Company Secretary | Interest in controlled corporation | 5,000,000 | 0.60% | | Zhao Hongliang | Executive Director and CEO | Interest in controlled corporation | 7,300,000 | 0.88% | [Major Shareholders' Interests](index=15&type=section&id=Major%20Shareholders%27%20Interests) In addition to the directors, Changguang Investment Co., Ltd., Manheim Investments, Inc., World Key Investment Trading Limited, and Grand Baoxin Auto Group Co., Ltd. are major shareholders holding company shares Major Shareholders' Interests in the Company's Shares (As of June 30, 2025) | Shareholder Name/Entity | Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Changguang Investment Co., Ltd. | Beneficial owner | 100,000,000 | 12.01% | | Manheim Investments, Inc. | Beneficial owner | 90,000,000 | 10.81% | | World Key Investment Trading Limited | Beneficial owner | 45,000,000 | 5.40% | | Grand Baoxin Auto Group Co., Ltd. | Interest in controlled corporation | 62,500,000 | 7.50% | [Corporate Governance Compliance](index=17&type=section&id=Corporate%20Governance%20Compliance) The company has complied with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules during the reporting period and up to the date of this interim report, and directors confirmed compliance with the Model Code for Securities Transactions - The company has complied with all code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules during the reporting period and up to the date of this interim report[60](index=60&type=chunk) - Following specific enquiries made to all Directors, they confirmed compliance with the Model Code throughout the reporting period and up to the date of this interim report[63](index=63&type=chunk) [Audit Committee and Dividend Policy](index=17&type=section&id=Audit%20Committee%20and%20Dividend%20Policy) The Audit Committee has reviewed the interim results and deemed the financial statements compliant with accounting standards; the Board does not recommend an interim dividend, and the company has not engaged in any purchase, sale, or redemption of listed securities - The Audit Committee, comprising Ms. Li Mochou (Chairperson), Mr. Wang Jianping, and Mr. Yan Jun, has reviewed the Group's unaudited interim results for the six months ended June 30, 2025[64](index=64&type=chunk) - The Directors do not recommend the payment of any interim dividend for the six months ended June 30, 2025[65](index=65&type=chunk) - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's securities listed on the Stock Exchange[66](index=66&type=chunk) [Material Litigation and Use of Proceeds from Global Offering](index=18&type=section&id=Material%20Litigation%20and%20Use%20of%20Proceeds%20from%20Global%20Offering) The company is not involved in any material litigation; net proceeds from the global offering were approximately HKD 83.0 million, with HKD 17.9 million utilized as of June 30, 2025, primarily for expanding the auction network, strengthening customer relationships, developing service portfolios, and R&D, with the remaining amount expected to be fully utilized by December 2028 - For the six months ended June 30, 2025, the company was not involved in any material litigation or arbitration[67](index=67&type=chunk) Use of Proceeds from Global Offering (As of June 30, 2025) | Purpose | Percentage (%) | Net Proceeds (HKD millions) | Amount Utilized During Reporting Period (HKD millions) | Unutilized Amount (HKD millions) | Expected Timeline for Full Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | | Expanding geographical coverage of auction network | 40.0 | 33.2 | 1.0 | 31.2 | 2028 | | Strengthening relationships with existing sellers and buyers, attracting new sellers and buyers | 10.0 | 8.2 | 1.6 | 5.0 | 2028 | | Developing and diversifying service portfolio, exploring new growth areas | 15.0 | 12.5 | 2.0 | 8.5 | 2028 | | Investing in research and development | 15.0 | 12.5 | 2.9 | 7.8 | 2028 | | Establishing potential strategic partnerships and alliances with business partners, making investments and/or acquisitions | 10.0 | 8.3 | 0 | 8.3 | 2028 | | Working capital and general corporate purposes | 10.0 | 8.3 | 2.0 | 4.3 | 2028 | | **Total** | **100.0** | **83.0** | **9.5** | **65.1** | | [Interim Report Approval](index=21&type=section&id=Interim%20Report%20Approval) The Board approved and authorized the publication of the Group's interim report and unaudited interim condensed consolidated results for the six months ended June 30, 2025, on August 29, 2025 - The Board approved and authorized the publication of the Group's interim report and unaudited interim condensed consolidated results for the six months ended June 30, 2025, on **August 29, 2025**[73](index=73&type=chunk) Interim Condensed Consolidated Statement of Profit or Loss [Profit or Loss Statement