[Company Information](index=3&type=section&id=Company%20Information) This section details changes in the board of directors and company secretary, along with the company's registered and primary business locations [Board of Directors and Company Secretary](index=3&type=section&id=Board%20of%20Directors%20and%20Company%20Secretary) During the reporting period, there were changes in the company's board members and company secretary, with Mr. Hu Ning appointed as an independent non-executive director and Ms. Ma Yongyi as the new company secretary - Mr. Hu Ning was appointed as an independent non-executive director, audit committee member, remuneration committee chairman, and nomination committee member on February 14, 2025, the same day Ms. Zhang Qian resigned[7](index=7&type=chunk)[58](index=58&type=chunk) - Ms. Ma Yongyi was appointed as company secretary, authorized representative, and agent for service of process on June 16, 2025, the same day Ms. Zhen Kaining resigned[7](index=7&type=chunk)[59](index=59&type=chunk) [Registered and Business Locations](index=3&type=section&id=Registered%20and%20Business%20Locations) The company is registered in the Cayman Islands, with primary business locations in Wan Chai, Hong Kong, and Chengdu, Sichuan Province, China, and its shares are listed under stock code 2165 - The company's registered office and principal share registrar are located in the Cayman Islands[9](index=9&type=chunk) - The principal place of business in Hong Kong is in Dah Sing Financial Centre, Wan Chai, while the China headquarters and principal place of business are in Global Financial Centre, Chengdu, Sichuan Province[8](index=8&type=chunk) - The company's stock code is **2165**, and its website is www.lingyue-service.com[9](index=9&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the group's business strategy, operational performance across various service lines, financial results, balance sheet items, liquidity, and human resources during the reporting period [Business Review and Outlook](index=5&type=section&id=Business%20Review%20and%20Outlook) The Group maintains its "deep cultivation in Southwest, layout in Xinjiang, and national development" strategy, achieving steady growth in managed scale and expanding service offerings across 34 cities in China, with a focus on quality and customer value for future development - The Group adheres to its "deep cultivation in Southwest, layout in Xinjiang, and national development" strategy, forming two growth poles in **Sichuan and Xinjiang**[10](index=10&type=chunk) - As of June 30, 2025, the Group provides property management and value-added services in **34 cities** across China, with a total of **257 contracted projects** (**252 under management**)[10](index=10&type=chunk) - For the second half of the year, the Group will continue to focus on quality and empathetic services, strengthen its operational foundation, create customer value, expand service boundaries, and pursue high-quality development guided by long-term principles[11](index=11&type=chunk) [Group Business Model](index=5&type=section&id=Group%20Business%20Model) The Group operates three business lines—property management, value-added services to non-property owners, and community value-added services—offering integrated services across the property management value chain, with a focus on expanding high-margin community value-added services - The Group's business lines include: (i) property management services, (ii) value-added services to non-property owners, and (iii) community value-added services[12](index=12&type=chunk) - Community value-added services typically generate **higher profit margins**, significantly enhancing the Group's financial performance, and the Group will continue to strengthen this service portfolio and expand market share[13](index=13&type=chunk) [Property Management Services](index=6&type=section&id=Property%20Management%20Services) As of June 30, 2025, the Group's total contracted GFA increased by **1.0%** to approximately **36.0 million square meters**, while GFA under management decreased by **1.0%** to approximately **31.4 million square meters**, with expanded coverage to 34 cities and continued project acquisition from both related and independent developers Key Indicators for Property Management Services | Indicator | June 30, 2025 | June 30, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Number of properties under management | 252 | 267 | -15 | -5.6% | | Number of contracted properties | 257 | 272 | -15 | -5.5% | | GFA under management (thousand sq.m.) | 31,353 | 31,680 | -327 | -1.0% | | Contracted GFA (thousand sq.m.) | 36,024 | 35,665 | +359 | +1.0% | | GFA not yet delivered (thousand sq.m.) | 4,671 | 3,985 | +686 | +17.2% | - The Group has expanded its geographical coverage to **34 cities**, **9 provinces**, **1 autonomous region**, and **1 municipality**[17](index=17&type=chunk) Revenue from Property Management Services by Region | Region | 2025 Revenue (RMB thousands) | 2025 Share (%) | 2024 Revenue (RMB thousands) | 2024 Share (%) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sichuan Province | 231,252 | 78.3 | 217,001 | 78.7 | 14,251 | 6.6 | | Xinjiang Uygur Autonomous Region | 24,658 | 8.3 | 22,161 | 8.0 | 2,497 | 11.2 | | Guangdong Province | 13,367 | 4.5 | 13,325 | 4.8 | 42 | 0.3 | | Jilin Province | 10,841 | 3.7 | 10,312 | 3.7 | 529 | 5.1 | | Hebei Province | 1,237 | 0.4 | 1,221 | 0.4 | 16 | 1.3 | | Henan Province | 3,872 | 1.3 | 4,310 | 1.6 | -438 | -10.2 | | Hubei Province | 3,679 | 1.2 | 3,425 | 1.2 | 254 | 7.4 | | Jiangsu Province | 998 | 0.3 | 762 | 0.3 | 236 | 31.0 | | Guizhou Province | 2,971 | 1.0 | 2,330 | 0.8 | 641 | 27.5 | | Chongqing Municipality | 1,980 | 0.7 | 1,444 | 0.5 | 536 | 37.1 | | Fujian Province | 957 | 0.3 | — | — | 957 | — | | **Total** | **295,812** | **100** | **276,291** | **100** | **19,521** | **7.1** | Source of Properties Under Management and Revenue Contribution | Developer Type | 2025 Revenue (RMB thousands) | 2025 Share (%) | 2024 Revenue (RMB thousands) | 2024 Share (%) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Landsea Holdings Group | 206,724 | 70.0 | 183,358 | 66.4 | 23,366 | 12.7 | | Joint ventures of Landsea Holdings Group | 5,469 | 1.8 | 14,722 | 5.3 | -9,253 | -62.8 | | Non-Landsea Holdings Group and non-joint ventures | 83,619 | 28.2 | 78,211 | 28.3 | 5,408 | 6.9 | | **Total** | **295,812** | **100** | **276,291** | **100** | **19,521** | **7.1** | Type of Properties Under Management and Revenue Contribution | Property Type | 2025 Revenue (RMB thousands) | 2025 Share (%) | 2024 Revenue (RMB thousands) | 2024 Share (%) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Residential properties | 240,242 | 81.2 | 206,108 | 74.6 | 34,134 | 16.6 | | —Early stage | 196,740 | 66.5 | 170,479 | 61.7 | 26,261 | 15.4 | | —Owners' committee stage | 43,502 | 14.7 | 35,629 | 12.9 | 7,873 | 22.1 | | Commercial properties | 27,379 | 9.3 | 38,133 | 13.8 | -10,754 | -28.2 | | Public and other properties | 28,191 | 9.5 | 32,050 | 11.6 | -3,859 | -12.0 | | **Total** | **295,812** | **100** | **276,291** | **100** | **19,521** | **7.1** | [Value-Added Services to Non-Property Owners](index=11&type=section&id=Value-Added%20Services%20to%20Non-Property%20Owners) During the reporting period, revenue from value-added services to non-property owners significantly decreased by **59.2%** to approximately **RMB 4.0 million**, primarily due to lower sales office management service revenue, accounting for **1.3%** of the Group's total revenue - Revenue from value-added services to non-property owners decreased by **59.2%** to approximately **RMB 4.0 million** from approximately **RMB 9.9 million** in the same period of 2024, mainly due to a decrease in sales office management service revenue[28](index=28&type=chunk) - Revenue from value-added services to non-property owners accounted for **1.3%** of the Group's total revenue[28](index=28&type=chunk) Revenue Breakdown of Value-Added Services to Non-Property Owners | Service Type | 2025 Revenue (RMB thousands) | 2025 Share (%) | 2024 Revenue (RMB thousands) | 2024 Share (%) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Preliminary planning and design consulting services | 2,148 | 53.1 | 2,110 | 21.3 | 38 | 1.8 | | Sales office management services | 1,702 | 42.1 | 6,500 | 65.6 | -4,798 | -73.8 | | Pre-delivery services | 9 | 0.2 | 525 | 5.3 | -516 | -98.3 | | Repair and maintenance services | 153 | 3.8 | 505 | 5.1 | -352 | -69.7 | | Property transaction assistance services | 33 | 0.8 | 270 | 2.7 | -237 | -87.8 | | **Total** | **4,045** | **100** | **9,910** | **100** | **-5,865** | **-59.2** | [Community Value-Added Services](index=11&type=section&id=Community%20Value-Added%20Services) During the reporting period, revenue from community value-added services decreased by **22.1%** to approximately **RMB 21.1 million**, primarily due to a decline in move-in services revenue, accounting for **6.6%** of the Group's total revenue - Revenue from community value-added services decreased by **22.1%** to approximately **RMB 21.1 million** from approximately **RMB 27.1 million** in the same period of 2024, mainly due to a decrease in move-in services revenue[30](index=30&type=chunk) - Revenue from community value-added services accounted for **6.6%** of the Group's total revenue[30](index=30&type=chunk) Revenue Breakdown of Community Value-Added Services | Service Type | 2025 Revenue (RMB thousands) | 2025 Share (%) | 2024 Revenue (RMB thousands) | 2024 Share (%) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Community space management services | 3,164 | 15.0 | 3,915 | 14.4 | -751 | -19.2 | | Decoration and move-in services | 6,397 | 30.3 | 16,766 | 61.9 | -10,369 | -61.8 | | Convenient living services | 9,592 | 45.5 | 6,314 | 23.3 | 3,278 | 51.9 | | Community retail services | 1,950 | 9.2 | 98 | 0.4 | 1,852 | 1889.8 | | **Total** | **21,103** | **100** | **27,093** | **100** | **-5,990** | **-22.1** | [Financial Review](index=12&type=section&id=Financial%20Review) During the reporting period, the Group's total revenue increased by **2.4%** to **RMB 321.0 million**, driven by property management services, but gross profit decreased by **4.5%**, with gross margin declining by **2.2 percentage points** to **29.6%** due to increased operating costs, and profit attributable to owners decreased by **14%** to **RMB 49.9 million** Revenue Contribution | Business Segment | 2025 Revenue (RMB thousands) | 2025 Share (%) | 2024 Revenue (RMB thousands) | 2024 Share (%) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Property management services | 295,812 | 92.1 | 276,291 | 88.2 | 19,521 | 7.1 | | Value-added services to non-property owners | 4,045 | 1.3 | 9,910 | 3.2 | -5,865 | -59.2 | | Community value-added services | 21,103 | 6.6 | 27,093 | 8.6 | -5,990 | -22.1 | | **Total** | **320,960** | **100** | **313,294** | **100** | **7,666** | **2.4** | - Cost of sales was approximately **RMB 225.9 million**, an increase of approximately **5.7%** compared to the same period in 2024, primarily due to increased infrastructure investment to enhance property quality, leading to higher operating costs[35](index=35&type=chunk) - Gross profit decreased by **4.5%** from approximately **RMB 99.6 million** in the same period of 2024 to approximately **RMB 95.1 million**, with the gross profit margin declining by **2.2 percentage points** from **31.8%** to **29.6%**, mainly due to increased operating costs[36](index=36&type=chunk) Gross Profit Margin by Business Line | Business Line | 2025 Gross Profit Margin (%) | 2024 Gross Profit Margin (%) | Change in Gross Profit Margin (percentage points) | | :--- | :--- | :--- | :--- | | Property management services | 29.4 | 30.2 | -0.8 | | Value-added services to non-property owners | 31.1 | 33.3 | -2.2 | | Community value-added services | 38.0 | 46.9 | -8.9 | | **Total** | **29.6** | **31.8** | **-2.2** | - Administrative expenses increased by approximately **2.2%** from approximately **RMB 27.5 million** in the same period of 2024 to approximately **RMB 28.1 million**, primarily due to increased labor costs[38](index=38&type=chunk) - Income tax expense decreased by approximately **31%** from **RMB 11.2 million** in the same period of 2024 to approximately **RMB 7.8 million**, mainly due to a decrease in taxable profit[39](index=39&type=chunk) - Profit and total comprehensive income attributable to owners of the Company was approximately **RMB 49.9 million**, a decrease of approximately **14%** compared to **RMB 58 million** in the same period of 2024[40](index=40&type=chunk) [Balance Sheet Items Analysis](index=14&type=section&id=Balance%20Sheet%20Items%20Analysis) As of June 30, 2025, trade receivables increased by **4.2%** to **RMB 141.3 million** due to higher total revenue, while prepayments, deposits, and other receivables decreased by **15.6%** to **RMB 44.6 million** mainly from lower in-transit funds, and trade payables decreased by **9.6%** to **RMB 37.1 million** due to adjusted payment schedules - Trade receivables were approximately **RMB 141.3 million**, an increase of approximately **4.2%** compared to December 31, 2024, primarily due to an increase in total revenue[41](index=41&type=chunk) - Prepayments, deposits, and other receivables were approximately **RMB 44.6 million**, a decrease of approximately **15.6%** compared to December 31, 2024, mainly due to a significant decrease in in-transit funds[42](index=42&type=chunk) - Trade payables were approximately **RMB 37.1 million**, a decrease of approximately **9.6%** compared to December 31, 2024, primarily due to the Group's adjustment of payment schedules based on market conditions[43](index=43&type=chunk) [Liquidity and Risk Management](index=14&type=section&id=Liquidity%20and%20Risk%20Management) The Group maintains prudent financial management, closely monitoring liquidity, with cash primarily used for investments, information technology, and working capital, and faces no significant interest rate or foreign exchange risks due to its RMB-denominated operations in China and absence of interest-bearing borrowings or contingent liabilities as of June 30, 2025 - The Group's cash is primarily used for investments, information technology infrastructure, and working capital, mainly funded by operating cash flows[44](index=44&type=chunk) - The Group has no significant interest-bearing assets or liabilities, thus not facing material risks directly related to market interest rate fluctuations[45](index=45&type=chunk) - The Group primarily operates in mainland China, with all transactions denominated and settled in RMB, and currently does not engage in hedging activities to manage foreign exchange rate risks[46](index=46&type=chunk) - As of June 30, 2025, the Group had **zero interest-bearing borrowings**, rendering the gearing ratio meaningless, and no contingent liabilities[47](index=47&type=chunk)[48](index=48&type=chunk) [Investments and Asset Status](index=15&type=section&id=Investments%20and%20Asset%20Status) During the reporting period, the Group made no significant acquisitions or disposals of subsidiaries, associates, or joint ventures, held no material investments, and had no future plans for significant investments or capital assets beyond those disclosed in the prospectus, with pledged deposits of **RMB 0.1 million** as of June 30, 2025 - During the reporting period, the Group made no significant acquisitions or disposals of subsidiaries, associates, or joint ventures, nor did it hold any material investments[49](index=49&type=chunk)[50](index=50&type=chunk) - As of June 30, 2025, the Group had no plans for significant investments or capital assets other than those disclosed in the prospectus[51](index=51&type=chunk) - As of June 30, 2025, the Group's pledged deposits amounted to **RMB 0.1 million**[52](index=52&type=chunk) [Employees and Remuneration Policy](index=16&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had **5,260 employees** with total staff costs of approximately **RMB 149.7 million**, and plans to enhance employee training and maintain a remuneration policy aligned with industry peers, considering responsibilities, market levels, and performance, while complying with local social insurance and housing provident fund regulations - As of June 30, 2025, the Group had **5,260 employees** (December 31, 2024: 5,644 employees)[53](index=53&type=chunk) - During the reporting period, total staff costs were approximately **RMB 149.7 million**, compared to approximately **RMB 149.5 million** in the same period of 2024[53](index=53&type=chunk) - The Group will further strengthen its employee training programs using internal and external resources and adopt remuneration policies similar to industry peers, with compensation determined by responsibilities and prevailing market levels in the region[53](index=53&type=chunk) [Corporate Governance and Other Information](index=17&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section outlines the company's adherence to corporate governance standards, changes in key personnel, details of the share option scheme, interests of directors and major shareholders, dividend policy, use of listing proceeds, and the audit committee's review of financial results [Corporate Governance Code and Model Code for Securities Transactions](index=17&type=section&id=Corporate%20Governance%20Code%20and%20Model%20Code%20for%20Securities%20Transactions) The Company is committed to high corporate governance standards, having adopted and complied with the Corporate Governance Code and the Model Code for Securities Transactions by Directors during the reporting period - The Company has adopted the principles and code provisions of the Corporate Governance Code as the basis for its corporate governance practices and complied with all applicable code provisions during the reporting period[55](index=55&type=chunk) - The Company has adopted the Model Code as its code of conduct for directors' securities transactions, and all directors confirmed compliance with the Model Code during the reporting period[56](index=56&type=chunk) [Changes in Directors and Company Secretary](index=17&type=section&id=Changes%20in%20Directors%20and%20Company%20Secretary) During the reporting period, Ms. Zhang Qian resigned as an independent non-executive director, succeeded by Mr. Hu Ning, and Ms. Zhen Kaining resigned as company secretary, with Ms. Ma Yongyi appointed as her replacement and authorized representative - Ms. Zhang Qian resigned as an independent non-executive director, audit committee member, remuneration committee chairman, and nomination committee member, effective February 14, 2025[58](index=58&type=chunk) - Mr. Hu Ning was appointed as an independent non-executive director, audit committee member, remuneration committee chairman, and nomination committee member, effective February 14, 2025[58](index=58&type=chunk) - Ms. Zhen Kaining resigned as company secretary, authorized representative, and agent for service of process, with Ms. Ma Yongyi appointed as her successor, both effective June 16, 2025[59](index=59&type=chunk) [Share Option Scheme](index=17&type=section&id=Share%20Option%20Scheme) The share option scheme acknowledges contributions from eligible participants, with **28,000,000 shares** available for grant as of June 30, 2025, representing **9.80%** of total issued shares, and no options were granted, exercised, cancelled, or lapsed during the reporting period - The share option scheme aims to recognize and reward the contributions of eligible participants, including employees, directors, and other selected individuals, to the Group[60](index=60&type=chunk) - As of June 30, 2025, **28,000,000 shares** were available for grant under the share option scheme, representing **9.80%** of the total issued shares as of the report date[61](index=61&type=chunk) - From the adoption date of the share option scheme until the end of the reporting period, no share options were granted, exercised, cancelled, or lapsed, and there were no outstanding share options under the scheme[61](index=61&type=chunk) [Directors' and Major Shareholders' Interests](index=18&type=section&id=Directors%27%20and%20Major%20Shareholders%27%20Interests) As of June 30, 2025, Mr. Liu Yuqi, Ms. Wang Tao, and Ms. Hou Sanli held approximately **74.67%** of the Company's shares through spousal or controlled company interests, with other ultimate controlling shareholders and their spouses also holding significant shares via controlled entities as parties acting in concert, and Hai Yue Holding Limited holding **7.98%** of shares Directors' Interests in Shares or Underlying Shares of the Company | Director's Name | Nature of Interest | Number of Shares Held | Approximate Percentage of Interest in the Company (%) | | :--- | :--- | :--- | :--- | | Mr. Liu Yuqi | Spouse's interest | 213,313,000 (L) | 74.67 | | Ms. Wang Tao | Interest in controlled corporation | 213,313,000 (L) | 74.67 | | Ms. Hou Sanli | Interest in controlled corporation | 213,313,000 (L) | 74.67 | - Pursuant to the acting in concert deed, the ultimate controlling shareholders (including Mr. Liu Yuqi, Ms. Wang Tao, Ms. Hou Sanli, etc.) agreed and confirmed that they have been and will continue to be parties acting in concert, making joint decisions for the Group[62](index=62&type=chunk) Interests of Persons Other Than Directors and Chief Executive | Shareholder Name/Entity | Nature of Interest/Capacity | Number of Shares Held | Approximate Percentage of Interest in the Company (%) | | :--- | :--- | :--- | :--- | | Mr. Liu Haowei | Interest in controlled corporation | 213,313,000 (L) | 74.67 | | Tianyue Holding | Beneficial owner | 68,960,430 (L) | 24.14 | | Mr. Liu Ce | Interest in controlled corporation | 213,313,000 (L) | 74.67 | | Linghui Holding | Beneficial owner | 68,939,640 (L) | 24.13 | | Ms. Long Yiqin | Interest in controlled corporation | 213,313,000 (L) | 74.67 | | Ms. Chen Aoao | Spouse's interest | 213,313,000 (L) | 74.67 | | Ms. Lan Tian | Spouse's interest | 213,313,000 (L) | 74.67 | | Mr. Liu Yuhui | Interest in controlled corporation | 213,313,000 (L) | 74.67 | | Jin Sha Jiang | Beneficial owner | 74,352,640 (L) | 26.03 | | Mr. Liu Shan | Spouse's interest | 213,313,000 (L) | 74.67 | | Hai Yue Holding Limited | Beneficial owner | 22,781,000 (L) | 7.98 | [Interim Dividend](index=20&type=section&id=Interim%20Dividend) The Board does not recommend paying an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[66](index=66&type=chunk) [Use of Net Proceeds from Listing](index=21&type=section&id=Use%20of%20Net%20Proceeds%20from%20Listing) The Company's net proceeds from listing, approximately **HKD 278.0 million**, were originally allocated for strategic acquisitions (**70%**), information system upgrades (**20%**), and working capital (**10%**), with approximately **HKD 49.7 million** utilized to date, and the remaining unutilized funds held in short-term demand deposits due to a revised timeline for planned uses - The net proceeds from the Company's global offering (including partial exercise of the over-allotment option) amounted to approximately **HKD 278.0 million**[68](index=68&type=chunk) - The original planned uses were: approximately **70.0%** for strategic acquisitions and investments; approximately **20.0%** for upgrading information systems and equipment; and approximately **10.0%** for working capital and general corporate purposes[68](index=68&type=chunk) - As of the date of this report, the Company had utilized approximately **HKD 49.7 million** of the net proceeds from listing, and the expected timeline for the planned use of proceeds has been postponed due to industry changes and current system capabilities meeting management needs[68](index=68&type=chunk)[70](index=70&type=chunk) Details of Use of Net Proceeds from Listing | Planned Use | Approximate Percentage | Planned Amount (HKD millions) | Unutilized as of January 1, 2025 (HKD millions) | Actual Use as of June 30, 2025 (HKD millions) | Unutilized as of June 30, 2025 (HKD millions) | | :--- | :--- | :--- | :--- | :--- | :--- | | Strategic acquisitions and investments — Acquisition and investment in other property management companies | 70.0% | 194.6 | 193.3 | — | 193.3 | | Upgrading information systems and equipment — Upgrading Lingyue Service Smart Property Management Platform | 10.0% | 27.8 | 24.1 | 1.2 | 22.9 | | Upgrading and improving equipment and facilities in managed communities | 10.0% | 27.8 | 13.4 | 1.3 | 12.1 | | Working capital | 10.0% | 27.8 | — | — | — | | **Total** | **100.0%** | **278.0** | **230.8** | **2.5** | **228.3** | [Other Disclosures](index=22&type=section&id=Other%20Disclosures) During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, nor did they hold any treasury shares, while maintaining sufficient public float, and no significant post-reporting period events have occurred since June 30, 2025 - During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, nor did they hold any treasury shares[71](index=71&type=chunk) - The Company has maintained a sufficient public float in accordance with the Listing Rules[73](index=73&type=chunk) - No significant events affecting the Company have occurred from June 30, 2025, up to the date of this report[74](index=74&type=chunk) [Audit Committee](index=22&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors with Ms. Zou Dan as chair, is responsible for reviewing and overseeing the Company's financial reporting, risk management, and internal control systems, and has reviewed the Group's unaudited interim results for the six months ended June 30, 2025 - The Audit Committee comprises three independent non-executive directors: Ms. Luo Ying, Mr. Hu Ning, and Ms. Zou Dan, with Ms. Zou Dan serving as the chair[76](index=76&type=chunk) - The Audit Committee is responsible for reviewing and overseeing the Company's financial reporting, risk management, and internal control systems, assisting the Board in fulfilling its audit responsibilities[75](index=75&type=chunk) - The Audit Committee has reviewed the Group's unaudited interim results for the six months ended June 30, 2025, and discussed accounting principles, risk management, internal controls, and financial reporting matters with management[76](index=76&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=24&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's revenue increased by **2.4%** to **RMB 320,960 thousand**, but gross profit decreased by **4.5%** to **RMB 95,061 thousand**, and profit for the period declined by **12.2%** to **RMB 52,960 thousand**, with basic and diluted earnings per share attributable to owners of the parent at **RMB 0.17**, down from **RMB 0.20** in the prior year Summary of Interim Condensed Consolidated Statement of Profit or Loss | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 320,960 | 313,294 | 7,666 | 2.4 | | Cost of sales | (225,899) | (213,732) | (12,167) | 5.7 | | Gross profit | 95,061 | 99,562 | (4,501) | -4.5 | | Other income and gains | 5,168 | 3,273 | 1,895 | 57.9 | | Administrative expenses | (28,076) | (27,475) | (601) | 2.2 | | Net impairment losses on financial assets and goodwill | (11,331) | (4,341) | (6,990) | 161.0 | | Profit before tax | 60,726 | 71,575 | (10,849) | -15.2 | | Income tax expense | (7,766) | (11,249) | 3,483 | -31.0 | | Profit for the period | 52,960 | 60,326 | (7,366) | -12.2 | | Profit attributable to owners of the parent | 49,076 | 58,018 | (8,942) | -15.4 | | Profit attributable to non-controlling interests | 3,884 | 2,308 | 1,576 | 68.3 | | Basic and diluted earnings per share (RMB) | 0.17 | 0.20 | -0.03 | -15.0 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=25&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total comprehensive income for the period was **RMB 53,745 thousand**, a **10.9%** decrease from **RMB 60,311 thousand** in the prior year, primarily due to lower profit for the period, despite a positive fair value change in equity investments designated at fair value through other comprehensive income Summary of Interim Condensed Consolidated Statement of Comprehensive Income | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Profit for the period | 52,960 | 60,326 | (7,366) | -12.2 | | Equity investments designated at fair value through other comprehensive income: Fair value change | 923 | (18) | 941 | -5227.8 | | Income tax effect | (138) | 3 | (141) | -4700.0 | | Other comprehensive income for the period, net of tax | 785 | (15) | 800 | -5333.3 | | **Total comprehensive income for the period** | **53,745** | **60,311** | **(6,566)** | **-10.9** | | Attributable to owners of the parent | 49,861 | 58,003 | (8,142) | -14.0 | | Attributable to non-controlling interests | 3,884 | 2,308 | 1,576 | 68.3 | [Interim Condensed Consolidated Statement of Financial Position](index=26&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total net assets increased by **8.5%** to **RMB 684,474 thousand** from December 31, 2024, with net current assets growing by **9.2%** to **RMB 651,143 thousand**, cash and bank balances increasing by **3.5%** to **RMB 737,816 thousand**, and total equity rising by **8.5%** to **RMB 684,474 thousand** Summary of Interim Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Total non-current assets | 34,165 | 35,793 | (1,628) | -4.5 | | Total current assets | 943,232 | 934,225 | 9,007 | 1.0 | | Total current liabilities | 292,089 | 338,203 | (46,114) | -13.6 | | Net current assets | 651,143 | 596,022 | 55,121 | 9.2 | | Total assets less current liabilities | 685,308 | 631,815 | 53,493 | 8.5 | | Total non-current liabilities | 834 | 936 | (102) | -10.9 | | **Net assets** | **684,474** | **630,879** | **53,595** | **8.5** | | Equity attributable to owners of the parent | 665,320 | 615,460 | 49,860 | 8.1 | | Non-controlling interests | 19,154 | 15,419 | 3,735 | 24.2 | | **Total equity** | **684,474** | **630,879** | **53,595** | **8.5** | - Cash and bank balances increased by **3.5%** from **RMB 712,885 thousand** as of December 31, 2024, to **RMB 737,816 thousand** as of June 30, 2025[80](index=80&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=28&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the Group's total equity increased from **RMB 630,879 thousand** at the beginning of the period to **RMB 686,094 thousand** at the end, primarily driven by a profit for the period of **RMB 52,960 thousand** and a net fair value change of **RMB 2,405 thousand** in equity investments designated at fair value through other comprehensive income Summary of Interim Condensed Consolidated Statement of Changes in Equity | Indicator | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total equity at beginning of period | 630,879 | 549,687 | | Profit for the period | 52,960 | 60,326 | | Other comprehensive income for the period (net of tax) | 2,405 | (15) | | Total comprehensive income for the period | 55,364 | 60,311 | | Contribution from non-controlling interests | — | 45 | | Dividends declared to non-controlling interests | (149) | (75) | | Total equity at end of period | 686,094 | 609,968 | [Interim Condensed Consolidated Statement of Cash Flows](index=30&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group's net cash flow from operating activities was **RMB 26,394 thousand**, a **32.2%** year-on-year decrease, with net cash used in investing activities at **RMB 472 thousand** and net cash used in financing activities at **RMB 1,000 thousand**, resulting in cash and cash equivalents of **RMB 737,706 thousand** at period-end, an increase of **RMB 24,922 thousand** from the beginning of the period Summary of Interim Condensed Consolidated Statement of Cash Flows | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Net cash flows from operating activities | 26,394 | 38,891 | (12,497) | -32.1 | | Net cash flows used in investing activities | (472) | (848) | 376 | -44.3 | | Net cash flows used in financing activities | (1,000) | (956) | (44) | 4.6 | | Net increase in cash and cash equivalents | 24,922 | 37,087 | (12,165) | -32.8 | | Cash and cash equivalents at beginning of period | 712,784 | 602,193 | 110,591 | 18.4 | | **Cash and cash equivalents at end of period** | **737,706** | **639,280** | **98,426** | **15.4** | - The decrease in net cash flows from operating activities was primarily influenced by factors such as lower profit before tax, an increase in trade receivables, and a decrease in contract liabilities[87](index=87&type=chunk) [Notes to the Interim Condensed Consolidated Financial Information](index=32&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes on the Group's company and operational information, basis of financial statement preparation, revenue breakdown, components of profit before tax, tax expenses, dividend policy, asset details, ageing analyses of receivables and payables, related party transactions, fair value measurements of financial instruments, and subsequent events [Company and Group Information](index=32&type=section&id=Company%20and%20Group%20Information) The Company, incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange since July 12, 2021, primarily provides property management, value-added services to non-property owners, and community value-added services, with its ultimate controlling shareholders being Mr. Liu Yuhui, Mr. Liu Ce, Mr. Liu Haowei, Ms. Wang Tao, Ms. Long Yiqin, and Ms. Hou Sanli - The Company was incorporated in the Cayman Islands, and its shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since **July 12, 2021**[90](index=90&type=chunk) - The Group is principally engaged in providing property management services, value-added services to non-property owners, and community value-added services[90](index=90&type=chunk) - The ultimate controlling shareholders of the Company are Mr. Liu Yuhui, Mr. Liu Ce, Mr. Liu Haowei, Ms. Wang Tao, Ms. Long Yiqin, and Ms. Hou Sanli[90](index=90&type=chunk) [Basis of Preparation and Accounting Policies](index=32&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The interim condensed consolidated financial information is prepared in accordance with IAS 34 and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024, with accounting policies consistent with the prior year, except for the first-time application of amendments to IAS 21 "Lack of Exchangeability," which had no significant impact on current period financial performance - The interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024[92](index=92&type=chunk) - The accounting policies adopted in the preparation of 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, except for the first-time application of amendments to IAS 21 "Lack of Exchangeability"[93](index=93&type=chunk)[94](index=94&type=chunk) - The application of amendments to IFRS accounting standards had no significant impact on the Group's financial performance and position for the current and prior periods[94](index=94&type=chunk) [Operating Segment Information](index=33&type=section&id=Operating%20Segment%20Information) Management monitors the Group's operating results, including property management and value-added service revenue by project location, consolidating all locations into a single reportable operating segment due to similar economic characteristics and business nature, with all external customer revenue and non-current assets located solely in mainland China, and revenue from Landsea Holdings Group increasing to **13.97%** of total Group revenue from **6.8%** in the prior year - All locations are aggregated into a single reportable operating segment due to their similar economic characteristics and business nature[95](index=95&type=chunk) - The Group's revenue from external customers is solely derived from its operations in mainland China, and no non-current assets are located outside China, thus no geographical information is presented[96](index=96&type=chunk) - For the six months ended June 30, 2025, revenue from Landsea Holdings Group Company Limited and its subsidiaries accounted for **13.97%** of the Group's revenue (June 30, 2024: **6.8%**)[97](index=97&type=chunk) [Revenue Analysis](index=33&type=section&id=Revenue%20Analysis) The Group's revenue primarily stems from property management, value-added services to non-property owners, and community value-added services, totaling **RMB 320,960 thousand** for the six months ended June 30, 2025, with most revenue recognized over time Revenue Analysis from Contracts with Customers | Service Type | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Property management services | 296,356 | 276,291 | 20,065 | 7.3 | | Value-added services to non-property owners | 4,045 | 9,910 | (5,865) | -59.2 | | Community value-added services | 20,559 | 27,093 | (6,534) | -24.1 | | **Total** | **320,960** | **313,294** | **7,666** | **2.4** | Timing of Revenue Recognition | Timing of Recognition | 2025 (RMB thousands) | 2025 Share (%) | 2024 (RMB thousands) | 2024 Share (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue recognized over time | 305,548 | 95.2 | 296,374 | 94.6 | | Revenue recognized at a point in time | 15,412 | 4.8 | 16,920 | 5.4 | | **Total revenue from contracts with customers** | **320,960** | **100** | **313,294** | **100** | [Components of Profit Before Tax](index=35&type=section&id=Components%20of%20Profit%20Before%20Tax) The Group's profit before tax is net of costs of services provided, depreciation of property, plant and equipment, amortization of other intangible assets, and net impairment of financial assets, with net impairment of trade receivables significantly increasing to **RMB 13,041 thousand** compared to the prior year Deductions from Profit Before Tax | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Cost of services provided | 225,899 | 213,732 | 12,167 | 5.7 | | Depreciation of property, plant and equipment | 1,711 | 1,745 | (34) | -2.0 | | Amortization of other intangible assets | 1,984 | 1,038 | 946 | 91.1 | | Net impairment of trade receivables | 13,041 | 4,654 | 8,387 | 180.2 | | Net reversal of impairment of amounts due from related companies | (1,058) | (106) | (952) | 898.1 | | Net impairment of financial assets included in prepayments and other receivables | (652) | (207) | (445) | 215.0 | [Income Tax](index=36&type=section&id=Income%20Tax) The Group is subject to income tax on its profits in mainland China, with rates including **25%**, a western region preferential rate of **15%**, and a small low-profit enterprise preferential rate, resulting in a total income tax expense of **RMB 7,766 thousand** for the six months ended June 30, 2025, a **31.0%** decrease from the prior year, mainly due to lower taxable profit - All of the Group's subsidiaries operating in mainland China are subject to enterprise income tax under the Enterprise Income Tax Law of the People's Republic of China, with tax rates including **25%**, a western region preferential tax rate of **15%**, and a preferential tax rate for small low-profit enterprises[102](index=102&type=chunk) Income Tax Expense | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Current — Mainland China: Expense for the period | 7,868 | 11,627 | (3,759) | -32.3 | | Deferred tax | (102) | (378) | 276 | -73.0 | | **Total tax expense for the period** | **7,766** | **11,249** | **(3,483)** | **-31.0** | [Dividends and Earnings Per Share](index=36&type=section&id=Dividends%20and%20Earnings%20Per%20Share) The Board does not recommend an interim dividend for the six months ended June 30, 2025, and basic earnings per share attributable to ordinary equity holders of the parent decreased to **RMB 0.17** from **RMB 0.20** in the prior year, with no dilutive adjustments as no potentially dilutive ordinary shares were issued during these periods - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025[104](index=104&type=chunk) - Basic earnings per share attributable to ordinary equity holders of the parent was **RMB 0.17** (June 30, 2024: **RMB 0.20**)[105](index=105&type=chunk) - No adjustments were made to the basic earnings per share amounts presented for the six months ended June 30, 2025, and June 30, 2024, for dilution, as the Group had no potentially dilutive ordinary shares in issue during these periods[105](index=105&type=chunk) [Property, Plant and Equipment](index=37&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group acquired assets at a cost of **RMB 466,000**, a decrease from **RMB 512,000** in the same period last year - For the six months ended June 30, 2025, the Group acquired assets at a cost of **RMB 466,000** (June 30, 2024: **RMB 512,000**)[107](index=107&type=chunk) [Trade Receivables Ageing Analysis](index=37&type=section&id=Trade%20Receivables%20Ageing%20Analysis) As of June 30, 2025, the Group's total trade receivables amounted to **RMB 141,311 thousand**, with the largest portion, **RMB 102,104 thousand**, due within one year, and an increase in receivables aged one to two years compared to December 31, 2024 Trade Receivables Ageing Analysis | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Within 1 year | 102,104 | 103,024 | (920) | -0.9 | | 1 to 2 years | 29,873 | 21,790 | 8,083 | 37.1 | | 2 to 3 years | 7,487 | 8,102 | (615) | -7.6 | | Over 3 years | 1,847 | 2,693 | (846) | -31.4 | | **Total** | **141,311** | **135,609** | **5,702** | **4.2** | [Trade Payables Ageing Analysis and Share Capital](index=38&type=section&id=Trade%20Payables%20Ageing%20Analysis%20and%20Share%20Capital) As of June 30, 2025, the Group's total trade payables amounted to **RMB 37,132 thousand**, with the largest portion due within one year, showing a decrease from December 31, 2024, while the Company's issued and fully paid share capital remained consistent at **285,685,000 ordinary shares** of **HKD 0.01** each, totaling **RMB 2,382 thousand** Trade Payables Ageing Analysis | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Within 1 year | 28,943 | 37,122 | (8,179) | -22.0 | | Over 1 year | 8,189 | 3,965 | 4,224 | 106.5 | | **Total** | **37,132** | **41,087** | **(3,955)** | **-9.6** | - The Company's issued and fully paid share capital consists of **285,685,000 ordinary shares** with a par value of **HKD 0.01** each, totaling **RMB 2,382 thousand**, consistent with December 31, 2024[109](index=109&type=chunk) [Related Party Transactions](index=38&type=section&id=Related%20Party%20Transactions) During the reporting period, the Group generated **RMB 45,047 thousand** in revenue from property management and value-added services to related companies, a **96.2%** year-on-year increase primarily from companies controlled by the controlling shareholder, while amounts due from related companies totaled **RMB 11,963 thousand**, a decrease from the end of 2024, and key management personnel remuneration decreased by **15.4%** to **RMB 601 thousand** Revenue from Services Provided to Related Companies | Related Party Type | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Companies controlled by controlling shareholders | 42,795 | 21,247 | 21,548 | 101.4 | | Joint ventures of Landsea Holdings Group | 2,252 | 1,190 | 1,062 | 89.2 | | Associates of Landsea Holdings Group | — | 526 | (526) | -100.0 | | **Total** | **45,047** | **22,963** | **22,084** | **96.2** | Outstanding Balances with Related Parties (Receivables) | Related Party Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Companies controlled by controlling shareholders | 16,026 | 32,688 | (16,662) | -51.0 | | Joint ventures of Landsea Holdings Group | 1,029 | 3,393 | (2,364) | -69.7 | | Associates of Landsea Holdings Group | 188 | 188 | 0 | 0.0 | | Joint ventures | 1 | — | 1 | — | | Impairment | (5,281) | (6,339) | 1,058 | -16.7 | | **Net amounts due from related companies** | **11,963** | **29,930** | **(17,967)** | **-60.0** | - Total remuneration for key management personnel was **RMB 601 thousand**, a **15.4%** decrease from **RMB 711 thousand** in the same period of 2024[114](index=114&type=chunk) [Fair Value and Fair Value Hierarchy of Financial Instruments](index=40&type=section&id=Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) The fair value of the Group's unlisted equity investments is estimated using the market approach, incorporating a discount for lack of marketability, with equity investments designated at fair value through other comprehensive income totaling **RMB 4,090 thousand** as of June 30, 2025, an increase from the beginning of the period, and all fair value measurements are classified as Level 3 with no transfers between levels during the period - The fair value of unlisted equity investments is estimated using the market approach, taking into account a discount for lack of marketability[115](index=115&type=chunk) - An increase/decrease of **5%** in the discount for lack of marketability would result in a decrease/increase in fair value of **RMB 223,000**[115](index=115&type=chunk) Equity Investments Designated at Fair Value Through Other Comprehensive Income | Date | Amount (RMB thousands) | | :--- | :--- | | As of June 30, 2025 | 4,090 | | As of December 31, 2024 | 3,241 | | As of January 1, 2025 | 3,241 | | Total gains/(losses) recognized in other comprehensive income | 849 | | As of June 30, 2025 | 4,090 | - All of the Group's fair value measurements are classified as **Level 3**, with no transfers between Level 1 and Level 2, or into or out of Level 3 for financial assets and liabilities during the period[116](index=116&type=chunk)[117](index=117&type=chunk) [Events After Reporting Period and Approval of Financial Information](index=42&type=section&id=Events%20After%20Reporting%20Period%20and%20Approval%20of%20Financial%20Information) No significant subsequent events have occurred since June 30, 2025, and the unaudited interim condensed consolidated financial information was approved and authorized for issue by the Company's Board of Directors on August 30, 2025 - No significant subsequent events have occurred after June 30, 2025[118](index=118&type=chunk) - The unaudited interim condensed consolidated financial information was approved and authorized for issue by the Company's Board of Directors on **August 30, 2025**[119](index=119&type=chunk) [Definitions](index=43&type=section&id=Definitions) This section provides definitions for key terms and expressions used throughout the report to ensure a clear understanding of its content

