2025 中期報告 INTERIM REPORT 2025 INTERIM REPORT 2025 中期報告 目 錄 | 公司資料 | 2 | | --- | --- | | 管理層討論與分析 | 4 | | 企業管治及其他資料 | 9 | | 中期簡明綜合全面收益表 | 13 | | 中期簡明綜合資產負債表 | 14 | | 中期簡明綜合權益變動表 | 16 | | 中期簡明綜合現金流量表 | 17 | | 中期簡明綜合財務資料附註 | 18 | 公司資料 董 事 執行董事 楊金明先生 （主 席 兼 行 政 總 裁） 董慧敏女士 蘇柏翰先生 非執行董事 楊帆先生 獨立非執行董事 彭漢忠先生 鄔錦雯教授 黃耀輝先生 註冊辦事處 Windward 3, Regatta Office Park P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands 總部及中國主要營業地點 中 國 廣東省茂名市 電白區電海街道 潘州大道與迎賓大道交叉口 學術交流中心12樓 香港主要營業地點 香 港 九龍灣 宏光道1號 億京中心B座 29樓C室 公司網站 www.tianyuangrou ...

[Company Information](index=3&type=section&id=Company%20Information) This section provides an overview of the company's governance structure, key personnel, contact details, and professional service providers [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) The Board comprises executive and independent non-executive directors, with changes in Audit, Remuneration, and Nomination Committee memberships during the reporting period - Board members include executive directors Zhao Lisheng (Chairman), Chen Leshen, Zhou Xuhua, and independent non-executive directors Duan Jidong, Huang Zhuolin, Zhang Jianbin (resigned), and Chu Xiaoping[8](index=8&type=chunk) - Mr. Zhang Jianbin resigned as an independent non-executive director, member of the Audit Committee, chairman of the Remuneration Committee, and member of the Nomination Committee on August 1, 2025[8](index=8&type=chunk)[197](index=197&type=chunk) - Dr. Chu Xiaoping was re-designated as Chairman of the Remuneration Committee on August 1, 2025[8](index=8&type=chunk) [Company Contact and Professional Services](index=3&type=section&id=Company%20Contact%20and%20Professional%20Services) This section details the company's secretarial and authorized representatives, registered and principal offices, main banks, and professional advisors - Mr. Chen Hanyun serves as Company Secretary, with Mr. Zhao Lisheng and Mr. Chen Hanyun as authorized representatives[8](index=8&type=chunk) - Key banks include China Construction Bank, Industrial Bank, and Nanyang Commercial Bank[9](index=9&type=chunk) - Crowe (HK) CPA Limited is the auditor[9](index=9&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) This section presents a summary of the company's interim financial performance, liquidity, and capital structure [Overview of Interim Financial Performance](index=5&type=section&id=Overview%20of%20Interim%20Financial%20Performance) For the six months ended June 30, 2025, the company's revenue and gross profit declined, leading to a significant decrease in profit for the period and a loss attributable to owners For the Six Months Ended June 30, 2025 Financial Highlights | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Percentage Change | | :--- | :--- | :--- | :--- | | Revenue | 404,850 | 526,088 | (23.0)% | | Cost of Sales | (302,807) | (388,828) | (22.1)% | | Gross Profit | 102,043 | 137,260 | (25.7)% | | Gross Profit Margin | 25.2% | 26.1% | (0.9) percentage points | | Profit for the Period | 11,436 | 45,620 | (74.9)% | | (Loss)/Profit Attributable to Owners of the Company | (5,412) | 30,716 | Not Applicable | | Basic (Loss)/Earnings Per Share (RMB cents) | (0.94) | 5.20 | Not Applicable | | **Liquidity and Gearing** | | | | | Current Ratio | 1.14 | 1.18 | (3.4)% | | Quick Ratio | 0.92 | 0.95 | (3.2)% | | Gearing Ratio | 26.2% | 21.6% | 4.6 percentage points | [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the company's market and industry, business segments, R&D, talent, sustainability, and financial performance [Market and Industry Review](index=6&type=section&id=Market%20and%20Industry%20Review) In H1 2025, Kingworld Medicines Group adapted to complex economic conditions, deepening supplier cooperation and planning for product line expansion and new project launches - In the first half of 2025, Kingworld Medicines Group flexibly adjusted its strategy and deepened national marketing cooperation with upstream suppliers, achieving steady development amidst complex economic conditions[15](index=15&type=chunk) - The second half will focus on exploring upstream cooperation potential, developing new dosages, specifications, and categories for existing products, and accelerating new cooperation projects to leverage terminal network advantages for rapid growth of newly introduced products[15](index=15&type=chunk) [Business Review](index=6&type=section&id=Business%20Review) The Group's business performance varied, with pharmaceutical sales declining, health products and daily chemicals gaining market influence, and medical devices achieving growth - The pharmaceutical distribution segment's sales were **RMB 266.2 million**, a year-on-year decrease of **25.3%**, mainly due to the decline in China's urban physical pharmacy market for proprietary Chinese medicines and rising raw material prices[16](index=16&type=chunk)[18](index=18&type=chunk) - **Seirogan** saw a year-on-year increase of **443.2%**, primarily benefiting from research findings that its main ingredient, creosote, inhibits Anisakis activity, indicating significant market potential[21](index=21&type=chunk) - **Fo Ci Kingworld Angong Niuhuang Wan** sales reached **RMB 1.5 million**, a year-on-year increase of **315.4%**, attributed to its high quality, cost-effectiveness, and inclusion in the "Chikungunya Fever Diagnosis and Treatment Plan"[27](index=27&type=chunk) - **Kingworld Imada Seihong Hua Oil** sales were **RMB 21.5 million**, a slight year-on-year decrease of **10.6%**, but its brand influence expanded through marathon sponsorships and mosquito repellent public welfare activities[23](index=23&type=chunk) - **Zhuangyao Jianshen Tablets** sales reached nearly **RMB 1.0 million**, having completed bidding for medical insurance listings in 13 provinces and cities nationwide and successfully developed distributors[30](index=30&type=chunk)[49](index=49&type=chunk) - The medical devices and equipment segment's sales were approximately **RMB 118.4 million**, a **4.0%** increase from last year, with the launch of the portable shockwave therapy device SW3200 Basic[77](index=77&type=chunk) [Key Review of Pharmaceutical Segment](index=6&type=section&id=Key%20Review%20of%20Pharmaceutical%20Segment) The pharmaceutical segment faced market challenges in H1 2025, with overall sales declining, but some key products achieved significant growth through strategic initiatives [Deepening Industrial Chain Cooperation, Consolidating Multi-channel Construction](index=11&type=section&id=Deepening%20Industrial%20Chain%20Cooperation,%20Consolidating%20Multi-channel%20Construction) The Group expanded its tier-one customer base and optimized its terminal network, while enhancing brand image and market penetration for key products through flagship stores and strategic partnerships - Tier-one customer count increased by **11.5%** to **204** in the first half, primarily driven by B2C business expansion[33](index=33&type=chunk) - The terminal network covers **182,677** outlets, including **151,589** chain and independent pharmacies, **20,414** primary healthcare institutions, and **10,655** hospitals and clinics[33](index=33&type=chunk) - The number of terminal outlets slightly decreased by **10%** compared to last year, mainly due to inventory control management and elimination of low-quality terminal networks[33](index=33&type=chunk) - **Seirogan** advanced its terminal flagship store construction plan in six major regions, covering **191** high-quality cooperative stores[34](index=34&type=chunk) - **Kingworld Imada Seihong Hua Oil** successfully established **400** flagship stores nationwide, enhancing brand image[34](index=34&type=chunk) [Strengthening Scenario-Based Interactive Marketing, Deeply Connecting with Consumer Emotions](index=12&type=section&id=Strengthening%20Scenario-Based%20Interactive%20Marketing,%20Deeply%20Connecting%20with%20Consumer%20Emotions) The Group implemented diverse scenario-based marketing strategies to foster emotional connections with consumers and enhance brand presence - **Nin Jiom Pei Pa Koa** and lozenges utilized scenario-based marketing through bus, building, and Wanda Cinema New Year advertisements[38](index=38&type=chunk) - The "Good Lungs, Good Voice" music caravan national tour covered **4** routes and **48** cities, integrating the brand into leisure and entertainment scenarios[38](index=38&type=chunk) - **Seirogan** set up "Gaokao Guardian Stations" during the college entrance exam period, providing emergency medicines and expanding brand exposure through media联动[41](index=41&type=chunk) - **Kingworld Imada Seihong Hua Oil** sponsored the 20th Asian Marathon Championships and the 2025 Jiaxing Marathon and Jinggangshan Trail Race, offering pre-race warm-up and post-race massage services[43](index=43&type=chunk) [Consolidating Online Communication and Marketing Matrix, Building a Full-Channel Brand Communication Ecosystem](index=15&type=section&id=Consolidating%20Online%20Communication%20and%20Marketing%20Matrix,%20Building%20a%20Full-Channel%20Brand%20Communication%20Ecosystem) The Group strengthened its online brand strategy through TV and streaming platform advertising, while exploring new e-commerce models to integrate online and offline sales - Brand advertisements were placed on CCTV-8 and iQiyi's hit dramas "Fearless: Never Give Up" and "Lychees in Chang'an"[46](index=46&type=chunk) - Launched the "Kingworld Cloud Chain" project, piloting the Douyin local life service platform with the first batch of **60** stores to achieve efficient online-offline linkage[48](index=48&type=chunk) - Explored leveraging Douyin's traffic aggregation effect to create popular products and tested a new marketing closed-loop of "online content generating interest, offline stores achieving instant sales"[48](index=48&type=chunk) [Revitalizing Kingworld's Proprietary Brands, Accelerating New Product Introduction](index=16&type=section&id=Revitalizing%20Kingworld's%20Proprietary%20Brands,%20Accelerating%20New%20Product%20Introduction) The Group is actively incubating proprietary brands and introducing new products through strategic collaborations to expand its market presence - **Kingworld Zhuangyao Jianshen Tablets** sales reached nearly **RMB 1.0 million**, becoming a strong product in the Group's pharmaceutical portfolio[49](index=49&type=chunk) - **Kingworld American Ginseng Capsules** gift boxes have seen increased market penetration and sales since their launch in April 2025[49](index=49&type=chunk) - Collaborated with Shang Ya Ju to cultivate Calculus Bovis slices and advanced national marketing cooperation with Qihuang Pharmaceutical for Cistanche Tubulosa Laxative Oral Liquid, an exclusive patented product expected to launch in the second half[51](index=51&type=chunk) [Key Review of Health Products and Daily Chemicals Segment](index=17&type=section&id=Key%20Review%20of%20Health%20Products%20and%20Daily%20Chemicals%20Segment) The health products and daily chemicals segment, as the Group's second-largest business, steadily increased market influence through online-offline synergy and new product introductions - Health products and daily chemicals is the Group's second-largest business segment, with **INNOPHARM** ranking fourth in overseas tonic brands on JD.com International, up one spot[54](index=54&type=chunk) - **INNOPHARM Fish Oil** published **77** product sharing notes on Xiaohongshu, accumulating over **7.6 million** exposures and **460,000** reads, successfully driving Xiaohongshu traffic to Tmall for conversion[56](index=56&type=chunk) - **Carmex Lip Balm** focused on the "lip primer" scenario, precisely targeting the 18-25 age group, achieving a **24%** year-on-year sales growth[59](index=59&type=chunk) - **Golden Partner Glucosamine Chondroitin Calcium Capsules** were deeply integrated with the Kingworld Red Flower Oil product line, creating a "topical pain relief + oral nourishment" scenario-based solution[61](index=61&type=chunk) - Introduced new products such as **German Horse Balm** and **Irish Probiotics**, and expanded into new channels including Hong Kong Yuhua Chain and HKTVMALL[65](index=65&type=chunk)[68](index=68&type=chunk) [High-Density Penetration into Emerging Communities, Connecting the Entire 'Seeding-to-Conversion' Chain](index=18&type=section&id=High-Density%20Penetration%20into%20Emerging%20Communities,%20Connecting%20the%20Entire%20'Seeding-to-Conversion'%20Chain) The Group achieved significant online exposure and sales conversion for its health products through targeted content marketing and e-commerce strategies - **INNOPHARM Fish Oil** collaborated with multi-domain professionals on Xiaohongshu, publishing **77** product sharing notes that garnered over **7.6 million** exposures and **460,000** reads[56](index=56&type=chunk) - The brand's official account continuously published **170**科普 content pieces, with over **30,000** reads, successfully diverting Xiaohongshu traffic to Tmall for conversion[56](index=56&type=chunk) - **Carmex Lip Balm** focused on the "lip primer" core scenario, precisely targeting the 18-25 age group, achieving a **24%** year-on-year sales growth[59](index=59&type=chunk) [Scenario Strategy Upgraded Again, Synergistic Product Dual-Core Driven](index=19&type=section&id=Scenario%20Strategy%20Upgraded%20Again,%20Synergistic%20Product%20Dual-Core%20Driven) The Group enhanced its scenario-based marketing for health products through sports sponsorships, innovative offline services, and product bundling strategies - **INNOPHARM Fish Oil** sponsored the Jiaxing Marathon Expo and the 2025 Jinggangshan Trail Race, achieving multi-dimensional brand exposure[60](index=60&type=chunk) - Innovated a "professional consultant" offline service model, providing scientific purchasing guidance through face-to-face communication with consumers by professional teams[60](index=60&type=chunk) - **Golden Partner Glucosamine Chondroitin Calcium Capsules** were deeply integrated with the Kingworld Red Flower Oil product line, creating a "topical pain relief + oral nourishment" scenario-based solution to drive associated sales of both products[61](index=61&type=chunk) [Enriching Product Portfolio, Continuously Developing New Channels for Leverage Communication](index=20&type=section&id=Enriching%20Product%20Portfolio,%20Continuously%20Developing%20New%20Channels%20for%20Leverage%20Communication) The Group is expanding its product offerings and distribution channels, including new R&D projects and international product introductions, supported by digital marketing - Steadily advancing the joint R&D project with Hong Kong University of Science and Technology on **Cistanche Probiotics**, expected to launch this year, targeting workplace sub-health and the elderly population[64](index=64&type=chunk) - Introduced new products from overseas to Hong Kong, such as **German Horse Balm** and **Irish Probiotics**, enriching the product portfolio[65](index=65&type=chunk) - Expanded into new channels including Hong Kong Yuhua Chain, Hong Kong Hospital Authority Staff Online Shopping Platform "Lok Hip", HKTVMALL, and Lion Life platform live streaming, and developed Kingworld's overseas independent website[68](index=68&type=chunk) - **INNOPHARM** collaborated with renowned artist Wong Cheung Hing and Facebook influencers for over **30** live streams, while Horse Balm and Probiotics also partnered with Christine Ng for live streams[70](index=70&type=chunk) [Partnering with Top European Pharmaceutical Manufacturers to Empower Product Matrix Upgrade](index=22&type=section&id=Partnering%20with%20Top%20European%20Pharmaceutical%20Manufacturers%20to%20Empower%20Product%20Matrix%20Upgrade) The Group is pursuing strategic cooperation with a leading European herbal therapy manufacturer to enhance its product matrix with international pharmaceutical-grade standards - Actively negotiating strategic cooperation with a top European herbal therapy manufacturer that adheres to European Good Manufacturing Practice (GMP) standards[72](index=72&type=chunk) - The first batch of cooperative products will focus on core areas such as joint health, sleep improvement, and immunity enhancement, aiming to introduce international leading pharmaceutical-grade standards[72](index=72&type=chunk) [Collaborating with National Scientific Research Teams, Building Core Technological Barriers](index=22&type=section&id=Collaborating%20with%20National%20Scientific%20Research%20Teams,%20Building%20Core%20Technological%20Barriers) The Group plans to deepen collaboration with academic institutions to develop global health products based on Traditional Chinese Medicine, integrating R&D, production, and sales - Plans to deepen cooperation with a senior professor team from a university, focusing on key Traditional Chinese Medicinal materials, leveraging national scientific research achievements to jointly develop health products for the global market[73](index=73&type=chunk) - The cooperation aims to integrate the "R&D-production-sales" chain, accelerating the transformation, registration, and internationalization of scientific research results through Shenzhen-Hong Kong synergy, promoting the "going global" of Traditional Chinese Medicine standards[73](index=73&type=chunk) - Focuses on key technologies such as primary processing of authentic medicinal materials, active ingredient extraction, quality standards, and fresh product storage, developing a series of products with anti-aging, anti-fatigue, and other effects, including fresh herbal extracts, natural active ingredients, and probiotic-enhanced products[73](index=73&type=chunk) [Key Review of Medical Devices and Equipment Segment](index=23&type=section&id=Key%20Review%20of%20Medical%20Devices%20and%20Equipment%20Segment) Dongdixin Technology achieved sales growth and launched an innovative portable shockwave therapy device, while deepening its domestic and international market presence - **Dongdixin Technology** sales were approximately **RMB 118.4 million**, a **4.0%** increase from last year[77](index=77&type=chunk) - Launched the new portable shockwave therapy device **SW3200 Basic**, integrating electromagnetic drive, portable design, and multi-layer conductive flexible treatment heads[77](index=77&type=chunk) - The product debuted at the 91st