Overview](index=22&type=section&id=Profit%20or%20Loss%20Statement%20Overview) For the six months ended June 30, 2025, the company's revenue was RMB 141.8 million, and gross profit was RMB 89.2 million; profit for the period was RMB 12.8 million, compared to a loss of RMB 142.2 million in the prior year, with basic and diluted earnings per share of RMB 0.01 Summary of Interim Condensed Consolidated Statement of Profit or Loss | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 141,846 | 191,309 | | Cost of revenue | (52,637) | (67,608) | | Gross profit | 89,209 | 123,701 | | Other income and gains, net | 3,775 | 4,457 | | Selling and distribution expenses | (30,460) | (39,620) | | Administrative expenses | (42,089) | (77,188) | | Other expenses | (952) | (1,552) | | Finance costs | (3,586) | (3,276) | | Share of profit/(loss) of an associate | 119 | – | | Fair value change of financial assets at FVTPL | – | 44 | | Fair value change of financial liabilities at FVTPL | – | (142,293) | | Profit/(Loss) before tax | 16,016 | (135,727) | | Income tax expense | (3,225) | (6,504) | | **Profit/(Loss) for the period** | **12,791** | **(142,231)** | | Earnings/(Loss) per share attributable to ordinary equity holders of the parent — Basic and diluted (RMB) | 0.01 | (0.19) | Interim Condensed Consolidated Statement of Comprehensive Income [Comprehensive Income Statement Overview](index=23&type=section&id=Comprehensive%20Income%20Statement%20Overview) For the six months ended June 30, 2025, the company's profit for the period was RMB 12.8 million, and after deducting other comprehensive loss of RMB 4.4 million due to exchange differences, total comprehensive income for the period was RMB 8.4 million Summary of Interim Condensed Consolidated Statement of Comprehensive Income | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit/(Loss) for the period | 12,791 | (142,231) | | Exchange differences on translation of financial statements of the company | (4,381) | (987) | | Other comprehensive loss for the period, net of tax | (4,381) | (987) | | **Total comprehensive income/(loss) for the period** | **8,410** | **(143,218)** | | Attributable to owners of the parent | 1,081 | (148,594) | | Non-controlling interests | 7,329 | 5,376 | Interim Condensed Consolidated Statement of Financial Position [Financial Position Overview](index=24&type=section&id=Financial%20Position%20Overview) As of June 30, 2025, the company's total assets were RMB 1,241.5 million, with current assets accounting for the largest proportion; total current liabilities were RMB 252.7 million, and net assets were RMB 945.9 million Summary of Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total non-current assets | 81,225 | 92,074 | | Total current assets | 1,160,292 | 1,158,162 | | **Total assets** | **1,241,517** | **1,250,236** | | Total current liabilities | 252,680 | 262,285 | | Total non-current liabilities | 42,899 | 50,423 | | **Total liabilities** | **295,579** | **312,708** | | **Net assets** | **945,938** | **937,528** | | Equity attributable to owners of the parent | 927,355 | 926,274 | | Non-controlling interests | 18,583 | 11,254 | | **Total equity** | **945,938** | **937,528** | - Cash and cash equivalents as of June 30, 2025, were **RMB 1,046.8 million**, a slight increase from **RMB 1,046.6 million** as of December 31, 2024[76](index=76&type=chunk) - Trade receivables were **RMB 15.0 million**, and trade payables were **RMB 10.3 million**[76](index=76&type=chunk)[77](index=77&type=chunk) Interim Condensed Consolidated Statement of Changes in Equity [Changes in Equity Overview](index=26&type=section&id=Changes%20in%20Equity%20Overview) For the six months ended June 30, 2025, total equity increased from RMB 937.5 million at the beginning of the period to RMB 945.9 million, primarily influenced by profit for the period and an increase in non-controlling interests Summary of Interim Condensed Consolidated Statement of Changes in Equity | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total equity at beginning of period | 937,528 | 394,726 | | Profit/(Loss) for the period | 12,791 | (142,231) | | Other comprehensive loss for the period | (4,381) | (987) | | Total comprehensive income/(loss) for the period | 8,410 | (143,218) | | Shares issued from initial public offering | – | 139,118 | | Share issue expenses | – | (7,779) | | Conversion of convertible redeemable preference shares to ordinary shares | – | 516,312 | | Capital contribution from non-controlling shareholders of subsidiaries | – | 245 | | Total equity at end of period | 945,938 | 899,404 | - Equity attributable to owners of the parent increased from **RMB 926.3 million** at the beginning of the period to **RMB 927.4 million** at the end of the period, while non-controlling interests