[Company Information](index=3&type=section&id=公司資料) This section provides an overview of the company's governance structure and fundamental operational details [Board of Directors and Committees](index=3&type=section&id=董事會及委員會) This chapter outlines the composition of the company's board of directors, including executive, non-executive, and independent non-executive directors, as well as audit, remuneration, and nomination committee members - The Board comprises executive directors (Mr. Zhao Donghui as Chairman), non-executive directors (Ms. Li Huihui, Mr. Ye Qionghai, Ms. Zhao Jiaqiao), and independent non-executive directors (Mr. Chen Baizhu, Mr. Hu Rongen, Ms. Liu Tao)[7](index=7&type=chunk) - The Audit Committee is chaired by Ms. Liu Tao, the Remuneration Committee by Mr. Hu Rongen, and the Nomination Committee by Mr. Zhao Donghui[7](index=7&type=chunk) [Company Basic Information](index=3&type=section&id=公司基本信息) This chapter provides essential operational details including the company's registered office, China headquarters, Hong Kong principal place of business, legal advisors, auditors, share registrar, principal bankers, and stock code - The China headquarters and principal place of business are located at 1111 Hucheng Ring Road, Pudong New Area, Shanghai, China[7](index=7&type=chunk) - The auditor is Ernst & Young[7](index=7&type=chunk) - The company's stock code is **1525**[8](index=8&type=chunk) [Financial Highlights](index=4&type=section&id=財務概要) This section presents unaudited financial data for the six months ended June 30, 2025, showing a decrease in revenue, gross profit, and profit for the period compared to the prior year [Financial Highlights](index=4&type=section&id=財務概要) This chapter provides unaudited financial data for the six months ended June 30, 2025, showing a decrease in revenue, gross profit, and profit for the period compared to the prior year Key Financial Indicators Comparison (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 534,054 | 535,434 | | Cost of sales | (216,850) | (204,601) | | Gross profit | 317,204 | 330,833 | | Profit before tax | 212,334 | 241,690 | | Profit for the period | 162,061 | 179,857 | - For the six months ended June 30, 2025, profit for the period was **RMB 162,061 thousand**, a **9.89% decrease** from **RMB 179,857 thousand** in the same period last year[9](index=9&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=管理層討論與分析) This section provides an overview of the group's business operations, financial performance, and future strategies, highlighting key developments in student enrollment, tuition fees, and educational quality [Business Overview](index=5&type=section&id=業務概覽) The Group, as a higher vocational education provider, operates Shanghai Jian Qiao University, a leading private university in Shanghai and the Yangtze River Delta region. During the reporting period, full-time student enrollment slightly decreased, but plans are in place to increase tuition fees for new undergraduate and junior college students - Shanghai Jian Qiao University is the largest private university in Shanghai and a leading private university in the entire Yangtze River Delta, ranking third among Type I private universities in China for four consecutive years[12](index=12&type=chunk) - The total number of full-time students in the 2024/25 academic year was **23,928**, a decrease of **1,085 students** from the 2023/24 academic year, primarily due to graduates from the "top-up" bachelor's degree program[13](index=13&type=chunk) - For the 2025/26 academic year, the minimum tuition fee for new undergraduate students will increase from **RMB 32,000/year** to **RMB 42,000/year**, and for new junior college students, it will increase from **RMB 20,000/year** to **RMB 23,000/year**[16](index=16&type=chunk)[40](index=40&type=chunk) [Student Enrollment](index=5&type=section&id=收生人數) This chapter details the full-time student enrollment numbers for undergraduate, junior college, and "top-up" bachelor's degree programs at Shanghai Jian Qiao University for each academic year, showing a decrease in total enrollment for the 2024/25 academic year, mainly due to graduates from the "top-up" program Student Enrollment Trends (by Academic Year) | Academic Year | Undergraduate Programs | Junior College Programs | "Top-up" Bachelor's Programs | Total Students | | :--- | :--- | :--- | :--- | :--- | | 2020/21 | 17,274 | 2,548 | 1,516 | 21,338 | | 2021/22 | 17,643 | 2,427 | 2,384 | 22,454 | | 2022/23 | 17,945 | 4,195 | 2,327 | 24,467 | | 2023/24 | 17,937 | 4,750 | 2,326 | 25,013 | | 2024/25 | 17,802 | 3,826 | 2,300 | 23,928 | - The total number of full-time students in the 2024/25 academic year was **23,928**, a decrease of **1,085 students** from the 2023/24 academic year[13](index=13&type=chunk) [Tuition Fee Standards](index=6&type=section&id=學費標準) This chapter discloses the tuition fee standards for full-time programs at Shanghai Jian Qiao University and announces an increase in tuition fees for new undergraduate and junior college students in the 2025/26 academic year to optimize revenue structure Tuition Fee Standard Adjustments (New Students for 2025/26 Academic Year) | Program Type | 2023/24 Academic Year (RMB Yuan) | 2024/25 Academic Year (RMB Yuan) | 2025/26 Academic Year (RMB Yuan) | | :--- | :--- | :--- | :--- | | Undergraduate Programs | 32,000-39,800 | 32,000-39,800 | 42,000-48,000 | | Junior College Programs | 20,000 | 20,000 | 23,000 | | "Top-up" Bachelor's Programs | 30,000-39,800 | 32,000-39,800 | 32,000-39,800 | - The tuition fee range for undergraduate programs includes those under international projects, excluding special programs such as the International Design College, bilingual Digital Media Technology and Journalism programs, and international programs co-organized with Vaughn College of Aeronautics and Technology[17](index=17&type=chunk) [Business Review and Operational Updates](index=6&type=section&id=業務回顧及運營更新) This chapter details Shanghai Jian Qiao University's latest progress and significant achievements in educational quality, policy support, vocational education system development, faculty strength, teaching facilities, student development, and industry-university cooperation, emphasizing the university's core role in industry-education integration transformation - The university has been ranked third among Type I private universities in China by Alumni Association for four consecutive years, and has repeatedly been awarded "National Civilized Unit" and "Shanghai Civilized Unit" honors[19](index=19&type=chunk) - The university has established a major strategy to transform into an industry-education integrated university, proposing the "Shanghai Jian Qiao University Action Plan for Accelerating Transformation into an Industry-Education Integrated University," aiming for full transformation by 2035[36](index=36&type=chunk) - The Group's fourth phase of campus buildings, with a total construction area of approximately **86,400 square meters**, was fully put into use in March 2025, aiming to deepen industry-education integration[37](index=37&type=chunk) [The University](index=6&type=section&id=本學院) This chapter introduces Shanghai Jian Qiao University as an applied technology university, detailing its professional offerings, disciplinary coverage, and its top-tier educational quality and brand reputation among similar institutions, listing multiple national and Shanghai municipal honors - The university offers **40 undergraduate programs** and **10 junior college programs**, covering seven disciplines including economics, management, literature, engineering, arts, science, and education[16](index=16&type=chunk) - The university has consecutively received the "Shanghai Civilized Unit" honorary title for **18 years** since 2004 and was first awarded "National Civilized Unit" in 2015, passing re-evaluation three times[19](index=19&type=chunk) - The university passed ISO9001 quality management system certification by the Shanghai Quality System Audit Center in 2018 and twice passed the Ministry of Education's undergraduate teaching work audit and evaluation in November 2019 and April 2025[19](index=19&type=chunk) [Dual Support from Lingang Special Area Policy and Vocational Education Policy](index=8&type=section&id=臨港特區政策及職教政策雙重支持) This chapter explains how multiple policies issued by the Lingang New Area and at the national level provide strong strategic support and locational advantages for Shanghai Jian Qiao University in industry-education integration and high-quality vocational education development - The Lingang New Area Management Committee issued the revised "Several Policy Opinions on Supporting Industry-Education Integration Development in the China (Shanghai) Pilot Free Trade Zone Lingang New Area," providing special support for eligible industry-education integration projects[21](index=21&type=chunk) - The "China (Shanghai) Pilot Free Trade Zone Lingang New Area Action Plan for High-Quality Development of Industry-Education Integration (2025-2027)" explicitly supports the university's construction as an industry-education integrated university[22](index=22&type=chunk) - The "Outline of the Plan for Building a Strong Education Nation (2024-2035)" issued by the CPC Central Committee and the State Council, and the "2025 Government Work Report" both emphasize promoting high-quality development of modern vocational education and industry-education integration[25](index=25&type=chunk) [Outstanding Achievements in High-Quality Vocational Education System Construction](index=10&type=section&id=高質量職業教育體系建設成果卓著) This chapter details the university's significant achievements in optimizing professional layout, enhancing faculty, upgrading teaching facilities, promoting student development, and deepening industry-university cooperation, with a special emphasis on the application of AI technology in teaching and the transformation strategy into an industry-education integrated university - The university has **29 programs** ranked among the top 10 nationwide, **33 programs** among the top 20 nationwide, with **13 programs** ranking first nationwide (applied type)[28](index=28&type=chunk) - As of September 30, 2024, **85.8%** of the university's full-time teachers hold master's degrees or above, **28.7%** hold doctoral degrees, and **45.7%** are "dual-qualified" teachers[29](index=29&type=chunk) - The university actively seizes the opportunity of AI development, comprehensively promoting "AI+Curriculum" construction and teaching innovation, having explored and built **70 "AI+Curricula"**[29](index=29&type=chunk) - The university's 2024 graduates achieved an employment rate of **99.1%**, a further study rate of **5.7%**, and an overseas study rate of **4.6%**[34](index=34&type=chunk) - The university is a high-skilled talent training base in Shanghai, one of the first batch of industry-education integration bases in the Lingang New Area, and successfully approved as one of the first "City-Region Industry-Education Joint Bodies" in Shanghai[36](index=36&type=chunk) [Future Outlook and Business Strategies](index=13&type=section&id=未來展望及業務策略) The Group will continue to uphold its high-quality education philosophy, leverage the advantages of the Pudong and Lingang dual special zones, and achieve sustainable growth and industry leadership through optimizing fees, diversifying business development (international education, adult continuing education, non-degree vocational education), and deepening industry-education-city integration - For the 2025/26 academic year, the minimum tuition fee for new undergraduate students will increase from **RMB 32,000/year** to **RMB 42,000/year**, and for new junior college students, it will increase from **RMB 20,000/year** to **RMB 23,000/year**[40](index=40&type=chunk) - The Group will vigorously develop international education, adult continuing education (with **4,065 enrolled students** as of June 30, 2025), and non-degree vocational education (having provided over **400 types of vocational qualification certificate training**)[41](index=41&type=chunk)[43](index=43&type=chunk) - The Group will fully seize the policy opportunities of the Lingang New Area as a "pioneer and experimental field for socialist modernization construction" and a "national pilot core zone for industry-education integration," accelerating its transformation into an industry-education integrated university[44](index=44&type=chunk) [Financial Review](index=15&type=section&id=財務回顧) This chapter provides a detailed review of the financial performance during the reporting period, showing stable revenue but a decrease in gross profit and profit before tax due to increased cost of sales and administrative expenses, while finance costs decreased due to reduced borrowing scale and interest rates - For the six months ended June 30, 2025, the Group's revenue was approximately **RMB 534.1 million**, remaining stable compared to the same period last year[47](index=47&type=chunk) - Cost of sales increased by approximately **RMB 12.2 million** or **6.0%** compared to the same period last year, primarily due to a **7.3% increase** in salary costs from a larger teaching staff and a **12.6% increase** in depreciation and amortization expenses as the fourth phase of campus facilities became operational[48](index=48&type=chunk) - Gross profit decreased by approximately **RMB 13.6 million** or **4.1%** to **RMB 317.2 million**, with a gross profit margin of **59.4%**, a **2.4 percentage point decrease** from the same period last year[49](index=49&type=chunk) - Administrative expenses increased by approximately **RMB 17.7 million** or **20.4%** to **RMB 104.5 million**, mainly due to increased administrative salary expenses and logistics expenses[54](index=54&type=chunk) - Finance costs decreased by **5.3%** to **RMB 13.0 million**, primarily due to a reduction in interest-bearing borrowings and a decrease in the average annual effective interest rate from **3.79%** to **3.07%**[55](index=55&type=chunk) - Profit before tax was approximately **RMB 212.3 million**, a decrease of approximately **RMB 29.4 million** from the same period last year[58](index=58&type=chunk) [Liquidity and Capital Resources](index=17&type=section&id=流動資金及資本資源) This chapter describes the Group's sources of liquidity, capital expenditures, bank borrowings, and financial leverage ratio. At the end of the reporting period, cash and cash balances decreased, but the financial leverage ratio declined, indicating a sound financial position - As of June 30, 2025, the Group's cash and cash equivalents and time deposits were approximately **RMB 277.0 million**, a **16.2% decrease** from December 31, 2024, mainly due to seasonal factors[63](index=63&type=chunk) - As of June 30, 2025, total bank borrowings were approximately **RMB 827.3 million**, bearing interest at an effective annual rate of **3.07%**[66](index=66&type=chunk) - Capital expenditure during the reporting period was **RMB 58.5 million**, primarily related to the university's fourth phase campus construction plan and maintenance upgrades of existing school premises[67](index=67&type=chunk) - The financial leverage ratio decreased from **0.4** as of December 31, 2024, to **0.3** as of June 30, 2025, mainly due to the repayment of some bank borrowings and an increase in equity[70](index=70&type=chunk) - As of June 30, 2025, the Group had **1,896 full-time employees**, with a total staff cost of **RMB 191.8 million**[74](index=74&type=chunk) [Other Information](index=19&type=section&id=其他資料) This section covers post-reporting period events, interim dividends, share transfer registration, securities transactions, corporate governance, and director information [Events After Reporting Period](index=20&type=section&id=報告期後事項) This chapter discloses the progress of legal proceedings and the board's resolution regarding interim dividends that occurred after the reporting period - In early August 2025, the Group received two civil judgments from the Shanghai Pudong New Area People's Court regarding a construction contract dispute between Jian Qiao University and a contractor, where Jian Qiao University was ordered to pay construction fees totaling approximately **RMB 8.3 million** plus interest for overdue payments, and an appeal has been filed[76](index=76&type=chunk) - On August 28, 2025, the Board resolved to recommend the payment of an interim dividend of **HKD 0.10 per ordinary share** for the six months ended June 30, 2025, to shareholders whose names appear on the company's register of members on October 10, 2025[76](index=76&type=chunk) [Interim Dividend](index=20&type=section&id=中期股息) This chapter discloses the board's resolution to declare an interim dividend consistent with the prior year and announces the payment and record dates - The Board has resolved to declare an interim dividend of **HKD 0.10 per ordinary share** for the six months ended June 30, 2025 (for the six months ended June 30, 2024: **HKD 0.10 per ordinary share**)[77](index=77&type=chunk) - The 2025 interim dividend is proposed to be paid from the company's share premium account[77](index=77&type=chunk) - The payment date for the 2025 interim dividend is expected to be Friday, October 24, 2025[77](index=77&type=chunk) [Closure of Register of Members](index=20&type=section&id=暫停辦理股份過戶登記手續) This chapter states that the company will temporarily suspend the registration of share transfers on specific dates to determine eligibility for the interim dividend, clarifying the relevant deadlines - To determine the entitlement of the company's shareholders to receive the 2025 interim dividend, the company will suspend the registration of share transfers on Friday, October 10, 2025[78](index=78&type=chunk) - To be eligible for the 2025 interim dividend, all transfer documents accompanied by the relevant share certificates must be lodged no later than 4:30 p.m. on Thursday, October 9, 2025[78](index=78&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=20&type=section&id=購買、出售或贖回本公司之上市證券) This chapter states that neither the company nor any of its subsidiaries purchased, sold, or redeemed any other listed securities of the company during the reporting period, and no treasury shares were held - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any other listed securities of the company[79](index=79&type=chunk) - As of June 30, 2025, the company did not hold any treasury shares[79](index=79&type=chunk) [Compliance with Corporate Governance Code](index=21&type=section&id=遵守企業管治守則) This chapter emphasizes the company's commitment to maintaining high standards of corporate governance and confirms compliance with all applicable provisions of the Corporate Governance Code during the reporting period - The company has complied with all applicable code provisions under the Corporate Governance Code for the six months ended June 30, 2025[82](index=82&type=chunk) [Compliance with Model Code](index=21&type=section&id=遵守標準守則) This chapter states that the company has adopted the Model Code as a code of conduct for directors' securities transactions and confirms that directors complied with it during the reporting period - Following specific enquiries made to all Directors, each Director confirmed that they have complied with the Model Code for the six months ended June 30, 2025[83](index=83&type=chunk) - The company has also adopted a code of conduct for employees' securities transactions with terms no less exacting than those set out in the Model Code[83](index=83&type=chunk) [Audit Committee and Review of Interim Results](index=21&type=section&id=審核委員會及中期業績審閱) This chapter states that the Audit Committee has reviewed the Group's adopted accounting principles and interim condensed consolidated financial statements, deeming them compliant with applicable accounting standards and legal requirements - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and, together with the Board, reviewed the Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025[84](index=84&type=chunk) - The Audit Committee believes that these financial statements comply with applicable accounting standards, the Listing Rules, and all other applicable legal requirements[84](index=84&type=chunk) [Update on Directors' Information and Changes in Directors and Senior Management](index=22&type=section&id=董事資料及董事和高級管理人員變更的更新) This chapter states that the Board was not informed of any changes in directors' information during the reporting period - During the reporting period, the Board was not informed of any changes in directors' information required to be disclosed under Rule 13.51B(1) of the Listing Rules[86](index=86&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures](index=22&type=section&id=董事及最高行政人員於股份、相關股份及債權證中的權益及淡倉) This chapter discloses the interests of the company's directors and chief executive in the company's shares or underlying shares as of June 30, 2025, with Mr. Zhao Donghui and Mr. Zhou Tianming holding a significant proportion of long positions - Mr. Zhao Donghui holds **100,000,000 long position shares** (approximately **24.10%**) and **87,190,000 long position shares** (approximately **21.01%**) in the company[87](index=87&type=chunk) - Mr. Zhou Tianming holds **6,297,000 long position shares** (approximately **1.52%**) in the company[87](index=87&type=chunk) - Mr. Ye Qionghai holds **4,728,000 long position shares** (approximately **1.14%**) in the company[87](index=87&type=chunk) [Interests in Shares or Underlying Shares of the Company](index=22&type=section&id=於本公司股份或相關股份之權益) This chapter details the long positions of directors and the chief executive in the company's shares, including the number of shares and approximate percentages held through controlled corporations and guaranteed interests Directors' Shareholding Details (As of June 30, 2025) | Name | Capacity/Nature of Interest | Number of Shares | Long/Short Position | Approximate Percentage | | :--- | :--- | :--- | :--- | :--- | | Mr. Zhao Donghui | Interest in controlled corporation | 100,000,000 | Long Position | 24.10% | | | Person with guaranteed interest in shares | 87,190,000 | Long Position | 21.01% | | Mr. Zhou Tianming | Interest in controlled corporation | 6,297,000 | Long Position | 1.52% | | Mr. Ye Qionghai | Beneficial owner | 4,728,000 | Long Position | 1.14 | - Ai Xin Limited, controlled by Mr. Zhao Donghui, holds **117,190,000 shares**, and Fwin Limited holds **70,000,000 shares**[89](index=89&type=chunk) [Interests in Shares of Associated Corporations of the Company](index=23&type=section&id=於本公司相聯法團股份之權益) This chapter discloses Mr. Zhao Donghui's interests in Jian Qiao Group, an associated corporation of the company - Mr. Zhao Donghui, as a beneficial owner, holds a **10.00% equity interest** in Jian Qiao Group[90](index=90&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=24&type=section&id=主要股東於股份及相關股份中的權益及淡倉) This chapter discloses the interests of substantial shareholders, other than directors or the chief executive, in the company's shares or underlying shares as of June 30, 2025 Substantial Shareholders' Shareholding Details (As of June 30, 2025) | Name | Capacity/Nature of Interest | Number of Shares | Long/Short Position | Approximate Percentage | | :--- | :--- | :--- | :--- | :--- | | Ai Xin Limited | Beneficial owner | 30,000,000 | Long Position | 7.23% | | | Person with guaranteed interest in shares | 87,190,000 | Long Position | 21.01% | | Fwin Limited | Beneficial owner | 70,000,000 | Long Position | 16.87% | | Hangzhou Changqi Enterprise Management Consulting Partnership (Limited Partnership) | Interest in controlled corporation | 70,000,000 | Long Position | 16.87% | | Shanghai Jiuhao Enterprise Management Consulting Co., Ltd. | Interest in controlled corporation | 70,000,000 | Long Position | 16.87% | | Changjiu Industrial Group Co., Ltd. | Interest in controlled corporation | 70,000,000 | Long Position | 16.87% | | Ze Ren Limited | Beneficial owner | 30,600,000 | Long Position | 7.37% | | Zhuang Rije | Interest in controlled corporation | 30,600,000 | Long Position | 7.37% | | Su Wenjun | Interest in controlled corporation | 30,600,000 | Long Position | 7.37% | | Everone (Hong Kong) Company Limited | Beneficial owner | 25,880,000 | Long Position | 6.24% | - As of June 30, 2025, eight shareholders of the company pledged a total of **87,190,000 shares** to Ai Xin Limited[93](index=93&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=25&type=section&id=董事收購股份或債權證的權利) This chapter states that during the reporting period, neither the company nor any of its subsidiaries entered into any arrangements enabling directors to acquire benefits by acquiring shares or debentures of the company or any other corporation - At no time during the reporting period did the company or any of its subsidiaries enter into any arrangements that would enable directors to acquire benefits by acquiring shares or debentures of the company or any other corporation[96](index=96&type=chunk) [Share Award Scheme](index=25&type=section&id=股份獎勵計劃) This chapter introduces the purpose and management of the company's share award scheme and its operation during the reporting period, noting no awards were granted or shares purchased - The Share Award Scheme aims to recognize and reward the contributions of eligible participants, retain them for the Group's continued operations and development, and attract suitable personnel to drive the Group's further growth[97](index=97&type=chunk) - During the reporting period, the Board did not grant, lapse, or cancel any awards, nor did the trustee of the Share Award Scheme purchase any shares[98](index=98&type=chunk) - At the beginning and end of the reporting period, the number of existing and new share awards that could be granted under the Share Award Scheme remained at **20,750,000**[99](index=99&type=chunk) [Share Option Scheme](index=25&type=section&id=購股權計劃) This chapter introduces the purpose of the company's share option scheme and notes that no share options have been granted, exercised, lapsed, or canceled since its listing - The Share Option Scheme aims to provide eligible persons with an opportunity to hold personal equity in the company and incentivize them to enhance their future contributions to the Group[100](index=100&type=chunk) - Since the company's listing, no share options under the Share Option Scheme have been granted, exercised, lapsed, or canceled[101](index=101&type=chunk) - The number of share options that could be granted under the Share Option Scheme was **40,000,000** at both the beginning and end of the reporting period[102](index=102&type=chunk) [Contractual Arrangements](index=26&type=section&id=合約安排) This chapter states that during the reporting period, the Board reviewed the overall performance of the contractual arrangements and found that the Group had complied with them in all material respects, with no significant changes - During the reporting period, the Board reviewed the overall performance of the contractual arrangements and considered that the Group had complied with the contractual arrangements in all material respects[104](index=104&type=chunk) - As of the date of this interim report, there have been no changes to the new contractual arrangements and/or the adoption of new contractual arrangements[105](index=105&type=chunk) [Latest Regulatory Developments](index=26&type=section&id=最新監管發展) This chapter states that there have been no significant updates in regulatory developments since the publication of the 2024 annual report, and the Board believes that existing laws and regulations will not have an immediate material adverse impact on the Group's business operations and financial position - There have been no significant updates since the publication of the 2024 annual report[106](index=106&type=chunk) - The Board believes that the aforementioned laws, decisions, implementing regulations and rules, and administrative measures will not have an immediate material adverse impact on the Group's business operations, business plans, and financial position[106](index=106&type=chunk) [Acknowledgement](index=26&type=section&id=致謝) This chapter expresses the Board's sincere gratitude to all shareholders, management team, employees, business partners, and students for their support and contributions to the Group's development - The Group extends its sincere gratitude to our shareholders, management team, employees, business partners, and our students for their support and contributions to the Group[107](index=107&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=27&type=section&id=中期簡明綜合損益表) This section presents the statement of profit or loss for the six months ended June 30, 2025, showing a decrease in profit for the period to RMB 162,061 thousand [Interim Condensed Consolidated Statement of Profit or Loss](index=27&type=section&id=中期簡明綜合損益表) This chapter provides the statement of profit or loss for the six months ended June 30, 2025, showing a profit for the period of **RMB 162,061 thousand**, a decrease from the same period last year Interim Condensed Consolidated Statement of Profit or Loss (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 534,054 | 535,434 | | Cost of sales | (216,850) | (204,601) | | Gross profit | 317,204 | 330,833 | | Other income and gains | 17,007 | 16,585 | | Selling and distribution expenses | (1,182) | (2,701) | | Administrative expenses | (104,473) | (86,797) | | Impairment loss on financial assets | (2,751) | (2,202) | | Other expenses | (442) | (272) | | Finance costs | (13,029) | (13,756) | | Profit before tax | 212,334 | 241,690 | | Income tax expense | (50,273) | (61,833) | | Profit for the period | 162,061 | 179,857 | | Earnings per share attributable to ordinary equity holders of the parent (Basic and diluted) | RMB 0.41 | RMB 0.45 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=28&type=section&id=中期簡明綜合全面收益表) This section presents the statement of comprehensive income for the six months ended June 30, 2025, showing a total comprehensive income of RMB 162,291 thousand, a decrease from the prior year [Interim Condensed Consolidated Statement of Comprehensive Income](index=28&type=section&id=中期簡明綜合全面收益表) This chapter provides the statement of comprehensive income for the six months ended June 30, 2025, showing a total comprehensive income for the period of **RMB 162,291 thousand**, a decrease from the same period last year Interim Condensed Consolidated Statement of Comprehensive Income (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the period | 162,061 | 179,857 | | Other comprehensive income/(loss), net of tax | 230 | (1,346) | | Total comprehensive income for the period | 162,291 | 178,511 | | Attributable to owners of the parent | 162,291 | 178,511 | [Interim Condensed Consolidated Statement of Financial Position](index=29&type=section&id=中期簡明綜合財務狀況表) This section presents the statement of financial position as of June 30, 2025, showing total assets less current liabilities of RMB 3,119,981 thousand and net assets of RMB 2,442,808 thousand, an increase from the end of 2024 [Interim Condensed Consolidated Statement of Financial Position](index=29&type=section&id=中期簡明綜合財務狀況表) This chapter provides the statement of financial position as of June 30, 2025, showing total assets less current liabilities of **RMB 3,119,981 thousand** and net assets of **RMB 2,442,808 thousand**, an increase from the end of 2024 Interim Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 2,388,330 | 2,407,320 | | Total non-current assets | 3,190,508 | 3,144,694 | | **Current assets** | | | | Cash and cash equivalents and time deposits | 285,410 | 338,768 | | Total current assets | 443,265 | 830,568 | | **Current liabilities** | | | | Total current liabilities | 513,792 | 978,993 | | Net current liabilities | (70,527) | (148,425) | | **Non-current liabilities** | | | | Interest-bearing bank borrowings | 663,275 | 666,926 | | Total non-current liabilities | 677,173 | 679,139 | | **Net assets** | 2,442,808 | 2,317,130 | | **Total equity** | 2,442,808 | 2,317,130 | - As of June 30, 2025, net assets were **RMB 2,442,808 thousand**, an increase from **RMB 2,317,130 thousand** as of December 31, 2024[117](index=117&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=30&type=section&id=中期簡明綜合權益變動表) This section presents the statement of changes in equity for the six months ended June 30, 2025, showing an increase in total equity attributable to owners of the parent from RMB 2,317,130 thousand at the beginning of the period to RMB 2,442,808 thousand at the end of the period [Interim Condensed Consolidated Statement of Changes in Equity](index=30&type=section&id=中期簡明綜合權益變動表) This chapter provides the statement of changes in equity for the six months ended June 30, 2025, showing an increase in total equity attributable to owners of the parent from **RMB 2,317,130 thousand** at the beginning of the period to **RMB 2,442,808 thousand** at the end of the period Interim Condensed Consolidated Statement of Changes in Equity (Six Months Ended June 30, 2025) | Indicator | 2025 January 1 (RMB thousand) | Profit for the period (RMB thousand) | Other comprehensive income (RMB thousand) | Final dividend declared for 2024 (RMB thousand) | 2025 June 30 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total equity attributable to owners of the parent | 2,317,130 | 162,061 | 230 | (36,613) | 2,442,808 | Interim Condensed Consolidated Statement of Changes in Equity (Six Months Ended June 30, 2024) | Indicator | 2024 January 1 (RMB thousand) | Profit for the period (RMB thousand) | Other comprehensive loss (RMB thousand) | Final dividend declared for 2023 (RMB thousand) | 2024 June 30 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total equity attributable to owners of the parent | 2,169,829 | 179,857 | (1,346) | (35,990) | 2,312,350 | [Interim Condensed Consolidated Statement of Cash Flows](index=32&type=section&id=中期簡明綜合現金流量表) This section presents the statement of cash flows for the six months ended June 30, 2025, showing net cash used in operating activities of RMB (204,190) thousand, net cash from investing activities of RMB 203,861 thousand, and net cash used in financing activities of RMB (53,267) thousand, resulting in a net decrease in cash and cash equivalents [Interim Condensed Consolidated Statement of Cash Flows](index=32&type=section&id=中期簡明綜合現金流量表) This chapter provides the statement of cash flows for the six months ended June 30, 2025, showing net cash used in operating activities of **RMB (204,190) thousand**, net cash from investing activities of **RMB 203,861 thousand**, and net cash used in financing activities of **RMB (53,267) thousand**, leading to a net decrease in cash and cash equivalents Interim Condensed Consolidated Statement of Cash Flows (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash used in operating activities | (204,190) | (242,269) | | Net cash from investing activities | 203,861 | 16,163 | | Net cash (used in)/from financing activities | (53,267) | 27,391 | | Net decrease in cash and cash equivalents | (53,596) (Decrease) | (198,715) (Decrease) | | Cash and cash equivalents at end of period | 247,033 | 306,046 | - Net cash from investing activities in 2025 was **RMB 203,861 thousand**, a significant increase from **RMB 16,163 thousand** in 2024, primarily due to the redemption of financial assets at fair value through profit or loss[127](index=127&type=chunk) [Notes to the Interim Condensed Consolidated Financial Information](index=33&type=section&id=中期簡明綜合財務資料附註) This section provides detailed notes to the interim condensed consolidated financial information, covering company details, accounting policies, segment information, revenue breakdown, profit before tax, income tax, dividends, earnings per share, property, plant and equipment, trade receivables, share capital, share award scheme, commitments, related party transactions, fair value of financial instruments, and post-reporting period events [1. Company Information](index=34&type=section&id=1.%20公司資料) This chapter briefly introduces the company's place of incorporation, nature, and primary business of providing undergraduate and junior college education services in China - The company was incorporated in the Cayman Islands as an exempted company under the laws of the Cayman Islands on May 8, 2018[128](index=128&type=chunk) - The Group primarily provides undergraduate and junior college education services in the People's Republic of China[128](index=128&type=chunk) [2. Basis of Preparation and Changes in Accounting Policies and Disclosures](index=34&type=section&id=2.%20編製基準及會計政策及披露變動) This chapter clarifies that the interim condensed consolidated financial information is prepared in accordance with IAS 34 and states that, except for the initial adoption of revised IFRSs, accounting policies are consistent with the annual consolidated financial statements - The interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[129](index=129&type=chunk) - Except for the initial adoption of revised International Financial Reporting Standards during this financial information period, the accounting policies adopted in preparing the interim condensed consolidated financial information are the same as those used in preparing the Group's annual consolidated financial statements for the year ended December 31, 2024[130](index=130&type=chunk) - IAS 21 (Amendment) "Lack of Exchangeability" has no impact on the interim condensed consolidated financial information, as the functional currencies of the Group and Group entities transacting in and converting to the Group's presentation currency are exchangeable[131](index=131&type=chunk) [3. Operating Segment Information](index=35&type=section&id=3.%20經營分部資料) This chapter states that the Group primarily provides higher education services in China, and no separate operating segment and geographical information is presented as all revenue and long-term assets are derived from China - The Group primarily provides higher education services in China, and the Directors review the Group's financial performance as a whole, thus no information on operating segments is presented[133](index=133&type=chunk) - During the period, as all revenue was generated in China and all long-term assets/capital expenditures were located in/originated from China, the Group operated in only one geographical location, and no geographical information is presented[134](index=134&type=chunk) - During the period, no revenue from services provided to a single customer accounted for **10% or more** of the Group's total revenue[135](index=135&type=chunk) [4. Revenue](index=35&type=section&id=4.