CMEF exhibition in Shanghai, receiving positive market feedback and showing promising prospects[77](index=77&type=chunk) [Deepening Domestic and International Layout, Significant Achievements in Strategic Cooperation](index=24&type=section&id=Deepening%20Domestic%20and%20International%20Layout,%20Significant%20Achievements%20in%20Strategic%20Cooperation) The company effectively navigated international trade challenges, expanded into new emerging markets, and strengthened its domestic presence through product re-registration and strategic partnerships - Achieved significant results in the North American market, effectively mitigating the impact of external environmental changes on first-half sales performance[78](index=78&type=chunk) - Intensified efforts to explore emerging potential markets such as South America, South Africa, and Southeast Asia, actively participating in multiple international industry exhibitions[78](index=78&type=chunk) - Completed the medical device re-registration for the biofeedback therapy device product, obtaining a five-year registration certificate[81](index=81&type=chunk) - Strategic cooperation with Merson Technology deepened, with ultrasound therapy device products ranking among the top in sales on mainstream e-commerce platforms like JD.com and Tmall[81](index=81&type=chunk) [Strengthening Internal Control and Efficiency, Multi-pronged Approach to Unleash Profit Potential](index=25&type=section&id=Strengthening%20Internal%20Control%20and%20Efficiency,%20Multi-pronged%20Approach%20to%20Unleash%20Profit%20Potential) The company optimized its quality, after-sales, and risk control systems, while implementing cost reduction and efficiency improvement strategies to enhance profitability - Established or co-established localized after-sales service response networks in major sales markets with core distributors, enhancing the timeliness and efficiency of customer issue resolution[82](index=82&type=chunk) - Optimized organizational structure and talent management through measures such as merging and streamlining positions and strengthening incentives for key employees[82](index=82&type=chunk) - Implemented cost reduction and efficiency improvement strategies, including multi-dimensional comparative procurement, bidding systems for equipment, consumables, and raw materials, saving production energy consumption, and reducing administrative expenses, effectively improving product gross profit margins[82](index=82&type=chunk) [Continuously Advancing Digital Transformation, Industry-University-Research Collaboration Driving New Product Development](index=25&type=section&id=Continuously%20Advancing%20Digital%20Transformation,%20Industry-University-Research%20Collaboration%20Driving%20New%20Product%20Development) The company is enhancing its digital manufacturing systems and leveraging AI and academic partnerships to drive product innovation and operational efficiency - Continuously advancing the optimization and upgrade of digital intelligent manufacturing systems, deepening strategic cooperation with top domestic artificial intelligence research institutes[83](index=83&type=chunk) - Actively exploring the deep application of artificial intelligence technology in improving production efficiency and empowering product research and development[83](index=83&type=chunk) - Collaborating with renowned domestic rehabilitation hospitals and the Shenzhen Institute of Advanced Technology, Chinese Academy of Sciences, on in-depth technical research in the rehabilitation field, with innovative technologies and products expected to be launched within the year[83](index=83&type=chunk) [Other Businesses](index=26&type=section&id=Other%20Businesses) Kingworld Longde Health Industrial Park consolidated its health industry ecosystem and attracted new clients, while the Group actively pursued investment opportunities for sustainable growth - **Kingworld Longde Health Industrial Park** consolidated its health industry collaborative ecosystem through industrial cooperation and policy linkage amidst macroeconomic downward pressure[84](index=84&type=chunk) - The park hosted **25** batches of government departments and business associations for visits and exchanges, adding **72** prospective clients[84](index=84&type=chunk)[89](index=89&type=chunk) - The Group actively seized investment and financing opportunities in the big health industry, leveraging its listed company advantages to integrate internal and external resources and deepen collaborative cooperation with upstream and downstream enterprises in the industry chain[91](index=91&type=chunk) [Gathering Momentum and Empowerment, with Longde Industrial Park as the Hub, Connecting the Health Industry Collaborative Ecosystem](index=26&type=section&id=Gathering%20Momentum%20and%20Empowerment,%20with%20Longde%20Industrial%20Park%20as%20the%20Hub,%20Connecting%20the%20Health%20Industry%20Collaborative%20Ecosystem) Longde Industrial Park actively engaged with industry leaders and government, hosting events and securing new clients to enhance its brand and service capabilities - Longde Health Industrial Park hosted high-level exchanges with industry leaders such as Yangtze River Pharmaceutical Group and Ningbo Tianyi Medical Co., Ltd., exploring the Greater Bay Area market and international product布局[84](index=84&type=chunk) - Received platform resource support for health technology enterprises from Longgang District Government, hosting **25** batches of government departments and business associations for visits and exchanges in the first half[84](index=84&type=chunk) - Jointly organized multiple large-scale industry exchange events with various chambers of commerce and enterprises, such as the preparatory symposium for the "National Food and Medicine Homology Industry Innovation Project - Agarwood Special Project"[87](index=87&type=chunk) - The park added **72** prospective clients and identified key platform projects such as the "Food and Medicine Homology Agarwood Base"[89](index=89&type=chunk) [Actively Seizing Investment and Financing Opportunities in the Big Health Industry, Promoting Sustainable Business Growth](index=28&type=section&id=Actively%20Seizing%20Investment%20and%20Financing%20Opportunities%20in%20the%20Big%20Health%20Industry,%20Promoting%20Sustainable%20Business%20Growth) The Group is strategically leveraging its capital market position to integrate resources, optimize financing, and strengthen industry chain collaborations for future growth - Actively seizing development opportunities in the big health industry, promoting the Group's sustainable business development through strategic investments[91](index=91&type=chunk) - Leveraging its listed company capital market advantages, integrating internal and external resources, optimizing financing platforms, and deepening collaborative cooperation with upstream and downstream enterprises in the industry chain[91](index=91&type=chunk) - The investment department will continue to focus on high-potential projects and strengthen investment布局 to provide solid support for the Group's business growth and increased investment returns[91](index=91&type=chunk) [Research and Development and Innovation](index=28&type=section&id=Research%20and%20Development%20and%20Innovation) The Group has built a robust intellectual property system and achieved significant progress in digital transformation, expense control, CRM, and AI applications - The Group and its related brands have cumulatively registered over **300** valid trademarks, **83** software copyrights, and **1** invention patent[92](index=92&type=chunk) - **Dongdixin** cumulatively holds **4** valid invention patents, **24** utility model patents, **1** design patent, and **13** software copyrights[92](index=92&type=chunk) - The market activity management system was successfully launched, achieving digital optimization and upgrade of expense control management[93](index=93&type=chunk) - The new version of the customer visit management system 2.0 was officially launched, comprehensively optimizing geolocation accuracy and visit planning rationality[93](index=93&type=chunk) - Achieved AI-powered office operations by introducing public AI interfaces, significantly improving office efficiency, and enhanced marketing and promotional content using AI digital imaging technology[93](index=93&type=chunk) - In the second half of 2025, the microservice architecture middleware will be officially launched, and the flow management system will undergo iterative upgrades[95](index=95&type=chunk) [Talent and Culture](index=29&type=section&id=Talent%20and%20Culture) The Group maintains a people-oriented approach, with a comprehensive talent development system, strategic recruitment, and a share award scheme to motivate employees - The Group has established a comprehensive talent development system, training nearly a thousand people through multi-channel recruitment, school-enterprise cooperation, headhunter partnerships, and internal promotions[96](index=96&type=chunk) - Added positions such as management accountants, introducing professional talent to assist the company in more precise analysis of various operating costs and rational allocation of strategic resources[98](index=98&type=chunk) - As of June 30, 2025, the Group had a total of **759** employees, with **137** at the Shenzhen head office, **261** stationed in **36** other regions for sales and marketing, and **361** at Dongdixin[98](index=98&type=chunk)[159](index=159&type=chunk) - On July 4, 2025, under the 2025 Share Award Scheme, a total of **3,457,600** award shares were granted at nil consideration to **70** selected participants, aiming to recognize key talent contributions and motivate the team[100](index=100&type=chunk)[195](index=195&type=chunk) [Improving Talent Development Mechanisms, Supporting New Breakthroughs in Corporate Strategy](index=29&type=section&id=Improving%20Talent%20Development%20Mechanisms,%20Supporting%20New%20Breakthroughs%20in%20Corporate%20Strategy) The Group's people-oriented approach includes robust talent development, strategic recruitment for specialized roles, and a focus on employee career growth - The Group has established a comprehensive talent development system, training nearly a thousand people through multi-channel recruitment, school-enterprise cooperation, headhunter partnerships, and internal promotions[96](index=96&type=chunk) - Added positions such as management accountants, introducing professional talent to assist the company in more precise analysis of various operating costs and rational allocation of strategic resources[98](index=98&type=chunk) - As of June 30, 2025, the Group had a total of **759** employees, with **137** at the Shenzhen head office, **261** stationed in **36** other regions, and **361** at Dongdixin[98](index=98&type=chunk)[159](index=159&type=chunk) [Continuously Advancing Share Award Scheme, Stimulating Team Vitality and Corporate Growth Momentum](index=30&type=section&id=Continuously%20Advancing%20Share%20Award%20Scheme,%20Stimulating%20Team%20Vitality%20and%20Corporate%20Growth%20Momentum) The Group's performance management and incentive mechanisms, including a share award scheme, aim to boost employee engagement and drive corporate growth - The Group has established a comprehensive performance management system and incentive mechanism, fully stimulating employee work enthusiasm and creativity[100](index=100&type=chunk) - On July 4, 2025, under the 2025 Share Award Scheme, a total of **3,457,600** award shares were granted at nil consideration to **70** selected participants[100](index=100&type=chunk)[195](index=195&type=chunk) - Of these, **1,397,600** award shares were granted to **19** connected grantees, and **2,060,000** shares to **51** non-connected grantees[100](index=100&type=chunk)[195](index=195&type=chunk) [Sustainable Development](index=31&type=section&id=Sustainable%20Development) The Group actively fulfills its corporate social responsibility through significant donations, public welfare activities, and support for sports and education - The Group donated over **RMB 680,000** in cash and pharmaceutical supplies to the earthquake-stricken areas in Xizang Autonomous Region's Xigaze City[102](index=102&type=chunk) - Launched the "Jianfu Capsule Public Welfare Donation" activity, donating Jianfu Capsules worth nearly **RMB 3 million** to help improve women's health protection standards[102](index=102&type=chunk) - Its foundation received the "2024 Guangdong Province Poverty Alleviation and Charity Kapok Cup Bronze Award"[102](index=102&type=chunk) - Continuously launched the "Summer Retreat Large-scale Monk Protection Public Welfare Activity," donating pharmaceutical supplies to over seventy famous mountains and temples nationwide[104](index=104&type=chunk) - During the Gaokao period, "Love Aid Stations" were set up near examination centers in Guangzhou, and public welfare sun shelters were erected in Haikou, Hainan, and other locations, providing emergency supplies and services[107](index=107&type=chunk) [Awards and Recognition](index=33&type=section&id=Awards%20and%20Recognition) The Group received multiple corporate, product, and public welfare honors in 2024, recognizing its contributions and brand influence - Awarded "2024-2026 Nanshan District 'Green Channel' Enterprise" and "2024 Shenzhen Health Industry Product Technology, Service Model Innovation Case"[114](index=114&type=chunk) - **Kingworld Imada Seihong Hua Oil** received "Special Runner Tribe - Running Greater Bay Area Glorious Partner"[114](index=114&type=chunk) - **Fo Ci Minshan Xiaoyao Wan** received the "2024-2025 Most Popular Brand in Hong Kong Pharmacies Award"[114](index=114&type=chunk) - Awarded "2024 Guangdong Poverty Alleviation and Charity Kapok Award Bronze" and "2024 Outstanding Enterprise for Social Responsibility"[114](index=114&type=chunk) [Individual Honors of Group Leaders](index=34&type=section&id=Individual%20Honors%20of%20Group%20Leaders) Several Group leaders were recognized with individual honors for their contributions to social responsibility, cultural communication, and innovation - Executive Director Ms. Chen Leshen received "2024 Outstanding Individual for Social Responsibility" and Southern Media Group's "New Era Shenzhen Loves Her" 3.8 Women's Day Most Beautiful Her[117](index=117&type=chunk) - Assistant to the Chairman Mr. Zhao Jianwei received the "Shining Starfish" Cultural Communication Practice Award and was appointed Executive Director of the Shenzhen Federation of Industry and Commerce[117](index=117&type=chunk) - Assistant to the Chairman Ms. Zhao Weiying was recognized as an Active CPPCC Member of Luohu District, Shenzhen, and a "Shenzhen New Generation Innovation and Entrepreneurship Figure" in the 5th edition[117](index=117&type=chunk) [Financial Review](index=35&type=section&id=Financial%20Review) The Group's H1 2025 financial performance saw a significant decline in revenue and profit, primarily due to reduced pandemic-related boosts and increased administrative expenses 2025 H1 Financial Performance | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 404,850 | 526,088 | (23.0)% | | Cost of Sales | (302,807) | (388,828) | (22.1)% | | Gross Profit | 102,043 | 137,260 | (25.7)% | | Gross Profit Margin | 25.2% | 26.1% | (0.9) percentage points | | Other Income, Revenue and Other Losses, Net | 7,877 | 4,222 | 86.6% | | Selling and Distribution Costs | (43,592) | (48,565) | (10.2)% | | Administrative Expenses | (55,020) | (42,708) | 28.8% | | Operating Profit | 15,958 | 57,929 | (72.5)% | | Finance Costs | (8,085) | (9,316) | (13.2)% | | Profit Before Tax | 13,874 | 55,466 | (75.0)% | | Income Tax | (2,438) | (9,846) | (75.2)% | | Profit for the Period | 11,436 | 45,620 | (74.9)% | | (Loss)/Profit Attributable to Owners of the Company | (5,412) | 30,716 | Not Applicable | - As of June 30, 2025, cash and cash equivalents were **RMB 230,541 thousand**, indicating adequate liquidity[131](index=131&type=chunk) - The gearing ratio was **26.2%**, an increase from **21.6%** at the end of 2024[135](index=135&type=chunk) - There were no material acquisitions or disposals, nor any significant legal or potential proceedings during the reporting period[139](index=139&type=chunk)[142](index=142&type=chunk) [Revenue](index=35&type=section&id=Revenue) The Group's revenue decreased by 23.0% year-on-year, primarily due to reduced positive effects from the lifting of pandemic control measures on its distribution business - Revenue was approximately **RMB 404,850 thousand**, a **23.0%** decrease from the same period last year[120](index=120&type=chunk) - The decrease was mainly due to reduced positive effects from the lifting of pandemic control measures on the distribution business of branded imported pharmaceutical and health products in China[120](index=120&type=chunk) - This was partially offset by increased sales of medical equipment products manufactured by Dongdixin[120](index=120&type=chunk) [Cost of Sales and Gross Profit Margin](index=35&type=section&id=Cost%20of%20Sales%20and%20Gross%20Profit%20Margin) Cost of sales decreased by 22.1% due to lower sales volume, but gross profit margin declined by 0.9 percentage points due to a shift in product mix - Cost of sales was approximately **RMB 302,807 thousand**, a year-on-year decrease of **22.1%**[121](index=121&type=chunk) - Gross profit margin decreased from **26.1%** in the same period of 2024 to **25.2%** in the same period of 2025, a **0.9** percentage point decline[121](index=121&type=chunk) - The decline in gross profit margin was mainly due to a shift in the sales mix, leading to an increased revenue contribution from lower-margin products[121](index=121&type=chunk) [Other Income, Revenue and Other Losses, Net](index=35&type=section&id=Other%20Income,%20Revenue%20and%20Other%20Losses,%20Net) Other income, revenue and other losses, net, increased by 86.6%, primarily due to reduced fair value change losses on financial assets - Other income, revenue and other losses, net, amounted to approximately **RMB 7,877 thousand**, an **86.6%** year-on-year increase[122](index=122&type=chunk) - The increase was mainly due to a reduction in fair value change losses on financial assets