increased from **RMB 11.3 million** to **RMB 18.6 million**[78](index=78&type=chunk) Interim Condensed Consolidated Statement of Cash Flows [Cash Flow Overview](index=28&type=section&id=Cash%20Flow%20Overview) For the six months ended June 30, 2025, net cash generated from operating activities was RMB 15.1 million, net cash generated from investing activities was RMB 6.1 million, net cash used in financing activities was RMB 17.8 million, and cash and cash equivalents at period-end were RMB 1,046.8 million Summary of Interim Condensed Consolidated Statement of Cash Flows | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash flows from/(used in) operating activities | 15,119 | (63,623) | | Net cash flows from investing activities | 6,078 | 11,432 | | Net cash flows (used in)/from financing activities | (17,771) | 75,476 | | Net increase in cash and cash equivalents | 3,426 | 23,285 | | Cash and cash equivalents at beginning of period | 1,046,599 | 935,441 | | Net effect of exchange rate changes | (3,182) | 930 | | **Cash and cash equivalents at end of period** | **1,046,843** | **959,656** | - Operating cash flow turned from a net outflow of **RMB 63.6 million** in the prior year to a net inflow of **RMB 15.1 million**, primarily benefiting from improved profit before tax[80](index=80&type=chunk) - Financing cash flow turned from a net inflow of **RMB 75.5 million** in the prior year to a net outflow of **RMB 17.8 million**, primarily due to repayment of interest-bearing bank borrowings and lease payments[81](index=81&type=chunk) Notes to the Interim Condensed Consolidated Financial Information [Company and Group Information](index=30&type=section&id=Company%20and%20Group%20Information) Autostreets Development Limited was incorporated in the Cayman Islands on September 3, 2014, as an investment holding company primarily engaged in used car buy-and-sell arrangements and providing used car services, and was listed on the Main Board of the Stock Exchange on May 31, 2024 - The company was incorporated as an exempted company under the Companies Act of the Cayman Islands on **September 3, 2014**[82](index=82&type=chunk) - The company is an investment holding company primarily engaged in used car buy-and-sell arrangements and providing used car services[83](index=83&type=chunk) - The company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since **May 31, 2024**[84](index=84&type=chunk) [Basis of Preparation and Changes in Accounting Policies](index=30&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34, with accounting policies consistent with the annual consolidated financial statements, and only a few newly adopted revised IFRS accounting standards are not expected to have a material impact - The interim condensed consolidated financial information has been prepared in accordance with **International Accounting Standard 34 Interim Financial Reporting**[85](index=85&type=chunk) - The accounting policies adopted in preparing the interim condensed consolidated financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024[86](index=86&type=chunk) - The newly adopted amendments to IFRSs are not expected to have any material impact on the Group's interim condensed consolidated financial information[86](index=86&type=chunk) [Operating Segment Information](index=30&type=section&id=Operating%20Segment%20Information) As the Group's revenue, results, and total assets are derived from a single operating segment (i.e., providing transportation and related services), and all revenue and non-current assets are from China, no operating segment and geographical information is presented, and no single customer accounts for more than 10% of total revenue - The Group's revenue and reported results for the reporting period, as well as its total assets at each period end, are derived from a **single operating segment** (i.e., providing transportation and related services), thus no operating segment information is presented[87](index=87&type=chunk) - All of the Group's revenue during the period was derived from China, and all non-current assets are located in China, thus no geographical segments are presented[88](index=88&type=chunk) - The Group has a large number of customers, and during the period, no single customer's revenue accounted for more than **10%** of the Group's total revenue[89](index=89&type=chunk) [Revenue Analysis](index=31&type=section&id=Revenue%20Analysis) For the six months ended June 30, 2025, total revenue was RMB 141.8 million, primarily from used car auction commissions and service fees, followed by used car value-added services and used car buy-and-sell arrangements; most revenue is recognized at the point of sale or service completion Disaggregated Revenue Information from Contracts with Customers | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Used car auction commissions and service fees | 94,051 | 133,309 | | Used car value-added service income | 28,456 | 33,179 | | Used car buy-and-sell arrangement income | 13,534 | 18,326 | | Exhibition business income | – | 721 | | Other service income | 5,805 | 5,774 | | **Total** | **141,846** | **191,309** | | Timing of revenue recognition | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | At a point in time (completion of sale or service) | 121,924 | 166,506 | | Over time (as services are provided) | 19,922 | 24,803 | | **Total** | **141,846** | **191,309** | [Components of Profit/(Loss) Before Tax](index=32&type=section&id=Components%20of%20Profit%2F%28Loss%29%20Before%20Tax) Profit/(loss) before tax is primarily influenced by various business costs, R&D costs, depreciation and amortization, fair value changes, and employee benefit expenses; the absence of fair value changes for convertible redeemable preference shares and listing expenses in H1 2025 positively impacted profit Summary of Items Deducted From/(Credited To) Profit/(Loss) Before Tax | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of used car auction commissions and service fees | 43,197 | 56,254 | | Research and development costs | 6,334 | 5,309 | | Depreciation of property, plant and equipment | 2,797 | 2,888 | | Depreciation of right-of-use assets | 10,616 | 11,955 | | Fair value change of convertible redeemable preference shares | – | 142,293 | | Listing expenses | – | 26,662 | | Employee benefit expenses (including directors' remuneration) | 38,207 | 56,584 | - In H1 2025, there were no fair value changes for convertible redeemable preference shares (H1 2024: loss of **RMB 142.3 million**) and no listing expenses (H1 2024: **RMB 26.7 million**)[92](index=92&type=chunk) [Income Tax](index=33&type=section&id=Income%20Tax) For the six months ended June 30, 2025, income tax expense was RMB 3.2 million, a decrease from the prior year; Chinese subsidiaries are subject to a 25% income tax rate, with some high-tech enterprises and western development zone enterprises enjoying a 15% preferential rate, and small and micro enterprises a 20% preferential rate Summary of Income Tax Expense | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current — Mainland China: Expense for the year | 556 | 5,012 | | Underprovision in prior years | 24 | 181 | | Deferred tax | 2,645 | 1,311 | | **Total** | **3,225** | **6,504** | - Changchun Baorui International Exhibition Co., Ltd. is certified as a "High-tech Enterprise" and enjoys a **15%** preferential income tax rate[96](index=96&type=chunk) - Xinjiang Huihan Motor Vehicle Auction Service Co., Ltd. enjoys a five-year income tax exemption, followed by a five-year 50% reduction; Guizhou Xintong Used Car Auction Co., Ltd. enjoys a **15%** preferential tax rate[96](index=96&type=chunk) - Certain Chinese subsidiaries qualify as small and micro enterprises, enjoying a **20%** preferential corporate income tax rate[97](index=97&type=chunk) [Dividends and Earnings Per Share](index=34&type=section&id=Dividends%20and%20Earnings%20Per%20Share) The Board does not recommend an interim dividend; for the six months ended June 30, 2025, basic and diluted earnings per share were RMB 0.01, compared to a loss per share of RMB 0.19 in the prior year - The company's Board of Directors has resolved not to declare an interim dividend for the six months ended June 30, 2025[98](index=98&type=chunk) Calculation of Basic and Diluted Earnings/(Loss) Per Share | Metric | 2025 (RMB thousands/thousands of shares/RMB) | 2024 (RMB thousands/thousands of shares/RMB) | | :--- | :--- | :--- | | Profit/(Loss) attributable to ordinary equity holders of the parent | 5,462 | (147,607) | | Weighted average number of ordinary shares in issue for basic and diluted EPS calculation | 832,662 | 773,706 | | **Earnings/(Loss) per share — Basic and diluted** | **0.01** | **(0.19)** | [Trade Receivables and Payables](index=35&type=section&id=Trade%20Receivables%20and%20Payables) As of June 30, 2025, total trade receivables were RMB 15.0 million, all due within six months; total trade payables were RMB 10.3 million, all settled within six months and non-interest bearing Ageing Analysis of Trade Receivables (As of June 30, 2025) | Ageing | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 6 months | 15,032 | 14,376 | | 6 months to 1 year | – | 294 | | **Total** | **15,032** | **14,670** | Ageing Analysis of Trade Payables (As of June 30, 2025) | Ageing | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 6 months | 10,320 | 10,906 | | 6 months to 1 year | – | 197 | | **Total** | **10,320** | **11,103** | - Trade payables are non-interest bearing and generally settled within **15 to 120 