%20收益) This chapter provides a detailed analysis of the Group's revenue sources, primarily including tuition fees, boarding fees, education-related services, and other services, with total revenue remaining stable compared to the prior year Revenue Composition (Six Months Ended June 30) | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Tuition fees | 451,863 | 454,760 | | Boarding fees | 72,202 | 70,636 | | Education-related services | 8,473 | 8,409 | | Other services | 1,516 | 1,629 | | **Total** | **534,054** | **535,434** | - Most revenue (tuition fees, boarding fees, some education-related services, and other services) is recognized over time, while a small portion of education-related services is recognized at a point in time[138](index=138&type=chunk) - Performance obligations for tuition fees and boarding fees are satisfied over time as services are provided, generally prepaid before the start of each academic year[139](index=139&type=chunk) [5. Profit Before Tax](index=37&type=section&id=5.%20除稅前溢利) This chapter lists the main expenses deducted from the Group's profit before tax, including cost of services provided, employee benefit expenses, depreciation and amortization, and impairment of financial assets Major Deductions (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of services provided | 216,850 | 204,601 | | Total employee benefit expenses | 191,843 | 177,175 | | Depreciation of property, plant and equipment | 57,882 | 50,932 | | Depreciation of right-of-use assets | 7,990 | 7,952 | | Amortization of other intangible assets | 1,135 | 495 | | Net impairment of financial assets | 2,751 | 2,202 | - For the six months ended June 30, 2025, depreciation of property, plant and equipment, depreciation of right-of-use assets, amortization of other intangible assets, and a portion of employee benefit expenses have been included in "cost of sales" in the statement of profit or loss[141](index=141&type=chunk) [6. Income Tax Expense](index=37&type=section&id=6.%20所得稅開支) This chapter explains the Group's income tax policies in different jurisdictions and discloses the composition of income tax expense for the reporting period, with Gench WFOE enjoying a preferential tax rate of 15% due to its high-tech enterprise qualification - The company is not subject to income tax in the Cayman Islands, and its directly held subsidiaries are not subject to income tax in the British Virgin Islands[142](index=142&type=chunk) - All subsidiaries operating in mainland China, except for Wangting Education Technology (Shanghai) Co., Ltd. (Gench WFOE), are subject to China corporate income tax at a rate of **25%**[145](index=145&type=chunk) - Gench WFOE, due to its "High-tech Enterprise" qualification, is subject to corporate income tax at a rate of **15%** for the six months ended June 30, 2025, and 2024[145](index=145&type=chunk) Income Tax Expense Composition (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current | 48,879 | 56,246 | | Deferred | 1,394 | 5,587 | | **Total tax deduction for the period** | **50,273** | **61,833** | [7. Dividends](index=38&type=section&id=7.%20股息) This chapter discloses the final dividends declared and paid and the interim dividends proposed by the Board - Final dividends declared and paid were **HKD 0.10 per ordinary share** (2025: **RMB 36,613 thousand**; 2024: **RMB 35,990 thousand**)[147](index=147&type=chunk) - The Board resolved to declare an interim dividend of **HKD 0.10 per share** for the six months ended June 30, 2025 (for the six months ended June 30, 2024: **HKD 0.10 per ordinary share**)[147](index=147&type=chunk) [8. Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=39&type=section&id=8.%20母公司普通股權益持有人應佔每股盈利) This chapter explains the calculation method for basic earnings per share and provides the profit for the period and weighted average number of ordinary shares used in the calculation - The basic earnings per share amount is calculated based on the profit for the period attributable to ordinary equity holders of the parent of **RMB 162,061 thousand** (for the six months ended June 30, 2024: **RMB 179,857 thousand**) and the weighted average number of ordinary shares outstanding during the period of **394,500,000 shares** (for the six months ended June 30, 2024: **395,401,500 shares**)[149](index=149&type=chunk) - For the six months ended June 30, 2025, and 2024, the Group had no outstanding potential dilutive ordinary shares[150](index=150&type=chunk) Earnings Per Share (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the parent used for calculating basic and diluted earnings per share | 162,061 | 179,857 | | Weighted average number of ordinary shares used for calculating basic and diluted earnings per share | 394,500,000 | 395,401,500 | [9. Property, Plant and Equipment](index=39&type=section&id=9.%20物業、廠房及設備) This chapter discloses the changes in property, plant and equipment during the reporting period, showing a slight decrease in the ending balance, mainly due to new additions being less than depreciation - As of June 30, 2025, the Group's property, plant and equipment amounted to approximately **RMB 2,388,330 thousand**[152](index=152&type=chunk) - Additions during the period were **RMB 38,929 thousand**, and depreciation charged was **RMB (57,882) thousand**, resulting in a decrease in the ending balance compared to the beginning of the period[152](index=152&type=chunk) - As of June 30, 2025, the original cost of the Group's property, plant and equipment of **RMB 237,369 thousand** was offset by government grants received[152](index=152&type=chunk) [10. Trade Receivables](index=40&type=section&id=10.%20應收賬款) This chapter provides an aging analysis of trade receivables at the end of the reporting period, showing a significant decrease in receivables within one year Aging Analysis of Trade Receivables (As of June 30) | Aging | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 4,288 | 9,517 | | 1 to 2 years | 885 | 1,684 | | 2 to 3 years | 186 | 481 | | Over 3 years | — | 66 | | **Total** | **5,359** | **11,748** | - Total trade receivables decreased from **RMB 11,748 thousand** as of December 31, 2024, to **RMB 5,359 thousand** as of June 30, 2025[153](index=153&type=chunk) [11. Share Capital](index=40&type=section&id=11.%20股本) This chapter discloses the company's authorized and issued share capital, showing that the number and amount of share capital remained unchanged during the reporting period - The authorized share capital consists of **500,000,000 ordinary shares** with a par value of **HKD 0.01 per share**, amounting to **RMB 4,462 thousand**[154](index=154&type=chunk) - The issued and fully paid share capital consists of **415,000,000 ordinary shares** with a par value of **HKD 0.01 per share**, amounting to **RMB 3,677 thousand**[154](index=154&type=chunk) [12. Share Award Scheme](index=41&type=section&id=12.%20股份獎勵計劃) This chapter details the eligibility, purpose, and management of the share award scheme, as well as share purchases during the reporting period, indicating no share purchases or awards granted - Eligible participants in the Share Award Scheme include employees, executives or officers, directors, or any consultants or advisors of any member of the Group[157](index=157&type=chunk) - The purpose and objectives of the Share Award Scheme are to recognize and reward the contributions of certain eligible participants, to retain them for the Group's continued operations and development, and to attract suitable personnel to drive the Group's further growth[157](index=157&type=chunk) - For the six months ended June 30, 2025, the trustee did not purchase any shares under the Share Award Scheme, nor did the Board grant, lapse, or cancel any awards[163](index=163&type=chunk) [13. Commitments](index=42&type=section&id=13.%20承擔) This chapter discloses the Group's capital commitments at the end of the reporting period, primarily related to the acquisition of property, plant and equipment - The Group's capital commitments related to property, plant and equipment at the end of the reporting period amounted to **RMB 6,293 thousand**[164](index=164&type=chunk) [14. Related Party Transactions](index=42&type=section&id=14.%20關聯方交易) This chapter lists transactions with related parties during the reporting period, including repayment of lease deposits and lease payments by associated companies, and discloses key management personnel compensation - Related parties include Shanghai Changjiu Qisheng Energy Co., Ltd. and Shanghai Changjiu Real Estate Development Co., Ltd., both controlled by Mr. Zhao Donghui[165](index=165&type=chunk) Transactions with Related Parties (Six Months Ended June 30) | Transaction Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total repayment of lease deposits by associated companies | — | 1,600 | | Total lease payments by associated companies | — | 328 | Key Management Personnel Compensation (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Short-term employee benefits | 3,321 | 3,402 | | Contributions to retirement benefit plans | 343 | 275 | | **Total** | **3,664** | **3,677** | [15. Fair Value and Fair Value Hierarchy of Financial Instruments](index=44&type=section&id=15.%20金融工具的公平值及公平值層級) This chapter explains the Group's fair value measurement methods and fair value hierarchy classification for financial instruments, including financial assets at fair value through profit or loss, debt investments at fair value through other comprehensive income, and equity investments Fair Value of Financial Assets (As of June 30) | Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Financial assets at fair value through profit or loss | 145,531 | 473,168 | | Debt investments at fair value through other comprehensive income | 192,906 | 131,037 | | Equity investments designated at fair value through other comprehensive income | 2,000 | — | | **Total** | **340,437** | **604,205** | Fair Value of Financial Liabilities (As of June 30) | Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest-bearing bank borrowings | 843,459 | 846,162 | - The fair value of unlisted investments (certificates of deposit and wealth management products) is estimated using the effective interest method and discounted cash flow valuation models; the fair value of unlisted equity investments designated at fair value through other comprehensive income is estimated using market-based valuation techniques[174](index=174&type=chunk)[176](index=176&type=chunk) Fair Value Hierarchy (As of June 30, 2025) | Type | Level 2 (RMB thousand) | Level 3 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss | 145,531 | — | 145,531 | | Debt investments at fair value through other comprehensive income | 192,906 | — | 192,906 | | Equity investments designated at fair value through other comprehensive income | — | 2,000 | 2,000 | | **Total assets** | **338,437** | **2,000** | **340,437** | | Interest-bearing bank borrowings | 843,459 | — | 843,459 | [16. Events After Reporting Period](index=48&type=section&id=16.%20報告期後事項) This chapter reconfirms the legal proceedings and interim dividend payment resolution that occurred after the reporting period - In early August 2025, the Group received two civil judgments from the Shanghai Pudong New Area People's Court regarding a construction contract dispute between Jian Qiao University and a contractor, where Jian Qiao University was ordered to pay construction fees totaling approximately **RMB 8.3 million** plus interest for overdue payments[186](index=186&type=chunk) - On August 28, 2025, the Board resolved to recommend the payment of an interim dividend of **HKD 0.10 per ordinary share** for the six months ended June 30, 2025, to shareholders whose names appear on the company's register of members on Friday, October 10, 2025[186](index=186&type=chunk) [17. Approval of Interim Condensed Consolidated Financial Information](index=48&type=section&id=17.%20中期簡明綜合財務資料的批准) This chapter specifies the approval date of the interim condensed financial information - The interim condensed financial information was approved by the Board and authorized for issue on August 28, 2025[187](index=187&type=chunk) [Definitions](index=48&type=section&id=釋義) This section provides definitions for key terms used in this interim report to ensure clear understanding of the content [Definitions](index=48&type=section&id=釋義) This chapter lists definitions for key terms used in this interim report, such as "2016 Decision," "Affiliates," "Associate," "Audit Committee," "Board," "Corporate Governance Code," "China," "Company," "Contractual Arrangements," "Directors," and "Group," to ensure clear understanding of the report's content - This chapter lists definitions for key terms such as "2016 Decision," "Affiliates," "Associate," "Audit Committee," "Board," "Corporate Governance Code," "China," "Company," "Contractual Arrangements," "Directors," and "Group"[189](index=189&type=chunk)[191](index=191&type=chunk)[197](index=197&type=chunk)

(於開曼群島註冊成立的有限公司) 股份代號: 1522 行穩致遠 中期報告 2025 6.6mm 2025 目錄 | 公司資料 | 2 | | --- | --- | | 公司概覽 | 3 | | 管理層討論及分析 | 5 | | 其他資料 | 19 | | 釋義 | 24 | | 中期審閱報告 | 26 | | 簡明綜合損益表 | 27 | | 簡明綜合損益及其他全面收益表 | 28 | | 簡明綜合財務狀況表 | 29 | | 簡明綜合權益變動表 | 31 | | 簡明綜合現金流量表 | 32 | | 未經審核中期財務報告附註 | 33 | 公司資料 董事會 執行董事 劉瑜先生 （行政總裁） 趙婧媛女士 非執行董事 任宇航先生 （主席） 孫方女士 曹明達先生 方志偉先生 獨立非執行董事 羅振邦先生 (CPA) 黃立新先生 伍穎恩女士 授權代表（根據上市規則第3.05條） 劉瑜先生 吳嘉雯女士 公司秘書 吳嘉雯女士 劉野菲先生 審核委員會 羅振邦先生 (CPA)（主席） 黃立新先生 伍穎恩女士 薪酬委員會 伍穎恩女士 （主席） 任宇航先生 黃立新先生 提名委員會 任宇航先生 （主席） 黃立新先生 伍穎恩女士 ...

(Incorporated in the Cayman Islands with Limited Liability) 股份代號 Stock Code : 00484 （於開曼群島註冊成立的有限公司） 中期報告 INTERIM REPORT 2025 Interim Report 2025 Forgame Holdings Limited Contents 目錄 2 Corporate Information 公司資料 5 Financial Highlights 財務摘要 7 Management Discussion and Analysis 管理層討論與分析 19 Corporate Governance and Other Information 企業管治及其他資料 28 Independent Review Report 獨立審閱報告 30 Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income 未經審核簡明合併損益及其他全面收益表 32 Unaudited Condens ...

[Financial Summary](index=3&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The company experienced a significant decline in revenue and profit for the six months ended June 30, 2025, despite a slight improvement in gross margin and strengthened liquidity Financial Summary for the Six Months Ended June 30, 2025 | Metric | 2025 (HK$ million) | 2024 (HK$ million) | Change | | :--- | :--- | :--- | :--- | | **Income Statement:** | | | | | Revenue | 157.4 | 281.9 | -44.2% | | Gross Profit | 17.8 | 30.4 | -41.5% | | Gross Profit Margin | 11.3% | 10.8% | +0.5% | | Profit for the period attributable to owners of the Company | 2.6 | 5.3 | -51.0% | | Net Profit Margin attributable to owners of the Company | 1.7% | 1.9% | -0.2% | | Basic and diluted earnings per share (HK$) | 0.0044 | 0.0088 | -50.0% | | **Financial Position (period-end):** | | | | | Net current assets | 86.2 | 83.0 | +3.9% | | Total Assets | 176.5 | 283.3 | -37.7% | | Borrowings | 5.0 | 21.2 | -76.4% | | Total Liabilities | 87.5 | 197.2 | -55.6% | | Equity attributable to owners of the Company | 88.9 | 86.1 | +3.3% | | **Financial Ratios:** | | | | | Current Ratio | 2.0 | 1.4 | +42.9% | | Inventory turnover days (days) | 86 | 38 | +126.3% | | Trade receivables turnover days (days) | 76 | 40 | +90.0% | | Trade payables turnover days (days) | 102 | 51 | +100.0% | [Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides an overview of the company's governance structure, contact details, and listing information [Board of Directors and Committees](index=4&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E5%A7%94%E5%93%A1%E6%9C%83) Details the company's executive and independent non-executive directors, along with members and chairpersons of its key committees - Executive Directors include **Wong Chi Sum (Chairman)** and **Wong Lai Fa**. Independent Non-executive Directors are **Wong Ting Kan**, **Pang Yuen Shan**, **Cheung Cheuk Cheung**, and **Chan Tsang Mo**[8](index=8&type=chunk) - The Audit Committee is chaired by **Wong Ting Kan**, the Nomination Committee by **Cheung Cheuk Cheung**, the Remuneration Committee by **Pang Yuen Shan**, and the Conflict of Interest Committee by **Wong Ting Kan**[9](index=9&type=chunk) [Company Contact and Registration Information](index=5&type=section&id=%E5%85%AC%E5%8F%B8%E8%81%AF%E7%B5%A1%E5%8F%8A%E8%A8%BB%E5%86%8A%E4%BF%A1%E6%81%AF) Provides details on the company's authorized representatives, auditor, legal counsel, registered office, principal places of business, and principal bankers - Authorized representatives are **Mr. Wong Chi Sum** and **Ms. Wong Lai Fa**[11](index=11&type=chunk) - The auditor is **PricewaterhouseCoopers**, and legal counsel is **DeHeng Law Offices (Hong Kong) LLP**[11](index=11&type=chunk) - Principal bankers include **Hang Seng Bank**, **Bank of China (Hong Kong)**, and **HSBC**[13](index=13&type=chunk) [Share and Listing Information](index=6&type=section&id=%E8%82%A1%E4%BB%BD%E5%8F%8A%E4%B8%8A%E5%B8%82%E4%BF%A1%E6%81%AF) Discloses the company's share registrar, listing venue (Hong Kong Stock Exchange), stock code (540), and corporate website - The company is listed on **The Stock Exchange of Hong Kong Limited** under stock code **540**[14](index=14&type=chunk) - The company's website is **www.speedy-global.com**[14](index=14&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides an in-depth review of the company's financial performance, position, liquidity, and future outlook for the reporting period [Financial Review](index=7&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) Revenue significantly decreased by 44.2% to HK$157.4 million due to reduced customer orders, while gross margin slightly improved to 11.3% through cost control Financial Performance for the Six Months Ended June 30, 2025 | Metric | 2025 (HK$ million) | 2024 (HK$ million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 157.4 | 281.9 | -44.2% | | Gross Profit | 17.8 | 30.4 | -41.5% | | Gross Profit Margin | 11.3% | 10.8% | +0.5% | | Profit for the period attributable to owners of the Company | 2.6 | 5.3 | -51.0% | | Selling and marketing expenses | 0.4 | 0.47 | -14.5% | | Administrative expenses | 13.4 | 23.87 | -43.8% | | Other losses – net | 0.7 | 0.5 | +40.0% | | Finance income | 0.7 | 0.998 | -27.4% | | Finance costs | 0.8 | 1.994 | -59.5% | | Income tax expense | 1.2 | 1.2 | 0.0% | - The decrease in revenue was primarily due to reduced sales orders from certain existing customers[16](index=16&type=chunk)[20](index=20&type=chunk) - The increase in gross profit margin was mainly attributable to effective cost control measures implemented during 2025[17](index=17&type=chunk)[21](index=21&type=chunk) - The reduction in administrative expenses was mainly due to decreased entertainment expenses and donations, along with a reduction in employee headcount and other administrative expenses following the **disposal of the Cambodian factory in 2024**[19](index=19&type=chunk)[23](index=23&type=chunk) [Financial Position Analysis](index=8&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E5%88%86%E6%9E%90) Inventory, trade receivables, and trade payables decreased, reflecting lower sales and purchases, while turnover days for inventory and receivables significantly increased Key Financial Position Metrics as at June 30, 2025 | Metric | June 30, 2025 (HK$ million) | December 31, 2024 (HK$ million) | Change | | :--- | :--- | :--- | :--- | | Inventory | 56.1 | 75.9 | -26.1% | | Inventory turnover days (days) | 86 | 38 | +126.3% | | Trade receivables | 43.1 | 91.8 | -53.1% | | Trade receivables turnover days (days) | 76 | 40 | +90.0% | | Trade payables | 63.2 | 93.6 | -32.5% | | Trade payables turnover days (days) | 102 | 51 | +100.0% | | Bank borrowings | 5.0 | 76.0 | -93.4% | - Inventory turnover days increased to **86 days**, primarily due to customers' production and delivery schedules being adjusted from the first half to the second half of 2025[28](index=28&type=chunk)[33](index=33&type=chunk) - The decrease in trade receivables is consistent with the reduction in revenue, while the decrease in trade payables is mainly due to lower procurement volumes[29](index=29&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk)[40](index=40&type=chunk) - Bank borrowings significantly decreased, with approximately **HK$0.6 million** repayable within one year and the remainder repayable in installments[37](index=37&type=chunk)[42](index=42&type=chunk) [Liquidity and Financial Policies](index=9&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E6%94%BF%E7%AD%96) The group maintained a sound liquidity position with sufficient cash and cash equivalents, improving its current ratio from 1.4 to 2.0 Liquidity Position as at June 30, 2025 | Metric | June 30, 2025 (HK$ million) | December 31, 2024 (HK$ million) | | :--- | :--- | :--- | | Cash and cash equivalents | 59.6 | 87.342 | | Current Ratio | 2.0 | 1.4 | - The Group maintained a sound liquidity position, with working capital provided by internal resources and bank borrowings[38](index=38&type=chunk)[43](index=43&type=chunk) - The company adopted a prudent financial management strategy, mitigating credit risk by continuously assessing customer creditworthiness[44](index=44&type=chunk)[45](index=45&type=chunk) - No financial instruments were used to hedge foreign currency risk during the reporting period, with no significant changes in capital structure or material capital commitments[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) [Employee Information](index=11&type=section&id=%E5%83%B1%E5%93%A1%E8%B3%87%E6%96%99) As of June 30, 2025, the group had 139 employees with total staff costs significantly reduced due to the 2024 Cambodian factory disposal Employee Information for the Six Months Ended June 30, 2025 | Metric | June 30, 2025 | Same period in 2024 | | :--- | :--- | :--- | | Total employees | 139 persons | Not applicable | | Total staff costs | HK$14.6 million | HK$30.8 million | - The decrease in employee headcount and staff costs was primarily due to the **disposal of the Cambodian factory in 2024**[54](index=54&type=chunk)[56](index=56&type=chunk) - The company has an employee share option scheme to incentivize or reward contributors to the Group, but no share options were granted, cancelled, or lapsed during the reporting period[55](index=55&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk)[65](index=65&type=chunk) [Investments and Future Plans](index=12&type=section&id=%E6%8A%95%E8%B3%87%E5%8F%8A%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) The group held no significant investments or future capital plans, and will focus on product innovation, operational efficiency, and cost reduction - As at June 30, 2025, the Group held no significant investments in equity interests of other companies and had no material plans for future investments or capital assets[61](index=61&type=chunk)[62](index=62&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - No material acquisitions or disposals of subsidiaries, associates, or joint ventures occurred during the reporting period, nor were there any asset pledges or significant contingent liabilities[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - Looking ahead to the second half of 2025, the Group will enhance product innovation and creativity, improve operational efficiency by streamlining production processes, collaborate closely with customers for integrated production and better material prices, and simplify its organizational structure to save costs[74](index=74&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=14&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This statement presents the group's financial performance, including revenue, expenses, and profit for the six months ended June 30, 2025 Condensed Consolidated Statement of Comprehensive Income (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Revenue | 157,420 | 281,856 | | Cost of sales | (139,646) | (251,505) | | Gross Profit | 17,774 | 30,351 | | Selling and marketing expenses | (365) | (427) | | Administrative expenses | (13,408) | (23,867) | | Other income | 501 | 1,873 | | Other losses – net | (651) | (475) | | Operating profit | 3,851 | 7,455 | | Finance income | 725 | 998 | | Finance costs | (807) | (1,994) | | Net finance costs | (82) | (996) | | Profit before income tax | 3,769 | 6,459 | | Income tax expense | (1,151) | (1,186) | | Profit for the period attributable to owners of the Company | 2,618 | 5,273 | | Exchange differences | 201 | (184) | | Total comprehensive income for the period attributable to owners of the Company | 2,819 | 5,089 | [Condensed Consolidated Statement of Financial Position](index=15&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This statement outlines the group's assets, liabilities, and equity as of June 30, 2025, reflecting its financial health Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Metric | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 4,240 | 4,600 | | Current assets | 172,218 | 278,710 | | **Total Assets** | **176,458** | **283,310** | | **Equity** | | | | Share capital | 60,000 | 60,000 | | Share premium | 53,441 | 53,441 | | Other reserves | 15,277 | 15,076 | | Accumulated losses | (39,781) | (42,399) | | **Total Equity** | **88,937** | **86,118** | | **Liabilities** | | | | Non-current liabilities | 1,477 | 1,462 | | Current liabilities | 86,044 | 195,730 | | **Total Liabilities** | **87,521** | **197,192** | | **Total Equity and Liabilities** | **176,458** | **283,310** | [Condensed Consolidated Statement of Changes in Equity](index=17&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) This statement details the changes in the group's equity components for the six months ended June 30, 2025 Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended June 30, 2025) | Item | Share Capital (HK$ '000) | Share Premium (HK$ '000) | Other Reserves (HK$ '000) | Retained Earnings (HK$ '000) | Total Equity (HK$ '000) | | :--- | :--- | :--- | :--- | :--- | :--- | | January 1, 2024 (audited) | 60,000 | 53,441 | 14,150 | (58,056) | 69,535 | | Profit for the period | – | – | – | 5,273 | 5,273 | | Exchange differences | – | – | (184) | – | (184) | | June 30, 2024 (unaudited) | 60,000 | 53,441 | 13,966 | (52,783) | 74,624 | | January 1, 2025 (audited) | 60,000 | 53,441 | 15,076 | (42,399) | 86,118 | | Profit for the period | – | – | – | 2,618 | 2,618 | | Exchange differences | – | – | 201 | – | 201 | | June 30, 2025 (unaudited) | 60,000 | 53,441 | 15,277 | (39,781) | 88,937 | [Condensed Consolidated Statement of Cash Flows](index=18&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) This statement presents the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 Condensed Consolidated Statement of Cash Flows (For the Six Months Ended June 30, 2025) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Net cash from/(used in) operating activities | 42,303 | (21,098) | | Net cash from investing activities | 725 | 1,284 | | Net cash used in financing activities | (71,024) | (2,792) | | Net decrease in cash and cash equivalents | (27,996) | (22,606) | | Cash and cash equivalents at beginning of period | 87,342 | 127,115 | | Exchange gain/(loss) on cash and cash equivalents | 261 | (212) | | Cash and cash equivalents at end of period | 59,607 | 104,297 | [Notes to the Unaudited Condensed Consolidated Interim Financial Statements](index=19&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides explanatory notes and additional details to the unaudited condensed consolidated interim financial statements [General Information](index=19&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) The company, incorporated in the Cayman Islands, primarily engages in apparel supply chain services, with Sky Halo Holdings Limited as its ultimate holding company - The company was incorporated as an exempted company in the Cayman Islands on **September 28, 2011**[95](index=95&type=chunk)[99](index=99&type=chunk) - The Group primarily engages in apparel supply chain services, offering woven, cut-and-sewn knit, and sweater knit products[95](index=95&type=chunk)[100](index=100&type=chunk) - The Group's immediate and ultimate holding company is **Sky Halo Holdings Limited ("Sky Halo")**[95](index=95&type=chunk)[99](index=99&type=chunk) [Basis of Preparation](index=19&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated interim financial statements are prepared in accordance with HKAS 34 and should be read in conjunction with the 2024 annual financial statements - The financial statements are prepared in accordance with **Hong Kong Accounting Standard 34 "Interim Financial Reporting"**[96](index=96&type=chunk)[101](index=101&type=chunk) - They should be read in conjunction with the annual financial statements for the year ended **December 31, 2024**[96](index=96&type=chunk)[101](index=101&type=chunk) [Accounting Policies](index=19&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) Applied accounting policies are consistent with 2024 annual financial statements, with new standards adopted having no significant impact, and future standards not expected to cause material changes - Hong Kong Accounting Standard 21 and Hong Kong Financial Reporting Standard 1 (Amendment) "Lack of Exchangeability" were adopted during the reporting period, but did not result in significant changes to policies or financial performance[98](index=98&type=chunk)[103](index=103&type=chunk) - Several new and amended standards issued but not yet effective, including **HKFRS 9 & 7**, **HKFRS 1, 7, 9, 10 & HKAS 7**, **HKFRS 18**, **Hong Kong Interpretation 5**, and **HKFRS 19**, are not expected to have a significant impact on the Group's financial performance[106](index=106&type=chunk) [Estimates](index=21&type=section&id=%E4%BC%B0%E8%A8%88) The preparation of interim financial statements involves management judgments, estimates, and assumptions, consistent with those applied in the 2024 annual financial statements - The preparation of financial statements involves management judgments, estimates, and assumptions, where actual results may differ from these estimates[107](index=107&type=chunk)[109](index=109&type=chunk) - The significant judgments and sources of estimation uncertainty are consistent with those applied in the **2024 annual consolidated financial statements**[107](index=107&type=chunk)[110](index=110&type=chunk) [Financial Risk Management](index=21&type=section&id=%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The group's operations are exposed to market, credit, and liquidity risks, with financial risk management information to be read with the 2024 annual financial statements - The Group is exposed to market risks (foreign exchange, interest rate), credit risk, and liquidity risk in its operations[108](index=108&type=chunk)[111](index=111&type=chunk) - The financial risk management information in this interim report should be read in conjunction with the **2024 annual financial statements**[108](index=108&type=chunk)[111](index=111&type=chunk) [Revenue and Segment Information](index=22&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) Revenue is recognized upon product transfer and assured collection, primarily from apparel supply chain services, with management reviewing it as a single operating segment - The Group's revenue primarily derives from apparel supply chain services, recognized upon product delivery and assured collection[112](index=112&type=chunk)[113](index=113&type=chunk) Major Customer Revenue Contribution (For the Six Months Ended June 30, 2025) | Customer | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Customer A | 133,371 | 156,810 | | Customer B | 1,150 | 85,712 | - Management reviews the business as a single operating segment due to consistent service nature, customer types, and service delivery methods across different regions[116](index=116&type=chunk)[119](index=119&type=chunk) [Operating Profit](index=23&type=section&id=%E7%B6%93%E7%87%9F%E6%BA%A2%E5%88%A9) Profit before tax is derived after deducting depreciation, amortization, employee benefits, and rental expenses, all of which significantly decreased year-on-year Key Deductions for Operating Profit (For the Six Months Ended June 30, 2025) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Depreciation and amortization | 304 | 1,655 | | Employee benefit expenses | 14,582 | 30,742 | | Rental expenses | 2,163 | 4,102 | [Finance Income and Finance Costs](index=23&type=section&id=%E8%B2%A1%E5%8B%99%E6%94%B6%E5%85%A5%E5%8F%8A%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Net finance costs were HK$0.082 million, with finance costs from bank borrowings significantly decreasing and finance income from short-term deposits also declining Finance Income and Finance Costs (For the Six Months Ended June 30, 2025) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Interest expense on bank borrowings | (807) | (1,986) | | Lease liabilities | – | (8) | | Interest income from short-term bank deposits | 725 | 998 | | Net finance costs | (82) | (996) | [Income Tax Expense](index=24&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Total income tax expense was HK$1.151 million, consistent with the prior period, with Hong Kong profits tax unprovided due to tax losses and China CIT at 25% Income Tax Expense (For the Six Months Ended June 30, 2025) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Hong Kong profits tax | (4) | 610 | | China Corporate Income Tax ("CIT") | (1,147) | (1,796) | | Total income tax expense | (1,151) | (1,186) | - No provision for Hong Kong profits tax was made as relevant group companies incurred tax losses[129](index=129&type=chunk)[132](index=132&type=chunk) - China Corporate Income Tax is provided at a rate of **25%**, with withholding tax provided at **5%** for dividends from Chinese subsidiaries[127](index=127&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) [Basic and Diluted Earnings Per Share](index=25&type=section&id=%E6%AF%8F%E8%82%A1%E5%9F%BA%E6%9C%AC%E5%8F%8A%E6%94%A4%E8%96%84%E6%BA%A2%E5%88%A9) Basic and diluted earnings per share for the six months ended June 30, 2025, decreased to HK$0.0044 from HK$0.0088 in the prior period Basic and Diluted Earnings Per Share (For the Six Months Ended June 30, 2025) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company (HK$ '000) | 2,618 | 5,273 | | Weighted average number of ordinary shares in issue | 600,000,000 | 600,000,000 | | Basic and diluted earnings per share (HK$) | 0.0044 | 0.0088 | - The company had no outstanding potential dilutive ordinary shares during the reporting period, thus diluted earnings per share are identical to basic earnings per share[135](index=135&type=chunk)[138](index=138&type=chunk) [Dividends](index=25&type=section&id=%E8%82%A1%E6%81%AF) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved not to declare an interim dividend for the six months ended **June 30, 2025**[137](index=137&type=chunk)[139](index=139&type=chunk) [Trade and Other Receivables](index=25&type=section&id=%E6%87%89%E6%94%B6%E8%B3%A3%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) Total trade and other receivables significantly decreased to HK$48.693 million as of June 30, 2025, reflecting a substantial reduction from the prior year-end Trade and Other Receivables (As at June 30, 2025) | Item | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Trade receivables | 43,077 | 91,794 | | Other receivables | 5,616 | 13,809 | | Less: Impairment allowance – trade receivables | – | (841) | | **Total** | **48,693** | **104,762** | Ageing Analysis of Trade Receivables (As at June 30, 2025) | Ageing | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | 0 to 30 days | 17,317 | 46,239 | | 31 to 90 days | 25,417 | 40,625 | | 91 to 180 days | 49 | 4,750 | | Over 180 days | 294 | 180 | - The Group generally grants credit terms of **30 to 90 days** to customers in its apparel supply chain services business[35](index=35&type=chunk)[142](index=142&type=chunk) [Trade and Other Payables](index=26&type=section&id=%E6%87%89%E4%BB%98%E8%B3%A3%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) Total trade and other payables decreased to HK$74.33 million as of June 30, 2025, primarily due to reduced procurement volumes Trade and Other Payables (As at June 30, 2025) | Item | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Trade payables – amounts due to third parties | 63,178 | 93,582 | | Accrued wages | 8,205 | 11,220 | | Other payables | 1,705 | 3,872 | | Other tax payables | 1,242 | 1,168 | | **Total** | **74,330** | **109,842** | Ageing Analysis of Trade Payables (As at June 30, 2025) | Ageing | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | 0 to 30 days | 33,982 | 32,098 | | 31 to 90 days | 25,281 | 55,126 | | 91 to 180 days | 256 | 1,227 | | Over 180 days | 3,659 | 5,131 | - The decrease in trade payables balance was mainly due to reduced purchases from suppliers for the six months ended **June 30, 2025**[36](index=36&type=chunk)[40](index=40&type=chunk) - Credit terms granted by the Group's major suppliers range from **30 to 90 days**[145](index=145&type=chunk) [Share Capital and Share Premium](index=27&type=section&id=%E8%82%A1%E6%9C%AC%E5%8F%8A%E8%82%A1%E4%BB%BD%E6%BA%A2%E5%83%B9) As of June 30, 2025, the company's issued and fully paid ordinary shares remained at 600 million, with total share capital and share premium unchanged at HK$113.441 million Share Capital and Share Premium (As at June 30, 2025) | Item | Number of Ordinary Shares | Ordinary Shares (HK$ '000) | Share Premium (HK$ '000) | Total (HK$ '000) | | :--- | :--- | :--- | :--- | :--- | | December 31, 2024 | 600,000,000 | 60,000 | 53,441 | 113,441 | | June 30, 2025 | 600,000,000 | 60,000 | 53,441 | 113,441 | - As at June 30, 2025, the total authorized ordinary shares were **1.2 billion** with a par value of **HK$0.1** per share[148](index=148&type=chunk)[149](index=149&type=chunk) [Other Reserves](index=28&type=section&id=%E5%85%B6%E4%BB%96%E5%84%B2%E5%82%99) Total other reserves increased slightly to HK$15.277 million as of June 30, 2025, primarily due to exchange differences Movement in Other Reserves (As at June 30, 2025) | Item | Exchange Reserve (HK$ '000) | Statutory Reserve (HK$ '000) | Merger Reserve (HK$ '000) | Capital Reserve (HK$ '000) | Total Reserves (HK$ '000) | | :--- | :--- | :--- | :--- | :--- | :--- | | January 1, 2025 (audited) | (5,783) | 14,030 | 2,957 | 3,872 | 15,076 | | Exchange differences | 201 | – | – | – | – | | June 30, 2025 (unaudited) | (5,582) | 14,030 | 2,957 | 3,872 | 15,277 | [Bank Borrowings](index=28&type=section&id=%E9%8A%80%E8%A1%8C%E5%80%9F%E8%B2%B8) Total bank borrowings significantly decreased to HK$5.028 million as of June 30, 2025, with repayment schedules across various periods Bank Borrowings Repayment Schedule (As at June 30, 2025) | Repayment Period | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Within one year | 626 | 16,446 | | Between one and two years | 646 | 636 | | Between two and five years | 2,058 | 2,027 | | Over five years | 1,698 | 2,054 | | **Total** | **5,028** | **21,163** | - All bank borrowings are provided by Hong Kong banks, bear interest at floating rates, and are subject to repayment on demand clauses[37](index=37&type=chunk)[42](index=42&type=chunk) [Other Information](index=29&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers various disclosures including securities transactions, directors' and major shareholders' interests, corporate governance, and audit committee review [Purchase, Sale or Redemption of the Company's Listed Securities](index=29&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period, and no treasury shares were held - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities[155](index=155&type=chunk)[156](index=156&type=chunk) - As at June 30, 2025, the company held no treasury shares[155](index=155&type=chunk)[156](index=156&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=29&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E7%9A%84%E6%AC%8A%E7%9B%8A%E6%88%96%E6%B7%A1%E5%80%89) Executive Director Mr. Wong Chi Sum held 54.54% of the company's shares through Sky Halo Holdings Limited, with Ms. Wong Lai Fa holding 0.02% Directors' Interests in the Company's Shares (As at June 30, 2025) | Name of Director | Capacity/Nature of Interest | Number and Class of Securities | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Wong Chi Sum | Interest in controlled corporation | 327,242,688 ordinary shares (L) | 54.54% | | Ms. Wong Lai Fa | Beneficial owner | 92,000 ordinary shares (L) | 0.02% | - Mr. Wong Chi Sum wholly owns **10,000 ordinary shares** of Sky Halo Holdings Limited, representing **100%** equity interest[164](index=164&type=chunk) - Save as disclosed, no other interests or short positions in shares or debentures of the company were held by directors and chief executives as required by the Securities and Futures Ordinance[166](index=166&type=chunk)[167](index=167&type=chunk) [Substantial Shareholders' Interests and/or Short Positions in the Company's Shares and Underlying Shares](index=31&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B8%AD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E2%88%95%E6%88%96%E6%B7%A1%E5%80%89) As of June 30, 2025, Sky Halo Holdings Limited held 54.54% of the company's shares, with other substantial shareholders also disclosed Substantial Shareholders' Interests in the Company's Shares (As at June 30, 2025) | Name of Shareholder | Capacity/Nature of Interest | Number and Class of Securities | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Sky Halo | Beneficial owner | 327,242,688 ordinary shares (L) | 54.54% | | Ms. Cheuk Wai Ying | Family interest | 327,242,688 ordinary shares (L) | 54.54% | | Mr. Chan Hung Kwong | Beneficial owner | 33,031,758 ordinary shares (L) | 5.51% | | Mr. Cheuk Lim Fai | Beneficial owner | 30,204,000 ordinary shares (L) | 5.03% | - Sky Halo Holdings Limited is wholly owned by **Mr. Wong Chi Sum**[169](index=169&type=chunk) - Ms. Cheuk Wai Ying, as the spouse of Mr. Wong Chi Sum, is deemed to be interested in Mr. Wong's interests in the company[169](index=169&type=chunk)[170](index=170&type=chunk) [Corporate Governance](index=32&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company complied with the Corporate Governance Code, though the roles of Chairman and Chief Executive Officer were combined, which the Board believes aids swift decision-making - The company complied with all code provisions of the Corporate Governance Code during the reporting period, but the roles of Chairman and Chief Executive Officer were combined and held by **Mr. Wong Chi Sum**[172](index=172&type=chunk)[175](index=175&type=chunk) - The Board believes this structure facilitates prompt and effective decision-making and execution, and will continue to consider the feasibility of appointing a separate Chief Executive Officer[172](index=172&type=chunk)[175](index=175&type=chunk) [Model Code for Securities Transactions by Directors](index=32&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E8%A1%8C%E7%82%BA%E5%AE%88%E5%89%87) The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers, with all directors confirming compliance during the reporting period - The company adopted the **Model Code for Securities Transactions by Directors of Listed Issuers**, and all directors confirmed compliance with the code during the reporting period[173](index=173&type=chunk)[176](index=176&type=chunk) [Audit Committee](index=33&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising four independent non-executive directors and chaired by Mr. Wong Ting Kan, reviewed the interim financial statements and found them compliant - The Audit Committee comprises **four independent non-executive directors** and is chaired by **Mr. Wong Ting Kan**[177](index=177&type=chunk)[179](index=179&type=chunk) - The Audit Committee reviewed the interim financial statements and deemed them compliant with applicable accounting standards, rules, and regulations, with appropriate disclosures made[177](index=177&type=chunk)[180](index=180&type=chunk) [Interim Dividend](index=33&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved not to declare an interim dividend for the six months ended **June 30, 2025**[137](index=137&type=chunk)[139](index=139&type=chunk)[178](index=178&type=chunk)[181](index=181&type=chunk) [Disclosure of Information](index=33&type=section&id=%E8%B3%87%E6%96%99%E6%8A%AB%E9%9C%B2) The company's interim report has been published on the HKEXnews website and the company's official website - The company's interim report has been published on the **HKEXnews website (http://www.hkexnews.hk)** and the **company's website (http://www.speedy-global.com)**[182](index=182&type=chunk)