at fair value through profit or loss during the reporting period[122](index=122&type=chunk) [Selling and Distribution Costs](index=35&type=section&id=Selling%20and%20Distribution%20Costs) Selling and distribution costs decreased by 10.2%, mainly due to lower promotion, transportation, and storage expenses resulting from reduced sales volume - Selling and distribution costs were approximately **RMB 43,592 thousand**, a year-on-year decrease of **10.2%**[123](index=123&type=chunk) - The decrease was mainly due to reduced promotion expenses, transportation, traffic, and storage costs resulting from lower sales volume during the reporting period[123](index=123&type=chunk) [Administrative Expenses](index=35&type=section&id=Administrative%20Expenses) Administrative expenses increased by 28.8%, primarily driven by higher depreciation and research and development expenses during the reporting period - Administrative expenses were approximately **RMB 55,020 thousand**, a year-on-year increase of **28.8%**[124](index=124&type=chunk) - The increase was mainly due to higher depreciation and research and development expenses during the reporting period[124](index=124&type=chunk) [Operating Profit](index=35&type=section&id=Operating%20Profit) Operating profit decreased by 72.5%, primarily due to reduced gross profit and increased administrative expenses, partially offset by lower selling and distribution costs - Operating profit was approximately **RMB 15,958 thousand**, a year-on-year decrease of **72.5%**[125](index=125&type=chunk) - The decrease in operating profit was mainly attributable to a reduction in gross profit of approximately **RMB 35,217 thousand** and an increase in administrative expenses, partially offset by a decrease in selling and distribution costs[125](index=125&type=chunk) [Finance Costs](index=36&type=section&id=Finance%20Costs) Finance costs decreased by 13.2%, mainly due to a reduction in bank loan interest resulting from lower average bank loan interest rates - Finance costs were approximately **RMB 8,085 thousand**, a year-on-year decrease of **13.2%**[126](index=126&type=chunk) - The decrease was mainly due to a reduction in bank loan interest resulting from lower average bank loan interest rates during the reporting period[126](index=126&type=chunk) [Profit Before Tax](index=36&type=section&id=Profit%20Before%20Tax) Profit before tax decreased by 75.0%, primarily attributable to the reduction in operating profit - Profit before tax was approximately **RMB 13,874 thousand**, a year-on-year decrease of **75.0%**[127](index=127&type=chunk) - The decrease in profit before tax was mainly attributable to the reduction in operating profit[127](index=127&type=chunk) [Income Tax](index=36&type=section&id=Income%20Tax) Income tax decreased by 75.2%, with the effective tax rate for the reporting period at 16.4% - Income tax was approximately **RMB 2,438 thousand**, a year-on-year decrease of **75.2%**[128](index=128&type=chunk) - The effective tax rate for the reporting period was **16.4%**, compared to **17.8%** for the six months ended June 30, 2024[128](index=128&type=chunk) [Profit for the Period](index=36&type=section&id=Profit%20for%20the%20Period) Profit for the period decreased by 74.9% to RMB 11,436 thousand - Profit for the period was approximately **RMB 11,436 thousand**, a year-on-year decrease of **74.9%**[129](index=129&type=chunk) [Loss/Profit Attributable to Owners of the Company for the Period](index=36&type=section&id=Loss%2FProfit%20Attributable%20to%20Owners%20of%20the%20Company%20for%20the%20Period) The Group recorded a loss attributable to owners of the company of RMB 5,412 thousand, a significant shift from a profit in the prior year - The loss attributable to owners of the company for the period was approximately **RMB 5,412 thousand**, compared to a profit of approximately **RMB 30,716 thousand** in the same period last year[130](index=130&type=chunk) [Liquidity and Sources of Funding](index=36&type=section&id=Liquidity%20and%20Sources%20of%20Funding) The Group maintains sufficient working capital, primarily funded by operations and bank borrowings, with cash and cash equivalents at RMB 230,541 thousand - As of June 30, 2025, cash and cash equivalents amounted to **RMB 230,541 thousand**[131](index=131&type=chunk) - The effective interest rate for fixed-rate loans ranged from **3.3%** to **7.0%**[131](index=131&type=chunk) - The directors believe the Group has sufficient working capital to meet its funding requirements for at least the next twelve months from the date of this interim report[131](index=131&type=chunk) [Cash Flows](index=37&type=section&id=Cash%20Flows) The Group experienced a net decrease in cash and cash equivalents, with operating activities generating positive cash flow but investing and financing activities consuming cash - During the reporting period, cash and cash equivalents decreased by approximately **RMB 4,758 thousand**[133](index=133&type=chunk) 2025 H1 Cash Flows | Cash Flow Activity | Amount (RMB thousand) | | :--- | :--- | | Net Cash Inflow from Operating Activities | 5,884 | | Net Cash Outflow from Investing Activities | (7,516) | | Net Cash Outflow from Financing Activities | (2,191) | | Net Effect of Exchange Rate Changes | (935) | [Capital Structure](index=37&type=section&id=Capital%20Structure) The Group's total borrowings increased, leading to a higher gearing ratio, with various assets pledged as collateral for bank financing - As of June 30, 2025, total borrowings were approximately **RMB 413,754 thousand**, an increase from **RMB 387,616 thousand** at the end of 2024[134](index=134&type=chunk) - The gearing ratio was **26.2%**, an increase from **21.6%** at the end of 2024[135](index=135&type=chunk) 2025 H1 Asset Pledges | Pledged Asset Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Investment Properties | 111,600 | 107,000 | | Right-of-Use Assets | 92,681 | 94,257 | | Property, Plant and Equipment | 207,610 | 15,526 | - Capital expenditure during the reporting period was approximately **RMB 1,955 thousand**, mainly for the acquisition of property, plant and equipment[137](index=137&type=chunk) - The Group is exposed to foreign exchange risk arising from RMB, HKD, EUR, and USD[138](index=138&type=chunk) [Contingent Liabilities, Legal and Potential Proceedings](index=38&type=section&id=Contingent%20Liabilities,%20Legal%20and%20Potential%20Proceedings) The Group had no significant legal or potential proceedings as of June 30, 2025, with a prior lawsuit concluded without material adverse impact - As of June 30, 2025, the Group had no significant legal or potential proceedings[139](index=139&type=chunk) - A lawsuit involving the 15% equity transfer of Dongdixin concluded in February 2025, when the Shenzhen People's Procuratorate of Guangdong Province disapproved the retrial application[141](index=141&type=chunk) - This lawsuit had no and will not have any material adverse impact on the normal operations and financial position of the Company and its subsidiaries[141](index=141&type=chunk) [Material Acquisitions and Disposals](index=38&type=section&id=Material%20Acquisitions%20and%20Disposals) The Group did not undertake any material acquisitions or disposals during the six months ended June 30, 2025 - For the six months ended June 30, 2025, the Group had no material acquisitions or disposals[142](index=142&type=chunk) [Going Concern](index=38&type=section&id=Going%20Concern) The Group's financial statements are prepared on a going concern basis, supported by sufficient financial resources for the foreseeable future - Based on its current financial position and available financing, the Group has sufficient financial resources to continue operating for the foreseeable future[143](index=143&type=chunk) - The financial statements have been prepared on a going concern basis[143](index=143&type=chunk) [Future Outlook](index=39&type=section&id=Future%20Outlook) The Group plans to deepen its core strategy, accelerate new product launches, and expand international cooperation to address market challenges and capitalize on health industry trends - In the first half of 2025, China's GDP grew by **5.3%** year-on-year, total retail sales of consumer goods increased by **5.0%**, and national residents' per capita disposable income grew by **5.4%** in real terms[145](index=145&type=chunk) - China's total import and export trade of pharmaceutical and health products reached **USD 97.95 billion**, a year-on-year increase of **0.23%**, with exports growing by **3.80%** to **USD 54.539 billion**[146](index=146&type=chunk) - Per capita healthcare consumption expenditure reached **RMB 1,314**, a year-on-year increase of **3.4%**, accounting for **9.2%** of per capita consumption expenditure[147](index=147&type=chunk) - Medical insurance centralized procurement continued to deepen, with the third batch of proprietary Chinese medicine centralized procurement implemented across **26** provinces nationwide in April 2025, covering **95** products[149](index=149&type=chunk) - Ai Media Consulting predicts that China's pharmaceutical e-commerce market size will exceed **RMB 340 billion** by 2026[152](index=152&type=chunk) - The Group will continue to deepen its core strategy, actively replicate successful product experiences, accelerate the launch of new products with market potential, and continuously optimize its product structure[155](index=155&type=chunk) - In the domestic market, leveraging the "food and medicine homology" concept, the Group will deepen industry-university-research cooperation with top universities like Hong Kong University of Science and Technology to strategically布局 "Cistanche Tubulosa Laxative Oral Liquid"[156](index=156&type=chunk) - In overseas markets, the Group will deepen strategic cooperation with international leading brands in herbal medicine, introducing distinctive products centered on botanical drugs to address emerging health pain points[156](index=156&type=chunk) [Industry Landscape and Trends](index=39&type=section&id=Industry%20Landscape%20and%20Trends) China's health industry showed robust growth in H1 2025, driven by economic expansion, increased health awareness, and policy support for Traditional Chinese Medicine and e-commerce - In the first half of 2025, China's GDP reached **RMB 66,053.6 billion**, a year-on-year increase of **5.3%**; total retail sales of consumer goods reached **RMB 24,545.8 billion**, a year-on-year increase of **5.0%**; national residents' per capita disposable income was **RMB 21,840**, a real increase of **5.4%**[145](index=145&type=chunk) - China's total import and export trade of pharmaceutical and health products reached **USD 97.95 billion**, a year-on-year increase of **0.23%**, with exports at **USD 54.539 billion**, a year-on-year increase of **3.80%**[146](index=146&type=chunk) - Per capita healthcare consumption expenditure reached **RMB 1,314**, a year-on-year increase of **3.4%**, and its proportion in per capita consumption expenditure rose to **9.2%**[147](index=147&type=chunk) - In the first half of 2025, the National Medical Products Administration approved **14** new Traditional Chinese Medicine drugs, including **5** innovative Traditional Chinese Medicine drugs[150](index=150&type=chunk) - Ai Media Consulting predicts that China's pharmaceutical e-commerce market size will exceed **RMB 340 billion** by 2026[152](index=152&type=chunk) [Challenges and Strategies](index=41&type=section&id=Challenges%20and%20Strategies) Facing a downturn in physical pharmacy sales, the Group plans to accelerate new product launches, optimize its product structure, and expand strategic collaborations in both domestic and international markets - In Q1 2025, retail sales of proprietary Chinese medicines were **RMB 41.2 billion**, a year-on-year decrease of **7.67%**[153](index=153&type=chunk) - From January to June 2025, the cumulative scale of China's physical pharmacies was **RMB 296.1 billion**, a **2.2%** decline from the same period last year[153](index=153&type=chunk) - The Group will continue to deepen its core strategy, actively replicate successful product experiences, accelerate the launch of new products with market potential, and continuously optimize its product structure[155](index=155&type=chunk) - In the domestic market, leveraging the "food and medicine homology" concept, the Group will deepen industry-university-research cooperation with top universities like Hong Kong University of Science and Technology to strategically布局 "Cistanche Tubulosa Laxative Oral Liquid"[156](index=156&type=chunk) - In overseas markets, the Group will deepen strategic cooperation with international leading brands in herbal medicine, introducing distinctive products centered on botanical drugs to address emerging health pain points such as sleep disorders, emotional tension, and post-COVID lung function recovery[156](index=156&type=chunk) [Conclusion](index=42&type=section&id=Conclusion) Kingworld Medicines Group is committed to proactive development in the big health sector, focusing on innovation, service upgrades, and strengthening core competitiveness - Kingworld Medicines Group will work together with employees and partners to flexibly adjust strategic implementation in the "VUCA era"[157](index=157&type=chunk) - Upholding the spirit of proactive progress and sincere altruism, the Group will deeply cultivate the big health sector, promote product innovation and service upgrades, and strengthen core competitiveness[157](index=157&type=chunk) [Other Information](index=43&type=section&id=Other%20Information) This section covers the Group's human resources, equity disclosures, share schemes, capital commitments, public float, dividends, securities transactions, corporate governance, and post-reporting period events [Human Resources and Training](index=43&type=section&id=Human%20Resources%20and%20Training) The Group employs 759 staff across its head office, regional sales, and Dongdixin, with a focus on training and incentive programs to enhance efficiency - As of June 30, 2025, the Group had a total of **759** employees[159](index=159&type=chunk) - Of these, **137** were employed at the Shenzhen head office, **261** were stationed in **36** other regions performing sales and marketing duties, and **361** were employed at Dongdixin[159](index=159&type=chunk) - For the six months ended June 30, 2025, the total remuneration paid by the Group to employees was approximately **RMB 61,110 thousand** (2024: approximately **RMB 66,559 thousand**)[159](index=159&type=chunk) - The Group employs various incentive mechanisms to enhance employee efficiency, regularly assesses employee performance, and provides training for different functional employees[159](index=159&type=chunk) [Disclosure of Interests](index=44&type=section&id=Disclosure%20of%20Interests) This section details the interests and short positions of the Company's directors, chief executive, and substantial shareholders in the Company's shares and underlying shares [Interests and Short Positions of Directors and Chief Executive in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=44&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%20and%20Chief%20Executive%20in%20Shares,%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) The table below summarizes the interests and short positions of the Company's directors and chief executive in the Company's shares as of June 30, 2025 Interests of Directors and Chief Executive in Company Shares (as of June 30, 2025) | Director Name | Capacity/Nature of Interest | Number of Company Shares Held | Approximate Percentage of Total Issued Share Capital of the Company | | :--- | :--- | :--- | :--- | | Zhao Lisheng | Beneficial Owner | 24,720,000 | 3.97% | | | Spouse's Interest | 90,448,000 | 14.53% | | | Interest in Controlled Corporation | 297,812,250 | 47.84% | | Chen Leshen | Beneficial Owner | 448,000 | 0.07% | | | Spouse's Interest | 322,532,250 | 51.81% | | | Interest in Controlled Corporation | 90,000,000 | 14.46% | | Zhou Xuhua | Beneficial Owner | 296,000 | 0.05% | | | Spouse's Interest | 2,380,000 | 0.38% | | Zhang Jianbin | Beneficial Owner | 248,000 | 0.04% | | Duan Jidong | Beneficial Owner | 212,000 | 0.03% | | Huang Zhuolin | Beneficial Owner | 212,000 | 0.03% | Interests of Directors in Shares of Associated Corporations (as of June 30, 2025) | Director Name | Name of Associated Corporation | Capacity/Nature of Interest | Percentage of Equity Interest | | :--- | :--- | :--- | :--- | | Zhao Lisheng | Kingworld | Beneficial Owner | 100% | | Chen Leshen | Jinchen | Beneficial Owner | 100% | [Interests and Short Positions of Substantial Shareholders in Shares and Underlying Shares of the Company](index=46&type=section&id=Interests%20and%20Short%20Positions%20of%20Substantial%20Shareholders%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) The table below outlines the interests and short positions of substantial shareholders in the Company's shares as of June 30, 2025 Interests of Substantial Shareholders in Company Shares (as of June 30, 2025) | Shareholder Name | Capacity/Nature of Interest | Number of Company Shares Held | Approximate Percentage of Total Issued Share Capital of the Company | | :--- | :--- | :--- | :--- | | Kingworld | Beneficial Owner | 297,812,250 | 47.84% | | Jinchen | Beneficial Owner | 90,000,000 | 14.46% | | Zhao Lisheng | Beneficial Owner | 24,720,000 | 3.97% | | | Spouse's Interest | 90,448,000 | 14.53% | | | Interest in Controlled Corporation | 297,812,250 | 47.84% | | Chen Leshen | Beneficial Owner | 448,000 | 0.07% | | | Spouse's Interest | 322,532,250 | 51.81% | | | Interest in Controlled Corporation | 90,000,000 | 14.46% | | Sinopharm Healthcare Fund L.P

2025 中期報告 目錄 | 公司資料 | 2 | | --- | --- | | 管理層討論及分析 | 4 | | 企業管治及其他資料 | 13 | | 簡明綜合損益表 | 21 | | 簡明綜合全面收益表 | 22 | | 簡明綜合財務狀況表 | 23 | | 簡明綜合權益變動表 | 25 | | 簡明綜合現金流量表 | 27 | | 簡明綜合財務報表附註 | 29 | 公司資料 於2025年8月28日 董事會 執行董事 袁紅兵先生 （主席） 閆潔華女士 （行政總裁） （於2025年8月15日獲委任） 非執行董事 陳運偉先生 曹玉奇女士（於2025年8月4日辭任） 獨立非執行董事 謝慶豪先生 麥天生先生 江浩先生 審核委員會 謝慶豪先生 （委員會主席） 麥天生先生 江浩先生 薪酬委員會 麥天生先生 （委員會主席） 袁紅兵先生 謝慶豪先生 江浩先生 提名委員會 袁紅兵先生 （委員會主席） 閆潔華女士 謝慶豪先生 麥天生先生 江浩先生 法定代表 葉昇先生 袁紅兵先生 公司秘書 葉昇先生 註冊辦事處 Cricket Square Hutchins Drive, P.O. Box 2681 Grand Cayma ...