days**[102](index=102&type=chunk) [Share Capital and Related Party Transactions](index=36&type=section&id=Share%20Capital%20and%20Related%20Party%20Transactions) The company's issued and fully paid share capital consists of 832,662,428 ordinary shares, with a share capital amount of RMB 56 thousand; the company has transactions with related parties such as Huzhou Baorui Auto Sales and Service Co., Ltd. and Shanghai Kailong Auto Group Co., Ltd. for used car value-added service costs and rental expenses, and has outstanding balances Issued and Fully Paid Share Capital | Share Capital Type | Number of Shares Issued | Share Capital (RMB thousands) | | :--- | :--- | :--- | | Ordinary shares of US$0.00001 each | 832,662,428 | 56 | Summary of Related Party Transactions (As of June 30, 2025) | Transaction Type | Related Party Name | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | | Cost of used car value-added services | Huzhou Baorui Auto Sales and Service Co., Ltd. | 143 | 92 | | Rental expenses | Shanghai Kailong Auto Group Co., Ltd. | 1,657 | 1,714 | | Rental expenses | Shanghai Longyun Property Management Co., Ltd. | 259 | 274 | Outstanding Balances with Related Parties (As of June 30, 2025) | Balance Type | Related Party Name | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | | Prepayments, transaction deposits and other receivables | Shanghai Kailong Auto Group Co., Ltd. | 2,610 | 2,610 | | Prepayments, transaction deposits and other receivables | Shanghai Longyun Property Management Co., Ltd. | 412 | 415 | | Trade payables and bills payable | Huzhou Baorui Auto Sales and Service Co., Ltd. | 88 | 122 | | Trade payables and bills payable | Ma'anshan Ruibao Auto Sales and Service Co., Ltd. | 24 | 14 | Summary of Key Management Personnel Remuneration (As of June 30, 2025) | Remuneration Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Salaries, allowances and benefits in kind | 3,611 | 4,546 | | Pension scheme contributions | 171 | 156 | | **Total** | **3,782** | **4,702** | [Fair Value of Financial Instruments and Fair Value Hierarchy](index=38&type=section&id=Fair%20Value%20of%20Financial%20Instruments%20and%20Fair%20Value%20Hierarchy) Management assesses that the fair value of most financial instruments approximates their carrying amounts; financial assets measured at fair value through profit or loss are primarily bank-issued financial products, classified as Level 2 in the fair value hierarchy - Management has assessed cash and cash equivalents, trade receivables, financial assets included in prepayments, transaction deposits and other receivables, financial liabilities included in other payables and accrued charges, and interest-bearing borrowings, determining that their fair values approximate their carrying amounts[107](index=107&type=chunk) - The Group's unlisted investments refer to financial products issued by banks, with fair value estimated using a discounted cash flow valuation model[108](index=108&type=chunk) Assets Measured at Fair Value (As of June 30, 2025) | Item | Quoted prices in active markets (Level 1) (RMB thousands) | Significant observable inputs (Level 2) (RMB thousands) | Significant unobservable inputs (Level 3) (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss | – | 4,000 | – | 4,000 | - As of June 30, 2025, and December 31, 2024, the Group had no financial liabilities measured at fair value[109](index=109&type=chunk) [Events After Reporting Period](index=39&type=section&id=Events%20After%20Reporting%20Period) As of the date of this interim report, no material events have occurred after June 30, 2025 - No material events have occurred after **June 30, 2025**[110](index=110&type=chunk) Definitions [Definitions of Key Terms](index=40&type=section&id=Definitions%20of%20Key%20Terms) This section provides definitions for key terms used in the report, including ADMS System, Auction, Contact Person, Audit Committee, Board, China, Company, Corporate Governance Code, Directors, Electric Vehicle, Group, HKD, Hong Kong, IAS, IFRS, Listing, Listing Date, Listing Rules, Main Board, Model Code, OEM, Prospectus, Reporting Period, Professional Buyer, RMB, SFO, Shares, Shareholders, Stock Exchange, Subsidiary, Substantial Shareholder, Trade-in, and Used Car - "ADMS System" refers to the company's proprietary used car management system, designed to assist dealer groups in managing used car inventory, improving efficiency, and profitability[111](index=111&type=chunk) - "The Group" or "we" refers to the company and its subsidiaries from time to time[111](index=111&type=chunk) - "Used car" refers to a used passenger vehicle, meaning a motor vehicle designed and constructed primarily for the carriage of passengers, generally not exceeding eight seats in addition to the driver's seat[112](index=112&type=chunk)