[Important Notice](index=3&type=section&id=Important%20Notice) This section emphasizes the truthfulness, accuracy, and completeness of the company's 2025 semi-annual report, with legal responsibility borne by the Board of Directors, Supervisory Committee, and senior management, noting no profit distribution or capital reserve conversion for the period and warning investors about forward-looking statements - The company's Board of Directors, Supervisory Committee, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report content and bear legal responsibility[8](index=8&type=chunk) - The company will not distribute 2025 semi-annual profits or convert capital reserves into share capital[8](index=8&type=chunk) - Forward-looking statements regarding future plans and development strategies in the report do not constitute substantive commitments, and investors are advised of investment risks[8](index=8&type=chunk) [Definitions](index=4&type=section&id=Definitions) This section defines common terms used in the report, including company names, governance bodies, geographical areas, reporting period, exchanges, group composition, major shareholders, and relevant laws and regulations, to ensure clear understanding of the report content - "Company," "the Company," or "Shanghai Petrochemical" refers to Sinopec Shanghai Petrochemical Company Limited[9](index=9&type=chunk) - "Reporting Period" refers to the six months ended June 30, 2025[9](index=9&type=chunk) - "The Group" refers to the Company and its subsidiaries[9](index=9&type=chunk) [Company Profile and Key Financial Indicators](index=5&type=section&id=Company%20Profile%20and%20Key%20Financial%20Indicators) This section outlines the company's key financial performance in the first half of 2025, prepared under PRC GAAP, showing significant declines in revenue and net profit, turning from profit to loss, but a substantial increase in net cash flow from operating activities, also disclosing differences between financial statements prepared under PRC GAAP and IFRS, and non-recurring gains and losses [Key Accounting Data and Financial Indicators (Prepared in Accordance with PRC GAAP)](index=5&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators%20%28Prepared%20in%20Accordance%20with%20PRC%20GAAP%29) The company's key financial data for H1 2025 shows a 9.21% year-on-year decrease in operating revenue, with total profit and net profit attributable to parent company shareholders turning from profit to significant loss, and basic earnings per share also turning negative, however, net cash flow from operating activities increased by 127.78% year-on-year H1 2025 Key Accounting Data and Financial Indicators (RMB thousands) | Indicator | Current Period (Jan-Jun) | Prior Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 39,523,226 | 43,532,806 | (9.21) | | Total (Loss)/Profit | (595,616) | 37,495 | (1,688.52) | | Net (Loss)/Profit Attributable to Parent Company Shareholders | (462,128) | 27,912 | (1,755.66) | | Net Cash Flow from Operating Activities | 778,943 | 341,970 | 127.78 | | Basic (Loss)/Earnings Per Share (RMB per share) | (0.044) | 0.003 | (1,566.67) | | Weighted Average Net Asset (Loss)/Return (%) | (1.870) | 0.113 | Decrease by 1.983 percentage points | [Differences Between Financial Statements Prepared in Accordance with PRC GAAP and IFRS](index=6&type=section&id=Differences%20Between%20Financial%20Statements%20Prepared%20in%20Accordance%20with%20PRC%20GAAP%20and%20IFRS) This section lists the differences in net (loss)/profit and net assets attributable to parent company shareholders when prepared under PRC GAAP and IFRS, showing losses under both standards but with slight variations in specific amounts Differences in Accounting Standards (RMB thousands) | Indicator | Net (Loss)/Profit Attributable to Parent Company Shareholders (Current Period) | Net (Loss)/Profit Attributable to Parent Company Shareholders (Prior Period) | Net Assets Attributable to Parent Company Shareholders (Current Period End) | Net Assets Attributable to Parent Company Shareholders (Current Period Start) | | :--- | :--- | :--- | :--- | :--- | | Under PRC GAAP | (462,128) | 27,912 | 24,305,137 | 25,040,254 | | Under IFRS | (449,274) | 2,845 | 24,293,317 | 25,028,251 | [Non-Recurring Gains and Losses (Prepared in Accordance with PRC GAAP)](index=7&type=section&id=Non-Recurring%20Gains%20and%20Losses%20%28Prepared%20in%20Accordance%20with%20PRC%20GAAP%29) This section details the non-recurring gains and losses for H1 2025, totaling RMB (22,753) thousands, primarily including gains/losses from disposal of non-current assets, government grants, fair value changes of financial assets, and severance benefits H1 2025 Non-Recurring Gains and Losses (RMB thousands) | Non-Recurring Item | Amount | | :--- | :--- | | Gains/Losses from disposal of non-current assets | (23,498) | | Government grants recognized in current profit or loss | 5,260 | | Gains/Losses from changes in fair value of financial assets and liabilities held by non-financial enterprises and disposal gains/losses | 7,230 | | One-off expenses incurred by enterprises due to discontinuation of related operating activities (e.g., severance benefits) | (22,066) | | Other gains and losses meeting the definition of non-recurring items | (890) | | Other non-operating income and expenses apart from the above | 3,240 | | Income tax impact | 8,265 | | Impact on minority interests (after tax) | (294) | | Total | (22,753) | [Board Report](index=8&type=section&id=Board%20Report) The Board Report comprehensively reviews the company's operations in H1 2025, covering business overview, management discussion and analysis, key operating conditions, asset and liability status, investment analysis, and potential risks, the company faced challenges such as global economic slowdown, tariff wars, and geopolitical volatility, leading to decreased revenue and net profit, but improved operating cash flow, the company actively promoted industrial transformation and upgrading, innovation-driven development, and reform management, and outlined market forecasts and work arrangements for the second half of the year [Section 1 Company Business Overview](index=8&type=section&id=Section%201%20Company%20Business%20Overview) This section outlines the company's business nature as a highly integrated petrochemical enterprise, its operating model, and industry environment, the company primarily processes crude oil into refining and chemical products, mainly sold in the East China region, facing a global economic slowdown, the company actively adjusted its product structure, optimized technology, and emphasized green and low-carbon development [Description of the Company's Main Business, Operating Model, and Industry Conditions During the Reporting Period](index=8&type=section&id=Description%20of%20the%20Company%27s%20Main%20Business%2C%20Operating%20Model%2C%20and%20Industry%20Conditions%20During%20the%20Reporting%20Period) The company is a highly integrated petrochemical enterprise in Jinshanwei, Shanghai, primarily processing crude oil into various refining and chemical products, with most sales in China, especially East China, facing a global economic slowdown and a cyclical trough in the chemical market, the company actively adjusted its product structure, optimized process technology, and promoted green and low-carbon development - The company is a highly integrated petrochemical enterprise, primarily processing crude oil into refining and chemical products, with its main market in East China[15](index=15&type=chunk) - Global economic growth has slowed, and the chemical market is at a cyclical bottom, but China's "green transformation," "domestic substitution," and "industrial upgrading" present strategic opportunities for the industry[15](index=15&type=chunk) - The company leverages its integrated advantages to adjust product structure, improve product quality, optimize process technology, and promote energy saving, consumption reduction, and green low-carbon development[15](index=15&type=chunk) [Analysis of Core Competencies During the Reporting Period](index=8&type=section&id=Analysis%20of%20Core%20Competencies%20During%20the%20Reporting%20Period) The company's core competencies include its integrated refining and chemical capabilities, superior geographical location, and extensive production and operation experience, located in the core Yangtze River Delta, it boasts a complete logistics system and supporting facilities, offering advantages in transportation costs and timely delivery, while enhancing sustainable development through product structure optimization and production technology - The company is one of China's major integrated refining and chemical petrochemical enterprises, possessing strong overall scale capabilities[16](index=16&type=chunk) - Key competitive advantages include quality, geographical location (core Yangtze River Delta, proximity to customers, convenient transportation), and vertical integrated production[16](index=16&type=chunk) - The company has over 50 years of petrochemical production, operation, and management experience, actively adjusting and optimizing product structure to improve comprehensive resource utilization efficiency[16](index=16&type=chunk) [Section 2 Management Discussion and Analysis](index=9&type=section&id=Section%202%20Management%20Discussion%20and%20Analysis) This section details the company's H1 2025 operations, facing complex domestic and international economic conditions and industry competition, resulting in decreased revenue and net profit, the company actively responded to challenges, advancing high-quality development projects, safety and environmental management, industrial transformation, and innovation-driven initiatives, it also provided market forecasts and outlined five key work arrangements for the second half of the year to achieve annual targets [Management Discussion and Analysis of Operating Performance During the Reporting Period](index=9&type=section&id=Management%20Discussion%20and%20Analysis%20of%20Operating%20Performance%20During%20the%20Reporting%20Period) In H1 2025, the company faced challenges from global economic slowdown, tariff wars, and geopolitical volatility, leading to a 9.17% year-on-year decrease in revenue and a pre-tax loss of RMB 583 million, despite this, the company made progress in production, project construction, safety and environmental protection, industrial transformation, and innovation, with detailed market forecasts and work arrangements for the second half of the year - In H1 2025, the Group's revenue was **RMB 39.50 billion**, a year-on-year decrease of **9.17%**; pre-tax loss was **RMB 583 million**, a year-on-year increase in loss of **RMB 595 million**[18](index=18&type=chunk) - Total main commodity production in H1 was **5.5768 million tons**, a year-on-year decrease of **4.35%**; crude oil processing was **6.3249 million tons**, a year-on-year decrease of **4.93%**[19](index=19&type=chunk) - Overall safety and environmental risks are controllable, with **100%** compliance rates for industrial wastewater discharge, controlled exhaust gas, and proper disposal of hazardous waste[20](index=20&type=chunk) [Key Operating Performance During the Reporting Period](index=16&type=section&id=Key%20Operating%20Performance%20During%20the%20Reporting%20Period) This section analyzes the changes in the company's major financial statement items for H1 2025, showing a 34.35% increase in R&D expenses, income tax turning from expense to income, a significant 1755.66% decrease in net profit attributable to parent company shareholders, and a substantial 127.78% increase in net cash flow from operating activities H1 2025 Changes in Major Financial Statement Items (RMB thousands) | Item | 2025 | 2024 | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | R&D Expenses | 130,190 | 96,904 | 34.35 | Increase in R&D projects | | Other Income | 7,909 | 12,915 | (38.76) | Decrease in government grants | | Asset Impairment Losses | (416,854) | (111,483) | Not applicable | Provision for inventory impairment of RMB 417 million | | Income Tax (Income)/Expense | (134,702) | 6,097 | (2,309.32) | Recognition of deferred income tax assets due to tax losses | | Net (Loss)/Profit Attributable to Parent Company Shareholders | (462,128) | 27,912 | (1,755.66) | Year-on-year decrease in operating performance | | Net Cash Flow from Operating Activities | 778,943 | 341,970 | 127.78 | Decrease in cash paid for goods and services | | Net Cash Flow from Investing Activities (Generated)/(Used) | 737,782 | (585,464) | Not applicable | Increase in recovered time deposits | | Net Cash Flow from Financing Activities (Used)/(Generated) | (1,295,408) | 1,342,692 | (196.48) | Increase in net cash outflow from borrowings obtained and repaid | [Analysis of Operating Performance by Industry, Product, or Region](index=18&type=section&id=Analysis%20of%20Operating%20Performance%20by%20Industry%2C%20Product%2C%20or%20Region) This section analyzes the company's main business operations by industry, product, and region, both revenue and cost for refining and chemical products decreased, but the gross profit margin for chemical products significantly improved, regionally, revenue in East China decreased, while export revenue sharply declined H1 2025 Main Business by Industry and Product (RMB thousands) | By Industry or Product | Operating Revenue | Operating Cost | Gross Profit Margin (%) | YoY Change in Operating Revenue (%) | YoY Change in Operating Cost (%) | YoY Change in Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Refining Products | 26,856,886 | 21,007,197 | 21.78 | (12.96) | (12.68) | Decrease by 0.26 percentage points | | Chemical Products | 8,536,089 | 7,872,977 | 7.77 | (3.41) | (10.31) | Increase by 7.10 percentage points | | Petrochemical Product Trading | 3,860,183 | 3,820,628 | 1.02 | 22.65 | 23.31 | Decrease by 0.53 percentage points | | Others | 60,727 | 56,343 | 7.22 | (77.06) | (78.33) | Increase by 5.42 percentage points | H1 2025 Main Business Revenue by Region (RMB thousands) | Region | Main Business Revenue | YoY Change in Main Business Revenue (%) | | :--- | :--- | :--- | | East China | 37,920,115 | (6.13) | | Other Regions in China | 367,563 | 24.36 | | Exports | 1,026,207 | (57.47) | [Analysis of Assets and Liabilities](index=19&type=section&id=Analysis%20of%20Assets%20and%20Liabilities) This section analyzes significant changes in the company's balance sheet for H1 2025, cash and cash equivalents and prepayments decreased substantially, while accounts receivable, other current assets, other non-current assets, and long-term borrowings significantly increased, short-term borrowings were fully repaid, and accounts payable and long-term borrowings grew considerably H1 2025 Changes in Assets and Liabilities (RMB thousands) | Item | Amount as of June 30, 2025 | Share of Total Assets as of June 30, 2025 (%) | Amount as of December 31, 2024 | Share of Total Assets as of December 31, 2024 (%) | Change (%) | Main Reason for Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 8,433,777 | 20.09 | 12,096,477 | 28.96 | (30.28) | Purchase of time deposits reclassified as other non-current assets | | Derivative Financial Assets | 100,162 | 0.24 | 49 | – | 204,312.24 | Purchase of crude oil and refined oil swap contracts | | Accounts Receivable | 1,959,309 | 4.67 | 701,587 | 1.68 | 179.27 | Increase in accounts receivable from refined oil sales | | Prepayments | 42,795 | 0.10 | 146,453 | 0.35 | (70.78) | Decrease in prepaid naphtha consumption tax | | Other Current Assets | 251,323 | 0.60 | 57,543 | 0.14 | 336.76 | Increase in input VAT to be deducted | | Other Non-Current Assets | 2,528,474 | 6.02 | – | – | Not applicable | Purchase of two-year and three-year time deposits | | Short-term Borrowings | – | – | 1,500,940 | 3.59 | (100.00) | Repayment of short-term borrowings | | Derivative Financial Liabilities | 87,191 | 0.21 | – | – | Not applicable | Purchase of crude oil and refined oil swap contracts | | Accounts Payable | 4,619,975 | 11.01 | 2,730,914 | 6.54 | 69.17 | Increase in accounts payable for crude oil purchases | | Taxes Payable | 895,443 | 2.13 | 1,388,147 | 3.32 | (35.49) | Decrease in consumption tax and VAT payable | | Long-term Borrowings | 386,572 | 0.92 | 67,685 | 0.16 | 471.13 | New long-term borrowings to supplement funding needs for engineering projects | | Treasury Shares | – | – | 56,159 | 0.13 | (100.00) | Cancellation of repurchased H-shares | [Analysis of Investment Status](index=21&type=section&id=Analysis%20of%20Investment%20Status) This section analyzes the company's investment status, noting no entrusted wealth management, entrusted loans, or use of raised funds during the reporting period, performance of major subsidiaries and associates varied, with some subsidiaries experiencing decreased net profit, while Shanghai Jinfie and Zhejiang Jinlian saw increased net losses, the company continued to advance non-raised fund projects and held financial assets measured at fair value and derivative investments for hedging purposes - During the reporting period, the company had no entrusted wealth management, entrusted loans, or use of raised funds[48](index=48&type=chunk)[49](index=49&type=chunk) - Shanghai Toufa and Jinshan Lianmao experienced a year-on-year decrease in net profit, while Shanghai Jinfie and Zhejiang Jinlian saw a year-on-year increase in net losses[52](index=52&type=chunk)[55](index=55&type=chunk) - The company continued to advance the Shanghai Petrochemical Thermal Power Unit Clean Efficiency Improvement Project and the 30,000 tons/year Large Tow Carbon Fiber Relocation Project[54](index=54&type=chunk) - The company held financial assets measured at fair value totaling **RMB 632,392 thousands**, primarily including accounts receivable financing and commodity swap contracts[56](index=56&type=chunk) - The company uses derivative financial instruments such as commodity swap contracts to manage commodity price risk, with no hedge ineffectiveness arising during the reporting period[57](index=57&type=chunk) [Other Disclosures](index=26&type=section&id=Other%20Disclosures) This section discloses significant risks the company may face, including cyclical fluctuations in the oil and petrochemical markets, rising crude oil prices and difficulty in cost transfer, uncertainties in capital expenditures and financing needs, environmental regulatory impacts, monetary policy adjustments and RMB exchange rate fluctuations, related party transaction risks, and major shareholder control risks - The cyclical nature of the oil and petrochemical markets and fluctuations in crude oil and petrochemical product prices may adversely affect the Group's operations[58](index=58&type=chunk)[59](index=59&type=chunk) - The Group faces risks related to imported crude oil procurement and the inability to transfer all increased costs due to rising crude oil prices[58](index=58&type=chunk) - The Group's development plans involve moderate capital expenditures and financing needs, with certain risks and uncertainties[58](index=58&type=chunk) - Adjustments in monetary policy and fluctuations in the RMB exchange rate may adversely affect the Group's business and operating results[62](index=62&type=chunk) - Related party transactions may adversely affect the Group's business and economic benefits, and the major shareholder, Sinopec Corp., holds an absolute controlling position, potentially exerting influence[63](index=63&type=chunk) [Significant Matters](index=29&type=section&id=Significant%20Matters) This section details the company's significant matters during the reporting period, including profit distribution plans, fulfillment of commitments, appointment of accounting firms, major lawsuits and arbitrations, penalties against the company and its executives, equity incentive plans, major related party transactions, and performance of significant contracts, the company distributed 2024 annual cash dividends in July 2025 and continued various daily operating and investment-related transactions with related parties [Ordinary Share Profit Distribution or Capital Reserve Conversion Plan](index=29&type=section&id=Ordinary%20Share%20Profit%20Distribution%20or%20Capital%20Reserve%20Conversion%20Plan) The company's 2024 annual profit distribution plan, approved at the 2024 annual general meeting, involved a cash dividend of RMB 0.02 per share (tax inclusive), totaling RMB 210,852,350, which was distributed in July 2025, no new profit distribution or capital reserve conversion plan was proposed for the reporting period - The 2024 annual profit distribution plan has been approved, with a cash dividend of **RMB 0.02 per share** (tax inclusive), totaling **RMB 210,852,350**[64](index=64&type=chunk) - The cash dividend was announced on July 17, 2025, and uploaded to the Hong Kong Stock Exchange and Shanghai Stock Exchange websites on July 16, 2025[64](index=64&type=chunk) - During the reporting period, the company will not distribute 2025 semi-annual profits or convert capital reserves into share capital[8](index=8&type=chunk)[65](index=65&type=chunk) [Fulfillment of Commitments](index=29&type=section&id=Fulfillment%20of%20Commitments) This section describes the fulfillment of commitments made by Sinopec Corp., the company's actual controller, regarding share reform, pledging continued support for Shanghai Petrochemical's development as a relevant business platform, which has been strictly adhered to, during the reporting period, there were no non-operating fund occupations by controlling shareholders or other related parties, nor any irregular guarantees - Sinopec Corp. committed to continue supporting Shanghai Petrochemical's subsequent development after the completion of its share reform and to use it as a platform for future related businesses, a commitment that has been strictly fulfilled[66](index=66&type=chunk) - During the reporting period, there were no non-operating fund occupations by controlling shareholders or other related parties[68](index=68&type=chunk) - During the reporting period, the company had no irregular guarantees[69](index=69&type=chunk) [Appointment and Dismissal of Accounting Firms](index=30&type=section&id=Appointment%20and%20Dismissal%20of%20Accounting%20Firms) During the reporting period, the company did not change its accounting firm, continuing to receive services from the original firm - During the reporting period, the company did not change its accounting firm[70](index=70&type=chunk) [Major Litigation and Arbitration Matters](index=30&type=section&id=Major%20Litigation%20and%20Arbitration%20Matters) During the reporting period, the company had no major litigation or arbitration matters - During the reporting period, the company had no major litigation or arbitration matters[71](index=71&type=chunk) [Penalties and Rectification for Listed Company, its Directors, Supervisors, Senior Management, Controlling Shareholder, and Actual Controller](index=31&type=section&id=Penalties%20and%20Rectification%20for%20Listed%20Company%2C%20its%20Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20Controlling%20Shareholder%2C%20and%20Actual%20Controller) During the reporting period, the company, its directors, supervisors, senior management, controlling shareholder, and actual controller were not subject to any investigations, compulsory measures, criminal liabilities, or administrative penalties by any competent authorities - During the reporting period, the company, its directors, supervisors, senior management, controlling shareholder, and actual controller were not subject to any investigations, compulsory measures, criminal liabilities, or administrative penalties by competent authorities[72](index=72&type=chunk) [Explanation of the Integrity Status of the Company, its Controlling Shareholder, and Actual Controller During the Reporting Period](index=31&type=section&id=Explanation%20of%20the%20Integrity%20Status%20of%20the%20Company%2C%20its%20Controlling%20Shareholder%2C%20and%20Actual%20Controller%20During%20the%20Reporting%20Period) During the reporting period, the company, its controlling shareholder, and actual controller had no unfulfilled effective court judgments or overdue large debts, maintaining a good integrity status - During the reporting period, the company and its controlling shareholder and actual controller had no unfulfilled effective court judgments or overdue large debts[73](index=73&type=chunk) [Company Equity Incentive Plan Status](index=31&type=section&id=Company%20Equity%20Incentive%20Plan%20Status) During the reporting period, the company neither granted A-share stock options under its equity incentive plan, nor were any A-share stock options exercised, cancelled, or expired by grantees, there was also no granting, exercise, or cancellation of H-share stock options - During the reporting period, the company neither granted A-share stock options under its equity incentive plan, nor were any A-share stock options exercised by grantees, or cancelled or expired[74](index=74&type=chunk) - The company also had no granting, exercise, or cancellation of H-share stock options[74](index=74&type=chunk) [Major Related Party Transactions](index=31&type=section&id=Major%20Related%20Party%20Transactions) This section discloses multiple significant related party transactions between the company and its controlling shareholder Sinopec Corp., actual controller Sinopec Group, and their associates, including product supply, sales services, comprehensive services, financial services, technology R&D, warehousing services, and steam sales, these transactions were conducted on normal commercial terms and complied with relevant approval and disclosure procedures [1. Related Party Transactions Related to Daily Operations](index=31&type=section&id=1.%20Related%20Party%20Transactions%20Related%20to%20Daily%20Operations) The company signed multiple framework agreements with Sinopec Group, Sinopec Corp., and their associates, covering raw material procurement, product sales, sales agency, construction and installation, engineering design, insurance services, property leasing, comprehensive services, financial services, technology R&D, and warehousing services, during the reporting period, raw material procurement amounted to RMB 24,913,702 thousands, and sales of petroleum and petrochemical products amounted to RMB 29,622,870 thousands - The company signed "Product Mutual Supply and Sales Service Framework Agreements" and "Comprehensive Service Framework Agreements" with Sinopec Group and Sinopec Corp., valid until December 31, 2025[75](index=75&type=chunk) - A "Financial Services Framework Agreement" was signed with Sinopec Finance Company to provide financial services, with an annual transaction limit not exceeding **RMB 200 million**[75](index=75&type=chunk) H1 2025 Daily Related Party Transaction Amounts (RMB thousands) | Type of Related Party Transaction | Related Party | 2025 Annual Maximum Limit | Transaction Amount for Current Period | Proportion of Similar Transaction Amount | | :--- | :--- | :--- | :--- | :--- | | Raw Material Procurement | Sinopec Group, Sinopec Corp. and their associates | 119,847,000 | 24,913,702 | 77.09% | | Sales of Petroleum and Petrochemical Products | Sinopec Corp. and its associates | 93,873,000 | 29,622,870 | 74.95% | | Petrochemical Industry Insurance Services | Sinopec Group | 140,000 | 60,749 | 100.00% | | Technology R&D Services (provided by the Company to Sinopec Corp.) | Sinopec Corp. | 180,000 | 7,730 | 100% | | Warehousing Services | Baishawan Branch | 114,000 | 57,000 | 93.20% | [2. Related Party Transactions Involving Acquisition or Disposal of Assets or Equity](index=35&type=section&id=2.%20Related%20Party%20Transactions%20Involving%20Acquisition%20or%20Disposal%20of%20Assets%20or%20Equity) The company's wholly-owned subsidiary, Shanghai Toufa, signed a "Supplemental Agreement to the Equity Forward Transfer Agreement" with Sinopec Capital, changing the completion deadline for acquiring 49.9% equity in Langfang Feize Composite Materials Technology Co., Ltd. to before December 31, 2026 - Shanghai Toufa signed a "Supplemental Agreement to the Equity Forward Transfer Agreement" with Sinopec Capital, changing the completion deadline for acquiring **49.9%** equity in Feize Company to before December 31, 2026[81](index=81&type=chunk) - Sinopec Capital is **51%** owned by Sinopec Group, the company's actual controller, making this transaction a related party transaction for the company[81](index=81&type=chunk) [3. Major Related Party Transactions Involving Joint External Investment](index=35&type=section&id=3.%20Major%20Related%20Party%20Transactions%20Involving%20Joint%20External%20Investment) During the reporting period, the company had no major related party transactions involving joint external investment - During the reporting period, the company had no major related party transactions involving joint external investment[82](index=82&type=chunk) [4. Related Party Debts and Credits](index=36&type=section&id=4.%20Related%20Party%20Debts%20and%20Credits) This section lists the company's debts and credits with related parties, as of the end of the reporting period, funds provided to related parties totaled RMB 14,354 thousands, and funds provided by related parties to the company totaled RMB 206,048 thousands, these transactions were conducted on normal commercial terms and did not affect the company's independence H1 2025 Related Party Debts and Credits (RMB thousands) | Related Party | Relationship | Period-end Balance of Funds Provided to Related Parties | Period-end Balance of Funds Provided by Related Parties to Listed Company | | :--- | :--- | :--- | :--- | | Sinopec Corp. and its subsidiaries, joint ventures, associates, and Sinopec Group and its subsidiaries | Controlling shareholder and actual controller and their associates | 14,354 | 206,048 | - The period-end balance of funds provided by the Group to related parties primarily consists of accounts receivable; the period-end balance of funds provided by related parties to the Group primarily consists of accounts payable[84](index=84&type=chunk) - Related party transaction prices are determined based on state pricing, guidance prices, or market prices, and do not significantly affect the company's independence[84](index=84&type=chunk) [5. Financial Services Between the Company and Related Finance Companies, and Between Company-Controlled Finance Companies and Related Parties](index=36&type=section&id=5.%20Financial%20Services%20Between%20the%20Company%20and%20Related%20Finance%20Companies%2C%20and%20Between%20Company-Controlled%20Finance%20Companies%20and%20Related%20Parties) This section discloses the company's deposit business with Sinopec Finance Company, with total deposits and withdrawals of RMB 49,696,648.6 thousands during the reporting period, resulting in a zero period-end balance, there were no loan businesses during the reporting period H1 2025 Deposit Business with Sinopec Finance Company (RMB 10,000s) | Related Party | Relationship | Beginning Balance | Total Deposits for Current Period | Total Withdrawals for Current Period | Period-end Balance | | :--- | :--- | :--- | :--- | :--- | :--- | | Sinopec Finance Company | Subsidiary of ultimate holding company | – | 4,969,664.86 | 4,969,664.86 | – | - As of June 30, 2025, the deposits between the company and its subsidiaries and Sinopec Finance Company were demand deposits[86](index=86&type=chunk) - During the reporting period, the company had no loan business with Sinopec Finance Company[88](index=88&type=chunk) [Significant Contracts and Their Performance](index=37&type=section&id=Significant%20Contracts%20and%20Their%20Performance) During the reporting period, the company had no entrustment, contracting, or leasing matters that generated profits exceeding 10% (inclusive) of the company's total profit for the current period, nor any guarantee matters or other significant contracts - During the reporting period, there were no entrustment, contracting, or leasing matters that generated profits exceeding **10%** (inclusive) of the company's total profit for the current period[89](index=89&type=chunk) - During the reporting period, the company had no guarantee matters[90](index=90&type=chunk) - During the reporting period, the company had no other significant contracts[91](index=91&type=chunk) [Explanation of Progress in Use of Raised Funds](index=37&type=section&id=Explanation%20of%20Progress%20in%20Use%20of%20Raised%20Funds) This section states that the explanation of progress in the use of raised funds is not applicable for the current reporting period - Explanation of progress in use of raised funds is not applicable[92](index=92&type=chunk) [Explanation of Other Significant Matters](index=37&type=section&id=Explanation%20of%20Other%20Significant%20Matters) This section states that the explanation of other significant matters is not applicable for the current reporting period - Explanation of other significant matters is not applicable[92](index=92&type=chunk) [Changes in Ordinary Shares and Shareholder Information](index=38&type=section&id=Changes%20in%20Ordinary%20Shares%20and%20Shareholder%20Information) This section details the changes in the company's ordinary share capital in H1 2025, primarily due to the cancellation of repurchased H-shares, leading to a decrease in total shares, it also reports the total number of shareholders and the shareholding of the top ten shareholders, confirming no change in the controlling shareholder and actual controller [Changes in Ordinary Share Capital During the Reporting Period](index=38&type=section&id=Changes%20in%20Ordinary%20Share%20Capital%20During%20the%20Reporting%20Period) During the reporting period, the company's ordinary share capital decreased by 132,610,000 shares, primarily due to the cancellation of repurchased H-shares, changing the total number of shares from 10,675,227,500 to 10,542,617,500 H1 2025 Changes in Ordinary Share Capital | Share Class | Quantity Before Change | Proportion Before Change (%) | Change in Quantity | Quantity After Change | Proportion After Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | RMB Ordinary Shares | 7,328,813,500 | 68.65% | – | 7,328,813,500 | 69.52% | | Overseas Listed Foreign Shares | 3,346,414,000 | 31.35% | (132,610,000) | 3,213,804,000 | 30.48% | | Total Shares | 10,675,227,500 | 100% | (132,610,000) | 10,542,617,500 | 100% | - The company cancelled repurchased H-shares totaling **132,610,000 shares** on March 3, 2025, and June 12, 2025, respectively[93](index=93&type=chunk) [Issuance of Securities](index=38&type=section&id=Issuance%20of%20Securities) During the reporting period, the company did not issue any securities, and apart from the disclosed H-share cancellation, there were no changes in the company's total shares, shareholder structure, or asset-liability structure due to bonus issues, rights issues, or other reasons, as of the end of the reporting period, the company had no internal employee shares - During the reporting period, the Group did not issue any securities[94](index=94&type=chunk) - Except for the disclosed H-share cancellation, there were no changes in the company's total shares, shareholder structure, or asset and liability structure due to bonus issues, rights issues, or other reasons[95](index=95&type=chunk) - As of the end of the reporting period, the company had no internal employee shares[96](index=96&type=chunk) [Shareholder Information](index=38&type=section&id=Shareholder%20Information) As of the end of the reporting period, the total number of ordinary shareholders was 90,340, among the top ten shareholders, China Petrochemical Corporation held 51.81% of the shares, and HKSCC Nominees Limited held 28.18% - As of the end of the reporting period, the total number of ordinary shareholders was **90,340**[97](index=97&type=chunk) Shareholding of Top Ten Shareholders as of the End of the Reporting Period | Shareholder Name | Share Class | Number of Shares Held at Period End | Shareholding Proportion (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | :--- | | China Petrochemical Corporation | A-share | 5,462,155,000 | 51.81% | State-owned Legal Person | | HKSCC Nominees Limited | H-share | 2,970,776,780 | 28.18% | Overseas Legal Person | | Hong Kong Securities Clearing Company Limited | A-share | 71,915,641 | 0.68% | Overseas Legal Person | | Zhang Mucheng | A-share | 49,564,000 | 0.47% | Domestic Natural Person | - Among the top ten shareholders with no selling restrictions, China Petrochemical Corporation held **5,462,155,000 RMB ordinary shares**[100](index=100&type=chunk) [Strategic Investors or General Legal Persons Becoming Top Ten Shareholders Due to New Share Placement](index=41&type=section&id=Strategic%20Investors%20or%20General%20Legal%20Persons%20Becoming%20Top%20Ten%20Shareholders%20Due%20to%20New%20Share%20Placement) This section states that the situation of strategic investors or general legal persons becoming top ten shareholders due to new share placement is not applicable - Not applicable for strategic investors or general legal persons becoming top ten shareholders due to new share placement[101](index=101&type=chunk) [Changes in Controlling Shareholder or Actual Controller](index=41&type=section&id=Changes%20in%20Controlling%20Shareholder%20or%20Actual%20Controller) During the reporting period, there were no changes in the company's controlling shareholder or actual controller - During the current reporting period, there were no changes in the company's controlling shareholder or actual controller[101](index=101&type=chunk) [Interests and Short Positions of Major Shareholders in the Company's Shares and Related Shares](index=42&type=section&id=Interests%20and%20Short%20Positions%20of%20Major%20Shareholders%20in%20the%20Company%27s%20Shares%20and%20Related%20Shares) As of June 30, 2025, China Petrochemical Corporation held 51.81% of the company's A-shares as a beneficial owner, Corn Capital Company Limited and Yardley Finance Limited and their associates also held certain H-share interests and short positions Major Shareholders' Interests in the Company's Ordinary Shares as of June 30, 2025 | Shareholder Name | Interests Owned or Deemed to be Owned (shares) | Percentage of Total Issued Shares of the Company (%) | Capacity | | :--- | :--- | :--- | :--- | | China Petrochemical Corporation | 5,462,155,000 A-share(L) | 51.81 | Beneficial Owner | | Corn Capital Company Limited | 200,020,000 H-share(L) | 1.90 | Beneficial Owner | | Kong Xianhui | 200,020,000 H-share(L) | 1.90 | Interest in Controlled Corporation | | Yardley Finance Limited | 200,020,000 H-share(L) | 1.90 | Security Interest in Shares | | Chen Jianxin | 200,020,000 H-share(L) | 1.90 | Interest in Controlled Corporation | - Sinopec Group directly and indirectly owned **69.64%** of Sinopec Corp.'s issued share capital and was deemed to have an interest in the A-shares of the company directly held by Sinopec Corp.