Interim Results Key Data [Financial Performance Overview](index=3&type=section&id=1.1%20Financial%20Performance%20Overview) In H1 2025, the Group's consolidated operating revenue, profit before tax, net profit, and basic EPS decreased year-on-year, impacted by lower revenue and increased operating costs. 2025 H1 Key Financial Data | Indicator | 2025 H1 (RMB '000) | 2024 H1 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 15,657,018 | 19,236,132 | -18.6% | | Profit Before Tax | 5,149,453 | 5,855,739 | -12.1% | | Profit for the Period | 4,174,485 | 4,864,018 | -14.2% | | Net Profit Attributable to Equity Holders of the Company | 3,519,492 | 4,074,861 | -13.6% | | Basic and Diluted Earnings Per Share (RMB cents) | 42.10 | 48.74 | -13.6% | - As of June 30, 2025, net assets per share (excluding non-controlling interests) were **RMB 8.91**[3](index=3&type=chunk) [Operational Data Overview](index=4&type=section&id=1.2%20Operational%20Data%20Overview) In H1 2025, the Group added 2,053.54 MW of new energy controlled installed capacity, with significant growth in wind and solar power, and total power generation increased year-on-year, especially for solar. Controlled Installed Capacity (As of June 30, 2025) | Energy Type | June 2025 (MW) | June 2024 (MW) | Change Rate | | :--- | :--- | :--- | :--- | | Wind Power | 31,396 | 28,349 | 10.75% | | Thermal Power | 0 | 1,875 | -100% | | Solar Power | 11,795 | 7,620 | 54.79% | | Other | 6 | 36 | -83.33% | | **Total** | **43,197** | **37,880** | **14.03%** | Electricity Sales (January-June 2025) | Energy Type | Jan-Jun 2025 (GWh) | Jan-Jun 2024 (GWh) | Change Rate | | :--- | :--- | :--- | :--- | | Wind Power | 32,676 | 31,992 | 2.14% | | Thermal Power | 0 | 3,674 | -100% | | Solar Power | 6,096 | 4,469 | 36.44% | | Other | 3 | 6 | -50% | | **Total** | **38,778** | **40,138** | **-3.39%** | Management Discussion and Analysis [Industry Review](index=7&type=section&id=2.1%20Industry%20Review) In H1 2025, China's economy showed stable and positive growth, with increases in electricity consumption and installed generation capacity, particularly rapid growth in new energy capacity, while power market reforms deepened. - National electricity consumption was **4,841.8 billion kWh**, a **3.7% year-on-year increase**; industrial power generation above designated size was **4,537.1 billion kWh**, a **2.3% year-on-year increase**[18](index=18&type=chunk) - As of June 30, 2025, national installed generation capacity reached **3.65 billion kW**, a **18.7% year-on-year increase**, with wind power at **570 million kW** (up **22.7%**) and solar power at **1.1 billion kW** (up **54.2%**)[18](index=18&type=chunk) - Cumulative market-based electricity transactions reached **2.95 trillion kWh**, a **4.8% year-on-year increase**, accounting for **60.9%** of total electricity consumption; green power transactions were **154 billion kWh**, up **49.3%** year-on-year[19](index=19&type=chunk) [Operating Environment](index=7&type=section&id=2.1.1%20Operating%20Environment) The national economy maintained overall stability and positive momentum, with steady growth in production demand, stable employment, increased resident income, and strong growth in new drivers. - The national average utilization hours of power generation equipment were **1,504 hours**, a decrease of **162 hours** compared to the same period last year[19](index=19&type=chunk) [Policy Environment](index=8&type=section&id=2.1.2%20Policy%20Environment) National policies emphasize market-based pricing for new energy, inclusion of new entities in auxiliary service markets, and accelerated development of spot electricity markets. - The "Notice on Deepening Market-Oriented Reform of New Energy On-grid Tariffs and Promoting High-Quality Development of New Energy" (Document No. 136) mandates that all new energy on-grid electricity enter the power market, with prices determined by market transactions[21](index=21&type=chunk) - The "Basic Rules for Power Auxiliary Service Market" includes new entities like energy storage companies, virtual power plants, and smart microgrids, following the principle of "whoever provides, profits; whoever benefits, bears the cost"[22](index=22&type=chunk) - The "Notice on Comprehensively Accelerating the Construction of Spot Electricity Markets" aims for national coverage of spot electricity markets by the end of 2025, with continuous settlement operations[23](index=23&type=chunk) - The "2025 Energy Work Guidance Opinion" outlines three main goals: enhancing energy supply security, deepening green and low-carbon transformation, and improving development quality and efficiency[25](index=25&type=chunk) - The "Opinions on Promoting High-Quality Development of Renewable Energy Green Certificate Market" aims to establish a green certificate market system by 2027 and achieve international application by 2030[26](index=26&type=chunk) - The "Notice on Orderly Promoting the Development of Green Power Direct Connection" defines green power direct connection as direct supply from new energy to a single user via dedicated lines, requiring new energy installed capacity to be determined by load[27](index=27&type=chunk) [Business Review](index=12&type=section&id=2.2%20Business%20Review) In H1 2025, the Group adhered to its "stability, safety, innovation, and high-quality development" strategy, adding 2,053.54 MW of new energy capacity, with growth in both wind and solar power generation, and made progress in safety, development, engineering, marketing, digitalization, financing, and overseas expansion. - In H1 2025, the Group's net new controlled installed capacity for new energy was **2,053.54 MW**, including **986.95 MW** of wind power and **1,096.59 MW** of solar power[29](index=29&type=chunk) - As of June 30, 2025, the Group's controlled installed capacity was **43,196.74 MW**, comprising **31,395.72 MW** of wind power and **11,794.92 MW** of solar power[29](index=29&type=chunk) - The Group's cumulative power generation in 2025 reached **39,652,477 MWh**, with wind power generation at **33,502,617 MWh** (up **6.07%** year-on-year) and solar power generation at **6,146,915 MWh** (up **71.37%** year-on-year)[29](index=29&type=chunk) - In H1 2025, the Group's average on-grid tariff for all power generation businesses was **RMB 399/MWh** (excluding VAT), a decrease of **RMB 23/MWh** compared to the same period in 2024[46](index=46&type=chunk) - In H1 2025, green power transactions totaled **4.14 billion kWh**, a **41.67% year-on-year increase**; green certificate transactions reached **4.232 million certificates**, an **81.46% year-on-year increase**[47](index=47&type=chunk) [Safety Operations](index=13&type=section&id=2.2.1%20Safety%20Operations) The Group is committed to a "zero-start, zero-effort" safety philosophy, aiming for zero casualties, zero accidents, and zero losses through comprehensive safety management. - The Group comprehensively promotes the construction of a safety production management system, firmly establishing the "starting from zero, striving for zero" safety philosophy, with goals of zero casualties, zero accidents, and zero losses[30](index=30&type=chunk) - Safety management is innovated through "three-one" regular education and training, "three rectifications" to strengthen civilized production, "three links" to strictly control outsourced operations, and "three lines of defense" to strictly control accident risks[30](index=30&type=chunk) - No general or above accidents or ecological environment incidents occurred in H1[30](index=30&type=chunk) [Early-Stage Development and Resource Layout](index=18&type=section&id=2.2.2%20Early-Stage%20Development%20and%20Resource%20Layout) The Group actively promotes large-scale wind and solar power bases in desert areas and expands offshore wind power, aiming to create national landmark new energy bases with Longyuan characteristics. - The Group is fully promoting "desert, Gobi, and barren land" wind and solar power bases, strengthening offshore wind power expansion, and building national landmark new energy bases with Longyuan characteristics[39](index=39&type=chunk) - In H1 2025, the Group signed new development agreements for **1.24 GW**, including **1.04 GW** for wind power and **0.2 GW** for energy storage[39](index

CHINA HEALTH GROUP INC. 中國醫療集團有限公司 （以「萬全醫療集團」名稱在香港經營業務） (於開曼群島註冊成立之有限公司) (股份代號: 08225) 二零二五年中期报告 截至二零二五年六月三十日止六個月 香港聯合交易所有限公司（「聯交所」）GEM 的特色 由於 GEM 上市公司之新興性質，在 GEM 買賣之證券可能會較於主機板買賣之證券承受較 大之市場波動風險，同時無法保證在 GEM 買賣之證券會有高流通量之市場。 香港交易及結算所有限公司及聯交所對本公佈之內容概不負責，對其準確性或完整性亦不發表 任何聲明，並明確表示概不就因本公佈全部或任何部分內容而產生或因倚賴該等內容而引致之 任何損失承擔任何責任。 本公佈乃遵照聯交所 GEM 證券上市規則之規定而提供有關中國醫療集團有限公司（「本公 司」） 之資料，本公司各董事（「董事」）願共同及個別對此負全責。董事經作出一切合理 查詢後，確認就彼等所深知及確信：本公佈所載資料在一切重要方面均屬準確及完整，且無誤 導成份；以及本公佈並無遺漏任何其他事實致使本公佈所載任何聲明產生誤導。 1 CHINA HEALTH GROUP INC. 中國醫療集 ...

[Definitions](index=3&type=section&id=Definitions) [Content of Definitions](index=3&type=section&id=Definitions_Content) This section defines key terms and abbreviations, including corporate entities, regulatory bodies, financial instruments, and currencies, to ensure clarity and consistency in the interim report - The report defines key terms such as "Audit Committee", "Board", "Corporate Governance Code", "Companies Ordinance", "the Company", "the Group", "HNA Group", "Hong Kong HNA", "Independent Investigation Committee", "Listing Rules", "Model Code", "Nomination Committee", "PRC", "Acceptance Bills", "Remuneration Committee", "the Restructuring Plan", "SFO", "HNA Trust Management", "Shares", "Shareholders", "Stock Exchange", "Subsidiaries", "the Trust", and various currencies (Euro, HKD, SGD, RMB, USD), ensuring clarity and accuracy of the report content[4](index=4&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) [Corporate Information](index=6&type=section&id=Corporate%20Information) [Board of Directors](index=6&type=section&id=Board%20of%20Directors) This section lists the company's executive and independent non-executive directors, including the Chairman and Chief Executive Officer - Executive Directors include **Wang Kan** (Chairman), **Zhao Quan**, **Wang Qi**, and **Shang Duoxu** (Chief Executive Officer)[11](index=11&type=chunk)[12](index=12&type=chunk) - Independent Non-executive Directors include **Lam Kin Fung**, **Liu Yi Fei**, and **Lo Wing Yan**[11](index=11&type=chunk)[12](index=12&type=chunk) [Committees](index=6&type=section&id=Committees) The company maintains Audit, Executive, Independent Investigation, Nomination, and Remuneration Committees, with listed chairmen and members, to ensure robust corporate governance - The Audit Committee Chairman is **Lo Wing Yan**, with members **Lam Kin Fung** and **Liu Yi Fei**[11](index=11&type=chunk)[12](index=12&type=chunk) - The Executive Committee Chairman is **Wang Kan**, with members **Wang Qi** and **Shang Duoxu**[11](index=11&type=chunk)[12](index=12&type=chunk) - The Independent Investigation Committee Chairman is **Lo Wing Yan**, with members **Lam Kin Fung** and **Liu Yi Fei**[11](index=11&type=chunk)[12](index=12&type=chunk) - The Nomination Committee Chairman is **Wang Kan**, with members **Lam Kin Fung** and **Lo Wing Yan**[11](index=11&type=chunk)[12](index=12&type=chunk) - The Remuneration Committee Chairman is **Lo Wing Yan**, with members **Wang Kan** and **Lam Kin Fung**[11](index=11&type=chunk)[12](index=12&type=chunk) [Other Key Personnel and Information](index=7&type=section&id=Other%20Key%20Personnel%20and%20Information) This section provides key company information including the Chief Financial Officer, Company Secretary, Auditor, Legal Advisor, Share Registrar, Stock Code, and official website - The Chief Financial Officer is **Yan Shen**, and the Company Secretary is **Liu Li Yi**[13](index=13&type=chunk)[14](index=14&type=chunk) - The Auditor is **Tienche Hong Kong Certified Public Accountants Limited**, and the Legal Advisor is **Baker McKenzie**[13](index=13&type=chunk)[14](index=14&type=chunk) - The Company's stock code is **521**, and its official website is **www.cwtinternational.com**[13](index=13&type=chunk)[14](index=14&type=chunk) [Report on Review of Interim Financial Report](index=8&type=section&id=Report%20on%20Review%20of%20Interim%20Financial%20Report) [Auditor's Conclusion](index=8&type=section&id=Auditor's%20Conclusion) The auditor reviewed the interim financial report for the six months ended June 30, 2025, finding no material non-compliance with Hong Kong Accounting Standard 34 - The auditor has reviewed the interim financial report in accordance with Hong Kong Standard on Review Engagements 2410[17](index=17&type=chunk)[19](index=19&type=chunk) - The auditor found no matters that cause them to believe the interim financial report for the six months ended June 30, 2025, is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[20](index=20&type=chunk)[21](index=21&type=chunk) [Interim Results](index=10&type=section&id=Interim%20Results) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, Group revenue increased to **HK$21,764,921 thousand**, with net profit significantly growing to **HK$300,380 thousand**, driven by commodity trading and logistics tax credits Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 21,764,921 | 20,275,771 | | Cost of sales | (20,767,006) | (19,415,626) | | Gross profit | 997,915 | 860,145 | | Other income | 270,495 | 351,720 | | Other net gains/(losses) | 18,115 | (52,690) | | Selling and distribution expenses | (269,206) | (242,359) | | Administrative expenses | (415,172) | (418,570) | | Finance costs | (296,942) | (306,603) | | Share of profits less losses of associates (after tax) | 30,841 | 22,473 | | Share of profits less losses of joint ventures (after tax) | (8,809) | (12,128) | | Profit before taxation | 327,237 | 201,988 | | Income tax expense | (26,857) | (65,541) | | Profit for the period | 300,380 | 136,447 | | Total comprehensive income for the period | 558,835 | 50,475 | | Profit for the period attributable to owners of the Company | 282,344 | 120,860 | | Profit for the period attributable to non-controlling interests | 18,036 | 15,587 | | Basic and diluted earnings per share (HK cents) | 2.48 | 1.06 | - The increase in net profit is primarily attributable to favorable premium differentials and improved profit margins in the commodity marketing segment, as well as tax credits recognized in the logistics services segment in H1 2025[180](index=180&type=chunk) [Condensed Consolidated Statement of Financial Position](index=13&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets less current liabilities increased to **HK$8,544,243 thousand**, and net assets rose to **HK$5,446,079 thousand**, driven by increases in non-current assets like property, plant and equipment and right-of-use assets, and significant growth in current assets such as inventories and prepayments Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 3,346,179 | 3,125,976 | | Right-of-use assets | 2,002,392 | 1,895,195 | | Intangible assets | 94,160 | 104,966 | | Interests in associates | 344,127 | 340,664 | | Interests in joint ventures | 89,401 | 93,843 | | Other financial assets | 28,129 | 29,465 | | Prepayments, deposits and other receivables | 89,947 | 108,421 | | Other non-current assets | 18,630 | 18,396 | | Derivative financial instruments | 2,346 | 3,686 | | Deferred tax assets | 58,042 | 41,004 | | **Current assets** | | | | Other financial assets | 1,348,886 | 1,332,188 | | Inventories | 4,021,555 | 3,214,026 | | Trade receivables | 3,188,469 | 3,363,238 | | Prepayments, deposits and other receivables | 12,101,148 | 10,499,844 | | Contract assets | 152,005 | 120,768 | | Derivative financial instruments | 268,628 | 858,558 | | Tax recoverable | 23,697 | 16,974 | | Pledged bank deposits | 215,579 | 193,291 | | Cash and cash equivalents | 2,343,387 | 2,271,537 | | **Current liabilities** | | | | Contract liabilities | 98,814 | 99,773 | | Trade and other payables | 14,203,479 | 13,820,292 | | Loans and borrowings | 5,928,246 | 5,136,740 | | Lease liabilities | 265,612 | 256,305 | | Derivative financial instruments | 623,008 | 393,522 | | Current tax payable | 73,305 | 76,715 | | **Non-current liabilities** | | | | Trade and other payables | 73,086 | 68,265 | | Loans and borrowings | 798,728 | 787,821 | | Lease liabilities | 1,955,825 | 1,834,045 | | Defined benefit obligations | 42,574 | 36,815 | | Deferred tax liabilities | 227,951 | 216,299 | | **Net assets** | 5,446,079 | 4,905,448 | | **Total equity** | 5,446,079 | 4,905,448 | [Condensed Consolidated Statement of Changes in Equity](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, equity attributable to owners increased from **HK$4,671,281 thousand** on January 1, 2024, to **HK$5,315,534 thousand** on June 30, 2025, primarily due to period profit and positive exchange differences Changes in Equity Attributable to Owners of the Company | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Balance at beginning of period (January 1, 2025/January 1, 2024) | 4,780,950 | 4,671,281 | | Profit for the period | 282,344 | 120,860 | | Total other comprehensive income/(expense) | 252,265 | (81,178) | | Capital contribution from non-controlling interests | - | - | | Dividends paid to non-controlling interests | - | (14,134) | | Changes in non-controlling interests | (25) | (29,689) | | Transfer to statutory reserve | - | - | | Balance at end of period | 5,315,534 | 4,681,274 | - In H1 2025, exchange differences arising from the translation of financial statements of overseas subsidiaries had a positive impact on equity, amounting to **HK$278,479 thousand**, compared to a negative impact of **HK$(88,099) thousand** in the corresponding period of 2024[37](index=37&type=chunk)[40](index=40&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=17&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities was a negative **HK$677,339 thousand**, while investing and financing activities generated positive cash flows, resulting in a net decrease of **HK$3,577 thousand** in cash and cash equivalents Key Data from Condensed Consolidated Statement of Cash Flows | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net cash (used in)/generated from operating activities | (677,339) | 399,933 | | Net cash generated from investing activities | 225,095 | 167,019 | | Net cash generated from/(used in) financing activities | 448,667 | (408,398) | | Net (decrease)/increase in cash and cash equivalents | (3,577) | 158,554 | | Cash and cash equivalents at beginning of period | 2,264,074 | 1,994,619 | | Effect of foreign exchange rate changes | 78,069 | (29,600) | | Cash and cash equivalents at end of period | 2,338,566 | 2,123,573 | - In H1 2025, cash flow from operating activities turned from **HK$656,486 thousand** generated in the corresponding period of 2024 to **HK$415,707 thousand** used[42](index=42&type=chunk) - Net cash from financing activities turned from **HK$408,398 thousand** used in the corresponding period of 2024 to **HK$448,667 thousand** generated, primarily due to increased proceeds from loans and borrowings[42](index=42&type=chunk) [Notes to the Unaudited Interim Financial Report](index=19&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) [1. General](index=19&type=section&id=1.%20General) The Company is a public limited company incorporated in Hong Kong, listed on the HKEX Main Board, with Hong Kong HNA Industrial Group Co., Limited as its direct parent - The Company is a public limited company incorporated in Hong Kong, with its shares listed on the Main Board of The Stock Exchange of Hong Kong Limited[47](index=47&type=chunk)[51](index=51&type=chunk) - Hong Kong HNA Industrial Group Co., Limited is the direct parent company of the Company, and Hainan HNA No. 2 Trust Management Services Co., Limited is the intermediate parent company[47](index=47&type=chunk)[51](index=51&type=chunk) [2. Basis of Preparation](index=19&type=section&id=2.%20Basis%20of%20Preparation) The interim financial report adheres to Listing Rules and HKAS 34, applying consistent accounting policies with the 2024 audited annual consolidated financial statements, which received an unqualified auditor's opinion - The interim financial report has been prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting"[48](index=48&type=chunk)[52](index=52&type=chunk) - Except for changes in accounting policies expected to be reflected in the 2025 annual consolidated financial statements, the interim financial report has been prepared in accordance with the same accounting policies adopted in the 2024 annual consolidated financial statements[49](index=49&type=chunk)[52](index=52&type=chunk) - The comparative financial information for the financial year ended December 31, 2024, is derived from the consolidated financial statements filed with the Registrar of Companies, and the auditor's report was unqualified[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) [3. Changes in Accounting Policies](index=21&type=section&id=3.%20Changes%20in%20Accounting%20Policies) The Group applied HKAS 21 amendments regarding exchange rate changes, which had no material impact due to a lack of relevant foreign currency transactions, and no other new standards were adopted - The Group has applied the amendments to Hong Kong Accounting Standard 21 "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability"[57](index=57&type=chunk)[59](index=59&type=chunk) - As the Group did not enter into any foreign currency transactions where a foreign currency is not exchangeable into another currency, these amendments had no material impact on this interim report[57](index=57&type=chunk)[59](index=59&type=chunk) - The Group has not applied any new standards or interpretations that are not yet effective for the current accounting period[58](index=58&type=chunk)[60](index=60&type=chunk) [4. Revenue and Segment Reporting](index=22&type=section&id=4.%20Revenue%20and%20Segment%20Reporting) The Group's revenue primarily derives from commodity trading and related services, with total revenue of **HK$21,764,921 thousand** in H1 2025, where China is the largest customer source, and commodity trading profit before tax significantly increased while logistics services slightly declined - For the six months ended June 30, 2025, the Group's total revenue was **HK$21,764,921 thousand**, an increase from **HK$20,275,771 thousand** in the corresponding period of 2024[64](index=64&type=chunk) - Commodity trading and related services were the primary source of revenue, contributing **HK$18,484,406 thousand** in H1 2025, accounting for **84.9%** of total revenue[64](index=64&type=chunk) - By customer location, China contributed **HK$15,264,222 thousand** in revenue, making it the largest market[66](index=66&type=chunk) [4. (a) Disaggregation of Revenue](index=22&type=section&id=4.%20(a)%20Disaggregation%20of%20revenue) The Group's revenue primarily comes from commodity trading and related services, contributing **HK$18,484,406 thousand** in H1 2025, with China being the largest revenue source by customer location, followed by Europe and Singapore Revenue by Major Product and Service Line | Product and Service Line | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Shipping services | 1,737,043 | 1,748,962 | | Logistics services | 739,489 | 761,617 | | Commodity marketing and related services | 18,484,406 | 17,000,820 | | Equipment and facility maintenance services | 359,701 | 320,239 | | Design and construction | – | 735 | | Brokerage services | 354,171 | 317,825 | | Others | 54,978 | 78,200 | | **Total revenue from contracts with customers** | **21,729,788** | **20,228,398** | | Lease income | 35,133 | 47,373 | | **Total revenue** | **21,764,921** | **20,275,771** | Revenue by Customer Location | Region | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | China | 15,264,222 | 13,897,982 | | Singapore | 1,175,007 | 1,477,156 | | Korea | 576,631 | 577,026 | | Hong Kong SAR, China | 50,395 | 44,322 | | Other Asia Pacific jurisdictions | 1,471,823 | 1,637,331 | | Europe | 2,605,813 | 2,442,830 | | North America | 129,748 | 100,891 | | Africa | 268,467 | 86,972 | | South America | 222,815 | 11,261 | | **Total revenue** | **21,764,921** | **20,275,771** | [4. (b) Segment Revenue and Results](index=24&type=section&id=4.%20(b)%20Segment%20revenue%20and%20results) The Group operates four reportable segments: Logistics Services, Commodity Marketing, Engineering Services, and Financial Services, with commodity marketing showing significant growth in revenue and profit before tax in H1 2025, while logistics services experienced a slight decline - The Group's reportable segments include Logistics Services for warehousing, shipping, freight forwarding and consolidation, and supply chain management services; Commodity Marketing for physical trading and supply chain management of base metal non-ferrous concentrates, primarily copper, lead, zinc, and other minor metals; Engineering Services for management and maintenance of facilities, vehicles, and equipment, supply and installation of engineering products, property management, and design and construction of logistics properties; and Financial Services for providing financial brokerage and asset management services[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) Reportable Segment Revenue and Profit Before Taxation | Segment | 2025 Revenue (HK$ thousand) | 2024 Revenue (HK$ thousand) | 2025 Profit Before Tax (HK$ thousand) | 2024 Profit Before Tax (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Logistics Services | 2,565,348 | 2,634,843 | 103,031 | 107,329 | | Commodity Marketing | 18,484,406 | 17,000,820 | 108,031 | 19,312 | | Engineering Services | 360,996 | 322,283 | 17,522 | 15,025 | | Financial Services | 354,171 | 317,825 | 115,378 | 121,399 | | Eliminations | – | – | (2,903) | (636) | | **Total** | **21,764,921** | **20,275,771** | **341,059** | **262,429** | Reportable Segment Assets and Liabilities | Segment | 2025 Assets (HK$ thousand) | 2024 Assets (HK$ thousand) | 2025 Liabilities (HK$ thousand) | 2024 Liabilities (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Logistics Services | 7,273,868 | 6,845,436 | 3,997,907 | 3,847,464 | | Commodity Marketing | 8,399,614 | 7,811,639 | 7,038,117 | 6,566,517 | | Engineering Services | 515,268 | 467,414 | 272,498 | 256,309 | | Financial Services | 13,154,428 | 12,123,138 | 11,873,091 | 11,000,706 | | Eliminations | (308,158) | (263,789) | (306,350) | (264,847) | | **Total** | **29,035,020** | **26,983,838** | **22,875,263** | **21,406,149** | [4. (c) Reconciliation of Reportable Segment Profit Before Taxation](index=27&type=section&id=4.%20(c)%20Reconciliation%20of%20reportable%20segment%20profit%20before%20taxation) This section reconciles reportable segment profit before taxation to the Group's total profit before taxation, indicating that net exchange gains positively impacted H1 2025 profit, while finance costs and unallocated expenses had a negative effect Reconciliation of Reportable Segment Profit Before Taxation | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Reportable segment profit before taxation | 341,059 | 262,429 | | Unallocated amounts: | | | | Net exchange gains/(losses) | 41,660 | (17,984) | | Net gains on financial instruments at fair value through profit or loss | – | 351 | | Finance costs | (18,510) | (17,966) | | Depreciation of right-of-use assets | (1,809) | (1,408) | | Unallocated income and gains | 4,881 | 13,359 | | Unallocated expenses | (40,044) | (36,793) | | **Profit before taxation** | **327,237** | **201,988** | [4. (d) Information about Major Customers](index=27&type=section&id=4.%20(d)%20Information%20about%20major%20customers) For the six months ended June 30, 2025 and 2024, no single customer contributed 10% or more to the Group's consolidated revenue - For the six months ended June 30, 2025 and 2024, no single customer contributed 10% or more to the Group's consolidated revenue[83](index=83&type=chunk)[84](index=84&type=chunk) [5. Other Net Gains/(Losses)](index=28&type=section&id=5.%20Other%20Net%20Gains/(Losses)) For the six months ended June 30, 2025, the Group recorded other net gains of **HK$18,115 thousand**, a significant improvement from a **HK$52,690 thousand** loss in the prior year, primarily driven by increased net exchange gains Other Net Gains/(Losses) | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net (losses)/gains on disposal of property, plant and equipment | (266) | 1,974 | | Net gains on disposal of subsidiaries, associates and joint ventures | 1,823 | 12 | | Net exchange gains/(losses) | 18,976 | (13,316) | | Reversal/(recognition) of impairment losses on trade and other receivables | 1,064 | (724) | | Net (losses)/gains on financial instruments at fair value through profit or loss | (171) | 368 | | Others | (3,311) | (41,004) | | **Total** | **18,115** | **(52,690)** | - Net exchange gains turned from a loss of **HK$13,316 thousand** in the corresponding period of 2024 to a gain of **HK$18,976 thousand** in the corresponding period of 2025, which is the main factor for the improvement[87](index=87&type=chunk) [6. Finance Costs](index=28&type=section&id=6.%20Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs slightly decreased to **HK$296,942 thousand** from **HK$306,603 thousand** in the prior year, primarily due to reduced interest expenses on bank borrowings and other financing Details of Finance Costs | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest expense on bank borrowings and other financing | 160,133 | 166,830 | | Interest expense on lease liabilities | 45,274 | 47,769 | | Other interest expenses | 35,925 | 42,302 | | Other finance costs | 25,457 | 21,875 | | Bank charges | 30,153 | 27,827 | | **Total** | **296,942** | **306,603** | - Interest expense on bank borrowings and other financing decreased from **HK$166,830 thousand** in the corresponding period of 2024 to **HK$160,133 thousand** in the corresponding period of 2025[89](index=89&type=chunk) [7. Profit Before Taxation](index=29&type=section&id=7.%20Profit%20Before%20Taxation) For the six months ended June 30, 2025, the Group's profit before taxation significantly increased to **HK$327,237 thousand** from **HK$201,988 thousand** in the prior year, influenced by higher staff costs, depreciation, amortization, and lower interest income Components of Profit Before Taxation | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Staff costs (including directors' emoluments) | 769,372 | 726,374 | | Depreciation of property, plant and equipment | 111,064 | 107,027 | | Depreciation of right-of-use assets | 149,013 | 154,329 | | Amortisation of intangible assets | 14,907 | 14,804 | | Cost of inventories sold | 16,998,247 | 15,910,719 | | Interest income | (238,635) | (275,810) | - Staff costs (including directors' emoluments) increased from **HK$726,374 thousand** in the corresponding period of 2024 to **HK$769,372 thousand** in the corresponding period of 2025[90](index=90&type=chunk) - Interest income decreased from **HK$275,810 thousand** in the corresponding period of 2024 to **HK$238,635 thousand** in the corresponding period of 2025[90](index=90&type=chunk) [8. Income Tax Expense](index=30&type=section&id=8.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's total income tax expense significantly decreased to **HK$26,857 thousand** from **HK$65,541 thousand** in the prior year, primarily due to adjustments for prior year over-provision and deferred tax recognition Details of Income Tax Expense | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current tax – Provision for the period – Overseas income tax | 64,148 | 59,134 | | Current tax – (Over-provision)/under-provision in prior years | (15,068) | 10,654 | | Deferred tax credited for the period | (22,785) | (5,075) | | Withholding tax | 562 | 828 | | **Total income tax expense** | **26,857** | **65,541** | - In H1 2025, the tax adjustment for prior years was an over-provision of **HK$15,068 thousand**, compared to an under-provision of **HK$10,654 thousand** in the corresponding period of 2024[92](index=92&type=chunk) - Deferred tax credited for the period increased from **HK$5,075 thousand** in the corresponding period of 2024 to **HK$22,785 thousand** in the corresponding period of 2025[92](index=92&type=chunk) - No provision for Hong Kong Profits Tax was made as the Group did not generate any assessable profits in Hong Kong for both periods[92](index=92&type=chunk)[94](index=94&type=chunk) [9. Dividend](index=31&type=section&id=9.%20Dividend) For the six months ended June 30, 2025 and 2024, the Company neither paid nor proposed any dividends to ordinary shareholders, with no dividends proposed after the reporting period - The Company did not pay or propose any dividends to ordinary shareholders for the six months ended June 30, 2025 and 2024[95](index=95&type=chunk)[97](index=97&type=chunk) - No dividends were proposed after the end of the reporting period[95](index=95&type=chunk)[97](index=97&type=chunk) [10. Earnings Per Share](index=31&type=section&id=10.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, the Company's basic and diluted earnings per share significantly increased to **2.48 HK cents** from **1.06 HK cents** in the prior year, with diluted earnings per share being identical to basic earnings due to no potentially dilutive ordinary shares Earnings Per Share Calculation | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Profit attributable to owners of the Company | 282,344 | 120,860 | | Weighted average number of ordinary shares in issue | 11,399,996,101 | 11,399,996,101 | | **Basic and diluted earnings per share (HK cents)** | **2.48** | **1.06** | - The calculation of basic earnings per share is based on the profit attributable to owners of the Company and the weighted average number of ordinary shares in issue during the period[96](index=96&type=chunk)[104](index=104&type=chunk) - No adjustment has been made to the basic earnings per share amount for dilution as the Company had no potentially dilutive ordinary shares[101](index=101&type=chunk)[103](index=103&type=chunk) [11. Property, Plant and Equipment and Right-of-Use Assets](index=32&type=section&id=11.%20Property,%20Plant%20and%20Equipment%20and%20Right-of-Use%20Assets) For the six months ended June 30, 2025, the Group acquired **HK$52,782 thousand** in property, plant and equipment, including **HK$31,087 thousand** in construction in progress, and recognized **HK$70,013 thousand** in right-of-use assets through new and renewed lease agreements - For the six months ended June 30, 2025, the Group acquired property, plant and equipment at a cost of **HK$52,782 thousand**, an increase from **HK$30,430 thousand** in the corresponding period of 2024[105](index=105&type=chunk)[108](index=108&type=chunk) - This amount includes construction in progress of **HK$31,087 thousand**, a significant increase from **HK$5,784 thousand** in the corresponding period of 2024[105](index=105&type=chunk)[108](index=108&type=chunk) - The Group renewed several lease agreements and entered into new lease agreements, recognizing right-of-use assets of **HK$70,013 thousand**, an increase from **HK$36,286 thousand** in the corresponding period of 2024[106](index=106&type=chunk)[108](index=108&type=chunk) [12. Trade Receivables](index=32&type=section&id=12.%20Trade%20Receivables) As of June 30, 2025, the Group's total trade receivables slightly decreased to **HK$3,188,469 thousand** from **HK$3,363,238 thousand** at December 31, 2024, with trade receivables containing provisional pricing features being the largest component, and all expected to be recovered within one year Details of Trade Receivables | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade debtors and bills receivable measured at amortised cost | 863,941 | 877,989 | | Less: Loss allowance | (25,623) | (26,820) | | Trade receivables containing provisional pricing features (measured at fair value through profit or loss) | 2,350,151 | 2,512,069 | | **Total** | **3,188,469** | **3,363,238** | Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0–90 days | 3,081,049 | 3,233,932 | | 91–180 days | 72,327 | 114,232 | | 181–365 days | 33,352 | 13,806 | | Over 1 year | 1,741 | 1,268 | | **Total** | **3,188,469** | **3,363,238** | - All trade receivables are expected to be recovered within one year[113](index=113&type=chunk) - As of June 30, 2025, trade receivables from associates, joint ventures, and other related parties were **HK$15,778 thousand**, **HK$2,722 thousand**, and **HK$4,994 thousand** respectively, all showing an increase compared to December 31, 2024[114](index=114&type=chunk) [13. Cash and Cash Equivalents](index=34&type=section&id=13.%20Cash%20and%20Cash%20Equivalents) As of June 30, 2025, the Group's cash and bank balances increased to **HK$2,343,387 thousand** from **HK$2,271,537 thousand** at December 31, 2024, with cash and cash equivalents in the condensed consolidated statement of cash flows totaling **HK$2,338,566 thousand** after deducting bank overdrafts Details of Cash and Cash Equivalents | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Cash and bank balances | 2,343,387 | 2,271,537 | | Less: Bank overdrafts | (4,821) | (7,463) | | **Cash and cash equivalents in condensed consolidated statement of cash flows** | **2,338,566** | **2,264,074** | - Cash and bank balances increased, while bank overdrafts decreased[117](index=117&type=chunk) [14. Trade and Other Payables](index=35&type=section&id=14.