[102](index=102&type=chunk) [Directors, Supervisors, Senior Management, and Other Information](index=43&type=section&id=Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Other%20Information) This section discloses changes in shareholdings, stock options, personnel changes, and interests of the company's directors, supervisors, and senior management in the company or associated corporations, during the reporting period, some executives retired, the company repurchased and cancelled H-shares, and confirmed compliance with the Corporate Governance Code and Model Code for Securities Transactions, environmental information and rural revitalization efforts were also disclosed [Changes in Shareholdings](index=43&type=section&id=Changes%20in%20Shareholdings) During the reporting period, the shareholdings of the company's current and former directors, supervisors, and senior management remained largely unchanged, with only Huang Xiangyu, Zhang Feng, and Chen Hongjun holding a small number of A-shares H1 2025 Changes in Shareholdings of Directors, Supervisors, and Senior Management (shares) | Name | Position | Beginning Shareholding | Period-end Shareholding | Change in Shareholding During Reporting Period | | :--- | :--- | :--- | :--- | :--- | | Guo Xiaojun | Executive Director, Chairman | Not held | Not held | No change | | Du Jun | Executive Director, Deputy General Manager, CFO | Not held | Not held | No change | | Huang Xiangyu | Executive Director, Deputy General Manager | 140,000 | 140,000 | No change | | Zhang Feng | Supervisor | 10,000 | 10,000 | No change | | Chen Hongjun | Supervisor | 31,400 | 31,400 | No change | [Stock Options Held by Directors, Supervisors, and Senior Management During the Reporting Period](index=44&type=section&id=Stock%20Options%20Held%20by%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management%20During%20the%20Reporting%20Period) During the reporting period, the company's directors, supervisors, and senior management did not hold any company stock options - During the reporting period, the company's directors, supervisors, and senior management did not hold any company stock options[107](index=107&type=chunk) [Changes in the Company's Directors, Supervisors, and Senior Management During the Reporting Period](index=45&type=section&id=Changes%20in%20the%20Company%27s%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management%20During%20the%20Reporting%20Period) Mr. Guan Zemin, the company's former Vice Chairman and Executive Director, resigned from his positions on February 26, 2025, due to reaching retirement age - Mr. Guan Zemin, the company's former Vice Chairman and Executive Director, resigned from his positions as Vice Chairman, Executive Director, Vice Chairman of the Strategy and ESG Committee, and General Manager on February 26, 2025, due to reaching retirement age[108](index=108&type=chunk) [Interests and Short Positions of Directors, Chief Executive, and Supervisors in the Company's or its Associated Corporations' Shares, Related Shares, or Debentures](index=45&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%2C%20Chief%20Executive%2C%20and%20Supervisors%20in%20the%20Company%27s%20or%20its%20Associated%20Corporations%27%20Shares%2C%20Related%20Shares%2C%20or%20Debentures) As of June 30, 2025, directors and supervisors such as Huang Xiangyu, Zhang Feng, and Chen Hongjun held a small number of the company's A-shares, but no other directors, chief executive, or supervisors held any disclosable interests or short positions in shares or related shares Interests of Directors, Chief Executive, and Supervisors in the Company's Shares as of June 30, 2025 | Name | Position | Number of Shares Held (shares) | Percentage of Total Issued Shares of the Company (%) | Capacity | | :--- | :--- | :--- | :--- | :--- | | Huang Xiangyu | Executive Director and Deputy General Manager | 140,000A-share(L) | 0.0013 | Beneficial Owner | | Zhang Feng | Supervisor | 10,000A-share(L) | 0.0001 | Beneficial Owner | | Chen Hongjun | Supervisor | 31,400A-share(L) | 0.0003 | Beneficial Owner | - Except for those disclosed above, as of June 30, 2025, no directors, chief executive, or supervisors of the company held any disclosable interests or short positions in any shares, related shares, or debentures of the company or its associated corporations[109](index=109&type=chunk) [Changes in Information of Directors and Supervisors](index=46&type=section&id=Changes%20in%20Information%20of%20Directors%20and%20Supervisors) Independent Non-Executive Director Mr. Chen Haifeng's position changed, no longer serving as Senior Director of GCL New Energy Holdings Limited from April 2025, and becoming Investment Manager of Jiangsu Shengkun Investment Management Co., Ltd. from May 2025, apart from this, there were no other changes in director and supervisor information during the reporting period - Independent Non-Executive Director Mr. Chen Haifeng ceased to be Senior Director of GCL New Energy Holdings Limited from April 2025 and became Investment Manager of Jiangsu Shengkun Investment Management Co., Ltd. from May 2025[110](index=110&type=chunk) [Audit and Compliance Management Committee](index=46&type=section&id=Audit%20and%20Compliance%20Management%20Committee) On August 19, 2025, the company's Audit and Compliance Management Committee convened a meeting to review the Group's financial report for the reporting period and discussed risk management, internal control, compliance management, and financial reporting matters - On August 19, 2025, the company's Audit and Compliance Management Committee reviewed the Group's financial report for the reporting period and discussed risk management, internal control, compliance management, and financial reporting matters[111](index=111&type=chunk) [Purchase, Sale, and Redemption of the Company's Securities](index=46&type=section&id=Purchase%2C%20Sale%2C%20and%20Redemption%20of%20the%20Company%27s%20Securities) During the reporting period, the company repurchased 77,240,000 H-shares, paying RMB 84,117 thousands, previously repurchased H-shares totaling 132,610,000 shares were cancelled on March 3, 2025, and June 12, 2025 - During the current reporting period, the company repurchased **77,240,000 H-shares** from the Hong Kong Stock Exchange, paying a consideration of **RMB 84,117 thousands**[112](index=112&type=chunk) H1 2025 H-share Repurchase Details | Repurchase Month | Number of Shares Repurchased | Highest Purchase Price Per Share (HKD/share) | Lowest Purchase Price Per Share (HKD/share) | Total Price (HKD) | | :--- | :--- | :--- | :--- | :--- | | January 2025 | 23,670,000 | 1.20 | 1.11 | 27,230,208.0 | | February 2025 | 17,306,000 | 1.23 | 1.18 | 20,874,535.2 | | April 2025 | 12,414,000 | 1.18 | 1.14 | 14,359,041.6 | | May 2025 | 23,850,000 | 1.23 | 1.16 | 28,878,311.4 | - The company cancelled a total of **132,610,000 repurchased H-shares** on March 3, 2025, and June 12, 2025[112](index=112&type=chunk) [Compliance with Corporate Governance Code](index=47&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) During the reporting period, the company complied with all code provisions contained in Appendix C1 of the Hong Kong Listing Rules' Corporate Governance Code - During the current reporting period, the company complied with all code provisions contained in Appendix C1 of the Hong Kong Listing Rules' Corporate Governance Code[113](index=113&type=chunk) [Compliance with Model Code for Securities Transactions](index=47&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions) The company adopted and implemented the Model Code for Securities Transactions and confirmed with all directors and supervisors their full compliance during the reporting period, no non-compliance by senior management was found - The company adopted and implemented the Model Code for Securities Transactions and obtained written confirmations from all directors and supervisors that they fully complied with the Model Code for Securities Transactions during the reporting period[114](index=114&type=chunk) - The company did not find any instances of non-compliance with the Model Code for Securities Transactions by senior management[114](index=114&type=chunk) [Environmental Information of Listed Companies and their Major Subsidiaries Included in the List of Enterprises Required to Disclose Environmental Information by Law](index=47&type=section&id=Environmental%20Information%20of%20Listed%20Companies%20and%20their%20Major%20Subsidiaries%20Included%20in%20the%20List%20of%20Enterprises%20Required%20to%20Disclose%20Environmental%20Information%20by%20Law) The company has been included in the list of enterprises required to disclose environmental information by law and provided an inquiry index for its environmental information disclosure report List of Enterprises Required to Disclose Environmental Information by Law | Serial Number | Enterprise Name | Inquiry Index for Environmental Information Disclosure Report | | :--- | :--- | :--- | | 1 | Sinopec Shanghai Petrochemical Company Limited | https://e2.sthj.sh.gov.cn:8081/jsp/view/hjxxgk/index.jsp | [Specific Progress in Consolidating and Expanding Poverty Alleviation Achievements, Rural Revitalization, etc.](index=47&type=section&id=Specific%20Progress%20in%20Consolidating%20and%20Expanding%20Poverty%20Alleviation%20Achievements%2C%20Rural%20Revitalization%2C%20etc.) The company continued to invest in educational assistance, improving the educational environment of Ban'go Middle School in Tibet, and planned multiple rural revitalization activities, investing a total of RMB 38 thousands in educational assistance during the reporting period - The company continued to improve the educational environment of Ban'go Middle School in Tibet and carried out various educational activities[116](index=116&type=chunk) - The company planned work schemes such as training for key teachers from Ban'go Middle School in Shanghai, study tours for outstanding students in Shanghai, and establishing the "Sinopec Chaoyang" Scholarship and Teaching Fund[116](index=116&type=chunk) - During the reporting period, the company invested a total of **RMB 38 thousands** in educational assistance[116](index=116&type=chunk) [Review Report on Interim Financial Information](index=48&type=section&id=Review%20Report%20on%20Interim%20Financial%20Information) KPMG reviewed the company's condensed consolidated interim financial information prepared in accordance with IFRS, the review concluded that nothing came to their attention to suggest that the interim financial information was not prepared, in all material respects, in accordance with IAS 34 "Interim Financial Reporting" - KPMG has reviewed the company's condensed consolidated interim financial information prepared in accordance with IFRS[117](index=117&type=chunk) - The scope of the review is substantially less than that of an audit, and therefore no audit opinion is expressed[118](index=118&type=chunk) - The review concluded that nothing came to their attention that caused them to believe the interim financial information was not prepared, in all material respects, in accordance with IAS 34 "Interim Financial Reporting"[119](index=119&type=chunk) [A. Unaudited Condensed Consolidated Interim Financial Information Prepared in Accordance with IFRS](index=49&type=section&id=A.%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information%20Prepared%20in%20Accordance%20with%20IFRS) This section presents the company's unaudited condensed consolidated interim financial information prepared in accordance with IFRS, including the income statement, statement of comprehensive income, balance sheet, statement of changes in equity, and cash flow statement, along with detailed notes to the financial statements, overall, it shows the company turning from profit to loss in H1 2025, but with improved operating cash flow [Consolidated Income Statement](index=49&type=section&id=Consolidated%20Income%20Statement) The company's H1 2025 consolidated income statement shows a year-on-year decrease in revenue, a significant increase in gross loss, a substantial expansion of operating loss, and net profit attributable to shareholders turning from profit to loss H1 2025 Consolidated Income Statement Key Data (RMB thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 39,499,530 | 43,489,664 | | Net Sales | 33,498,305 | 37,496,528 | | Gross Loss | (640,538) | (65,928) | | Operating Loss | (742,003) | (167,366) | | (Loss)/Profit Before Income Tax | (582,762) | 12,428 | | (Loss)/Profit for the Period | (448,060) | 6,331 | | Net (Loss)/Profit Attributable to Shareholders of the Company | (449,274) | 2,845 | | Basic (Loss)/Earnings Per Share | RMB (0.0425) | RMB0.0003 | [Consolidated Statement of Comprehensive Income](index=50&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) The company's H1 2025 consolidated statement of comprehensive income shows a loss for the period of RMB (448,060) thousands, compared to a profit in the prior period, other comprehensive income (after tax) was RMB 15,416 thousands, mainly from net changes in cash flow hedge reserves, total comprehensive income attributable to shareholders of the

[Company Information](index=4&type=section&id=Company%20Information) Provides essential administrative and governance details, including board composition, committee structures, banking relationships, and registered office information [Board of Directors](index=4&type=section&id=Board%20of%20Directors) Outlines the company's board members, including executive, non-executive, and independent non-executive directors, identifying the Chairman and Managing Director - The Board of Directors comprises executive, non-executive, and independent non-executive directors[6](index=6&type=chunk) - Mr. Li Sing Kui is the Chairman, and Mr. Li Sing Wai is the Managing Director[6](index=6&type=chunk)[8](index=8&type=chunk) [Committees](index=4&type=section&id=Committees) The company has Audit, Remuneration, and Nomination Committees, each chaired by an independent non-executive director, ensuring governance independence and effectiveness - The company has an Audit Committee, a Remuneration Committee, and a Nomination Committee[7](index=7&type=chunk)[9](index=9&type=chunk) - Mr. Ngai Wah Sang is the Chairman of the Audit Committee and Remuneration Committee, and Ms. Yeung Lai Sum is the Chairman of the Nomination Committee[7](index=7&type=chunk)[9](index=9&type=chunk) [Banks](index=5&type=section&id=Banks) Lists the company's main banking partners in Hong Kong and mainland China, reflecting its extensive financial network - Hong Kong banks include Bank of China (Hong Kong) Limited, The Bank of East Asia, Limited, China CITIC Bank International Limited, The Hongkong and Shanghai Banking Corporation Limited, and Standard Chartered Bank (Hong Kong) Limited[11](index=11&type=chunk) - Mainland China banks include Bank of China Limited, Bank of Communications Co., Ltd., The Bank of East Asia (China) Limited, China Construction Bank Corporation, China Merchants Bank Co., Ltd., Industrial and Commercial Bank of China Limited, and Ping An Bank Co., Ltd[12](index=12&type=chunk) [Registered Office and Other Information](index=5&type=section&id=Registered%20Office%20and%20Other%20Information) Provides the company's registered office address, contact details, share registrar, company secretary, auditor, legal advisors, stock code, and official website - The registered office is located at 22nd Floor, United Centre, 138 Gloucester Road, Wanchai, Hong Kong[13](index=13&type=chunk) - The share registrar is Tricor Secretaries Limited[13](index=13&type=chunk) - The company's stock code is **28**, and it maintains an official website[13](index=13&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) Presents the company's financial performance, highlighting significant growth in revenue, gross profit, and profit attributable to shareholders for the period [Condensed Consolidated Statement of Profit or Loss](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) During the reporting period, the company achieved substantial growth in revenue and gross profit, with profit attributable to shareholders surging 29 times year-on-year, primarily due to property sales recognition Key Financial Data from Condensed Consolidated Statement of Profit or Loss | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Year-on-year change | | :--- | :--- | :--- | :--- | | Revenue | 8,670,198 | 1,549,382 | 4.6x increase | | Cost of sales | (3,741,061) | (1,007,267) | 2.7x increase | | Gross profit | 4,929,137 | 542,115 | 8.1x increase | | Profit before tax | 4,462,013 | 232,010 | 18.2x increase | | Profit for the period | 2,355,991 | 134,154 | 16.6x increase | | Profit attributable to shareholders of the Company | 2,344,802 | 78,056 | 29x increase | - The significant increase in profit for the period was primarily due to revenue recognized from the delivery of sold units at the Tian An No. 1 Phase II (Zone C) residential project in Shanghai, China, to customers in early 2025[215](index=215&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Details the company's total comprehensive income, reflecting the combined impact of profit for the period and other comprehensive income items [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Total comprehensive income for the period significantly increased, driven by a substantial rise in profit for the period and a positive shift in exchange differences Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Year-on-year change | | :--- | :--- | :--- | :--- | | Profit for the period | 2,355,991 | 134,154 | 16.6x increase | | Exchange differences arising on translation to presentation currency | 249,447 | (9,814) | Turned from negative to positive | | Other comprehensive income (expense) for the period, net of tax | 376,978 | (23,302) | Significant increase | | Total comprehensive income for the period | 2,732,969 | 110,852 | 23.6x increase | | Total comprehensive income attributable to shareholders of the Company | 2,706,579 | 50,022 | 53.1x increase | [Condensed Consolidated Statement of Financial Position](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Presents the company's financial position, detailing assets, liabilities, and equity, reflecting changes in liquidity and overall financial health [Condensed Consolidated Statement of Financial Position](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets and total equity increased, with a significant improvement in net current assets, indicating a robust financial position Key Data from Condensed Consolidated Statement of Financial Position | Metric | 2025-06-30 (HK$ thousand) | 2024-12-31 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Non-current assets | 34,868,860 | 33,468,166 | Increase | | Current assets | 21,216,019 | 24,942,926 | Decrease | | Current liabilities | 18,409,187 | 23,095,876 | Decrease | | Net current assets | 2,806,832 | 1,847,050 | Increase | | Total equity | 30,736,557 | 28,163,482 | Increase | | Non-current liabilities | 6,939,135 | 7,151,734 | Decrease | - Interests in joint ventures significantly increased from **HK$10,830,612 thousand** as of December 31, 2024, to **HK$12,284,389 thousand** as of June 30, 2025[29](index=29&type=chunk) - Inventories of completed properties for sale significantly decreased from **HK$4,727,223 thousand** as of December 31, 2024, to **HK$2,420,928 thousand** as of June 30, 2025, reflecting property sales and deliveries[29](index=29&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Illustrates the changes in the company's equity components over the reporting period, including profit, other comprehensive income, and transactions with owners [Condensed Consolidated Statement of Changes in Equity](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity attributable to shareholders significantly increased during the period, primarily due to the contribution from profit for the period and positive changes in the exchange fluctuation reserve Key Data from Condensed Consolidated Statement of Changes in Equity | Metric | 2025-01-01 (HK$ thousand) | 2025-06-30 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Share capital | 3,788,814 | 3,788,814 | No change | | Exchange fluctuation reserve | (911,582) | (535,051) | Increase by 376,531 | | Accumulated profits | 23,542,764 | 25,730,190 | Increase by 2,187,426 | | Total equity attributable to shareholders of the Company | 26,387,005 | 28,948,767 | Increase by 2,561,762 | | Non-controlling interests | 1,776,477 | 1,787,790 | Increase by 11,313 | | Total equity | 28,163,482 | 30,736,557 | Increase by 2,573,075 | - Profit for the period was **HK$2,344,802 thousand**, significantly contributing to equity attributable to shareholders of the Company[41](index=41&type=chunk) - Exchange differences arising on translation to presentation currency resulted in a positive change of **HK$243,464 thousand**[41](index=41&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=14&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Summarizes the company's cash inflows and outflows from operating, investing, and financing activities, indicating the net change in cash and cash equivalents [Condensed Consolidated Statement of Cash Flows](index=14&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) During the reporting period, operating cash flow turned positive, investing cash outflows increased, and financing cash outflows decreased, resulting in a net decrease in cash and cash equivalents Key Data from Condensed Consolidated Statement of Cash Flows | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Year-on-year change | | :--- | :--- | :--- | :--- | | Net cash from (used in) operating activities | 415,501 | (20,440) | Turned from outflow to inflow | | Net cash used in investing activities | (1,209,999) | (388,329) | Outflow increased | | Net cash used in financing activities | (828,375) | (617,689) | Outflow increased | | Net decrease in cash and cash equivalents | (1,622,873) | (1,026,458) | Decrease widened | | Cash and cash equivalents at end of period | 9,217,095 | 7,010,829 | Increase | | Effect of foreign exchange rate changes | 267,787 | (2,514) | Turned from negative to positive | - In investing activities, loans to joint ventures significantly increased from **HK$(266,638) thousand** in the same period of 2024 to **HK$(1,233,849) thousand** in the first half of 2025[44](index=44&type=chunk) - In financing activities, new bank and other borrowings decreased from **HK$949,339 thousand** in the same period of 2024 to **HK$482,313 thousand** in the first half of 2025[49](index=49&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, segment information, and financial instrument fair value measurements [Basis of Preparation](index=16&type=section&id=Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and Appendix D2 of the Listing Rules, with reference to the 2024 statutory financial statements submission - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix D2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[50](index=50&type=chunk)[52](index=52&type=chunk) - The company has filed its financial statements for the year ended December 31, 2024, with the Registrar of Companies in accordance with section 662(3) and Part 3 of Schedule 6 to the Hong Kong Companies Ordinance, and the auditor's report was unqualified[53](index=53&type=chunk) [Accounting Policies](index=16&type=section&id=Accounting%20Policies) The condensed consolidated financial statements are primarily prepared on a historical cost basis, with some properties and financial instruments measured at fair value; current accounting policies are consistent with the prior year, with minor, non-material adjustments from HKFRS amendments - The condensed consolidated financial statements are prepared on the historical cost basis, except for certain properties and financial instruments which are measured at fair value[54](index=54&type=chunk) - The accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended June 30, 2025, are consistent with those presented in the Group's annual consolidated financial statements for the year ended December 31, 2024, except for changes in accounting policies due to the application of amendments to Hong Kong Financial Reporting Standards[55](index=55&type=chunk) - The application of amendments to Hong Kong Financial Reporting Standards during this interim period has had no material impact on the Group's financial position and performance and/or disclosures contained in these condensed consolidated financial statements for the current and prior periods[61](index=61&type=chunk)[64](index=64&type=chunk) [Revenue](index=17&type=section&id=Revenue) During the reporting period, the company's revenue primarily stemmed from a significant increase in completed property sales, supplemented by income from hospital fees, construction material sales, and property management Revenue Classification | Revenue Source | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Year-on-year change | | :--- | :--- | :--- | :--- | | Sales of completed properties | 7,405,562 | 319,089 | 22.2x increase | | Hospital fees and charges (at a point in time) | 389,721 | 435,679 | 10.6% decrease | | Sales of construction materials | 117,674 | 43,862 | 1.7x increase | | Property management | 89,011 | 65,612 | 35.7% increase | | Hospital fees and charges (over time) | 367,018 | 364,711 | 0.6% increase | | Lease income | 276,958 | 286,624 | 3.4% decrease | | Total revenue | 8,670,198 | 1,549,382 | 4.6x increase | [Segment Information](index=18&type=section&id=Segment%20Information) The company's main businesses are property development, property investment, healthcare, and other operations; property development significantly boosted revenue and profit, while property investment recorded a loss - The Group's operating segments include property development, property investment, healthcare, and other operations (primarily property management, elderly care services, and trading of construction materials)[66](index=66&type=chunk) Segment Revenue and Profit (Loss) | Segment | 2025 H1 Revenue (HK$ thousand) | 2024 H1 Revenue (HK$ thousand) | 2025 H1 Profit (Loss) (HK$ thousand) | 2024 H1 Profit (Loss) (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Property development | 7,405,562 | 319,089 | 4,417,593 | 47,221 | | Property investment | 276,958 | 286,624 | (190,218) | (5,605) | | Healthcare | 756,739 | 800,390 | 45,130 | 82,583 | | Other operations | 230,939 | 143,279 | 45,891 | (5,870) | | Consolidated total | 8,670,198 | 1,549,382 | 4,318,396 | 118,329 | [Other Income and Gains](index=20&type=section&id=Other%20Income%20and%20Gains) Other income and gains slightly decreased during the reporting period, primarily comprising bank deposit interest income, loans receivable interest income, and other miscellaneous income Details of Other Income and Gains | Income Item | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Dividend income | 1,216 | 1,702 | | Interest income from bank deposits | 58,313 | 45,089 | | Interest income from loans receivable | 2,182 | 4,680 | | Interest income from joint ventures | 25,819 | 29,263 | | Other income | 24,179 | 22,457 | | Total | 111,709 | 120,949 | - Interest income from bank deposits significantly increased from **HK$45,089 thousand** in the same period of 2024 to **HK$58,313 thousand** in the first half of 2025[77](index=77&type=chunk) [Finance Costs](index=20&type=section&id=Finance%20Costs) Total finance costs decreased during the reporting period, mainly due to reduced bank loan interest and capitalized amounts Details of Finance Costs | Cost Item | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Interest on bank loans | 111,285 | 121,061 | | Interest on other loans | 30,637 | 35,632 | | Interest on lease liabilities | 59 | 1,537 | | Loan arrangement fees | 92 | – | | Subtotal | 142,073 | 158,230 | | Less: Amount capitalised | (44,769) | (46,880) | | Total finance costs | 97,304 | 111,350 | - Interest expense on bank loans decreased from **HK$121,061 thousand** in the same period of 2024 to **HK$111,285 thousand** in the first half of 2025[79](index=79&type=chunk) [Taxation](index=21&type=section&id=Taxation) Tax expenses significantly increased during the reporting period, primarily driven by substantial growth in China corporate income tax and land appreciation tax Details of Taxation Expense | Tax Type | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 16,333 | 6,323 | | Overseas taxation | 23 | 18 | | PRC corporate income tax | 754,673 | 84,144 | | Land appreciation tax | 1,403,909 | 42,661 | | Subtotal for current period taxation | 2,174,938 | 133,146 | | (Over-provision) under-provision in prior years | (5,404) | 44,304 | | Deferred taxation | (63,512) | (79,594) | | Total taxation | 2,106,022 | 97,856 | - PRC corporate income tax and land appreciation tax significantly increased from **HK$84,144 thousand** and **HK$42,661 thousand** in the same period of 2024 to **HK$754,673 thousand** and **HK$1,403,909 thousand** respectively in the first half of 2025[83](index=83&type=chunk) [Profit for the Period](index=22&type=section&id=Profit%20for%20the%20Period) Profit for the period significantly increased after deducting expenses such as depreciation, amortization, and cost of inventories, with a substantial rise in the amount of inventory costs treated as expenses Deductions from Profit for the Period | Item | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 54,865 | 55,925 | | Depreciation of right-of-use assets | 4,167 | 7,055 | | Amortisation of other assets – property interests | 236 | 239 | | Amortisation of properties under development | – | 4,689 | | Total depreciation and amortisation | 59,235 | 67,521 | | Cost of inventories recognised as an expense | 3,149,052 | 531,512 | | Net impairment of inventories of completed properties for sale | 23,928 | 195 | - The cost of inventories recognized as an expense significantly increased from **HK$531,512 thousand** in the same period of 2024 to **HK$3,149,052 thousand** in the first half of 2025[86](index=86&type=chunk) [Earnings Per Share](index=23&type=section&id=Earnings%20Per%20Share) Basic earnings per share significantly increased during the reporting period, reflecting a substantial improvement in the company's profitability Earnings Per Share Data | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Basic earnings per share (HK cents) | 159.94 | 5.32 | | Profit for the purpose of calculating basic earnings per share (HK$ thousand) | 2,344,802 | 78,056 | | Number of ordinary shares (thousands) | 1,466,069 | 1,466,069 | - Basic earnings per share significantly increased from **5.32 HK cents** in the same period of 2024 to **159.94 HK cents** in the first half of 2025[20](index=20&type=chunk)[215](index=215&type=chunk) [Dividends](index=24&type=section&id=Dividends) The Board decided not to declare an interim dividend for the six months ended June 30, 2025, and the 2024 interim dividend (in lieu of final dividend) paid in the first half of 2025 decreased compared to the prior year - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[96](index=96&type=chunk)[211](index=211&type=chunk) Dividends Recognised as Distribution | Dividend Type | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | 2024 (2024: 2023) interim dividend paid (in lieu of final dividend) | 146,607 | 293,214 | [Property, Plant and Equipment and Right-of-Use Assets](index=24&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Right-of-Use%20Assets) During the reporting period, the company acquired property, plant, and equipment, with right-of-use assets primarily representing the leased land portion of self-occupied properties - During the six months ended June 30, 2025, the Group acquired property, plant and equipment amounting to **HK$75,124,000**, compared to **HK$77,600,000** for the six months ended June 30, 2024[97](index=97&type=chunk) - As of June 30, 2025, right-of-use assets totaled **HK$207,665,000**, primarily representing the leased land portion of self-occupied properties[98](index=98&type=chunk) [Investment Properties](index=25&type=section&id=Investment%20Properties) During the reporting period, the company reclassified some completed property inventories to investment properties, with no change in valuation methods, and the highest and best use remains current or anticipated - During the six months ended June 30, 2025, the Group transferred completed properties for sale with a fair value of **HK$29,176,000** to investment properties[101](index=101&type=chunk) - There was no change in the valuation methods used in prior periods/years[102](index=102&type=chunk) - In estimating the fair value of properties, the highest and best use of the properties is their current or anticipated use[103](index=103&type=chunk) [Properties Under Development](index=25&type=section&id=Properties%20Under%20Development) During the reporting period, the company did not recognize any impairment losses on properties under development - The Group did not recognise any impairment loss on properties under development for the six months ended June 30, 2025, and June 30, 2024[104](index=104&type=chunk)[108](index=108&type=chunk) [Loans Receivable](index=25&type=section&id=Loans%20Receivable) As of June 30, 2025, the company's total loans receivable amounted to HK$75,387 thousand, with most of it subject to impairment provisions, including both secured and unsecured loans Details of Loans Receivable | Metric | 2025-06-30 (HK$ thousand) | 2024-12-31 (HK$ thousand) | | :--- | :--- | :--- | | Gross amount before impairment: secured | 478,140 | 477,015 | | Gross amount before impairment: unsecured | 455,406 | 455,406 | | Less: impairment | (858,159) | (856,318) | | Total loans receivable | 75,387 | 76,103 | - Loans receivable of **HK$398,140,000** (secured, interest rate **15% to 30%** per annum) were overdue and fully provided for impairment[115](index=115&type=chunk) - Loans receivable of **HK$455,406,000** (unsecured, interest rate **18% to 36%** per annum) were fully provided for impairment[115](index=115&type=chunk) [Trade and Other Receivables, Deposits and Prepayments](index=27&type=section&id=Trade%20and%20Other%20Receivables%2C%20Deposits%20and%20Prepayments) The company's receivables primarily stem from property sales and hospital operations, with credit terms typically ranging from 30 to 120 days; trade receivables (net of provisions) increased at the end of the reporting period - Receivables from property sales are settled by customers according to the terms of the sale and purchase agreements[119](index=119&type=chunk) - Customers of hospital operations settle accounts via cash, credit card, or local government social security schemes, with credit terms typically **90 days**[121](index=121&type=chunk) Ageing Analysis of Trade Receivables | Ageing | 2025-06-30 (HK$ thousand) | 2024-12-31 (HK$ thousand) | | :--- | :--- | :--- | | Less than 31 days | 105,154 | 126,170 | | 31 to 60 days | 19,771 | 26,131 | | 61 to 90 days | 38,610 | 5,522 | | 91 to 180 days | 7,766 | 10,308 | | Over 180 days | 29,152 | 13,631 | | Total | 200,453 | 181,762 | [Trade and Other Payables](index=29&type=section&id=Trade%20and%20Other%20Payables) At the end of the reporting period, total trade payables decreased, but payables less than 31 days significantly increased; other payables mainly include deposits, other taxes payable, accrued interest, and accrued expenses Ageing Analysis of Trade Payables | Ageing | 2025-06-30 (HK$ thousand) | 2024-12-31 (HK$ thousand) | | :--- | :--- | :--- | | Less than 31 days | 786,259 | 274,719 | | 31 to 60 days | 55,633 | 159,918 | | 61 to 90 days | 24,093 | 12,971 | | 91 to 180 days | 9,037 | 136,378 | | Over 180 days | 256,309 | 867,981 | | Total | 1,131,331 | 1,451,967 | - Other payables primarily include deposits, other taxes payable, accrued interest, and accrued expenses[130](index=130&type=chunk) [Interest-Bearing Borrowings](index=29&type=section&id=Interest-Bearing%20Borrowings) During the reporting period, the company obtained new borrowings and repaid some bank and other loans, with most loans due within five years, and new borrowings primarily used for properties under development and operations - During the six months ended June 30, 2025, the Group obtained new borrowings of **HK$482,313,000** and repaid bank and other loans of **HK$958,855,000**[132](index=132&type=chunk) - Most of the loans as of June 30, 2025, are repayable within **five years**[132](index=132&type=chunk) - Proceeds from new borrowings were used to finance construction progress payments for the Group's properties under development and for operating activities[132](index=132&type=chunk) [Interest-Free Borrowings](index=30&type=section&id=Interest-Free%20Borrowings) As of June 30, 2025, the company's interest-free borrowings primarily consisted of amounts due to joint ventures, which are unsecured, interest-free, and repayable on demand Details of Interest-Free Borrowings | Lender | 2025-06-30 (HK$ thousand) | 2024-12-31 (HK$ thousand) | | :--- | :--- | :--- | | Amounts due to associates | 6,673 | 6,552 | | Amounts due to joint ventures | 1,826,012 | 1,866,545 | | Borrowings from non-controlling interests | 160 | 158 | | Total | 1,832,845 | 1,873,255 | - These amounts are unsecured, interest-free, and repayable on demand[135](index=135&type=chunk) [Share Capital](index=30&type=section&id=Share%20Capital) As of June 30, 2025, the company's issued and fully paid share capital remained unchanged Share Capital Information | Metric | Number of ordinary shares | Amount (HK$ thousand) | | :--- | :--- | :--- | | Issued and fully paid: as at 1 January 2024, 31 December 2024 and 30 June 2025 | 1,466,069,491 | 3,788,814 | [Capital Commitments](index=31&type=section&id=Capital%20Commitments) As of the end of the reporting period, the company's contracted but unprovided capital expenditures primarily included property, plant, and equipment and capital contributions to joint ventures Details of Capital Commitments | Item | 2025-06-30 (HK$ thousand) | 2024-12-31 (HK$ thousand) | | :--- | :--- | :--- | | Property, plant and equipment | 95,834 | 133,747 | | Improvement and alteration works for an investment property | 13,484 | 20,063 | | Capital contributions to joint ventures | 271,429 | 260,870 | - Capital contributions to joint ventures increased from **HK$260,870 thousand** as of December 31, 2024, to **HK$271,429 thousand** as of June 30, 2025[140](index=140&type=chunk) [Contingent Liabilities and Financial Guarantee Contracts](index=32&type=section&id=Contingent%20Liabilities%20and%20Financial%20Guarantee%20Contracts) The company faces various contingent liabilities, including bank guarantees for property buyers and joint ventures, and potential risks related to idle land investigations and legal proceedings for properties under development, though the Board deems economic loss unlikely Guarantees Given to Banks | Guarantee Type | 2025-06-30 (HK$ thousand) | 2024-12-31 (HK$ thousand) | | :--- | :--- | :--- | | Mortgage loans to property buyers | 2,950,863 | 3,672,294 | | Bank credit facilities to joint ventures (utilised) | 220,021 | 200,736 | | Bank credit facilities to joint ventures (unutilised) | 96,459 | 204,050 | | Bank credit facilities to investee companies (utilised) | 128,225 | 120,675 | | Government agency guarantees for property development projects (utilised) | 6,360 | – | | Government agency guarantees for property development projects (unutilised) | 95 | – | - A joint venture holding properties under development with a total carrying amount of approximately **HK$795,771,000** is currently under investigation by local authorities for idle land[143](index=143&type=chunk) - Another joint venture holding properties under development with a carrying amount of approximately **HK$167,000,000** has been classified as idle land by local authorities[147](index=147&type=chunk) - The company is involved in two legal proceedings with potential contingent liabilities of approximately **HK$35,440,000** and **HK$157,143,000** respectively, but the Board considers the likelihood of economic loss to be low[148](index=148&type=chunk)[151](index=151&type=chunk) [Fair Value Measurement of Financial Instruments](index=34&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) The company measures some financial assets at fair value, categorized into three levels based on observable inputs; the report details fair values, valuation methods, and key unobservable parameters for various financial instruments - Fair value measurements are categorised into Level 1 (quoted prices in active markets), Level 2 (observable inputs directly or indirectly), and Level 3 (unobservable inputs)[153](index=153&type=chunk) Details of Fair Value Measurement of Financial Instruments | Financial Instrument Type | Fair Value Level | 2025-06-30 (HK$ thousand) | 2024-12-31 (HK$ thousand) | Valuation Method and Key Parameters | | :--- | :--- | :--- | :--- | :--- | | Listed equity securities in PRC (FVTPL) | Level 1 | 45,083 | 45,500 | Quoted bid prices in active markets | | Unlisted fund investments (FVTPL) | Level 2 | 26,493 | 25,598 | Quoted prices provided by financial institutions | | Unlisted fund investments (FVTPL) | Level 3 | 31,265 | 35,394 | Quoted prices provided by financial institutions (considering net asset value of special purpose vehicles for relevant investments) | | Unlisted equity instruments (FVTOCI) | Level 3 | 23,230 | 25,960 | Asset-based approach (term yield, reversionary yield, market unit rent, discount for lack of control and marketability) | | Investment properties (FVTPL) | Level 3 | 1,030,416 | 883,355 | Discounted cash flow (discount rate, cash flows, remaining construction period) | - As of June 30, 2025, total financial assets measured at Level 3 fair value amounted to **HK$1,061,681 thousand**, with equity instruments at **HK$23,230 thousand**, totaling **HK$1,084,911 thousand**[171](index=171&type=chunk) [Related Party Transactions and Balances](index=40&type=section&id=Related%20Party%20Transactions%20and%20Balances) During the reporting period, the company engaged in various related party transactions and balances with its ultimate holding company, United Group and its subsidiaries, fellow subsidiaries, associates, joint ventures, and key management personnel, including leases, management fees, interest income/expense, dividends, and remuneration Related Party Transactions | Transacting Party | Transaction Type | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | :--- | | United Group | Short-term leases, property management and air-conditioning charges | 2,053 | 2,021 | | United Group | Management fees | 7,852 | 7,913 | | Fellow subsidiaries | Interest expenses | 15,126 | 15,237 | | Associates and joint ventures | Interest income | 25,819 | 29,263 | | Associates and joint ventures | Dividends | 17,946 | 32,473 | | Key management personnel | Salaries and other short-term benefits | 7,697 | 7,759 | Related Party Balances | Balance Party | Balance Type | 2025-06-30 (HK$ thousand) | 2024-12-31 (HK$ thousand) | | :--- | :--- | :--- | :--- | | United Group | Other payables | 4,310 | 4,969 | | Fellow subsidiaries | Loans payable | 573,267 | 610,157 | | Chairman of the Board, Mr. Li Sing Kui | Loans payable | 167,462 | 125,502 | | Joint ventures | Financial guarantees (utilised) | 220,021 | 200,736 | - Loans payable to fellow subsidiaries bear interest rates ranging from **2.33% to 5.27%** per annum, and loans payable to the Chairman of the Board, Mr. Li Sing Kui, bear an interest rate of **6.4%** per annum[194](index=194&type=chunk) [Pledged Assets](index=46&type=section&id=Pledged%20Assets) As of June 30, 2025, several of the company's assets, including investment properties, properties under development, and bank deposits, were pledged to secure bank credit facilities and margin loan facilities Details of Pledged Assets | Asset Type | 2025-06-30 (HK$ thousand) | 2024-12-31 (HK$ thousand) | | :--- | :--- | :--- | | Property, plant and equipment | 587,316 | 31,175 | | Investment properties | 9,575,126 | 10,259,740 | | Right-of-use assets | 15,082 | – | | Inventories of properties under development | 2,089,046 | 507,718 | | Inventories of completed properties for sale | – | 30,509 | | Bank deposits | 8,791 | – | | Total | 12,275,361 | 10,829,142 | - The total value of pledged assets increased from **HK$10,829,142 thousand** as of December 31, 2024, to **HK$12,275,361 thousand** as of June 30, 2025[197](index=197&type=chunk) - Assets of certain subsidiaries were pledged to secure the Group's bank credit facilities, and interests in subsidiaries and equity securities were pledged to secure margin loan facilities[196](index=196&type=chunk)[199](index=199&type=chunk) [Events After the Reporting Period](index=47&type=section&id=Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, a company joint venture successfully bid to acquire a 50% equity interest in Shanghai Yongye Urban Renewal Construction Development Co., Ltd., with the transaction approved by relevant banking institutions - Shanghai Ruitianli Enterprise Management Co., Ltd., a joint venture of the Group, successfully bid through public auction on June 23, 2025, to acquire a **50%** equity interest in Shanghai Yongye Urban Renewal Construction Development Co., Ltd. for a consideration of **RMB2,893,650,000**[201](index=201&type=chunk)[202](index=202&type=chunk) - The transaction has received unanimous consent from certain banking institutions providing credit facilities to the project company[201](index=201&type=chunk)[202](index=202&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=48&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) Presents the independent review report on the condensed consolidated financial statements, confirming compliance with relevant accounting standards [Review Report on Condensed Consolidated Financial Statements](index=48&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements and concluded that nothing has come to their attention to suggest that the financial statements are not prepared in all material respects in accordance with HKAS 34 - Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements[210](index=210&type=chunk) - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, with a scope substantially less than an audit[206](index=206&type=chunk)[208](index=208&type=chunk) - The conclusion is that nothing has come to their attention that causes them to believe the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[207](index=207&type=chunk)[209](index=209&type=chunk) [Interim Dividend](index=50&type=section&id=Interim%20Dividend) Addresses the Board's decision regarding the interim dividend for the reporting period and its rationale [Interim Dividend](index=50&type=section&id=Interim%20Dividend) The Board decided not to declare an interim dividend for the six months ended June 30, 2025, to retain funds for future business development opportunities - The Board does not recommend the declaration of an interim dividend for the six months ended June 30, 2025 (2024: nil)[211](index=211&type=chunk)[213](index=213&type=chunk) - This decision aims to retain an appropriate level of funds to fully capitalize on future business development opportunities[211](index=211&type=chunk)[213](index=213&type=chunk) [Management Discussion and Analysis](index=50&type=section&id=Management%20Discussion%20and%20Analysis) Provides management's perspective on the company's financial performance, business operations, financial position, and future outlook [Financial Performance](index=50&type=section&id=Financial%20Performance) In the first half of 2025, the company achieved substantial growth in revenue and profit attributable to shareholders, with significantly improved earnings per share, primarily driven by the delivery of a Shanghai residential project Financial Performance Overview | Metric | 2025 H1 | 2024 H1 | Year-on-year change | | :--- | :--- | :--- | :--- | | Revenue | 8,670.2 HK$ million | 1,549.4 HK$ million | 4.6x increase | | Profit attributable to shareholders of the Company | 2,344.8 HK$ million | 78.1 HK$ million | 29x increase | | Earnings per share | 159.94 HK cents | 5.32 HK cents | Significant increase | | Net asset value per share (as at end of June) | 19.75 HK$ | 18.00 HK$ (2024-12-31) | Increase | - Profit growth was primarily attributable to revenue recognized from the delivery of sold units at the Tian An No. 1 Phase II (Zone C) residential project in Shanghai, China, to customers in early 2025[215](index=215&type=chunk) [Business Review](index=51&type=section&id=Business%20Review) The company primarily engages in property development and investment, property management, healthcare in mainland China, and property investment and management in Hong Kong; while total attributable registered sales and completed floor area decreased in H1 2025, construction area remains substantial, and the Shanghai residential project is progressing well - Principal activities include: property development and investment in residential, office, and commercial properties in mainland China; property management; investment and operation of hospitals, elderly care, and wellness-related businesses; and property investment and management in Hong Kong[217](index=217&type=chunk)[218](index=218&type=chunk) Key Business Operations Data | Metric | 2025 H1 | 2024 H1 | Year-on-year change | | :--- | :--- | :--- | :--- | | Total attributable registered sales | 62,300 square meters | 126,800 square meters | 51% decrease | | Total attributable completed gross floor area | 135,600 square meters | 170,500 square meters | 20% decrease | | Total attributable gross floor area under construction (period end) | 1,186,000 square meters | 1,491,000 square meters | 20% decrease | | Rental income | Slight decrease | - | 3% decrease | | Loss attributable to shareholders of Asia Orient Properties Limited | Approx. 63.3 HK$ million | Approx. 17.0 HK$ million | Loss widened | | Profit attributable to shareholders of Tian An Healthcare Limited | Approx. 12.0 HK$ million | Approx. 21.7 HK$ million | Profit decreased | - The Shanghai residential project Tian An No. 1 Phase II (Zone C) was completed by the end of 2024 and delivered in early 2025, with Phase II (Zone B) achieving successful pre-sales[219](index=219&type=chunk) [Financial Review](index=52&type=section&id=Financial%20Review) The financial review details the company's liquidity, financing strategy, significant borrowing transactions, major investments, foreign exchange risk, pledged assets, and contingent liabilities, demonstrating a robust liquidity position, healthy gearing, and active risk monitoring [Liquidity and Funding](index=52&type=section&id=Liquidity%20and%20Funding) Liquidity Position | Metric | 2025-06-30 (HK$ million) | 2024-12-31 (HK$ million) | | :--- | :--- | :--- | | Total bank balances and cash reserves | 10,980.3 | 12,318.5 | | Total borrowings | 7,663.4 | 8,067.2 | | Current liabilities | 4,028.9 | 4,197.5 | | Non-current liabilities | 3,634.5 | 3,869.7 | | Gearing ratio (net debt to total equity) | Negative 10.8% | Negative 15.1% | - Approximately **66%** of outstanding borrowings are due within two years[229](index=229&type=chunk) - Most bank borrowings are denominated and repayable in RMB, with approximately **12%** being fixed-rate borrowings and the remainder being floating-rate borrowings[229](index=229&type=chunk) [Significant Lending Transactions](index=53&type=section&id=Significant%20Lending%20Transactions) - The company will provide loans as part of its treasury management activities to effectively utilise financial resources and enhance shareholder returns[231](index=231&type=chunk) - The Board considers the loan terms to be normal commercial terms, fair and reasonable, and in the overall interests of the company and its shareholders[232](index=232&type=chunk) - For the six months ended June 30, 2025, the Group did not grant any loans to borrowers[232](index=232&type=chunk) [Significant Investments](index=54&type=section&id=Significant%20Investments) - The company holds a **50%** interest in Tian An Cyberpark (Holdings) Company Limited, with an investment cost of **US$60 million**[236](index=236&type=chunk) - As of June 30, 2025, the carrying amount of the interest in Tian An Cyberpark (Holdings) Company Limited was approximately **HK$3,313.7 million**, representing **5.9%** of the Group's total assets[236](index=236&type=chunk) - Tian An Cyberpark (Holdings) Company Limited recorded a loss for the period of approximately **HK$14.7 million** in the first half of 2025, with the company's share of loss being approximately **HK$11.0 million**[238](index=238&type=chunk) [Significant Acquisitions and Disposals](index=55&type=section&id=Significant%20Acquisitions%20and%20Disposals) - There were no significant acquisitions and disposals of subsidiaries, associates, and joint ventures for the six months ended June 30, 2025, and up to the date of this interim results report[241](index=241&type=chunk)[244](index=244&type=chunk) [Foreign Exchange Fluctuation Risk](index=55&type=section&id=Foreign%20Exchange%20Fluctuation%20Risk) - The Group holds foreign currency balances due to its recurring operating activities and existing and potential investment activities, exposing it to reasonable exchange rate risk[242](index=242&type=chunk)[245](index=245&type=chunk) - The Group will closely monitor the risks undertaken as needed[242](index=242&type=chunk)[245](index=245&type=chunk) [Pledged Assets](index=55&type=section&id=Pledged%20Assets) - As of June 30, 2025, bank deposits of approximately **HK$8.8 million**, property, plant and equipment of approximately **HK$587.3 million**, right-of-use assets of approximately **HK$15.1 million**, properties under development of approximately **HK$2,089.0 million**, investment properties of approximately **HK$9,575.1 million**, equity securities of approximately **HK$4.3 million**, and interests in a subsidiary of approximately **HK$4.1 million** were pledged[246](index=246&type=chunk) - The purpose of the pledges is to secure bank credit facilities and a margin loan facility for the Group[246](index=246&type=chunk) [Contingent Liabilities](index=56&type=section&id=Contingent%20Liabilities) - A joint venture holding properties under development with a total carrying amount of approximately **HK$795.8 million** is currently under investigation by local authorities for idle land[247](index=247&type=chunk)[249](index=249&type=chunk) - Another joint venture holding properties under development with a carrying amount of approximately **HK$167.0 million** has been classified as idle land by local authorities[247](index=247&type=chunk)[249](index=249&type=chunk) - As of June 30, 2025, the Group provided guarantees to banks for mortgage loans to property buyers, credit facilities to joint ventures and investee companies, and guarantees to government agencies for property development projects, totaling approximately **HK$3,402.0 million**[250](index=250&type=chunk) - The company is involved in two legal proceedings with potential contingent liabilities of approximately **HK$35.4 million** and **HK$157.1 million** respectively, but the Board considers the likelihood of economic loss to be low[251](index=251&type=chunk) [Segment Information](index=57&type=section&id=Segment%20Information) - Detailed segment information regarding revenue and profit or loss is disclosed in Note 4 to the condensed consolidated financial statements[253](index=253&type=chunk)[257](index=257&type=chunk) [Events After the Reporting Period](index=57&type=section&id=Events%20After%20the%20Reporting%20Period) Detailed information regarding events after the reporting period is disclosed in Note 25 to the condensed consolidated financial statements - Details of events after the reporting period and up to the date of this interim results report are set out in Note 25 to the condensed consolidated financial statements[254](index=254&type=chunk)[258](index=258&type=chunk) [Employees](index=57&type=section&id=Employees) As of June 30, 2025, the company's employee count increased, and it maintains a competitive remuneration system with salaries and bonuses based on performance - As of June 30, 2025, the Group employed **3,900** staff members, an increase from **3,646** as of December 31, 2024[255](index=255&type=chunk)[259](index=259&type=chunk) - The Group ensures its remuneration system is competitive with the market and awards salaries and bonuses based on employee performance[255](index=255&type=chunk)[259](index=259&type=chunk) [Business Outlook](index=57&type=section&id=Business%20Outlook) Despite market uncertainties from Chinese property developers' financial issues, high US interest rates, and geopolitical conflicts, the company remains confident in the long-term prospects of the mainland China and Hong Kong property markets, benefiting from the PRC central bank's accommodative monetary policy and government stabilization measures - Market uncertainties have increased, primarily influenced by financial issues of major Chinese property developers, high US dollar interest rates, US-China trade tensions, the war in Ukraine, and conflicts in the Middle East[260](index=260&type=chunk) - The People's Bank of China lowered the one-year and five-year Loan Prime Rates (LPR) by **10 basis points** in 2025 and reduced the reserve requirement ratio for eligible financial institutions by **0.50%**, which helps alleviate the financial burden on the real estate sector and stimulate the economy[261](index=261&type=chunk) - The central and local governments have introduced easing measures to stabilise the real estate market, including lowering mortgage interest rates, reducing down payment requirements, increasing home purchase subsidies, and relaxing purchase restrictions[261](index=261&type=chunk) - Despite short-term uncertainties, the Group remains confident in the long-term prospects of the property markets in mainland China and Hong Kong[261](index=261&type=chunk) [Other Information](index=58&type=section&id=Other%20Information) Presents additional disclosures including financial assistance to affiliated companies, directors' and substantial shareholders' interests, and corporate governance matters [Financial Assistance to Affiliated Companies](index=58&type=section&id=Financial%20Assistance%20to%20Affiliated%20Companies) As of June 30, 2025, the total financial assistance and guarantees provided by the company to affiliated companies exceeded the 8% asset ratio stipulated by the Listing Rules, thus requiring compliance with Listing Rule 13.22 - As of June 30, 2025, the aggregate value of financial assistance provided by the Group to affiliated companies, together with guarantees provided by the Group for credit facilities granted to affiliated companies, exceeded the **8%** asset ratio stipulated by Listing Rule 14.07(1)[262](index=262&type=chunk) - The Group is required to comply with the provisions of Listing Rule 13.22[262](index=262&type=chunk) Summary of Unaudited Consolidated Statement of Financial Position of Affiliated Companies | Metric | 2025-06-30 (HK$ thousand) | | :--- | :--- | | Non-current assets | 28,304,054 | | Current assets | 35,300,842 | | Current liabilities | (21,651,918) | | Non-current liabilities | (31,729,600) | | Non-controlling interests | (285,214) | | Equity attributable to shareholders of affiliated companies | 9,938,164 | | Net asset value attributable to the Group | 5,040,616 | [Directors' Interests](index=59&type=section&id=Directors%27%20Interests) As of June 30, 2025, Directors Mr. Li Sing Kui, Mr. Sung Tsang Ping, and Mr. Lo King Yu held interests in the company's and its associated corporations' shares, related shares, or debentures, with Mr. Li Sing Kui holding the largest percentage Directors' Interests in the Company and Associated Corporations | Name of Director | Name of Company | Number of shares and underlying shares in which interests are held | Approximate percentage of total issued shares | Nature of interest | | :--- | :--- | :--- | :--- | :--- | | Li Sing Kui | The Company | 834,809,096 | 56.94% | Other interests | | Li Sing Kui | United Group | 2,635,105,180 | 74.99% | Personal interests and other interests | | Sung Tsang Ping | Tian An Healthcare | 80,000 | 0.01% | Personal interests | | Lo King Yu | United Group | 280,000 | 0.00% | Personal interests | | Lo King Yu | Tian An Healthcare | 276,000 | 0.02% | Personal interests | - Mr. Li Sing Kui controls approximately **74.99%** of the shares in United Group through Lee and Lee Trust and is therefore deemed to have an interest in United Group's shares in the Company[268](index=268&type=chunk) [Interests of Substantial Shareholders and Other Persons](index=61&type=section&id=Interests%20of%20Substantial%20Shareholders%20and%20Other%20Persons) As of June 30, 2025, United Group, Lee and Lee Trust, Li Suk Wai, PIA Ltd, Vigor Online Offshore Limited, China Spirit Limited, Chong Shun Yee, SKK Special Situation Fund, Argyle Street Management Limited, Argyle Street Management Holdings Limited, and Chan Kin were substantial shareholders or other persons with interests in the company's shares Interests of Substantial Shareholders and Other Persons in the Company's Shares | Name of Shareholder | Number of shares and underlying shares in which interests are held | Approximate percentage of total issued shares | | :--- | :--- | :--- | | United Group | 834,809,096 | 56.94% | | Lee and Lee Trust | 834,809,096 | 56.94% | | Li Suk Wai | 835,109,096 | 56.96% | | PIA Ltd | 264,353,570 | 18.03% | | Vigor Online Offshore Limited | 142,938,000 | 9.74% | | China Spirit Limited | 142,938,000 | 9.74% | | Chong Shun Yee | 142,938,000 | 9.74% | | SKK Special Situation Fund | 99,462,400 | 6.78% | | Argyle Street Management Limited | 103,070,400 | 7.03% | | Argyle Street Management Holdings Limited | 103,070,400 | 7.03% | | Chan Kin | 103,070,400 | 7.03% | - United Group, Lee and Lee Trust, and Li Suk Wai collectively hold over **56%** of the share interests[271](index=271&type=chunk) - Argyle Street Management Limited and its affiliates (including Chan Kin) collectively hold over **7%** of the share interests[273](index=273&type=chunk) [Corporate Governance and Other Information](index=64&type=section&id=Corporate%20Governance%20and%20Other%20Information) The company generally complied with the Corporate Governance Code during the reporting period, with some deviations in the terms of reference for the Remuneration and Audit Committees; the Directors' Securities Transactions Code was fully observed, and changes in directors' information and remuneration were disclosed [Corporate Governance Code](index=64&type=section&id=Corporate%20Governance%20Code) - The company has applied and complied with the Corporate Governance Code in Appendix C1 to the Listing Rules, except for certain deviations in the terms of reference for the Remuneration Committee and Audit Committee[284](index=284&type=chunk) - The Remuneration Committee only makes recommendations on the remuneration of executive directors, excluding senior management[286](index=286&type=chunk) - The Audit Committee's terms of reference deviate from the Code provisions regarding recommending policies on non-audit services, monitoring risk management and internal control systems, and coordinating the work of internal and external auditors[287](index=287&type=chunk) [Code for Securities Transactions by Directors](index=65&type=section&id=Code%20for%20Securities%20Transactions%20by%20Directors) - The company has adopted the Model Code as its code for securities transactions by directors[293](index=293&type=chunk) - All directors confirmed their full compliance with the standards set out in the Model Code during the review period[293](index=293&type=chunk) [Changes in Directors' Information](index=65&type=section&id=Changes%20in%20Directors%27%20Information) - Mr. Li Sing Kui has been an alternate director to the Non-Executive Chairman of Mount Gibson Iron Limited since April 17, 2025[297](index=297&type=chunk) - Dr. Cheng Mo Chi, Moses has been appointed Chairman of the Hong Kong Maritime and Port Board since July 1, 2025[297](index=297&type=chunk) - Mr. Ngai Wah Sang resigned as an independent non-executive director of Shuangcai Zhuang Co., Ltd. effective August 1, 2025[297](index=297&type=chunk) - Effective January 1, 2025, the monthly salaries of Mr. Li Sing Kui, Mr. Lo King Yu, Mr. Li Sing Wai, and Mr. To Chan Sang were all increased by approximately **2.25%** compared to 2024[297](index=297&type=chunk) [Review by Audit Committee](index=66&type=section&id=Review%20by%20Audit%20Committee) The Audit Committee reviewed accounting principles and practices with management, discussed internal controls and financial reporting, including an overview of the interim financial report, relying on the external auditor's review and management's report - The Audit Committee has reviewed the accounting principles and practices adopted by the Group with management and discussed matters relating to internal control and financial reporting[299](index=299&type=chunk)[302](index=302&type=chunk) - The Audit Committee relied on the review results prepared by the Group's external auditor in accordance with Hong Kong Standard on Review Engagements 2410, and management's report, for the aforementioned review[299](index=299&type=chunk)[302](index=302&type=chunk) - The Audit Committee did not conduct a detailed independent audit review[299](index=299&type=chunk)[302](index=302&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=66&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the reporting period, neither the company nor any of its subsidiaries repurchased, sold, or redeemed any of the company's listed securities - Neither the company nor any of its subsidiaries repurchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025[300](index=300&type=chunk)[303](index=303&type=chunk)

Company Information Provides essential details about Hebei Construction Group Corporation Limited, including its registration, contact information, and legal/audit advisors [Basic Information](index=3&type=section&id=Basic%20Information) Hebei Construction Group Corporation Limited is a non-state-owned construction group in China, with a board of directors and a supervisory board to be abolished in June 2025 - The company's legal name is Hebei Construction Group Corporation Limited, with its English name being Hebei Construction Group Corporation Limited[3](index=3&type=chunk) - The Board of Directors comprises executive, non-executive, and independent non-executive directors, with Mr. Li Baozhong serving as Chairman and Mr. Shang Jinfeng as President[3](index=3&type=chunk) - Following shareholder approval, the company will no longer have a Supervisory Board from **June 30, 2025**, and all supervisors will step down from that date[3](index=3&type=chunk) [Registration and Contact Information](index=5&type=section&id=Registration%20and%20Contact%20Information) The company's registered office and main business location in China are in Baoding, Hebei, with its Hong Kong office in Wan Chai, and provides investor relations contacts - The company's registered office and principal place of business in China are located at No. 125 Lugang Road, Jingxiu District, Baoding, Hebei Province, China[5](index=5&type=chunk) - The principal place of business in Hong Kong is located on the 40th Floor, Dah Sing Financial Centre, 248 Queen's Road East, Wan Chai, Hong Kong[5](index=5&type=chunk) - The company's stock short name and stock code are Hebei Construction (01727), and its H-share registrar is Tricor Investor Services Limited[5](index=5&type=chunk) [Legal and Audit Advisors](index=5&type=section&id=Legal%20and%20Audit%20Advisors) The company has appointed Clifford Chance as its Hong Kong legal advisor, Jia Yuan Law Offices as its PRC legal advisor, and Ernst & Young Hua Ming LLP as its auditor - The Hong Kong legal advisor is Clifford Chance, and the PRC legal advisor is Jia Yuan Law Offices[5](index=5&type=chunk) - The company's auditor is Ernst & Young Hua Ming LLP[5](index=5&type=chunk) Financial Summary Provides a concise overview of the company's key financial performance indicators for the reporting period [Key Financial Indicators](index=5&type=section&id=Key%20Financial%20Indicators) For the six months ended June 30, 2025, the company's revenue, net profit, and earnings per share all decreased year-on-year, reflecting operational challenges 2025 H1 Key Financial Indicators (Year-on-Year) | Indicator | June 30, 2025 | 2024 Same Period | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | RMB 7.908 billion | - | Down 28% | | Net Profit | RMB 95 million | - | Down 21% | | Earnings Per Share | RMB 0.06 | - | Down 14% | Business Overview Presents an overview of the company's business operations, including new contracts, and performance across different construction segments [Company Profile and New Contracts](index=6&type=section&id=Company%20Profile%20and%20New%20Contracts) The company is a leading non-state-owned construction group in China, with a significant decrease in new contracts in H1 2025, and a shift towards infrastructure construction - The company is a leading non-state-owned construction group in China, primarily engaged in building construction, infrastructure construction, and specialized and other construction engineering contracting businesses[8](index=8&type=chunk)[10](index=10&type=chunk) 2025 H1 Newly Signed Contracts (Year-on-Year) | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Newly Signed Contracts | 8.039 | 13.960 | Down 42.41% | | Beijing-Tianjin-Hebei Region Share | 79.71% | 88.91% | Down 9.2 percentage points | | Other Regions Share | 20.29% | 11.09% | Up 9.2 percentage points | | Infrastructure Construction Share | 39.05% | 18.77% | Up 20.28 percentage points | | Building Construction Share | 40.38% | 55.98% | Down 15.6 percentage points | | Specialized and Other Construction Share | 20.57% | 25.25% | Down 4.68 percentage points | [Building Construction Business](index=7&type=section&id=Building%20Construction%20Business) The company provides general contracting services for residential, public, industrial, and commercial building projects, experiencing a significant decline in new contracts in H1 2025 - The company undertakes most building construction projects as a general contractor, responsible for major areas such as construction, foundation engineering, curtain walls, decoration, and fire protection engineering[11](index=11&type=chunk) 2025 H1 Building Construction Business Newly Signed Contracts (Year-on-Year) | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Newly Signed Contracts | 3.246 | 7.815 | Down 58.46% | | Residential Building Projects Share | 35.85% | 34.54% | Up 1.31 percentage points | | Public Building Projects Share | 51.27% | 46.87% | Up 4.4 percentage points | | Industrial Building Projects Share | 12.88% | 18.59% | Down 5.71 percentage points | | Commercial Building Projects Share | 0.00% | 0.00% | No change | [Infrastructure Construction Business](index=8&type=section&id=Infrastructure%20Construction%20Business) The company provides construction services for municipal and transportation infrastructure projects, with new contracts growing in H1 2025, particularly in municipal infrastructure - The company provides construction engineering contracting services for municipal and transportation infrastructure projects, including water supply, gas, urban pipelines, roads, bridges, and airport runway facilities[15](index=15&type=chunk) - Infrastructure construction clients are primarily local governments[15](index=15&type=chunk) 2025 H1 Infrastructure Construction Business Newly Signed Contracts (Year-on-Year) | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Newly Signed Contracts | 3.139 | 2.620 | Up 19.81% | | Municipal Infrastructure Construction Share | 77.22% | 62.43% | Up 14.79 percentage points | | Transportation Infrastructure Construction Share | 22.78% | 37.57% | Down 14.79 percentage points | [Specialized and Other Construction Engineering Contracting Business](index=8&type=section&id=Specialized%20and%20Other%20Construction%20Engineering%20Contracting%20Business) The company undertakes projects in specialized fields like M&E installation, steel structures, and decoration, with new contracts significantly decreasing in H1 2025, but new energy and water conservancy projects increasing - The company undertakes construction engineering contracting projects leveraging its qualifications and experience in specialized fields such as M&E installation, steel structure construction, and decoration and renovation[17](index=17&type=chunk) 2025 H1 Specialized and Other Construction Engineering Contracting Business Newly Signed Contracts (Year-on-Year) | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Newly Signed Contracts | 1.654 | 3.525 | Down 53.09% | | M&E Installation Share | 6.17% | 25.20% | Down 19.03 percentage points | | Steel Structure Share | 0.66% | 0.17% | Up 0.49 percentage points | | Decoration and Renovation Share | 12.52% | 5.25% | Up 7.27 percentage points | | New Energy Share | 55.99% | ╱ | New | | Water Conservancy and Hydropower Share | 12.33% | ╱ | New | | Other Construction Business Share | 12.33% | 69.38% | Down 57.05 percentage points | [Representative Engineering Projects](index=9&type=section&id=Representative%20Engineering%20Projects) The company highlights representative new, ongoing, and completed projects in H1 2025 across various business categories and regions, including transportation, municipal, residential, commercial, industrial, and new energy [Representative Newly Signed Contracts](index=9&type=section&id=Representative%20Newly%20Signed%20Contracts) Newly signed representative projects include road reconstruction, flood control, integrated health and wellness park, resettlement housing, and energy storage power station projects - Transportation infrastructure new projects include the design and construction general contracting for the reconstruction of S333 Haixing to Shunping Highway Anping Section, with a contract value of **RMB 584 million**, located in Hebei Province[20](index=20&type=chunk) - Municipal infrastructure new projects include the Baoding Flood Control and Drainage Project and the Lanshan Hot Spring Health and Wellness Rural Complex Project, with contract values of **RMB 584 million** and **RMB 500 million** respectively[20](index=20&type=chunk) - New energy new projects include the EPC general contracting for Antai (Baoding) New Energy Technology Co.'s 100MW/200MWh independent energy storage power station project (**RMB 357 million**) and Cixian's 200MW/400MWh shared energy storage power station project EPC general contracting (**RMB 570 million**), both located in Hebei Province[23](index=23&type=chunk) [Representative Ongoing Projects](index=11&type=section&id=Representative%20Ongoing%20Projects) Ongoing projects cover public buildings (e.g., Chinese Academy of Chinese Medical Sciences Guang'anmen Hospital Baoding Hospital), residential (e.g., Jinan Tianqiao Beihu Core Area), commercial (e.g., Hengbai International Plaza), industrial (e.g., Dangshan Economic Development Zone), transportation infrastructure (e.g., Yangzhou Taizhou International Airport), municipal infrastructure (e.g., Innovation Manufacturing Industrial Park), and specialized construction - Public building ongoing projects include the General Contracting Project for Guang'anmen Hospital Baoding Hospital of China Academy of Chinese Medical Sciences (**RMB 1.943 billion**) and Shunping County Hospital New Campus Construction Project (**RMB 607 million**), both located in Hebei Province[24](index=24&type=chunk) - Residential building ongoing projects include the General Contracting Project for Jinan Tianqiao District Beihu Core Area West Side Plot A South Zone (**RMB 1.097 billion**) and Hengshui Yongjin Peninsula Project Phase III and VI General Contracting Project (**RMB 745 million**)[28](index=28&type=chunk) - Transportation infrastructure ongoing projects include Yangzhou Taizhou International Airport Phase II Expansion Project Airfield Pavement Engineering Section 1 (**RMB 201 million**) and Hohhot New Airport Airfield Pavement Engineering (**RMB 488 million**)[31](index=31&type=chunk) - Municipal infrastructure ongoing projects include Innovation Manufacturing Industrial Park Infrastructure Construction Project EPC General Contracting (**RMB 1.362 billion**) and Baoding South Second Ring Road Pipeline and Supporting Municipal Infrastructure Upgrade Project EPC General Contracting (**RMB 881 million**)[33](index=33&type=chunk) [Representative Completed Projects](index=18&type=section&id=Representative%20Completed%20Projects) Completed projects include Knowledge City ZSCXN-B3-2 (Medical City), Botou Longtun New City Village Renovation Phase II, Knowledge City Fortune Plaza Phase I, and Chongqing Jiangbei International Airport T3B Terminal and Fourth Runway Airfield Pavement Project - Public building completed projects include Knowledge City ZSCXN-B3-2 (Medical City) Project (**RMB 1.26 billion**) and Xing'an League Third People's Hospital Relocation and New Construction Project (**RMB 336 million**)[36](index=36&type=chunk) - Residential building completed projects include Botou Longtun New City Village Renovation Phase II Project (**RMB 954 million**) and Changlingju Residential Project Phase II General Contracting (**RMB 423 million**)[36](index=36&type=chunk) - Transportation infrastructure completed projects include Chongqing Jiangbei International Airport T3B Terminal and Fourth Runway Airfield Pavement Project Section 003 (**RMB 616 million**)[36](index=36&type=chunk) Scientific Research Achievements and Awards Highlights the company's advancements in technology, intellectual property, and recognition through various awards and demonstration projects [Technological Progress and Intellectual Property](index=19&type=section&id=Technological%20Progress%20and%20Intellectual%20Property) In H1 2025, the company achieved significant results in R&D projects, technology platform construction, and intellectual property, receiving multiple awards and new patents - The company was approved for **19 provincial construction industry scientific and technological progress awards**, **12 new technology application demonstration projects**, and **2 green construction technology demonstration projects**[37](index=37&type=chunk) - **9 scientific and technological achievements** were evaluated as leading domestically, and **4 scientific and technological achievements** passed provincial construction association acceptance, of which **3 achievements** were evaluated as leading domestically[37](index=37&type=chunk) - R&D expenses of **RMB 347 million** were aggregated for 300 enterprise-level scientific research projects in 2024[37](index=37&type=chunk) - As of the end of June 2025, the company had **35 new patents granted** (including 8 invention patents) and **21 new patent applications**[37](index=37&type=chunk) Future Outlook Outlines the company's strategic priorities for the second half of the year, focusing on platform building, organizational vitality, project quality, and safety [Strategic Focus](index=20&type=section&id=Strategic%20Focus) In the second half of the year, the company will focus on building high-quality platforms, activating organizational vitality, improving project quality, and ensuring production safety for sustainable development - In the second half of the year, the company will continuously build high-quality enterprise platforms, unleashing the value of resources such as brand reputation, qualifications, financial credit, and talent reserves[39](index=39&type=chunk) - The company will continue to activate the vitality of organizations at all levels, encouraging innovation and entrepreneurship along the industry chain to seek new economic growth points[39](index=39&type=chunk) - The company will continuously improve the quality of engineering projects, deeply carry out special rectification for common quality issues, promote quality management standardization, and strictly control special construction plans for hazardous projects[39](index=39&type=chunk) - The company will always maintain vigilance on production safety, strengthen safety education and publicity, and strictly control processes through various means to ensure stable safety performance throughout the year[40](index=40&type=chunk) Management Discussion and Analysis Provides management's perspective on the company's financial performance, liquidity, capital structure, and other significant financial information [Financial Review](index=21&type=section&id=Financial%20Review) In H1 2025, the company's operating revenue and net profit both decreased, primarily due to reduced construction contracting revenue, a sluggish real estate market, and the completion of some large projects [Operating Revenue, Operating Costs, and Gross Profit](index=21&type=section&id=Operating%20Revenue%2C%20Operating%20Costs%2C%20and%20Gross%20Profit) In H1 2025, total revenue decreased by approximately RMB 3.107 billion to RMB 7.908 billion, mainly due to a RMB 3.174 billion decrease in construction contracting revenue - Revenue for the six months ended June 30, 2025, decreased by approximately **RMB 3.107 billion** to **RMB 7.908 billion** compared to the same period last year[41](index=41&type=chunk) - Construction engineering contracting segment revenue decreased by **RMB 3.174 billion**, mainly due to the completion of some large projects and a decrease in contract value and number of newly undertaken projects[41](index=41&type=chunk)[42](index=42&type=chunk) Construction Engineering Contracting Segment Operating Performance (2025 H1 vs 2024 H1) | Segment | 2025 H1 Revenue (RMB billion) | 2025 H1 Gross Margin (%) | 2024 H1 Revenue (RMB billion) | 2024 H1 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Building Construction Business | 4.744 | 5.1 | 6.984 | 5.1 | | Infrastructure Construction Business | 2.218 | 7.8 | 3.099 | 7.1 | | Specialized and Other Construction Business | 0.672 | 5.5 | 0.725 | 5.4 | | **Total** | **7.634** | **5.9** | **10.808** | **5.7** | [Expenses and Impairment](index=22&type=section&id=Expenses%20and%20Impairment) In H1 2025, management and R&D expenses decreased, while credit impairment losses increased due to provisions for high-risk clients, and asset impairment reversals increased due to lower contract asset values - Management expenses were **RMB 122 million**, a decrease of **RMB 89.77 million** from the same period in 2024, mainly due to reduced staff salaries, benefits, and social insurance expenses[44](index=44&type=chunk) - R&D expenses were **RMB 27.97 million**, a decrease of **RMB 5.25 million** from the same period in 2024, mainly due to fewer new projects initiated[45](index=45&type=chunk) - Credit impairment losses were **RMB 92 million**, an increase of **RMB 15 million** from the same period in 2024, primarily due to individual bad debt provisions for clients with significant default risk[46](index=46&type=chunk) - Asset impairment losses reversed **RMB 68 million**, compared to a reversal of **RMB 37 million** in the same period in 2024, mainly due to a decrease in the original value of contract assets resulting from lower revenue in the current period, leading to lower new bad debt provisions for contract assets[48](index=48&type=chunk) [Investment Income and Income Tax](index=23&type=section&id=Investment%20Income%20and%20Income%20Tax) In H1 2025, investment income turned from loss to profit, driven by continuous profitability of strategic associate and joint ventures, while income tax expenses decreased due to lower pre-tax profit, resulting in a year-on-year decrease in net profit - Investment income was **RMB 0.69 million**, compared to an investment loss of **RMB 1.9 million** in the same period in 2024, mainly due to the continuous profitability of strategically invested associates and joint ventures[49](index=49&type=chunk) - Income tax expense was **RMB 28 million**, a decrease of **RMB 7 million** from the previous year, mainly due to lower pre-tax profit in the current period[50](index=50&type=chunk) - Net profit for H1 2025 was **RMB 95 million**, a decrease of approximately **RMB 26 million** from the previous year[51](index=51&type=chunk) [Liquidity, Financial Resources, and Capital Structure](index=23&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20and%20Capital%20Structure) As of June 30, 2025, the company's cash and cash equivalents decreased, with a decline in monetary funds and accounts receivable financing, while accounts payable decreased and bills payable increased, reflecting adjustments in fund management and payment structure - As of June 30, 2025, cash and cash equivalents were approximately **RMB 3.896 billion**, a decrease from approximately **RMB 5.000 billion** as of December 31, 2024[52](index=52&type=chunk) - Monetary funds as of June 30, 2025, were **RMB 4.315 billion**, a