%20Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables slightly increased to **HK$14,203,479 thousand** from **HK$13,820,292 thousand** at December 31, 2024, with a significant increase in amounts allocated to customers and most payables aged within 90 days Details of Trade and Other Payables | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade payables and bills payable (measured at amortised cost) | 400,556 | 398,857 | | Trade payables and bills payable (containing provisional pricing features and measured at fair value through profit or loss) | 1,045,847 | 1,487,503 | | Other payables, deposits received and accrued expenses | 12,830,162 | 12,002,197 | | Less: Non-current portion | (73,086) | (68,265) | | **Total** | **14,203,479** | **13,820,292** | Ageing Analysis of Trade Payables and Bills Payable | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0–90 days | 1,340,917 | 1,746,286 | | 91–180 days | 44,289 | 61,434 | | 181–365 days | 40,999 | 62,588 | | 1–2 years | 14,821 | 10,688 | | Over 2 years | 5,377 | 5,364 | | **Total** | **1,446,403** | **1,886,360** | - As of June 30, 2025, the balance included amounts allocated to customers of **HK$11,312,680 thousand**, an increase from **HK$10,325,252 thousand** at December 31, 2024[122](index=122&type=chunk) [15. Loans and Borrowings](index=37&type=section&id=15.%20Loans%20and%20Borrowings) As of June 30, 2025, the Group's total loans and borrowings amounted to **HK$6,726,974 thousand**, with **HK$5,928,246 thousand** classified as current liabilities, primarily revolving short-term trade financing, and most loans are secured by property, plant and equipment, bank balances, trade receivables, and inventories Details of Loans and Borrowings | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | **Non-current** | | | | Acceptance bills | 666,000 | 666,000 | | Secured bank loans | 132,728 | 121,821 | | **Current** | | | | Perpetual notes | 361,072 | 357,351 | | Secured bank loans | 566,256 | 576,896 | | Revolving short-term trade financing | 4,728,389 | 3,894,216 | | E-bonds | 267,708 | 300,814 | | Secured bank overdrafts | 4,821 | 7,463 | | **Total** | **6,726,974** | **5,924,561** | - The principal amount of acceptance bills is **HK$666,000 thousand**, bearing interest at an annual rate of **5.5%**, and is fully payable on July 18, 2028[126](index=126&type=chunk) - The perpetual notes, with a total principal amount of **US$46,000 thousand**, are unsecured, interest-free, guaranteed by an affiliate of HNA Trust Management, and classified as "current liabilities" under current accounting standards[129](index=129&type=chunk) Details of Pledged Assets | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Property, plant and equipment | 1,708,952 | 1,613,452 | | Pledged bank balances and time deposits | 215,579 | 193,291 | | Trade and other receivables | 897,124 | 1,072,512 | | Inventories | 3,996,561 | 3,183,315 | | **Total** | **6,818,216** | **6,062,570** | [16. Share Capital](index=39&type=section&id=16.%20Share%20Capital) As of June 30, 2025, the Company had **11,399,996,101** issued and fully paid ordinary shares, with share capital amounting to **HK$4,731,480 thousand**; ordinary shares have no par value under the Hong Kong Companies Ordinance and rank equally for dividends and residual assets Details of Share Capital | Item | Number of Shares | Amount (HK$ thousand) | | :--- | :--- | :--- | | Issued and fully paid ordinary shares (as of June 30, 2025) | 11,399,996,101 | 4,731,480 | - In accordance with Section 135 of the Hong Kong Companies Ordinance, the Company's ordinary shares have no par value[134](index=134&type=chunk)[135](index=135&type=chunk) - Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company; all ordinary shares rank equally with regard to the Company's residual assets[135](index=135&type=chunk)[136](index=136&type=chunk) [17. Capital Commitment](index=40&type=section&id=17.%20Capital%20Commitment) As of June 30, 2025, the Group's contracted but unprovided capital expenditure for property, plant and equipment acquisition decreased to **HK$16,494 thousand** from **HK$21,507 thousand** at December 31, 2024 Details of Capital Commitment | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Contracted but unprovided capital expenditure for the acquisition of property, plant and equipment | 16,494 | 21,507 | - The amount of capital commitment has decreased, indicating a reduction in future capital expenditure pressure[138](index=138&type=chunk) [18. Contingent Liabilities](index=40&type=section&id=18.%20Contingent%20Liabilities) The Group faces various litigation, regulatory, and arbitration matters in its ordinary course of business, which management believes will not materially impact the Group's financial position upon resolution - The Group is subject to various litigation, regulatory, and arbitration matters in the ordinary course of its business[139](index=139&type=chunk)[140](index=140&type=chunk) - Management believes that the resolution of these matters will not have a material adverse effect on the Group's financial position[139](index=139&type=chunk)[140](index=140&type=chunk) [19. Fair Value Measurements of Financial Instruments](index=41&type=section&id=19.%20Fair%20Value%20Measurements%20of%20Financial%20Instruments) The Group employs a three-level hierarchy for fair value measurements of financial instruments, with most derivative financial assets and liabilities, and trade receivables and payables with provisional pricing features, classified as Level 2, while unlisted equity securities use Level 3 valuation influenced by revenue growth rates and discount rates - Fair value measurements are categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (significant unobservable inputs)[144](index=144&type=chunk)[145](index=145&type=chunk) - As of June 30, 2025, total derivative financial assets amounted to **HK$270,974 thousand**, with most being commodity futures and forward contracts, primarily classified as Level 1 and Level 2[147](index=147&type=chunk) - Trade receivables and payables containing provisional pricing features are primarily classified as Level 2, with their fair values based on month-end spot and forward prices[147](index=147&type=chunk)[154](index=154&type=chunk) - Unlisted equity securities within other financial assets are classified as Level 3, with their fair values based on discounted cash flow models, influenced by revenue growth rates and discount rates[147](index=147&type=chunk)[158](index=158&type=chunk) [19. (a) Financial Assets and Liabilities Measured at Fair Value](index=41&type=section&id=19.%20(a)%20Financial%20assets%20and%20liabilities%20measured%20at%20fair%20value) The Group's financial assets and liabilities are measured at fair value, primarily including derivative financial instruments, trade receivables and payables with provisional pricing features, and other financial assets, categorized into Level 1, Level 2, and Level 3 based on the observability of their input data Financial Assets and Liabilities Measured at Fair Value (June 30, 2025) | Item | Level 1 (HK$ thousand) | Level 2 (HK$ thousand) | Level 3 (HK$ thousand) | Total (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | **Financial Assets** | | | | | | Interest rate swaps | – | 2,346 | – | 2,346 | | Commodity futures | 157,147 | 90,203 | – | 247,350 | | Commodity forward contracts | 9,839 | 8,191 | – | 18,030 | | Currency forward contracts | – | 1,401 | – | 1,401 | | Currency options | – | 1,847 | – | 1,847 | | Total derivative financial assets | 166,986 | 103,988 | – | 270,974 | | Trade receivables containing provisional pricing features | – | 2,350,151 | – | 2,350,151 | | Other financial assets | 599 | 253 | 27,877 | 28,729 | | **Financial Liabilities** | | | | | | Commodity futures | (252,035) | (365,387) | – | (617,422) | | Commodity forward contracts | (25) | (444) | – | (469) | | Commodity options | – | (599) | – | (599) | | Currency forward contracts | – | (2,654) | – | (2,654) | | Currency options | – | (1,864) | – | (1,864) | | Total derivative financial liabilities | (252,060) | (370,948) | – | (623,008) | | Trade payables containing provisional pricing features | – | (1,045,847) | – | (1,045,847) | - There were no transfers between Level 1, Level 2, or Level 3 for the six months ended June 30, 2025 and 2024[158](index=158&type=chunk)[161](index=161&type=chunk) [19. (b) Financial Assets and Liabilities Measured at Cost or Amortised Cost](index=46&type=section&id=19.%20(b)%20Financial%20assets%20and%20liabilities%20measured%20at%20cost%20or%20amortised%20cost) As of June 30, 2025, and December 31, 2024, there were no material differences between the carrying amounts and fair values of the Group's financial assets and liabilities measured at cost or amortized cost - As of June 30, 2025, and December 31, 2024, there were no material differences between the carrying amounts and fair values of the Group's financial assets and liabilities measured at cost or amortised cost[159](index=159&type=chunk)[160](index=160&type=chunk) [20. Material Related Party Transactions](index=47&type=section&id=20.%20Material%20Related%20Party%20Transactions) The Group engaged in significant related party transactions, including sales and purchases of goods and/or services with entities in which directors have interests, associates, and joint ventures, as well as interest expenses paid to related parties and key management personnel compensation - Related parties refer to affiliates of HNA Trust Management[169](index=169&type=chunk)[170](index=170&type=chunk) [20. (a) Income](index=47&type=section&id=20.%20(a)%20Income) For the six months ended June 30, 2025, the Group's total income from sales of goods and/or services to entities in which directors have interests, associates, and joint ventures decreased to **HK$67,558 thousand** from **HK$83,631 thousand** in the prior year Details of Related Party Transaction Income | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Sales of goods and/or services to entities in which directors have interests | 20,490 | 22,506 | | Sales of goods and/or services to associates | 34,582 | 38,359 | | Sales of goods and/or services to joint ventures | 12,436 | 22,766 | | **Total** | **67,508** | **83,631** | [20. (b) Expense](index=48&type=section&id=20.%20(b)%20Expense) For the six months ended June 30, 2025, the Group's total expenses for goods and/or services purchased from entities in which directors have interests, associates, and joint ventures decreased to **HK$26,433 thousand** from **HK$38,706 thousand** in the prior year, with interest expenses paid to related parties totaling **HK$18,315 thousand** Details of Related Party Transaction Expenses | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Purchases of goods and/or services from entities in which directors have interests | 6,132 | 11,725 | | Purchases of goods and/or services from associates | 8,793 | 8,013 | | Purchases of goods and/or services from joint ventures | 11,508 | 18,968 | | Interest expense to related parties | 18,315 | 17,900 | | **Total** | **44,748** | **56,606** | [20. (c) Compensation of Key Management Personnel](index=49&type=section&id=20.%20(c)%20Compensation%20of%20key%20management%20personnel) For the six months ended June 30, 2025, short-term benefits for key management personnel (Group directors) increased to **HK$2,489 thousand** from **HK$1,872 thousand** in the prior year, with executive directors' remuneration determined by the Remuneration Committee based on performance and market trends Details of Key Management Personnel Compensation | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Short-term benefits | 2,489 | 1,872 | - Executive directors' remuneration is determined by the Remuneration Committee based on individual performance and market trends[173](index=173&type=chunk) [21. Events After the Reporting Period](index=49&type=section&id=21.%20Events%20After%20the%20Reporting%20Period) On July 17, 2025, MRI Trading AG, an indirect wholly-owned subsidiary, entered into a sales contract with GTS Shipping Management Co. Limited for the purchase of electrolytic copper, with a consideration not exceeding **US$5,000,000**, constituting a one-off connected transaction under Listing Rule 14A - On July 17, 2025, MRI Trading AG, an indirect wholly-owned subsidiary of the Company, entered into a sales contract with GTS Shipping Management Co. Limited, where GTS Shipping agreed to purchase electrolytic copper from MRI Trading[174](index=174&type=chunk)[176](index=176&type=chunk) - The contract consideration does not exceed **US$5,000,000** (approximately **HK$39,000,000**)[174](index=174&type=chunk)[176](index=176&type=chunk) - GTS Shipping is an indirect subsidiary of HNA Trust Management, the controlling shareholder of the Company, thus this transaction constitutes a one-off connected transaction under Chapter 14A of the Listing Rules[175](index=175&type=chunk)[176](index=176&type=chunk) [Management Discussion and Analysis](index=50&type=section&id=Management%20Discussion%20and%20Analysis) [Overview](index=50&type=section&id=Overview) Despite a challenging global economic outlook in H1 2025, marked by trade barriers, financial tightening, and geopolitical tensions, the Group's revenue grew to **HK$21,764,921 thousand** and net profit increased to **HK$300,380 thousand**, primarily driven by strong commodity trading performance and logistics services tax credits - The global outlook for 2025 is increasingly challenging, with trade barriers, tighter financial conditions, weakening business and consumer confidence, and rising policy uncertainty posing significant risks to economic growth[178](index=178&type=chunk) - For the six months ended June 30, 2025, the Group's revenue was **HK$21,764,921 thousand**, and net profit was **HK$300,380 thousand**, representing significant growth compared to the same period last year[180](index=180&type=chunk) - The increase in net profit is primarily attributable to the strong performance of concentrate products (commodity marketing segment) and tax credits recognized in the logistics services segment[180](index=180&type=chunk) [Logistics Services](index=50&type=section&id=Logistics%20Services) The Logistics Services segment experienced a **2%** revenue decrease to **HK$2,530,215 thousand** and a **4%** decline in profit before tax to **HK$103,031 thousand**, primarily due to returned leased warehouses, reduced warehousing and integrated logistics business, and freight market challenges from tariffs and geopolitical conflicts - Logistics services revenue decreased by **2%** from **HK$2,587,470 thousand** to **HK$2,530,215 thousand**[196](index=196&type=chunk) - Profit before tax decreased by **4%** from **HK$107,329 thousand** to **HK$103,031 thousand**[196](index=196&type=chunk) - The decline in revenue was primarily due to the return of certain expired leased warehouses, reduced warehousing and integrated logistics business, and a deteriorating freight market caused by US tariffs and the Israel-Iran conflict[196](index=196&type=chunk) [Warehousing and Integrated Logistics](index=50&type=section&id=Warehousing%20and%20Integrated%20Logistics) Facing challenges in the Singapore logistics market, the Group focused on cost control and asset optimization, strategically investing in digital and green logistics, while a petrochemical downturn impacted ISO tank container volumes, yet cold chain logistics maintained its leading position with near **100%** warehouse utilization - The Singapore logistics market faced ongoing challenges and an uncertain outlook in 2025, with the Group focusing on cost control, asset optimization, and flexible operations[181](index=181&type=chunk)[183](index=183&type=chunk) - The downturn in the petrochemical and chemical industries led to a sharp decline in ISO tank container volumes, resulting in reduced throughput and sustained pricing pressure[181](index=181&type=chunk)[183](index=183&type=chunk) - Cold chain logistics advanced its strategic objectives by consolidating its leading position in premium, high-security warehousing and focusing on converting pipeline opportunities and expanding IoT applications[184](index=184&type=chunk)[189](index=189&type=chunk) - Despite market uncertainties, the Group's warehouses currently operate at nearly **100%** utilization, with occupancy rates expected to remain stable over the next 12 months[185](index=185&type=chunk)[189](index=189&type=chunk) [Freight Logistics](index=51&type=section&id=Freight%20Logistics) The H1 2025 freight market was volatile due to Middle East conflicts and Red Sea attacks, leading to significant declines in sea freight rates and impacts from US-China tariffs and a weaker USD, prompting the Group to expand into new regions and integrate Greater Bay Area offices while maintaining stable performance - The freight market remained volatile in H1 2025 due to ongoing Middle East conflicts and increased Red Sea attacks, disrupting carrier freight rates and capacity[186](index=186&type=chunk)[190](index=190&type=chunk) - Sea freight rates significantly decreased compared to 2024, coupled with widespread US tariffs against China, Europe, and Southeast Asia, harming global supply chains and freight volumes[186](index=186&type=chunk)[190](index=190&type=chunk) - The Group is expanding its business into several new regions and integrating its Shenzhen, Hong Kong, and Guangzhou offices into the Greater Bay Area to better integrate into the Pearl River Delta economic landscape[187](index=187&type=chunk)[190](index=190&type=chunk) - Despite ongoing challenges, the Group's performance remained stable compared to the same period last year, and it maintains cautious optimism for H2 2025 results[188](index=188&type=chunk)[191](index=191&type=chunk) [Commodity Logistics](index=52&type=section&id=Commodity%20Logistics) Commodity logistics delivered strong performance in H1 2025, exceeding revenue targets despite West African cocoa supply disruptions and record prices, leveraging core strengths in warehousing, freight, and inventory management, alongside market expansion in Turkey and Malaysia, with future growth planned through operational excellence and targeted expansion - In H1 2025, commodity logistics demonstrated strong performance and resilience in a challenging market[193](index=193&type=chunk)[199](index=199&type=chunk) - The Group's core strengths in warehousing, freight, and inventory management for metals, minerals, and soft commodities, combined with strategic international expansion, led by Turkey's performance and growth in the Malaysian market, helped the Group exceed revenue targets amidst market volatility[193](index=193&type=chunk)[199](index=199&type=chunk) - Severe supply disruptions in the West African cocoa market led to record-high prices and underutilization of warehousing capacity, squeezing industry-wide profits[194](index=194&type=chunk)[199](index=199&type=chunk) - Looking ahead, the Group is well-prepared to sustain continuous growth through operational excellence, cost control, and targeted expansion[195](index=195&type=chunk)[199](index=199&type=chunk) [Commodity Marketing](index=52&type=section&id=Commodity%20Marketing) In H1 2025, Commodity Marketing achieved outstanding performance, with profit before tax surging **459%** to **HK$108,031 thousand** and revenue growing **9%** to **HK$18,484,406 thousand**, driven by a tight copper concentrate market, rigorous execution, operational efficiency, and strategic expansion, including enhanced blending capabilities and expanded customer base - Commodity marketing delivered outstanding performance in H1 2025, with profit before tax increasing by **459%** to **HK$108,031 thousand** and revenue growing by **9%** to **HK$18,484,406 thousand**[197](index=197&type=chunk)[201](index=201&type=chunk) - These exceptional results reflect the Group's ability to fully capitalize on the extremely tight copper concentrate market through rigorous execution, operational efficiency, and continuous strategic expansion[197](index=197&type=chunk)[201](index=201&type=chunk) - The Group strengthened its blending capabilities to meet smelter demand, expanded its customer base, developed new regions and commodities, and improved logistics delivery reliability and cost control in Africa[198](index=198&type=chunk)[201](index=201&type=chunk) - Looking ahead, commodity marketing will continue to focus on scaling operations in key growth areas, deepening energy trading businesses, and exploring new mineral sectors[202](index=202&type=chunk)[207](index=207&type=chunk) [Financial Services](index=53&type=section&id=Financial%20Services) Financial Services revenue grew **11%** to **HK$354,171 thousand** due to increased trading volume from market volatility, but profit before tax decreased **5%** to **HK$115,378 thousand** due to lower interest income from declining rates; the Group expanded its client base and secured a Major Payment Institution license in Singapore, driving Southeast Asian retail market expansion and digital transformation - Financial services revenue increased by **11%** to **HK$354,171 thousand**, primarily due to increased trading volume driven by significant market volatility[203](index=203&type=chunk)[208](index=208&type=chunk) - Profit before tax decreased by **5%** to **HK$115,378 thousand**, attributed to lower interest income resulting from declining interest rates[203](index=203&type=chunk)[208](index=208&type=chunk) - The total client equity fund in the core futures and options business increased by **8%** in H1 2025, and the Group was awarded the "Most Active Commodity Futures Broker (No. 1)" for 2024 by the Singapore Exchange Commodities Division[204](index=204&type=chunk)[208](index=208&type=chunk) - The Group has received in-principle approval for a Major Payment Institution license from the Monetary Authority of Singapore under the Payment Services Act 2019, allowing it to enter Singapore's regulated digital payment token market[205](index=205&type=chunk)[208](index=208&type=chunk) - The Group is actively expanding into the Southeast Asian retail market and prioritizing digital transformation across the Group, focusing on automation, operational efficiency, and digital customer touchpoints[206](index=206&type=chunk)[209](index=209&type=chunk) [Engineering Services](index=54&type=section&id=Engineering%20Services) In H1 2025, Engineering Services revenue grew **12%** to **HK$360,996 thousand** and profit before tax increased **17%** to **HK$17,522 thousand**, driven by improved profit margins; the Group secured two significant contracts with the Civil Aviation Authority of Singapore totaling **S$56.5 million**, with stable performance expected in the second half - In H1 2025, engineering services revenue increased by **12%** to **HK$360,996 thousand**, and profit before tax increased by **17%** to **HK$17,522 thousand**, a significant rise from the same period last year, primarily due to improved profit margins[211](index=211&type=chunk)[216](index=216&type=chunk) - The Group successfully secured two significant contracts with the Civil Aviation Authority of Singapore, totaling **S$56.5 million** (approximately **HK$348,800 thousand**), for a 20-month contract for the replacement of mechanical and electrical systems and facilities, and a 5-year contract for the maintenance of mechanical and electrical systems, respectively[212](index=212&type=chunk)[216](index=216&type=chunk) - The business demonstrated strong operational performance in H1 2025, with performance expected to remain stable in the second half of the year[213](index=213&type=chunk)[217](index=217&type=chunk) [Liquidity, Financial Resources and Financing Activities](index=54&type=section&id=Liquidity,%20Financial%20Resources%20and%20Financing%20Activities) As of June 30, 2025, the Group held **HK$2,343,387 thousand** in cash and cash equivalents, with total loans and borrowings of **HK$6,726,974 thousand**, largely current liabilities, and managed foreign exchange risk through natural hedging, maintaining approximately **100%** commodity inventory hedging, resulting in a **17.4%** gearing ratio - As of June 30, 2025, the Group had cash and cash equivalents of **HK$2,343,387 thousand**, an increase from **HK$2,271,537 thousand** at December 31, 2024[214](index=214&type=chunk)[218](index=218&type=chunk) - Total loans and borrowings amounted to **HK$6,726,974 thousand**, of which **HK$5,928,246 thousand** are repayable within one year, including revolving short-term trade financing of **HK$4,728,389 thousand**[214](index=214&type=chunk)[218](index=218&type=chunk) - The Group's loans and borrowings of **HK$5,432,194 thousand** are secured by property, plant and equipment, bank balances and time deposits, trade and other receivables, and inventories, with pledged assets totaling **HK$6,818,216 thousand**[214](index=214&type=chunk)[218](index=218&type=chunk) - As of June 30, 2025, the Group's total debt was **HK$4,220,022 thousand**, consolidated net debt was **HK$1,661,056 thousand**, and the gearing ratio was **17.4%** (December 31, 2024: **18.6%**)[221](index=221&type=chunk)[226](index=226&type=chunk) - The Group maintains an appropriate level of foreign currency borrowings for natural hedging to minimize foreign exchange risk, with a hedging level of approximately **100%** of total commodity inventories[222](index=222&type=chunk)[223](index=223&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Associated Companies and Joint Ventures](index=55&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Associated%20Companies%20and%20Joint%20Ventures) For the six months ended June 30, 2025, the Company did not undertake any material acquisitions or disposals of subsidiaries, associated companies, or joint ventures - For the six months ended June 30, 2025, the Company did not have any material acquisitions or disposals of subsidiaries, associated companies, or joint ventures[224](index=224&type=chunk)[228](index=228&type=chunk) [Contingent Liabilities](index=56&type=section&id=Contingent%20Liabilities) The Group faces various litigation, regulatory, and arbitration matters in its ordinary course of business, which management believes will not materially impact the Group's financial position upon resolution - The Group is subject to various litigation, regulatory, and arbitration matters in the ordinary course of its business[229](index=229&type=chunk)[233](index=233&type=chunk) - Management believes that the resolution of these matters will not have a material adverse effect on the Group's financial position[229](index=229&type=chunk)[233](index=233&type=chunk) [Employees and Remuneration Policies](index=56&type=section&id=Employees%20and%20Remuneration%20Policies) As of June 30, 2025, the Group, including its associates and joint ventures, had **6,011** employees with total staff costs of **HK$769,372 thousand**; the remuneration policy aims to ensure a fair and competitive compensation package to motivate, retain, and attract talent - As of June 30, 2025, the total number of employees of the Group, together with its associates and joint ventures, was **6,011**, an increase from **5,936** at December 31, 2024[230](index=230&type=chunk)[234](index=234&type=chunk) - Total staff costs (including directors' emoluments) amounted to **HK$769,372 thousand**, an increase from **HK$726,374 thousand** in the corresponding period of 2024[230](index=230&type=chunk)[234](index=234&type=chunk) - The Group's remuneration policy aims to ensure that the overall compensation package is fair and competitive to motivate and retain existing employees and attract potential talent[230](index=230&type=chunk)[234](index=234&type=chunk) [Subsequent Events](index=56&type=section&id=Subsequent%20Events) On July 17, 2025, MRI Trading AG, an indirect wholly-owned subsidiary, entered into a sales contract with GTS Shipping Management Co. Limited for the purchase of electrolytic copper, with a consideration not exceeding **US$5,000,000**, constituting a one-off connected transaction under Listing Rule 14A - On July 17, 2025, MRI Trading AG, an indirect wholly-owned subsidiary of the Company, entered into a sales contract with GTS Shipping Management Co. Limited, where GTS Shipping agreed to purchase electrolytic copper from MRI Trading[231](index=231&type=chunk)[235](index=235&type=chunk) - The contract consideration shall not exceed **US$5,000,000** (equivalent to approximately **HK$39,000,000**)[231](index=231&type=chunk)[235](index=235&type=chunk) - GTS Shipping is an indirect subsidiary of HNA Trust Management, the controlling shareholder of the Company, thus this transaction constitutes a one-off connected transaction under Chapter 14A of the Listing Rules[232](index=232&type=chunk)[235](index=235&type=chunk) [Looking Forward and Our Strategies](index=57&type=section&id=Looking%20Forward%20and%20Our%20Strategies) Amid global economic challenges and opportunities, the Group will focus on core industries, enhance capabilities, foster business synergies, and seek opportunities in China and other developing countries to diversify risk, while also exploring growth in Southeast Asia, Europe, and the Americas to maximize shareholder value - The global economic outlook strengthened in H1 2025, but downside risks from potential tariff increases, heightened uncertainty, and geopolitical tensions persist[236](index=236&type=chunk)[239](index=239&type=chunk) - The Group will continue to focus on core industries, enhance core capabilities, promote further synergy and cooperation among business segments, and seek business opportunities in China and other developing countries to diversify risks[237](index=237&type=chunk)[239](index=239&type=chunk) - The Group has established subsidiaries in the Hainan Free Trade Port and will continue to monitor growth opportunities in global regions such as Southeast Asia, Europe, and the Americas[237](index=237&type=chunk)[239](index=239&type=chunk) - In H2 2025, the Group will further promote internal synergies, continue to expand its global business network, and strive to capture further growth opportunities in Greater China and other global regions to maximize shareholder value[238](index=238&type=chunk)[239](index=239&type=chunk) [Interim Dividend](index=58&type=section&id=Interim%20Dividend) [Interim Dividend](index=58&type=section&id=Interim%20Dividend_Content) The Board of Directors did not declare an interim dividend for the six months ended June 30, 2025, consistent with the same period in 2024 - The Board of Directors did not declare an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[240](index=240&type=chunk)[244](index=244&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=58&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) [Purchase, Sale or Redemption of the Company's Listed Securities](index=58&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities_Content) During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities on the Stock Exchange or any other securities exchange - During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities on the Stock Exchange or any other securities exchange[241](index=241&type=chunk)[245](index=245&type=chunk) [Directors' and Chief Executives' Interests and Short Positions in Shares, Underlying Shares and Debentures](index=58&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) [Directors' and Chief Executives' Interests and Short Positions in Shares, Underlying Shares and Debentures](index=58&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures_Content) As of June 30, 2025, no directors or chief executives held disclosable interests or short positions in the Company's or its associated corporations' shares, underlying shares, or debentures, nor were any rights to subscribe for equity or debt securities granted or exercised - As of June 30, 2025, no directors or chief executives had any interests or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations that were required to be recorded in the register kept under Section 352 of the SFO or notified to the Company and the Stock Exchange under the Model Code[242](index=242&type=chunk)[246](index=246&type=chunk) - For the six months ended June 30, 2025, the Company did not grant any rights to subscribe for equity or debt securities of the Company to any directors or chief executives (including their spouses or children under 18), nor did any such persons exercise any such rights[243](index=243&type=chunk)[246](index=246&type=chunk) [Shareholder Interests and Short Positions Discloseable under the SFO](index=59&type=section&id=Interests%20and%20Short%20

Financial Performance - Baozun Inc. reported a revenue of $150 million for the first half of 2025, representing a 15% increase year-over-year[2]. - The company achieved a gross profit margin of 25%, up from 22% in the same period last year[2]. - Baozun Inc. reported a net income of $30 million for the first half of 2025, a 10% increase compared to the previous year[2]. - Total net revenue for the six months ended June 30, 2025, was approximately RMB 4,617.0 million (USD 644.5 million), representing a growth of 5.6% compared to RMB 4,370.8 million in the same period of 2024[42]. - Product sales revenue increased by 14.3% year-on-year to RMB 1,803.4 million, driven by optimized product mix and sales growth in the Gap brand[42][43]. - Service revenue for the period was RMB 2,813.6 million, a slight increase of 0.7% from RMB 2,792.9 million in the previous year[42][44]. - The company reported a net loss of RMB 92,722 for the six months ended June 30, 2025, compared to a net loss of RMB 87,281 for the same period in 2024, indicating a 6.6% increase in losses[123]. - The company incurred a total comprehensive loss of RMB 114,444 for the six months ended June 30, 2025, compared to a comprehensive loss of RMB 69,317 for the same period in 2024[125]. Business Expansion and Strategy - Baozun Inc. plans to expand its market presence in Southeast Asia, targeting a 30% growth in that region by the end of 2025[2]. - The company is investing $10 million in new technology development to enhance its e-commerce platform[2]. - The company aims to improve customer retention rates by 15% through enhanced service offerings and loyalty programs[2]. - The company plans to open about 40 new Gap stores in 2025, continuing to optimize store structure and location[31]. - The company aims to enhance supply chain efficiency and release gross margin opportunities through effective supply chain management strategies[34]. - The company plans to enhance its e-commerce capabilities and expand into new markets, focusing on localized services and digital solutions[36][37]. - The company is committed to a "global localization" strategy, combining global opportunities with local knowledge and resources[36]. Operational Highlights - User data showed an increase in active merchants by 20%, reaching a total of 5,000 active merchants[2]. - The company expanded its business into three lines: Baozun E-commerce (BEC), Baozun Brand Management (BBM), and Baozun International (BZI) in 2023[19]. - The company collaborates with global leaders like Philips, Nike, and Microsoft, leveraging efficient e-commerce operations to assist brand partners[22]. - The company operates under three business models: distribution model, service fee model, and consignment model, generating revenue through product sales and service fees[24]. - Approximately 48.5% of brand partners operated stores across at least two channels as of June 30, 2025, up from 45.8% in the same period last year[27]. Financial Position and Liabilities - Current assets as of June 30, 2025, were approximately RMB 6,625.3 million (USD 924.9 million), a decrease of 8.2% from RMB 7,214.2 million (USD 988.3 million) as of December 31, 2024[54]. - The debt-to-equity ratio as of June 30, 2025, was 0.99, down from 1.08 as of December 31, 2024, indicating improved financial stability[70]. - The company has a total liability of RMB 3,954,766,000 as of June 30, 2025, compared to RMB 4,426,422,000 as of December 31, 2024[119]. - The company has cash and cash equivalents of RMB 1,189,429,000 as of June 30, 2025, compared to RMB 1,289,323,000 as of December 31, 2024[117]. Investments and Acquisitions - The company is exploring potential acquisitions to strengthen its logistics capabilities, with a budget of $20 million allocated for this purpose[2]. - The acquisition of Gap's China business was completed on January 31, 2023, allowing the company to operate Gap's business in mainland China, Hong Kong, and Macau from February 1, 2023[29]. - The company has signed an investment letter of intent to acquire 51% of ABG Hunter LLC, which holds relevant intellectual property rights for the Hunter brand in Greater China and Southeast Asia[30]. Employee and Governance - The group had a total of 6,887 full-time employees as of June 30, 2025, down from 7,650 as of December 31, 2024, primarily due to efficiency improvements and cost control measures[76]. - The group continues to review and enhance its corporate governance practices to ensure compliance with governance codes[81]. - The company has established comprehensive training programs, including onboarding and on-the-job training, to improve performance and service quality[77]. Shareholder Information - As of June 30, 2025, the company will issue 13,300,738 Class A ordinary shares, representing approximately 8.31% of the total issued and outstanding Class A ordinary shares[14]. - The company’s founders control 33.35% and 14.19% of the total voting power, respectively, through different share classes[16][17]. - Champion Kerry Inc. holds 26,469,422 Class A ordinary shares, representing 15.05% of the total[99]. - The board of directors did not recommend the payment of an interim dividend for the reporting period, consistent with the previous year[105]. Future Outlook - Future guidance indicates expected revenue growth of 12% to 15% for the second half of 2025[2]. - The company aims to integrate online and offline channels seamlessly to empower brands and establish long-term, value-driven growth[39]. - Future focus areas include improving customer-centric services, increasing quality revenue, and fostering a sustainable corporate culture[38].