decrease of **RMB 1.435 billion** from the end of 2024, mainly due to net cash outflow from operating activities[53](index=53&type=chunk) - Accounts receivable financing as of June 30, 2025, was **RMB 29 million**, a decrease of **RMB 77 million** from the end of 2024, mainly because the Group preferred bank deposit settlements over bank acceptance bills issued by real estate companies[56](index=56&type=chunk) - Accounts payable balance was **RMB 29.464 billion**, a decrease of **RMB 2.883 billion** (9%) from the end of 2024, mainly due to reduced procurement volume resulting from lower engineering volume in the current period[63](index=63&type=chunk) - Bills payable balance increased by **RMB 432 million** from the end of the previous year, mainly due to the Group enriching payment methods, adjusting payment structure, and increasing the proportion of bill payments[63](index=63&type=chunk) [Financial Ratios](index=26&type=section&id=Financial%20Ratios) As of June 30, 2025, the company's current ratio and quick ratio remained stable, the debt-to-capital ratio decreased, while return on assets and return on equity both declined Financial Ratios (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio (times) | 1.10 | 1.10 | | Quick Ratio (times) | 1.10 | 1.10 | | Debt-to-Capital Ratio | 91.5% | 94.8% | | Return on Assets (non-annualized) | 0.2% | 0.3% | | Return on Equity (non-annualized) | 1.5% | 2.5% | [Other Financial Information](index=26&type=section&id=Other%20Financial%20Information) During the reporting period, the company had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures, nor any major investments. Contingent liabilities primarily arose from pending litigation, and RMB exchange rate fluctuations had minimal impact - During the reporting period, the Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures, nor did it hold any major investments[66](index=66&type=chunk)[67](index=67&type=chunk) - As of June 30, 2025, contingent liabilities arising from pending litigation or arbitration amounted to **RMB 35 million**[68](index=68&type=chunk) - The Group's vast majority of business and bank loans are transacted in RMB, thus posing no significant foreign exchange fluctuation risk, and currently has no hedging policy[70](index=70&type=chunk) - As of June 30, 2025, the Group had **6,403 full-time employees**, a decrease from 6,940 as of December 31, 2024[71](index=71&type=chunk) Other Matters Covers various corporate governance and operational aspects, including issued share capital, corporate governance practices, securities dealings by directors, amendments to articles of association, continuing connected transactions, share repurchases, dividend distribution, and post-balance sheet events [Issued Share Capital](index=28&type=section&id=Issued%20Share%20Capital) As of June 30, 2025, the company's total share capital was RMB 1,761,383,500, with no changes during the reporting period - As of June 30, 2025, the total share capital of the Company was **RMB 1,761,383,500**, divided into 1,761,383,500 shares with a par value of RMB 1.00 per share[75](index=75&type=chunk) - There were no changes in the Company's share capital during the reporting period[75](index=75&type=chunk) [Corporate Governance Practices](index=28&type=section&id=Corporate%20Governance%20Practices) The company is committed to maintaining high corporate governance standards, has established an effective corporate oversight structure, and complied with all code provisions of the Corporate Governance Code during the reporting period - The Company is committed to achieving and maintaining a high level of corporate governance, having established an effective corporate oversight structure and continuously striving to improve its internal controls and corporate governance mechanisms[76](index=76&type=chunk) - During the reporting period, the Company complied with all code provisions of the Corporate Governance Code and adopted most of its recommended best practices[76](index=76&type=chunk) [Securities Transactions by Directors and Supervisors](index=28&type=section&id=Securities%20Transactions%20by%20Directors%20and%20Supervisors) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as the code of conduct for securities dealings by directors and supervisors, who confirmed compliance during the reporting period - The Company has adopted Appendix C3 of the Listing Rules, "Model Code for Securities Transactions by Directors of Listed Issuers," as the code of conduct for securities transactions by directors and supervisors of the Company[77](index=77&type=chunk) - All directors and supervisors confirmed their compliance with the required standards set out in the Model Code during the reporting period[77](index=77&type=chunk) [Amendments to Articles of Association](index=28&type=section&id=Amendments%20to%20Articles%20of%20Association) The Board of Directors reviewed and approved the proposal to abolish the Supervisory Board and amend the Articles of Association, which became effective upon shareholder approval on June 30, 2025 - On May 26, 2025, the Board of Directors reviewed and approved the proposal to abolish the Supervisory Board and amend the Articles of Association[78](index=78&type=chunk) - The aforementioned proposal was approved by a special resolution at the Shareholders' Meeting held on **June 30, 2025**, and the revised Articles of Association became effective from that date[78](index=78&type=chunk) [Continuing Connected Transactions](index=29&type=section&id=Continuing%20Connected%20Transactions) The company renewed several continuing connected transaction framework agreements, including labor subcontracting with Baoding Tianli and property leasing, commodity procurement, and property services with Zhongming Real Estate, setting annual caps for 2026-2027 - The Company entered into a new labor subcontracting framework agreement with Baoding Tianli, with annual caps of **RMB 2.2 billion** for both 2026 and 2027[80](index=80&type=chunk) - The Company entered into a new property leasing framework agreement with Zhongming Real Estate, with annual caps for rent and other fees paid by the Group to Zhongming Real Estate and its associates set at **RMB 5.6 million**[81](index=81&type=chunk) - The Company entered into a new commodity procurement framework agreement with Zhongming Real Estate, with annual caps for total payments for goods by the Group to Zhongming Real Estate and its associates set at **RMB 10 million**[83](index=83&type=chunk) [Share Repurchases, Sales, or Redemptions](index=30&type=section&id=Share%20Repurchases%2C%20Sales%2C%20or%20Redemptions) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, nor did they hold any treasury shares - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[85](index=85&type=chunk) - As of the end of the reporting period, neither the Company nor any of its subsidiaries held any treasury shares[85](index=85&type=chunk) [Dividend Distribution](index=30&type=section&id=Dividend%20Distribution) The Board of Directors does not recommend the payment of a final dividend for 2024 or an interim dividend for 2025, to safeguard the company's continuous stable operations and the long-term interests of all shareholders - According to the "2024 Profit Distribution Plan" approved by shareholders at the 2024 Annual General Meeting held on **June 30, 2025**, the Company will not distribute a final dividend for the year ended December 31, 2024[86](index=86&type=chunk) - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[87](index=87&type=chunk) [Significant Post-Balance Sheet Events](index=30&type=section&id=Significant%20Post-Balance%20Sheet%20Events) From June 30, 2025, to the latest practicable date, no significant post-balance sheet events occurred for the Group - From June 30, 2025, to the latest practicable date, no significant post-balance sheet events occurred for the Group, other than those disclosed in this interim report[88](index=88&type=chunk) [Audit Committee Review](index=30&type=section&id=Audit%20Committee%20Review) The company's Audit Committee has reviewed and confirmed the Group's interim results announcement, interim report, and unaudited interim financial statements for the six months ended June 30, 2025 - The Company's Audit Committee has reviewed and confirmed the Group's interim results announcement, 2025 interim report, and unaudited interim financial statements prepared in accordance with China Accounting Standards for Business Enterprises for the six months ended June 30, 2025[89](index=89&type=chunk) Share Capital Changes and Shareholder Information Details the company's share capital structure, historical changes, and shareholdings of directors, senior management, and major shareholders [Share Capital and Changes in Share Capital](index=31&type=section&id=Share%20Capital%20and%20Changes%20in%20Share%20Capital) The company's H-shares were listed on the HKEX main board on December 15, 2017, with an increase in H-shares on January 5, 2018, due to partial exercise of the over-allotment option - The Company's H-shares were listed on the main board of the Stock Exchange on **December 15, 2017**[90](index=90&type=chunk) - On **January 5, 2018**, the over-allotment option was partially exercised, allotting **28,049,500 H-shares**, increasing the share capital to **1,761,383,500 shares**[90](index=90&type=chunk) - As of June 30, 2025, the Company's total issued share capital was **RMB 1,761,383,500**, comprising 1,300,000,000 domestic shares and 461,383,500 H-shares[90](index=90&type=chunk) [Shareholdings of Directors and Chief Executive](index=31&type=section&id=Shareholdings%20of%20Directors%20and%20Chief%20Executive) As of June 30, 2025, Mr. Li Baoyuan indirectly held 1,300,000,000 domestic shares, representing 73.80% of the total issued share capital, through controlled corporations Interests and Short Positions of Directors and Chief Executive in Company Shares (June 30, 2025) | Name of Director and Chief Executive | Capacity | Number of Shares Share Class | Nature of Interest | Approximate Percentage of Total Issued Share Capital of the Company | | :--- | :--- | :--- | :--- | :--- | | Mr. Li Baoyuan | Interest in controlled corporation | 1,300,000,000 Domestic Shares | Long position | 73.80% | Interests and Short Positions of Directors and Chief Executive in Shares of Associated Corporations (June 30, 2025) | Name of Director and Chief Executive | Name of Associated Corporation | Capacity | Number of Ordinary Shares Interested | Nature of Interest | Approximate Percentage of Issued Share Capital of Associated Corporation | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Li Baoyuan | Qianbao Investment | Beneficial owner | 45,000,000 | Long position | 90.00% | | Mr. Li Baoyuan | Zhongru Investment | Interest in controlled corporation | 289,500,000 | Long position | 100.00% | | Mr. Li Baozhong | Qianbao Investment | Beneficial owner | 5,000,000 | Long position | 10.00% | | Mr. Shang Jinfeng | Zhongru Investment | Beneficial owner | 5,000,000 | Long position | 1.73% | | Mr. Zhao Wensheng | Zhongru Investment | Beneficial owner | 3,000,000 | Long position | 1.04% | | Mr. Tian Wei | Zhongru Investment | Beneficial owner | 3,000,000 | Long position | 1.04% | | Mr. Zhang Wenzhong | Zhongru Investment | Beneficial owner | 3,000,000 | Long position | 1.04% | [Directors' Rights to Acquire Shares or Debentures](index=34&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) As of June 30, 2025, no rights to acquire shares or debentures of the company were granted to any director, their spouse, or children under 18, nor were any such rights exercised - As of June 30, 2025, no rights to acquire benefits through the purchase of shares or debentures of the Company were granted to any director or their respective spouses or children under the age of 18, nor were any such rights exercised by them[98](index=98&type=chunk) [Major Shareholder Holdings](index=34&type=section&id=Major%20Shareholder%20Holdings) As of June 30, 2025, Zhongru Investment held 1,202,500,000 domestic shares, representing 68.27% of the total issued share capital, while Qianbao Investment held a combined 73.81% through controlled corporations and beneficial ownership Interests and Short Positions of Major Shareholders in Company Shares and Related Shares (June 30, 2025) | Shareholder Name | Capacity | Number of Shares Interested | Share Class | Nature of Interest | Approximate Percentage of Holding in Relevant Share Class | Approximate Percentage of Total Issued Share Capital of the Company | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Zhongru Investment | Beneficial owner | 1,202,500,000 | Domestic Shares | Long position | 92.50% | 68.27% | | Qianbao Investment | Interest in controlled corporation | 1,202,500,000 | Domestic Shares | Long position | 92.50% | 68.27% | | Qianbao Investment | Beneficial owner | 97,500,000 | Domestic Shares | Long position | 7.50% | 5.54% | Directors, Supervisors, and Senior Management Information Provides details on the composition of the Board of Directors and senior management, as well as changes in their appointments [Composition of Directors and Senior Management](index=35&type=section&id=Composition%20of%20Directors%20and%20Senior%20Management) As of the latest practicable date, the company's Board of Directors comprises 9 directors, including 5 executive, 1 non-executive, and 3 independent non-executive directors, with 7 senior management personnel - The Company's Board of Directors consists of **9 directors**, including 5 executive directors (Mr. Li Baozhong, Mr. Shang Jinfeng, Mr. Zhao Wensheng, Mr. Zhang Wenzhong, and Mr. Tian Wei), 1 non-executive director (Mr. Li Baoyuan), and 3 independent non-executive directors (Ms. Shen Lifeng, Ms. Chen Xin, and Mr. Chen Yisheng)[100](index=100&type=chunk) - The Company has **7 senior management personnel**, including Mr. Shang Jinfeng (President), Mr. Zhao Wensheng (Vice President, Chief Accountant, and Financial Controller), etc[100](index=100&type=chunk) [Changes in Appointments of Directors, Supervisors, and Senior Management](index=35&type=section&id=Changes%20in%20Appointments%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) Mr. Tian Wei was elected as an employee representative director and continues as an executive director. The Supervisory Board was abolished on June 30, 2025, with all supervisors stepping down - Mr. Tian Wei was elected as an employee representative director of the Company's third Board of Directors and will continue to serve as an executive director[101](index=101&type=chunk) - Following shareholder approval to abolish the Supervisory Board, the Company will no longer have a Supervisory Board from **June 30, 2025**, and all supervisors will step down from that date[102](index=102&type=chunk) - There were no changes in the Company's senior management during the reporting period[103](index=103&type=chunk) Financial Statements Presents the unaudited interim consolidated and company-level financial statements, including balance sheets, income statements, statements of changes in equity, and cash flow statements [Interim Consolidated Balance Sheet (Unaudited)](index=36&type=section&id=Interim%20Consolidated%20Balance%20Sheet) As of June 30, 2025, the company's total consolidated assets were RMB 58,379,226 thousand, a decrease from the end of 2024, with both current assets and liabilities decreasing, and owners' equity slightly increasing Interim Consolidated Balance Sheet Summary (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Assets | 58,379,226 | 61,835,035 | | Total Current Assets | 51,974,532 | 55,394,965 | | Total Non-Current Assets | 6,404,694 | 6,440,070 | | Total Liabilities | 51,906,801 | 55,445,089 | | Total Current Liabilities | 48,916,624 | 52,260,750 | | Total Non-Current Liabilities | 2,990,177 | 3,184,339 | | Total Owners' Equity | 6,472,425 | 6,389,946 | [Interim Consolidated Income Statement (Unaudited)](index=38&type=section&id=Interim%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the company's consolidated operating revenue was RMB 7,908,202 thousand, and net profit was RMB 95,244 thousand, both decreasing year-on-year, with earnings per share at RMB 0.06 Interim Consolidated Income Statement Summary (2025 H1 vs 2024 H1) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Operating Revenue | 7,908,202 | 11,015,171 | | Operating Costs | 7,403,489 | 10,365,625 | | Operating Profit | 122,653 | 157,082 | | Net Profit | 95,244 | 120,879 | | Net Profit Attributable to Parent Company Owners | 104,611 | 126,889 | | Basic and Diluted Earnings Per Share (RMB/share) | 0.06 | 0.07 | [Interim Consolidated Statement of Changes in Owners' Equity (Unaudited)](index=39&type=section&id=Interim%20Consolidated%20Statement%20of%20Changes%20in%20Owners'%20Equity) For the six months ended June 30, 2025, the company's total consolidated owners' equity was RMB 6,472,425 thousand, an increase from the beginning of the period, primarily influenced by total comprehensive income Interim Consolidated Statement of Changes in Owners' Equity Summary (2025 H1) | Indicator | Beginning Balance (RMB thousand) | Change for the Period (RMB thousand) | Ending Balance (RMB thousand) | | :--- | :--- | :--- | :--- | | Total Equity Attributable to Parent Company Shareholders | 6,221,833 | 91,846 | 6,313,679 | | Minority Interests | 168,113 | (9,367) | 158,746 | | Total Owners' Equity | 6,389,946 | 82,479 | 6,472,425 | [Interim Consolidated Cash Flow Statement (Unaudited)](index=41&type=section&id=Interim%20Consolidated%20Cash%20Flow%20Statement) For the six months ended June 30, 2025, the company reported a net cash outflow from operating activities of RMB 760,670 thousand, a net cash inflow from investing activities of RMB 11,984 thousand, and a net cash outflow from financing activities of RMB 355,190 thousand, resulting in a net decrease in cash and cash equivalents Interim Consolidated Cash Flow Statement Summary (2025 H1 vs 2024 H1) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | (760,670) | (1,729,142) | | Net Cash Flow from Investing Activities | 11,984 | 37,046 | | Net Cash Flow from Financing Activities | (355,190) | 4,274 | | Net Increase in Cash and Cash Equivalents | (1,103,768) | (1,687,803) | | Cash and Cash Equivalents at End of Period | 3,895,937 | 4,839,883 | [Company Balance Sheet (Unaudited)](index=43&type=section&id=Company%20Balance%20Sheet) As of June 30, 2025, the company's total assets were RMB 44,413,565 thousand, a decrease from the end of 2024, with both current assets and liabilities decreasing, and owners' equity slightly increasing Company Balance Sheet Summary (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Assets | 44,413,565 | 47,946,954 | | Total Current Assets | 39,128,331 | 42,629,245 | | Total Non-Current Assets | 5,285,234 | 5,317,709 | | Total Liabilities | 38,108,694 | 41,730,300 | | Total Current Liabilities | 37,988,829 | 41,560,040 | | Total Non-Current Liabilities | 119,865 | 170,260 | | Total Owners' Equity | 6,304,871 | 6,216,654 | [Company Income Statement (Unaudited)](index=45&type=section&id=Company%20Income%20Statement) For the six months ended June 30, 2025, the company's operating revenue was RMB 5,182,812 thousand, and net profit was RMB 101,590 thousand, both decreasing year-on-year Company Income Statement Summary (2025 H1 vs 2024 H1) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Operating Revenue | 5,182,812 | 7,951,540 | | Operating Costs | 4,853,732 | 7,531,011 | | Operating Profit | 116,434 | 114,709 | | Net Profit | 101,590 | 106,448 | | Total Comprehensive Income | 88,217 | 116,102 | [Company Statement of Changes in Owners' Equity (Unaudited)](index=46&type=section&id=Company%20Statement%20of%20Changes%20in%20Owners'%20Equity) For the six months ended June 30, 2025, the company's total owners' equity was RMB 6,304,871 thousand, an increase from the beginning of the period, primarily influenced by total comprehensive income Company Statement of Changes in Owners' Equity Summary (2025 H1) | Indicator | Beginning Balance (RMB thousand) | Change for the Period (RMB thousand) | Ending Balance (RMB thousand) | | :--- | :--- | :--- | :--- | | Total Owners' Equity | 6,216,654 | 88,217 | 6,304,871 | [Company Cash Flow Statement (Unaudited)](index=48&type=section&id=Company%20Cash%20Flow%20Statement) For the six months ended June 30, 2025, the company reported a net cash outflow from operating activities of RMB 376,905 thousand, a net cash inflow from investing activities of RMB 14,626 thousand, and a net cash outflow from financing activities of RMB 85,824 thousand, resulting in a net decrease in cash and cash equivalents Company Cash Flow Statement Summary (2025 H1 vs 2024 H1) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | (376,905) | (2,358,614) | | Net Cash Flow from Investing Activities | 14,626 | 17,032 | | Net Cash Flow from Financing Activities | (85,824) | (81,372) | | Net Increase in Cash and Cash Equivalents | (447,995) | (2,422,935) | | Cash and Cash Equivalents at End of Period | 2,560,280 | 3,197,317 | Notes to Financial Statements Provides detailed explanations and breakdowns for various items presented in the financial statements, including accounting policies, changes in consolidation scope, and specific account analyses [General Information](index=51&type=section&id=General%20Information) Hebei Construction Group Corporation Limited, formerly Hebei Construction Group Co., Ltd., was restructured in 1997, completed its shareholding reform in 2017, and listed its H-shares on December 15, 2017, with its ultimate parent company being Qianbao Investment Co., Ltd - Hebei Construction Group Corporation Limited, formerly Hebei Construction Group Co., Ltd., was restructured and established on **September 29, 1997**[134](index=134&type=chunk) - The Company completed the initial public offering of H-shares to overseas investors on **December 15, 2017**, and exercised the over-allotment option on **January 5, 2018**, issuing a total of **461,383,500 H-shares**[135](index=135&type=chunk) - The Group's principal operating activity is general contracting for construction projects, and its ultimate parent company is Qianbao Investment Co., Ltd., established in China[136](index=136&type=chunk) [Basis of Preparation of Financial Statements](index=52&type=section&id=Basis%20of%20Preparation%20of%20Financial%20Statements) These financial statements are prepared in accordance with "Accounting Standard for Business Enterprises No. 32 – Interim Financial Reporting" issued by the Ministry of Finance and the disclosure requirements of the Hong Kong Stock Exchange Listing Rules, presented on a going concern basis - These financial statements are prepared in accordance with "Accounting Standard for Business Enterprises No. 32 – Interim Financial Reporting" issued by the Ministry of Finance and the disclosure requirements of the Listing Rules of The Stock Exchange of Hong Kong Limited[137](index=137&type=chunk) - These financial statements are presented on a going concern basis[138](index=138&type=chunk) [Changes in Accounting Policies and Accounting Estimates](index=52&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Accounting%20Estimates) The accounting policies and estimates adopted in these financial statements are consistent with those in the 2024 annual financial statements, with no significant changes during the reporting period - The accounting policies and accounting estimates adopted in these financial statements are consistent with those in the 2024 annual financial statements[139](index=139&type=chunk) [Changes in Consolidation Scope](index=52&type=section&id=Changes%20in%20Consolidation%20Scope) During the current period, the company established 5 new subsidiaries, deregistered 2 subsidiaries, and transferred 100% equity of 1 subsidiary, with the remaining scope of consolidated financial statements consistent with the previous year - The Company established **Hebei Wangzhu Construction Engineering Co., Ltd., Hebei Construction Group (Xiong'an) Construction Development Co., Ltd., Tianjin Tianzheng Construction Engineering Co., Ltd., Jiangsu Zhengrui Construction Engineering Co., Ltd., and Hebei Xiongheng Baocheng Construction Engineering Co., Ltd.** in the current period[140](index=140&type=chunk) - The Company's subsidiaries, **Hebei Bainac产能基地有限责任公司 and Hebei Tuopu Construction Engineering Co., Ltd.**, were deregistered in the current period[140](index=140&type=chunk) - The Company transferred **100% equity of Beijing Tianjia Construction Engineering Co., Ltd.** in the current period and no longer consolidates it as a subsidiary thereafter[140](index=140&type=chunk) [Notes to Major Items in Consolidated Financial Statements](index=53&type=section&id=Notes%20to%20Major%20Items%20in%20Consolidated%20Financial%20Statements) This section provides detailed explanations for major items in the consolidated financial statements, including aging analysis of accounts receivable and long-term receivables, changes in long-term equity investments and fixed assets, aging analysis of accounts payable, composition and timing of revenue recognition, details of credit impairment losses and asset impairment losses, income tax expenses, earnings per share calculation, and assets with restricted ownership [Accounts Receivable and Long-term Receivables](index=53&type=section&id=Accounts%20Receivable%20and%20Long-term%20Receivables) The Group's accounts receivable primarily consist of engineering contracting receivables, with credit terms typically 1 to 3 months. Long-term receivables mainly relate to build-operate-transfer water supply services - The Group's accounts receivable primarily consist of engineering contracting receivables, with credit terms typically **1 to 3 months**, and are non-interest bearing[141](index=141&type=chunk) Accounts Receivable Aging Analysis (June 30, 2025 vs December 31, 2024) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 6,509,814 | 6,294,717 | | 1 to 2 years | 813,467 | 1,156,111 | | 2 to 3 years | 501,549 | 501,379 | | Over 3 years | 933,635 | 987,408 | | **Total** | **8,758,465** | **8,939,615** | | Less: Provision for bad debts on accounts receivable | 1,706,471 | 1,612,871 | | **Net Value** | **7,051,994** | **7,326,744** | - The Group's long-term receivables primarily consist of receivables from build-operate-transfer water supply services, to be repaid in installments over **1 to 25 years**[144](index=144&type=chunk) [Long-term Equity Investments](index=55&type=section&id=Long-term%20Equity%20Investments) In H1 2025, the Group increased its long-term equity investment in Baoding City Agricultural Investment Construction Engineering Co., Ltd. by RMB 221 thousand, with no disposals during the same period - For the period from January 1 to June 30, 2025, the Group increased its long-term equity investment in Baoding City Agricultural Investment Construction Engineering Co., Ltd. by **RMB 221 thousand**[147](index=147&type=chunk) - For the period from January 1 to June 30, 2025, the Group had no disposals of long-term equity investments[147](index=147&type=chunk) [Fixed Assets](index=55&type=section&id=Fixed%20Assets) In H1 2025, the Group acquired fixed assets with an original cost of RMB 1,833 thousand and disposed of fixed assets with a book value of RMB 1,589 thousand, resulting in an asset disposal loss of RMB 65 thousand - For the period from January 1 to June 30, 2025, the Group acquired fixed assets with an original cost of **RMB 1,833 thousand**[148](index=148&type=chunk) - For the period from January 1 to June 30, 2025, the Group disposed of fixed assets with a book value of **RMB 1,589 thousand**, resulting in an asset disposal loss of **RMB 65 thousand**[148](index=148&type=chunk) [Accounts Payable](index=56&type=section&id=Accounts%20Payable) Accounts payable are non-interest bearing. As of June 30, 2025, total accounts payable amounted to RMB 29,463,558 thousand, with the highest proportion being within 1 year - Accounts payable are non-interest bearing[149](index=149&type=chunk) Accounts Payable Aging Analysis (June 30, 2025 vs December 31, 2024) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 18,318,232 | 20,640,524 | | 1 to 2 years | 8,526,684 | 8,877,374 | | 2 to 3 years | 1,551,425 | 1,521,756 | | Over 3 years | 1,067,217 | 1,306,994 | | **Total** | **29,463,558** | **32,346,648** | [Operating Revenue](index=57&type=section&id=Operating%20Revenue) In H1 2025, the company's operating revenue was RMB 7,908,202 thousand, primarily from construction engineering contracting. Revenue recognition mainly occurs over a period, with most revenue from customers within China Operating Revenue Composition (2025 H1 vs 2024 H1) | Revenue Type | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Principal Business Revenue | 7,633,670 | 10,808,378 | | Other Business Revenue | 274,532 | 206,793 | | **Total** | **7,908,202** | **11,015,171** | Operating Revenue from Customer Contracts by Product Type and Region (2025 H1) | Category | Construction (RMB thousand) | Other (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | | Building Construction Projects | 4,743,764 | – | 4,743,764 | | Infrastructure Construction Projects | 2,025,200 | 192,644 | 2,217,844 | | Specialized and Other Construction Projects | 672,062 | – | 672,062 | | Sales of Goods and Other | 175,046 | 89,898 | 264,944 | | Sewage and Reclaimed Water Treatment | – | 8,136 | 8,136 | | **Total** | **7,616,072** | **290,678** | **7,906,750** | | Principal Operating Region (China) | 7,616,072 | 290,678 | 7,906,750 | | Revenue Recognition Timing (Over a period) | 7,441,026 | 192,658 | 7,633,684 | - Performance obligations for construction services are satisfied over time, with contract payments typically due within **90 days** after invoicing[156](index=156&type=chunk) [Credit Impairment Losses](index=61&type=section&id=Credit%20Impairment%20Losses) In H1 2025, the company's total credit impairment losses amounted to RMB (91,884) thousand, primarily from bad debt losses on accounts receivable Credit Impairment Losses Composition (2025 H1 vs 2024 H1) | Loss Type | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Bad Debt Losses on Accounts Receivable | (93,600) | (76,100) | | Bad Debt Losses on Other Receivables | 1,416 | (663) | | Bad Debt Losses on Long-term Receivables | 300 | – | | **Total** | **(91,884)** | **(76,763)** | [Asset Impairment Losses](index=61&type=section&id=Asset%20Impairment%20Losses) In H1 2025, the company reversed asset impairment losses of RMB 67,821 thousand, mainly from contract asset impairment losses Asset Impairment Losses Composition (2025 H1 vs 2024 H1) | Loss Type | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Contract Asset Impairment Losses | 67,821 | 36,784 | [Income Tax Expenses](index=62&type=section&id=Income%20Tax%20Expenses) In H1 2025, the company's income tax expenses were RMB 27,944 thousand, a decrease from the previous year, primarily comprising current income tax expenses and deferred income tax expenses Income Tax Expenses Composition (2025 H1 vs 2024 H1) | Expense Type | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Current Income Tax Expense | 45,473 | 57,793 | | Deferred Income Tax Expense | (17,529) | (22,699) | | **Total** | **27,944** | **35,094** | [Profit Distribution](index=62&type=section&id=Profit%20Distribution) In H1 2025, the Group did not implement any profit distribution - For the period from January 1 to June 30, 2025, the Group did not implement any profit distribution[163](index=163&type=chunk) [Earnings Per Share](index=62&type=section&id=Earnings%20Per%20Share) In H1 2025, the company's basic earnings per share were RMB 0.06, a decrease from the previous year. Diluted earnings per share equal basic earnings per share as the Group has no dilutive potential ordinary shares Earnings Per Share (2025 H1 vs 2024 H1) | Indicator | 2025 H1 (RMB/share) | 2024 H1 (RMB/share) | | :--- | :--- | :--- | | Basic Earnings Per Share (Continuing Operations) | 0.06 | 0.07 | | Current Net Profit Attributable to Ordinary Shareholders of the Company (RMB thousand) | 104,611 | 126,889 | | Weighted Average Number of Ordinary Shares Outstanding of the Company | 1,761,383,500 | 1,761,383,500 | - The Group has no dilutive potential ordinary shares, therefore, diluted earnings per share are equal to basic earnings per share[166](index=166&type=chunk) [Assets with Restricted Ownership](index=63&type=section&id=Assets%20with%20Restricted%20Ownership) As of June 30, 2025, the Group's total assets with restricted ownership amounted to RMB 3,618,599 thousand, primarily including monetary funds, contract assets, long-term receivables, investment properties, fixed assets, and intangible assets, pledged or mortgaged for borrowings or as guarantees Assets with Restricted Ownership (June 30, 2025 vs December 31, 2024) | Asset Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Monetary Funds | 419,295 | 750,657 | | Accounts Receivable | – | 129,374 | | Contract Assets | 2,492,187 | 2,491,704 | | Long-term Receivables (including those due within one year) | 204,190 | 208,702 | | Investment Properties | 91,600 | 91,000 | | Fixed Assets | 322,339 | 409,274 | | Intangible Assets | 88,988 | 91,626 | | **Total** | **3,618,599** | **4,172,337** | - As of June 30, 2025, the Group pledged contract assets with a carrying value of **RMB 2,492,187,000** and long-term receivables of **RMB 204,190,000** to obtain long-term borrowings of **RMB 2,098,504,000**[169](index=169&type=chunk) - As of June 30, 2025, the Group's restricted monetary funds included **RMB 251,199,000** frozen for judicial and other reasons, **RMB 68,596,000** for bill guarantees, and **RMB 99,500,000** for letter of credit guarantees[170](index=170&type=chunk) [Segment Reporting](index=65&type=section&id=Segment%20Reporting) The Group is divided into two reporting segments: construction engineering contracting and other. In H1 2025, the construction engineering contracting segment generated external transaction revenue of RMB 7,616,072 thousand, and the other segment generated RMB 292,130 thousand [Operating Segments](index=65&type=section&id=Operating%20Segments) In H1 2025, the construction engineering contracting segment contributed the majority of external transaction revenue and a total profit of RMB 221,904 thousand, while the "other" segment, including service concession arrangements, reported a total loss of RMB 98,673 thousand - The Group has **2 reporting segments**: the construction engineering contracting segment primarily engages in general contracting and subcontracting of construction projects; the "other" segment primarily includes the Group's service concession arrangements and other services[172](index=172&type=chunk)[174](index=174&type=chunk) Operating Segment Performance (2025 H1) | Indicator | Construction Engineering Contracting (RMB thousand) | Other (RMB thousand) | Adjustments and Eliminations (RMB thousand) | Consolidated (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | External Transaction Revenue | 7,616,072 | 292,130 | – | 7,908,202 | | Investment Income from Joint Ventures and Associates | 704 | – | – | 704 | | Credit Impairment Losses | 42,901 | 48,983 | – | 91,884 | | Asset Impairment Losses | (80,361) | 12,540 | – | (67,821) | | Depreciation and Amortization Expenses | 20,325 | 14,682 | – | 35,007 | | Total Profit | 221,904 | (98,673) | (43) | 123,188 | [Other Information](index=66&type=section&id=Other%20Information) The Group's revenue primarily originates from customers within China, and all non-current assets are located in mainland China. During the reporting period, there was no single customer accounting for more than 10% of consolidated revenue - The Group's revenue primarily originates from customers within China, thus no more detailed geographical segment information is required[176](index=176&type=chunk) - All non-current assets held by the Group are located in mainland China[177](index=177&type=chunk) - During the reporting period, the Group had no single customer accounting for more than **10%** of consolidated revenue[178](index=178&type=chunk) [Fair Value](index=67&type=section&id=Fair%20Value) This section discloses assets and liabilities measured at fair value, including financial assets held for trading, accounts receivable financing, other equity instrument investments, and investment properties, detailing valuation techniques and inputs, especially for Level 3 fair value measurements [Assets and Liabilities Measured at Fair Value](index=67&type=section&id=Assets%20and%20Liabilities%20Measured%20at%20Fair%20Value) As of June 30, 2025, the Group's total recurring fair value measurements amounted to RMB 743,801 thousand, primarily comprising other equity instrument investments and investment properties Assets and Liabilities Measured at Fair Value (June 30, 2025) | Asset Type | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Level 3 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Financial Assets Held for Trading | 2,560 | – | – | 2,560 | | Accounts Receivable Financing | – | 28,822 | – | 28,822 | | Other Equity Instrument Investments | 46,765 | – | 466,254 | 513,019 | | Investment Properties | – | – | 199,400 | 199,400 | | **Total** | **49,325** | **28,822** | **665,654** | **743,801** | [Valuation Techniques and Inputs for Fair Value Measurement](index=68&type=section&id=Valuation%20Techniques%20and%20Inputs%20for%20Fair%20Value%20Measurement) In H1 2025, there were no changes in the valuation processes, techniques, or input levels for fair value measurements. Unlisted equity investments are valued using the listed company comparable method, and investment properties using the discounted cash flow method - For the period from January 1 to June 30, 2025, there were no changes in the valuation processes, valuation techniques, or input levels for fair value measurements[180](index=180&type=chunk) Overview of Significant Unobservable Inputs for Level 3 Fair Value Measurements (June 30, 2025) | Asset Type | Valuation Technique | Unobservable Input | Range (Weighted Average) | | :--- | :--- | :--- | :--- | | Unlisted Equity Investments (Baoding City Commercial Bank Co., Ltd.) | Listed Company Comparable Method | Price-to-Book Ratio (Peer Median) | 0.6–0.9 | | | | Liquidity Discount | 30% | | Investment Properties (Darunfa Supermarket) | Discounted Cash Flow Method | Capitalization Rate | 6.5% | | | | Annual Market Rent (per square meter) | 100–116 | | Investment Properties (Qingyuan Green Industrial Park) | Discounted Cash Flow Method | Capitalization Rate | 6.00% | | | | Annual Market Rent (per square meter) | 17–19 | [Transfers Between Levels of Recurring Fair Value Measurements](index=69&type=section&id=Transfers%20Between%20Levels%20of%20Recurring%20Fair%20Value%20Measurements) In H1 2025, there were no transfers between levels for assets and liabilities subject to recurring fair value measurements - For the period from January 1 to June 30, 2025, there were no transfers between levels for assets and liabilities subject to recurring fair value measurements[182](index=182&type=chunk) [Financial Assets and Liabilities Not Measured at Fair Value](index=69&type=section&id=Financial%20Assets%20and%20Liabilities%20Not%20Measured%20at%20Fair%20Value) As of June 30, 2025, the carrying value of fixed-rate long-term borrowings was RMB 1,785,828 thousand, with a fair value of RMB 1,765,358 thousand Financial Assets and Liabilities Not Measured at Fair Value (June 30, 2025) | Financial Liability | Carrying Value (RMB thousand) | Fair Value (RMB thousand) | Inputs Used for Fair Value Disclosure (Level 2) (RMB thousand) | | :--- | :--- | :--- | :--- | | Fixed-rate Long-term Borrowings | 1,785,828 | 1,765,358 | 1,765,358 | - For the period from January 1 to June 30, 2025, there were no changes in the valuation techniques and input levels for fair value measurements[183](index=183&type=chunk) [Related Party Relationships and Transactions](index=70&type=section&id=Related%20Party%20Relationships%20and%20Transactions) This section details the Group's related party relationships and major transactions, including acceptance and provision of services, leasing, guarantees, and key management personnel compensation, along with balances of related party receivables and payables [Related Party Relationships](index=70&type=section&id=Related%20Party%20Relationships) The Group's related parties include its ultimate holding company Qianbao Investment, parent company Zhongru Investment, various associates, joint ventures, and other entities under common control - Qianbao Investment Co., Ltd. is the Group's ultimate holding company, and Zhongru Investment Co., Ltd. is the parent company[184](index=184&type=chunk) - Related parties also include various associates (e.g., Jianwei County Yizong Liangheng Project Management Co., Ltd.), joint ventures (e.g., Qinhuangdao Yuanyi Road Construction Management Co., Ltd.), and other entities under common control (e.g., Zhongming Real Estate Group Co., Ltd., Baoding Tianli Labor Co., Ltd.)[184](index=184&type=chunk)[185](index=185&type=chunk) [Major Transactions Between the Group and Related Parties](index=72&type=section&id=Major%20Transactions%20Between%20the%20Group%20and%20Related%20Parties) In H1 2025, the Group accepted services of RMB 706,925 thousand from related parties, primarily Baoding Tianli Labor Co., Ltd., and provided services of RMB 71,438 thousand, mainly to Xi'an Zhongyuan Real Estate Development Co., Ltd Services Accepted from Related Parties (2025 H1 vs 2024 H1) | Related Party | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Baoding Tianli Labor Co., Ltd. | 700,363 | 1,146,953 | | Hebei Zhongcheng Property Services Co., Ltd. | 3,179 | 3,403 | | **Total** | **706,925** | **1,154,231** | Services Provided to Related Parties (2025 H1 vs 2024 H1) | Related Party | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Xi'an Zhongyuan Real Estate Development Co., Ltd. | 28,908 | 18,243 | | Hebei Baocang Expressway Co., Ltd. | 21,539 | – | | Zhongyuan Environmental Protection | 12,639 | 11,942 | | **Total** | **71,438** | **63,316** | - The Group provided a guarantee to Qinhuangdao Yuanyi Road Construction Management Co., Ltd. for **RMB 600 million**, with an actual guarantee liability of **RMB 509.75 million**[189](index=189&type=chunk) - The Group received multiple guarantees from Zhongming Real Estate Group Co., Ltd. and Zhongcheng Real Estate Development Co., Ltd., with guarantee amounts ranging from **RMB 10 million to RMB 200 million**[190](index=190&type=chunk) - Key management personnel compensation for H1 2025 was **RMB 2.934 million**[192](index=192&type=chunk) [Balances of Related Party Receivables and Payables](index=77&type=section&id=Balances%20of%20Related%20Party%20Receivables%20and%20Payables) As of June 30, 2025, the Group's total related party accounts receivable were RMB 150,882 thousand, contract assets RMB 470,391 thousand, and other receivables RMB 67,518 thousand. Total related party accounts payable were RMB 1,069,486 thousand, other payables RMB 73,340 thousand, and contract liabilities RMB 93,734 thousand Related Party Accounts Receivable Balances (June 30, 2025) | Related Party | Book Balance (RMB thousand) | Provision for Bad Debts (RMB thousand) | | :--- | :--- | :--- | | Huailai Zhongcheng Real Estate Development Co., Ltd. | 71,127 | 1,347 | | Baoding Zhucheng Real Estate Development Co., Ltd. | 23,738 | 914 | | Baoding City Taiji Real Estate Development Co., Ltd. | 30,872 | 398 | | Chengde Bishu Cultural Industrial Park Co., Ltd. | 26,682 | 344 | | **Total** | **150,882** | **3,003*

[Company Information](index=3&type=section&id=Company%20Information) This section provides an overview of the company's governance structure, including board and committee members, professional advisors, and key office locations [Board of Directors and Supervisory Committee Members](index=3&type=section&id=Board%20of%20Directors%20and%20Supervisory%20Committee%20Members) This section lists the company's executive, non-executive, independent non-executive directors, and supervisory committee members, noting the appointment of Ms. Qin Yiran and the retirement of Mr. Yang Hongbing as non-executive directors - Executive Directors include Dr. Pu Zhongjie (Chairman) and Dr. Sui Ziye (General Manager)[5](index=5&type=chunk) - Non-executive Director Ms. Qin Yiran was appointed effective June 27, 2025, and Mr. Yang Hongbing retired on the same day[5](index=5&type=chunk) [Committee Members](index=3&type=section&id=Committee%20Members) This section details the composition of the Audit, Remuneration and Assessment, Nomination, and Strategy Committees, noting the retirement of Dr. Pu Zhongjie and appointment of Ms. Pu Jue to the Nomination Committee - The Audit Committee Chairman is Mr. Hua Fengmao[5](index=5&type=chunk) - The Nomination Committee Chairman is Mr. Zhou Demin, Ms. Pu Jue was appointed effective June 27, 2025, and Dr. Pu Zhongjie retired on the same day[5](index=5&type=chunk) [Professional Advisors and Offices](index=3&type=section&id=Professional%20Advisors%20and%20Offices) This section provides details on the company's joint company secretaries, authorized representatives, auditor, legal advisors, H-share registrar, principal place of business in Hong Kong, principal bankers, and head office in China - The auditor is Ernst & Young[5](index=5&type=chunk) - The company's head office and principal place of business in China are located at No. 651 Lianheng Road, Minhang District, Shanghai, China[7](index=7&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) As of June 30, 2025, total assets were RMB 2,361,606 thousand, total liabilities RMB 1,649,811 thousand, and total equity RMB 711,795 thousand, with revenue significantly growing to RMB 465,942 thousand and operating income turning profitable at RMB 42,981 thousand Comparison of Financial Position as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Total Assets | 2,361,606 | 2,280,685 | | Total Liabilities | 1,649,811 | 1,598,882 | | Total Equity | 711,795 | 681,803 | Comparison of Profit or Loss for the Six Months Ended June 30, 2025, and Same Period in 2024 | Metric | June 30, 2025 (RMB Thousand) | June 30, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue | 465,942 | 133,283 | | Cost of Sales | (27,403) | (21,042) | | Gross Profit | 438,539 | 112,241 | | Operating Income / (Loss) | 42,981 | (184,036) | | Profit / (Loss) Before Income Tax | 29,302 | (196,966) | [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's operational performance, financial condition, product pipeline, R&D progress, and future strategic outlook [Overview](index=6&type=section&id=Overview) The company is an innovative biopharmaceutical enterprise focused on oncology, possessing comprehensive ADC technology and end-to-end capabilities, strategically developing multiple oncology product pipelines through innovation and partnerships for commercialization and global expansion - The company focuses on oncology, particularly targeted and immunotherapy, with integrated capabilities from drug discovery to GMP manufacturing[10](index=10&type=chunk) - The product pipeline includes one clinical/commercial-stage candidate, nine clinical-stage candidates, and three combination therapies, with several drugs granted Breakthrough Therapy Designation (BTD), Orphan Drug Designation (ODD), and Fast Track Designation (FTD) by the FDA and CDE[11](index=11&type=chunk) - Puyouheng® has completed full commercialization and is rapidly growing, while CMG901 and MRG007 have successfully entered into out-licensing partnerships, laying the foundation for future commercialization and global collaboration[12](index=12&type=chunk) [Product Pipeline](index=7&type=section&id=Product%20Pipeline) The company boasts a rich product pipeline, including various ADCs, oncolytic viruses, and cancer immunotherapies, with MRG003, MRG002, and Puyouheng® as core products, many of which are in key clinical stages and have received Breakthrough Therapy Designation Key Candidate Drugs and Development Status | Candidate Drug | Indication | Preclinical | Phase Ia | Phase Ib | Phase II | Pivotal/Phase III | NDA | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | MRG003* EGFR-targeted ADC | NPC second-line or above NPC | | | | | | | | MRG004A TF-targeted ADC | TF-positive advanced or metastatic solid tumors | | | US | | | | | MRG002* HER2-targeted ADC | BC HER2-high expression liver metastasis BC | | | | | | | | CMG901 CLDN18.2-targeted ADC | G/GEJ cancer and other solid tumors | | | | | Global | | | CG0070 Oncolytic Virus | BCG-unresponsive NMIBC | | | | | | | | Puyouheng® Anti-PD-1 mAb | Second-line or above MSI-H/dMMR solid tumors | | | | | | | - MRG003 for NPC treatment has been granted BTD, ODD, and FTD by the FDA, and BTD by the CDE[11](index=11&type=chunk) - Global rights for CMG901 have been licensed to AstraZeneca, and ex-Greater China rights for MRG007 have been licensed to ArriVent[12](index=12&type=chunk)[13](index=13&type=chunk) [Business Review](index=8&type=section&id=Business%20Review) During the reporting period, the company achieved significant revenue growth, driven by MRG007 out-licensing income and strong sales of core product Puyouheng®, alongside substantial R&D progress for multiple candidates, continuous innovation platform development, and steady manufacturing facility construction - The Group's total revenue was approximately **RMB 465.9 million**, a **3.5-fold increase** compared to the same period in 2024[14](index=14&type=chunk) - Licensing revenue was approximately **RMB 309.0 million**, primarily from the out-licensing of MRG007[14](index=14&type=chunk) - Puyouheng® sales revenue was approximately **RMB 150.6 million**, a **58.8% increase** compared to the same period in 2024[14](index=14&type=chunk) [Commercialization](index=8&type=section&id=Commercialization) The company achieved significant commercialization results, with substantial revenue growth, strong Puyouheng® sales, and successful out-licensing of MRG007, actively expanding its sales network and offering CDMO services using surplus capacity - As of June 30, 2025, the company completed bidding procedures in **28 provinces** across China, covering approximately **118 cities**[15](index=15&type=chunk) - Global exclusive license for MRG007 granted to ArriVent, entitling the company to up to **USD 1.2 billion** in upfront, milestone payments, and tiered royalties on net sales[16](index=16&type=chunk) - Puyouheng® was successfully included in the 2023 CSCO and CSGO guidelines, enhancing market recognition[16](index=16&type=chunk) [R&D Progress](index=9&type=section&id=R%26D%20Progress) The company's core candidate drugs achieved significant clinical development progress, with MRG003's NDA under review, MRG004A entering Phase III, and positive clinical data or regulatory advancements for MRG002, MRG001, MRG006A, MRG007, CMG901, and CG0070 - MRG003's NDA for R/M NPC treatment is under review by the NMPA CDE and has been granted priority review[18](index=18&type=chunk) - MRG004A entered Phase III clinical trials in August 2025, with Phase Ib data to be presented at the ESMO conference[20](index=20&type=chunk) - MRG007 received NMPA IND approval in June 2025 and entered an exclusive licensing agreement with ArriVent, securing a **USD 47 million** upfront payment and near-term milestone payments[28](index=28&type=chunk) - CG0070 received BTD from the CDE for treating recurrent or refractory BCG-unresponsive bladder cancer patients[31](index=31&type=chunk) [Innovation Platforms](index=13&type=section&id=Innovation%20Platforms) The company continuously invests in innovative technology platforms, including Hi-TOPi ADC, bispecific ADC, next-generation PD-1, and T-cell engager platforms, which have successfully developed candidate drugs with global first-in-class or best-in-class potential - The Hi-TOPi ADC platform has developed MRG006A (global first-in-class potential) and MRG007 (global best-in-class potential), both having received China IND approval[34](index=34&type=chunk) - Bispecific ADCs aim to expand the therapeutic scope for key indications such as lung cancer[36](index=36&type=chunk) - The T-cell engager platform (TOPAbody) aims to unleash T-cell potential by simultaneously activating TCR signaling and co-stimulatory pathways[36](index=36&type=chunk) [Manufacturing Facilities](index=14&type=section&id=Manufacturing%20Facilities) The company operates a 2,000L GMP-compliant bioreactor production line in Beijing, and its Shanghai Biotech Park, with a 12,000L total design capacity, has completed construction, with the R&D center already operational to meet future business needs - The Beijing manufacturing plant operates a **2,000L GMP-compliant** bioreactor production line, supporting clinical drug supply and CDMO services[37](index=37&type=chunk) - The Shanghai Biotech Park R&D center is operational, with a total designed production capacity of **12,000L**, and has obtained environmental assessment reports for mAb and ADC production[37](index=37&type=chunk) [Significant Events After Reporting Period](index=14&type=section&id=Significant%20Events%20After%20Reporting%20Period) After the reporting period, the company completed a new share placement, raising approximately HKD 463 million for core product commercialization, clinical trials, and new product R&D, finalized H-share full circulation, entered a licensing deal with Excalipoint, and MRG004A received CDE Breakthrough Therapy Designation - On July 11, 2025, the company completed a placement of **93,825,000 shares**, raising net proceeds of approximately **HKD 462.94 million**[38](index=38&type=chunk) - Proceeds from the placement will be used for MRG003 commercialization (**20%**), core product clinical trials (**60%**), and new product R&D (**20%**)[38](index=38&type=chunk) - On July 21, 2025, **54,268,364 unlisted shares** of the company were converted into H-shares and listed[39](index=39&type=chunk) - On August 1, 2025, a licensing deal was reached with Excalipoint, granting global rights for two preclinical assets developed from the TOPAbody T-cell engager platform, receiving a **USD 10 million** upfront payment and up to **USD 847.5 million** in milestone payments[40](index=40&type=chunk)[42](index=42&type=chunk) - In August 2025, MRG004A was granted Breakthrough Therapy Designation (BTD) by the CDE for pancreatic cancer treatment[43](index=43&type=chunk) [Future Developments](index=15&type=section&id=Future%20Developments) The company will continue to focus on oncology, enriching its product portfolio through R&D and strategic partnerships, accelerating late-stage product commercialization, enhancing Puyouheng® accessibility and preparing MRG003 launch in the domestic market, and expanding internationally to seek more strategic partners - In drug R&D, the focus will be on strategic development of next-generation ADC drugs and immuno-oncology bispecific/trispecific antibodies, accelerating late-stage product commercialization[44](index=44&type=chunk) - For domestic commercialization, the company will enhance Puyouheng® market accessibility, expand market share, and prepare for MRG003's commercial launch[45](index=45&type=chunk) - Internationally, the company will expand its global network, explore new business development opportunities, and seek more strategic partners to develop ADC products and other innovative candidate drugs[46](index=46&type=chunk) [Financial Review](index=16&type=section&id=Financial%20Review) For the six months ended June 30, 2025, the company's revenue significantly grew 3.5 times to RMB 465.9 million, driven by MRG007 out-licensing income and Puyouheng® sales, with operating activities turning profitable, achieving a profit of RMB 29.3 million Revenue Composition and Year-on-Year Change | Revenue Source | H1 2025 (RMB Million) | H1 2024 (RMB Million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 465.9 | 133.3 | 249.5% | | Out-licensing Revenue (primarily from MRG007) | 309.0 | 20.7 | 1392.7% | | Puyouheng® Sales Revenue | 150.6 | 94.8 | 58.8% | | CDMO Service Revenue | 6.3 | 17.8 | -64.6% | - Sales and marketing expenses increased to **RMB 97.9 million**, consistent with revenue growth[49](index=49&type=chunk) - Administrative expenses increased to **RMB 55.4 million**, primarily due to increased depreciation and property tax after the completion and operation of Shanghai Biotech Park, and higher professional fees[50](index=50&type=chunk) - R&D expenses were **RMB 202.2 million**, a decrease from **RMB 216.6 million** in the prior year period, mainly due to reduced clinical research-related expenses and adjustments in employee benefits expenses[52](index=52&type=chunk)[54](index=54&type=chunk) - Profit for the period was **RMB 29.3 million**, a turnaround from a loss of **RMB 197.0 million** in the same period of 2024[59](index=59&type=chunk) [Liquidity and Financial Resources](index=19&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the company reported a net cash inflow from operating activities of RMB 46.7 million, with cash and cash equivalents increasing to RMB 472.7 million, maintaining a stable gearing ratio and total bank borrowings of RMB 877.1 million - Net cash inflow from operating activities was **RMB 46.7 million**, a significant improvement from a net outflow of **RMB 115.1 million** in the same period of 2024[62](index=62&type=chunk) - Cash and cash equivalents increased to **RMB 472.7 million**, an increase of **RMB 71.4 million** from the end of 2024[62](index=62&type=chunk) - Total bank borrowings were **RMB 877.1 million**, of which **RMB 566.6 million** is repayable within one year[62](index=62&type=chunk) - The gearing ratio was **69.9%**, largely consistent with **70.1%** at the end of 2024[64](index=64&type=chunk) [Other Financial Information](index=19&type=section&id=Other%20Financial%20Information) During the reporting period, the company had no significant investments, acquisitions, or disposals, with capital commitments primarily for property, plant, and equipment, no contingent liabilities, no foreign exchange hedging policy, and an expanded employee team resulting in increased total staff costs - As of June 30, 2025, capital commitments were **RMB 448.7 million**, primarily for property, plant, and equipment[66](index=66&type=chunk) - As of June 30, 2025, the company had no contingent liabilities[67](index=67&type=chunk) - As of June 30, 2025, the Group had **546 employees**, with total staff costs of **RMB 110.3 million**, mainly due to the expansion of the sales team[70](index=70&type=chunk) [Use of Proceeds](index=20&type=section&id=Use%20of%20Proceeds) The company detailed the planned and actual use of proceeds from its listing and 2024 placement, with listing proceeds primarily for core product R&D and commercialization, and 2024 placement proceeds mainly for ADC candidate R&D and CG0070 clinical trials Use of Net Proceeds from Listing (as of June 30, 2025) | Proposed Use | Percentage of Total Net Proceeds | Net Allocation (RMB Million) | Amount Utilized as of June 30, 2025 (RMB Million) | Amount Utilized During Reporting Period (RMB Million) | Unutilized Amount as of June 30, 2025 (RMB Million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Funding for core products | 68.51% | 450.57 | 439.50 | 26.43 | 11.07 | | Funding for other key clinical-stage and preclinical candidates | 6.35% | 41.70 | 40.35 | 1.10 | 1.35 | | Acquisition of potential technologies and assets and expansion of candidate pipeline | 15.79% | 103.85 | 103.85 | – | – | | General corporate purposes | 9.35% | 61.49 | 61.49 | – | – | | **Total** | **100%** | **657.61** | **645.19** | **27.53** | **12.42** | - The unutilized net proceeds from the listing are expected to be utilized by December 31, 2025[74](index=74&type=chunk) Use of Proceeds from 2024 Placement (as of June 30, 2025) | Intended Use | Percentage of Total Net Proceeds | Net Allocation (RMB Million) | Amount Utilized as of June 30, 2025 (RMB Million) | Amount Utilized During Reporting Period (RMB Million) | Unutilized Amount as of June 30, 2025 (RMB Million) | | :--- | :--- | :--- | :--- | :--- | :--- | | For R&D, clinical trials, registration, and other workflows for ADC candidate products | 70.00% | 146.43 | 84.43 | 59.85 | 62.00 | | For CG0070 clinical trials and other workflows | 20.00% | 41.84 | 0.14 | 0.14 | 41.70 | | For supplementing working capital and general corporate purposes | 10.00% | 20.92 | 19.87 | 0 | 1.05 | | **Total** | **100%** | **209.18** | **104.44** | **59.99** | **104.75** | - The unutilized net proceeds from the 2024 placement are expected to be utilized by December 31, 2026[76](index=76&type=chunk) [Other Information](index=23&type=section&id=Other%20Information) This section covers interests of directors and major shareholders, corporate governance, compliance, and the review of interim financial information and dividend policy [Interests of Directors, Supervisors, and Chief Executive](index=24&type=section&id=Interests%20of%20Directors%2C%20Supervisors%2C%20and%20Chief%20Executive) As of June 30, 2025, Dr. Pu Zhongjie and Ms. Pu Jue held interests in the company's H-shares primarily through controlled corporations, with no directors, supervisors, or chief executives holding disclosable interests or short positions in associated corporations' shares or debentures during the period Directors' Long Positions in the Company's Shares (as of June 30, 2025) | Director Name | Share Class | Nature of Interest | Number of Shares | Approximate Percentage of Relevant Share Class | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | :--- | | Dr. Pu Zhongjie | H-shares | Interest in controlled corporation | 658,591,549 | 39.76% | 38.50% | | Ms. Pu Jue | H-shares | Interest in controlled corporation | 90,000,000 | 5.43% | 5.26% | [Major Shareholders' Interests](index=25&type=section&id=Major%20Shareholders%27%20Interests) As of June 30, 2025, Hong Kong Miracogen, Miracogen Inc., Dr. Hu Zhaohong, and Suzhou Yipu No. 1 Equity Investment Partnership were major shareholders holding 5% or more interests, primarily through beneficial or controlled corporate interests Major Shareholders' Long Positions in the Company's Shares (as of June 30, 2025) | Shareholder Name | Share Class | Nature of Interest | Number of Shares | Approximate Percentage of Relevant Share Class | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | :--- | | Hong Kong Miracogen | H-shares | Beneficial interest | 131,496,106 | 7.94% | 7.69% | | Miracogen Inc. | H-shares | Interest in controlled corporation | 131,496,106 | 7.94% | 7.69% | | Dr. Hu Zhaohong | H-shares | Interest in controlled corporation | 131,496,106 | 7.94% | 7.69% | | Suzhou Yipu No. 1 Equity Investment Partnership | H-shares | Beneficial interest | 39,436,621 | 2.38% | 2.31% | | Suzhou Yipu No. 1 Equity Investment Partnership | Domestic shares | Beneficial interest | 39,436,620 | 72.67% | 2.31% | [Corporate Governance and Compliance](index=27&type=section&id=Corporate%20Governance%20and%20Compliance) During the reporting period, the company neither entered into arrangements for directors to acquire share or debenture interests nor purchased, sold, or redeemed any listed securities, while complying with corporate governance and securities dealing codes and disclosing changes in director and supervisor information - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities[86](index=86&type=chunk) - The company has complied with the principles and code provisions set out in the Corporate Governance Code[90](index=90&type=chunk) - Non-executive Director Mr. Yang Hongbing resigned, and Ms. Qin Yiran was appointed as a non-executive director[91](index=91&type=chunk) [Interim Report Review and Dividends](index=29&type=section&id=Interim%20Report%20Review%20and%20Dividends) The interim financial information has been reviewed by independent auditor Ernst & Young, and the Audit Committee has reviewed financial reporting matters with management and the auditor, with the Board not recommending an interim dividend for the six months ended June 30, 2025 - This interim financial information has been reviewed by Ernst & Young in accordance with International Standard on Review Engagements 2410[94](index=94&type=chunk) - The Audit Committee has reviewed the interim results and deemed them compliant with applicable accounting standards, laws, and regulations[94](index=94&type=chunk) - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[95](index=95&type=chunk) [Review Report on Interim Financial Information](index=29&type=section&id=Review%20Report%20on%20Interim%20Financial%20Information) Independent auditor Ernst & Young has reviewed the company's interim financial information in accordance with International Standard on Review Engagements 2410, finding no matters that lead them to believe it is not prepared in all material respects in accordance with IAS 34 - The auditor has reviewed the interim financial information in accordance with International Standard on Review Engagements 2410[98](index=98&type=chunk) - The auditor concluded that nothing has come to their attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with IAS 34[99](index=99&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=31&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company achieved revenue of RMB 465,942 thousand, a significant increase year-on-year, with a profit for the period of RMB 29,302 thousand, reversing the prior year's loss, and basic earnings per share of RMB 0.02 Summary of Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue | 465,942 | 133,283 | | Gross Profit | 438,539 | 112,241 | | Operating Income / (Loss) | 42,981 | (184,036) | | Profit / (Loss) for the period | 29,302 | (196,966) | | Profit / (Loss) attributable to owners of the company | 41,745 | (192,430) | | Basic earnings / (loss) per share | 0.02 | (0.12) | [Interim Condensed Consolidated Statement of Financial Position](index=32&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets were RMB 2,361,606 thousand, with a significant portion in non-current assets, total equity at RMB 711,795 thousand, and total liabilities at RMB 1,649,811 thousand, with a higher proportion of current liabilities Summary of Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Total Assets | 2,361,606 | 2,280,685 | | Total Non-current Assets | 1,657,153 | 1,635,177 | | Total Current Assets | 704,453 | 645,508 | | Total Equity | 711,795 | 681,803 | | Total Liabilities | 1,649,811 | 1,598,882 | | Total Non-current Liabilities | 538,015 | 555,369 | | Total Current Liabilities | 1,111,796 | 1,043,513 | [Interim Condensed Consolidated Statement of Changes in Equity](index=34&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, equity attributable to owners increased from RMB 702,825 thousand at the beginning of the period to RMB 745,260 thousand, primarily due to profit for the period Summary of Interim Condensed Consolidated Statement of Changes in Equity | Metric | June 30, 2025 (RMB Thousand) | June 30, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Total equity at beginning of period | 681,803 | 888,700 | | Profit / (Loss) for the period | 29,302 | (196,966) | | Other comprehensive income | 98 | 85 | | Total equity at end of period | 711,795 | 902,010 | [Interim Condensed Consolidated Statement of Cash Flows](index=35&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash flow from operating activities turned to an inflow of RMB 46,696 thousand from a prior year outflow, with net cash outflow from investing activities of RMB 43,166 thousand, net cash inflow from financing activities of RMB 63,353 thousand, and cash and cash equivalents at period-end of RMB 472,708 thousand Summary of Interim Condensed Consolidated Statement of Cash Flows | Metric | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Net cash from / (used in) operating activities | 46,696 | (115,130) | | Net cash used in investing activities | (43,166) | (23,619) | | Net cash from financing activities | 63,353 | 225,985 | | Net increase in cash and cash equivalents | 66,883 | 87,236 | | Cash and cash equivalents at end of period | 472,708 | 513,640 | [Notes to the Interim Condensed Consolidated Financial Information](index=36&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes on the company's interim financial information, covering general data, accounting policies, financial risk management, segment reporting, and specific balance sheet and income statement items [General Information and Basis of Preparation](index=36&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) The company, incorporated in Shanghai, China on January 19, 2018, focuses on global cancer targeted and immunotherapy discovery, development, and commercialization, with this interim condensed consolidated financial information prepared in accordance with IAS 34 on a going concern basis - The company primarily focuses on the discovery, development, and commercialization of global cancer targeted and immunotherapies[109](index=109&type=chunk) - This interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 and presented on a going concern basis[111](index=111&type=chunk) [Accounting Policies and Financial Risk Management](index=37&type=section&id=Accounting%20Policies%20and%20Financial%20Risk%20Management) This period's financial information first adopted the revised IAS 21 with no significant impact on the Group, whose business is exposed to market, credit, and liquidity risks, with financial assets and liabilities measured at fair value - The amendments to International Accounting Standard 21 had no impact on the Group's interim condensed consolidated financial information[114](index=114&type=chunk) - The company's business is exposed to market risk, credit risk, and liquidity risk, with no significant changes in risk management policies since December 31, 2024[116](index=116&type=chunk)[117](index=117&type=chunk) Assets and Liabilities Measured at Fair Value (as of June 30, 2025) | Metric | Level 3 (RMB Thousand) | Total (RMB Thousand) | | :--- | :--- | :--- | | Financial assets at fair value through profit or loss | 63,628 | 63,628 | | Financial liabilities at fair value through profit or loss | 280,069 | 280,069 | [Segment Information and Revenue Composition](index=38&type=section&id=Segment%20Information%20and%20Revenue%20Composition) The company primarily engages in pharmaceutical product sales and new drug R&D, managed as a single operating segment, with revenue for the six months ended June 30, 2025, mainly from licensing income and pharmaceutical product sales, and a significant increase in overseas revenue contribution - The company's primary operating entities are located in mainland China, and management views the business as a single operating segment[122](index=122&type=chunk) Revenue Composition (for the six months ended June 30, 2025) | Revenue Type | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Sales of pharmaceutical products | 150,645 | 94,836 | | Licensing income | 309,039 | 20,678 | | CDMO services | 6,258 | 17,769 | | **Total** | **465,942** | **133,283** | Revenue by Geographical Market (for the six months ended June 30, 2025) | Geographical Market | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Mainland China | 156,903 | 112,605 | | Overseas | 309,039 | 20,678 | | **Total** | **465,942** | **133,283** | - Licensing income from ArriVent BioPharma INC. was approximately **RMB 295,033 thousand**, accounting for **63.32%** of total revenue[126](index=126&type=chunk) [Details of Statement of Profit or Loss Items](index=40&type=section&id=Details%20of%20Statement%20of%20Profit%20or%20Loss%20Items) This section details other income, profit before tax composition, net other losses, finance income and costs, income tax expense, and the calculation methods and specific data for earnings/loss per share Other Income (for the six months ended June 30, 2025) | Income Source | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Government grants | 1,032 | 202 | | Individual income tax refunds | 225 | 316 | | Investment income from financial assets | 55 | – | | Others | 652 | 133 | | **Total** | **1,964** | **651** | - R&D expenses were **RMB 202,243 thousand**, with clinical research-related expenses accounting for **39.0%**[129](index=129&type=chunk)[54](index=54&type=chunk) - Finance income primarily derived from bank interest income and exchange gains, while finance costs mainly comprised interest on bank borrowings[132](index=132&type=chunk) - Income tax expense for the reporting period was **zero** due to no estimated taxable profit[133](index=133&type=chunk) - Basic earnings per share were **RMB 0.02**, compared to a loss of **RMB 0.12** in the same period last year[136](index=136&type=chunk) [Details of Statement of Financial Position Items](index=43&type=section&id=Details%20of%20Statement%20of%20Financial%20Position%20Items) This section details the carrying values and changes for property, plant and equipment, right-of-use assets, intangible assets, investments accounted for using the equity method, receivables, financial assets, share capital, borrowings, deferred income tax, and payables - The net book value of property, plant, and equipment was **RMB 941,514 thousand**, with a portion pledged as collateral for bank borrowings[140](index=140&type=chunk) - The net book value of intangible assets was **RMB 462,565 thousand**, with **RMB 39,097 thousand** of PD-1 product development costs capitalized during the period[143](index=143&type=chunk) - Trade receivables amounted to **RMB 49,749 thousand**, primarily due within **0 to 30 days**[149](index=149&type=chunk) - Total borrowings were **RMB 877,124 thousand**, comprising secured and unsecured bank borrowings[153](index=153&type=chunk) - The period-end balance of financial liabilities at fair value through profit or loss was **RMB 280,069 thousand**[160](index=160&type=chunk) [Commitments and Related Party Transactions](index=52&type=section&id=Commitments%20and%20Related%20Party%20Transactions) The company's capital commitments totaled RMB 448.7 million at the reporting period end, with this section detailing related party transactions including purchases, sales, leasing services, balances, and key management compensation, noting no dividends were paid or declared during the period - As of June 30, 2025, capital commitments were **RMB 448,663 thousand**, primarily for property, plant, and equipment[163](index=163&type=chunk) Transactions with Other Related Parties (for the six months ended June 30, 2025) | Transaction Type | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Licensing income from associates | 13,992 | 20,678 | | CDMO service income from related parties | 6,258 | 17,769 | | Income from asset sales to related parties | 3,968 | – | | Purchase of professional services from related parties | 799 | 1,104 | | Purchase of raw materials from related parties | 265 | 16 | - Key management compensation totaled **RMB 3,140 thousand**, including salaries, bonuses, and retirement benefit costs[172](index=172&type=chunk) - Neither the company nor any Group companies paid or declared any dividends for the six months ended June 30, 2025, and 2024[173](index=173&type=chunk) [Events After Reporting Period](index=55&type=section&id=Events%20After%20Reporting%20Period) After the reporting period, the company completed a new H-share placement totaling approximately HKD 471 million, increasing total issued shares, and entered a licensing deal with Excalipoint for global rights to two preclinical assets from its T-cell engager platform, receiving a USD 10 million upfront payment and potential milestone payments - On July 11, 2025, the company completed a placement of **93,825,000 new H-shares**, raising total proceeds of approximately **HKD 471,002 thousand**[174](index=174&type=chunk) - On August 1, 2025, a licensing deal was reached with Excalipoint, granting global rights for two preclinical assets developed from the TOPAbody T-cell engager platform, receiving a **USD 10 million** cash upfront payment and **10% equity** in Excalipoint Cayman, plus up to **USD 847.5 million** in milestone payments[174](index=174&type=chunk) [Definitions and Technical Glossary](index=55&type=section&id=Definitions%20and%20Technical%20Glossary) This section provides detailed definitions for professional terms, abbreviations, and company-related entities used in the report, covering key vocabulary across pharmaceutical R&D, clinical trials, regulatory bodies, corporate governance, and finance, to enhance reader comprehension

[Corporate Information](index=3&type=section&id=Corporate%20Information) This chapter provides basic corporate information for Goodme Holdings Limited, including board members, committee structures, principal places of business in mainland China and Hong Kong, registered office, share registrar, compliance advisor, auditor, legal counsel, company website, stock code, listing date, and principal bankers; the company was listed on the Main Board of the HKEX on February 12, 2025 [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) Goodme Holdings Limited's board comprises executive, non-executive, and independent non-executive directors, supported by audit, remuneration, and nomination committees to ensure robust corporate governance - Executive directors include **Wang Yunan** (Founder, Chairman, and CEO), **Qi Xia** (President), **Ruan Xiudi**, **Jin Yayu**, and **Cai Yunjiang**[3](index=3&type=chunk) - The Audit Committee Chairman is Mr. Zhuoyue, the Remuneration Committee Chairman is Mr. Li Jianbo, and the Nomination Committee Chairman is Mr. Wang Yunan[3](index=3&type=chunk)[4](index=4&type=chunk) [Company Details and Listing Information](index=4&type=section&id=Company%20Details%20and%20Listing%20Information) This section details the company's principal operating and registered addresses, along with key listing information including the Hong Kong share registrar, compliance advisor, auditor, legal counsel, company website, stock code, and listing date - The company's principal place of business in China is in Xiaoshan District, Hangzhou, Zhejiang Province, and in Hong Kong is in Hysan Avenue, Causeway Bay[6](index=6&type=chunk)[7](index=7&type=chunk) - The company's stock code is **01364**, and its listing date is **February 12, 2025**[9](index=9&type=chunk)[10](index=10&type=chunk) - Ernst & Young is the company's auditor, and Carey Olsen (Hong Kong) is the Hong Kong legal counsel[9](index=9&type=chunk)[10](index=10&type=chunk) [Financial Highlights](index=6&type=section&id=Financial%20Highlights) Goodme Holdings Limited achieved strong financial growth in H1 2025, with total revenue up 41.2% and profit for the period surging 119.8%; adjusted profit and adjusted core profit also saw significant increases of 42.4% and 49.0% respectively, reflecting robust profitability amid market recovery and expansion strategies Key Financial Data for H1 2025 (RMB thousands) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 5,662,904 | 4,009,353 | 41.2 | | Gross Profit | 1,785,968 | 1,266,887 | 41.0 | | Profit for the Period | 1,626,468 | 740,063 | 119.8 | | Profit Attributable to Owners of the Parent | 1,625,473 | 733,807 | 121.5 | | Adjusted Profit (Non-IFRS Measure) | 1,085,748 | 762,476 | 42.4 | | Adjusted Core Profit (Non-IFRS Measure) | 1,135,748 | 762,476 | 49.0 | | Earnings Per Share (Basic, RMB) | 0.72 | 0.39 | 84.6 | | Earnings Per Share (Diluted, RMB) | 0.46 | 0.39 | 17.9 | - Adjusted profit is defined as profit for the period plus fair value changes of financial liabilities at fair value through profit or loss and listing expenses[13](index=13&type=chunk)[14](index=14&type=chunk) - Adjusted core profit further adds back withholding tax on distributable profits of the Group's PRC subsidiaries[13](index=13&type=chunk)[14](index=14&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This chapter analyzes Goodme Holdings Limited's H1 2025 business performance, outlook, and financial position, highlighting significant progress in store network expansion, GMV growth, product innovation, and supply chain efficiency, alongside detailed explanations of financial metric changes and non-IFRS adjustments [BUSINESS REVIEW](index=7&type=section&id=BUSINESS%20REVIEW) Goodme Holdings Limited, a leading ready-to-drink beverage company in China, expanded its store network, improved performance, and achieved steady growth through effective product and supply chain strategies in H1 2025, focusing on the mass-market tea beverage segment and deepening its presence in lower-tier cities - The company is a leading and fast-growing ready-to-drink beverage company in China, focusing on the mass-market ready-to-drink tea beverage market[15](index=15&type=chunk)[16](index=16&type=chunk) - Total revenue reached RMB **5.6629** billions in H1 2025, a year-on-year increase of **41.2%**; gross profit was RMB **1.7860** billions, a year-on-year increase of **41.0%**[15](index=15&type=chunk)[16](index=16&type=chunk) [Store Network and Store Performance](index=7&type=section&id=Store%20Network%20and%20Store%20Performance) As of June 30, 2025, Goodme's store network expanded to 11,179 locations, a 17.5% year-on-year increase, covering over 200 Chinese cities, with 81% of stores in Tier 2 and below cities and 43% in townships, demonstrating enhanced single-store GMV and cup sales due to effective product and marketing strategies - As of June 30, 2025, the total number of stores reached **11,179**, an increase of **17.5%** compared to the same period in 2024[17](index=17&type=chunk)[19](index=19&type=chunk) Store Count by City Tier (as of June 30) | City Tier | 2025 Store Count | 2025 Share (%) | 2024 Store Count | 2024 Share (%) | | :--- | :--- | :--- | :--- | :--- | | Tier 1 cities | 318 | 3 | 281 | 3 | | New Tier 1 cities | 1,812 | 16 | 1,685 | 18 | | Tier 2 and below cities | 9,049 | 81 | 7,550 | 79 | | **Total** | **11,179** | **100** | **9,516** | **100** | - Stores in Tier 2 and below cities accounted for **81%** of the total, and the proportion of township stores increased from **39%** in 2024 to **43%** in 2025, indicating the company's deep penetration in lower-tier markets[22](index=22&type=chunk)[24](index=24&type=chunk) Key Store Performance Indicators (for the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total GMV (RMB thousands) | 14,094,001.2 | 10,483,944.5 | | GMV per Store (RMB thousands) | 1,370.5 | 1,136.8 | | Average Daily GMV per Store (RMB thousands) | 7.6 | 6.2 | | Total Cups Sold (thousands of cups) | 816,894.7 | 627,780.6 | | Cups Sold per Store (thousands of cups) | 79.4 | 68.1 | | Average Daily Cups Sold per Store | 439 | 374 | - The acceleration in new store openings is primarily due to the recovery of the ready-to-drink tea market and the company's adjusted expansion strategy and franchisee incentive policies[26](index=26&type=chunk)[27](index=27&type=chunk) [Our Franchisees](index=10&type=section&id=Our%20Franchisees) Goodme primarily operates through a franchise model, fostering mutually beneficial relationships by providing site selection, training, centralized procurement, and logistics support, while monitoring operational standards via in-store cameras and regular visits from store supervisors; as of June 30, 2025, the number of collaborating franchisees increased to 5,875 - The company operates through a franchise model, leveraging franchisees' local knowledge, and providing site selection, training, centralized procurement, and logistics support[31](index=31&type=chunk)[33](index=33&type=chunk) - As of June 30, 2025, the number of collaborating franchisees was **5,875**, an increase from **4,798** in the same period of 2024[32](index=32&type=chunk)[34](index=34&type=chunk) Changes in Franchisee Count (for the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Franchisee Count at Beginning of Period | 4,868 | 4,614 | | New Franchisees Added During Period | 1,338 | 551 | | Franchisees Exited During Period | 331 | 367 | | Franchisee Count at End of Period | 5,875 | 4,798 | [Product Offerings](index=11&type=section&id=Product%20Offerings) Goodme offers fruit tea, milk tea, and coffee beverages, continuously investing in R&D to maintain product appeal; in H1 2025, 52 new products were launched, with significant progress in coffee beverages, as over 8,000 stores were equipped with coffee machines and 16 new coffee drinks introduced, alongside sustained growth in mini-program members and active users - "Goodme" stores primarily sell fruit tea beverages, milk