2025 中期報告 * 僅供識別 香港 • 中國內地 • 澳門 • 台灣 • 馬來西亞 • 泰國 • 新加坡 • 美國 • 歐洲 • 澳大利亞 二零二五年度 中期業績概覽 集團主要財務指標均錄得佳績： 1 新簽訂單約為1,519.3百萬港元， 較去年同期上升 17.3% 2 集團期內毛利上升至 129.0百萬港元 4 集團期內溢利為41.5百萬港元， 較去年同期增加 9.0%。 該增幅主要是由於本期錄得的 應佔聯營公司業績增加 6 集 團 核 心 業 務（ 即 香 港 及 其 他 亞 太 地 區 之 業 務 ）收 入 錄 得 1,332.9百萬港元，較去年同期 上 升 8.8% 3 集團核心業務經調整 EBITDA 增長至 59.6百萬港元 5 每股基本溢利較 去年同期增長， 錄 得 4.98港 仙 7 新簽訂單 收 入 毛 利 經調整 EBITDA 期內溢利 每股基本盈利 1. 集團業績概覽 摘 要 集團業績亮點 集團主要財務指標 （百萬港元） 新簽訂單 收 入 期內溢利 每股基本盈利 （港仙） (CY24 1H： $1,295.0) (CY24 1H： $1,225.5) 17.3% 8.8% (CY24 ...

Financial Performance - For the six months ended June 30, 2025, the Group's turnover was RMB8,438.4 million, representing an increase of 11.9% compared to RMB7,542.9 million for the same period in 2024[14]. - Gross profit for the same period was RMB864.4 million, a decrease of 18.6% from RMB1,061.8 million in 2024[14]. - Profit for the period was RMB69.5 million, down 71.3% from RMB241.7 million in the previous year[14]. - Profit attributable to owners of the parent was approximately RMB93.7 million, a decline of 61.7% compared to RMB244.8 million in 2024[14]. - Basic earnings per share decreased to RMB0.07 from RMB0.18 in the prior year[16]. - The Group's revenue for the period reached RMB8,438.4 million, an increase of 11.9% compared to RMB7,542.9 million in the same period of 2024[61]. - Profit for the period was RMB69.5 million, a significant decrease from RMB241.7 million in the prior year, with profit attributable to owners of the parent at RMB93.7 million, down 61.7%[93]. - Basic and diluted earnings per share dropped to RMB0.07, compared to RMB0.18 and RMB0.17 for the six months ended June 30, 2024, primarily due to a lower gross profit margin[61]. - Total comprehensive income for the period was RMB94,931, down 59.3% from RMB233,041 in 2024[184]. Sales and Revenue Breakdown - The network power battery business accounted for 40.6% of total sales, generating RMB3,428.8 million, a 9.4% year-on-year growth[24]. - The sales revenue from the network energy battery business was RMB3,428.8 million, representing a year-on-year growth of 9.4% driven by increased demand from data centers[26]. - The SLI battery business recorded sales revenue of RMB3,115.3 million, a 9.6% increase year-on-year, primarily due to higher vehicle production in emerging markets[28]. - The motive power battery business saw a decline in sales revenue to RMB621.8 million, down 9.5% year-on-year, attributed to weak demand in Mainland China[29]. - The recycled lead business reported sales revenue of RMB1,089.5 million, a significant increase of 46.4% year-on-year, driven by strong sales efforts in Mainland China[32]. - Revenue from the power solutions business increased by 8.1% to RMB7,348.9 million, while revenue from the recycled lead business surged by 46.4% to RMB1,089.5 million[62]. - Sales revenue in Mainland China rose by 9.2% to RMB4,764.8 million, accounting for 56.5% of total revenue[69]. - Sales revenue in EMEA increased by 31.7% to RMB1,534.7 million, driven by strong demand for network power batteries[70]. - Revenue in the Americas grew by 4.7% to RMB1,412.4 million, supported by expansion in emerging markets, particularly Brazil[70]. Economic and Market Conditions - The overall economic environment remains unpredictable, influenced by structural issues and fiscal conditions across nations[23]. - The demand for lead-acid batteries in UPS applications is expected to grow significantly as global dependence on digital infrastructure expands[24]. - The International Energy Agency predicts that global electricity demand for data centers will double to approximately 945 terawatt-hours by 2030, accounting for about 3% of total global electricity consumption[33]. Strategic Initiatives and Future Plans - The Group plans to strengthen its presence in high-growth regions such as Southeast Asia, Africa, and South America to meet rising demand for SLI batteries[28]. - The Group is expected to achieve significant growth in performance due to increased energy storage demand and digital infrastructure upgrades[38]. - The advancement of clean energy technologies and the integration of renewable energy sources are expected to drive demand for efficient battery management systems[34]. - The Group aims to leverage its technological advantages to provide stable and efficient energy solutions, particularly in critical backup power systems[40]. - The Group is strategically increasing investment in high-end lead-acid battery business for data centers and communications, aiming to drive sustainable growth through technological iteration and market penetration[43]. - The after-sales channel market is identified as a key opportunity for growth, with a focus on full lifecycle service to enhance market competitiveness[45]. - The Group is developing smart energy storage solutions, integrating battery management systems and IoT technologies to deliver reliable lithium battery energy storage solutions[48]. - A new production base in Mexico is expected to commence in Q4 2023, enhancing service capabilities for the American market and ensuring close-range supply chain coverage[52]. - The Group plans to expand localized production in response to market feedback, aiming to support business growth in the Americas[57]. - The Group aims to create stable and growing returns for shareholders by expanding its product range through technological innovation[58]. - A proposed spin-off and separate listing of Leoch Energy Inc. is intended to unlock market value for both the spin-off group and the remaining group[59]. - The Group is conducting feasibility studies for capacity expansion in Mexico and local manufacturing in the U.S. to strengthen its supply chain and support business growth in the Americas[60]. Financial Position and Assets - As of June 30, 2025, the Group's net current assets were RMB640.3 million, down from RMB1,296.2 million at the end of 2024[99]. - The Group's gearing ratio improved slightly to 34.6% from 35.3% at the end of 2024, indicating a stable financial position[101]. - The group's bank borrowings stood at RMB5,342.0 million as of June 30, 2025, compared to RMB5,121.5 million as of December 31, 2024, with an interest rate range of 2.00% to 8.25%[104]. - Employee benefit expenses totaled RMB835.9 million for the period, up from RMB714.0 million for the six months ended June 30, 2024[113]. - The group had 17,957 employees as of June 30, 2025[113]. - The group maintains a healthy level of cash reserves and bank borrowings to ensure smooth business operations[105]. - The company's total equity as of June 30, 2025, was RMB5,044,478,000, an increase from RMB5,018,780,000 at the end of 2024[193]. - The retained profits increased to RMB2,687,860,000 as of June 30, 2025, compared to RMB2,685,523,000 at the end of 2024[193]. Governance and Compliance - The Company has confirmed compliance with the Model Code for Securities Transactions by Directors during the Period[160]. - The Board believes the Company has adhered to the Corporate Governance Code, with the exception of the chairman's absence at the annual general meeting due to other commitments[161]. - The Audit Committee, consisting of three independent non-executive Directors, reviewed the unaudited financial statements and discussed accounting principles and internal controls[165]. - The Company has maintained a high standard of corporate governance to safeguard shareholder interests and enhance corporate value[161]. - The independent review report was prepared by Ernst & Young, confirming the financial information's compliance with relevant standards[179]. Cash Flow and Investments - Cash generated from operations was RMB566,171,000, significantly improved from a cash used of RMB558,948,000 in the prior year[197]. - The net cash flows generated from operating activities amounted to RMB502,775,000, contrasting with a net cash outflow of RMB599,191,000 in 2024[197]. - Cash flows used in investing activities for the six months ended June 30, 2025, amounted to RMB707,639,000, an increase of 89.9% compared to RMB372,469,000 in 2024[199]. - The company reported a net decrease in cash and cash equivalents of RMB91,432,000 for the six months ended June 30, 2025, compared to a decrease of RMB705,575,000 in 2024[200]. - Cash and cash equivalents at the end of the period were RMB653,539,000, down from RMB856,868,000 in 2024, indicating a decline of 23.7%[200].

[Company Information](index=3&type=section&id=Company%20Information) This section provides fundamental company details, including board composition, committees, auditors, and contact information [Board of Directors and Committee Composition](index=3&type=section&id=Board%20of%20Directors%20and%20Committee%20Composition) This chapter lists the company's basic information, including board members, committee compositions, company secretary, authorized representatives, auditors, and stock code - **Board composition:** Executive Directors Zhu Yuan (Chairperson and Chief Executive Officer), Yang Linwei; Independent Non-executive Directors Gao Hui, Chen Jianguo, Xu Xinglian[4](index=4&type=chunk) - **Audit Committee Chairperson:** Gao Hui[4](index=4&type=chunk) - **Company Secretary and Authorized Representative:** Li Wing Sze[4](index=4&type=chunk) - **Auditor:** BDO Limited[4](index=4&type=chunk) - **Stock Code:** 1068[5](index=5&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the company's performance, industry trends, and financial position [Industry Review](index=4&type=section&id=Industry%20Review) The Chinese economy faced complexities in H1 2025, with a fragile recovery, while the hog farming industry experienced significant price pressure - China's GDP grew by **5.3% year-on-year** in H1 2025 (at constant prices)[7](index=7&type=chunk) - National Consumer Price Index (CPI) **decreased by 0.1% year-on-year**, indicating insufficient consumer willingness[7](index=7&type=chunk) - Hog slaughter volume **increased by 0.6% year-on-year** to **366.19 million heads**[7](index=7&type=chunk) - Hog inventory **increased by 2.2% year-on-year** to **424.47 million heads**[7](index=7&type=chunk) - Long-term trend of pork consumption is expected to **decline** due to improved living standards, increased health awareness, aging population, and declining birth rates[7](index=7&type=chunk) [Business Review](index=4&type=section&id=Business%20Review) The Group focused on "Harbin Meat Union" products, but reduced low-profit slaughtering and terminated some processing plant leases, leading to a significant revenue decrease - Core brand: 'Harbin Meat Union' series, adhering to traditional craftsmanship while exploring innovation[8](index=8&type=chunk) - Average live hog price in H1 2025: **RMB15.32/kg**, a **2.2% year-on-year decrease**[8](index=8&type=chunk) - Average pork retail price in H1 2025: **RMB26.48/kg**, a **3.4% year-on-year increase**[8](index=8&type=chunk) - Overall revenue **decreased by approximately 52.6% year-on-year**[10](index=10&type=chunk) [Product Quality and R&D](index=5&type=section&id=Product%20Quality%20and%20R%26D) The Group upholds "quality first" by strictly controlling food safety from raw material procurement to sales, ensuring product consistency - Core principle: 'Quality First', strict food safety standards[9](index=9&type=chunk) - Quality control: Strict control over every stage from raw material procurement, production, processing to sales[9](index=9&type=chunk) [Sales and Distribution](index=5&type=section&id=Sales%20and%20Distribution) The Group strategically reduced low-profit slaughtering and terminated some processing plant leases, leading to decreased sales, though chilled and low-temperature processed meats remain key - Strategic adjustment: Reduced production at individual low-profit slaughtering plants and terminated businesses related to some processed meat product plant lease agreements[10](index=10&type=chunk) Product Sales Performance | Product Type | H1 2025 Sales (HK$) | H1 2024 Sales (HK$) | Year-on-year Change | % of Total Revenue (2025) | % of Total Revenue (2024) | | :----------------------- | :------------------ | :------------------ | :------------------ | :------------------------ | :------------------------ | | Chilled Meat | HK$54 million | HK$270 million | -80.1% | 21% | 50% | | Low-temperature Processed Meat | HK$185 million | HK$154 million | +20.7% | 73% | 28% | [Production Facilities and Capacity](index=5&type=section&id=Production%20Facilities%20and%20Capacity) As of June 30, 2025, the Group's annual production capacity for upstream slaughtering and downstream processed meat products remained consistent with December 31, 2024 - Upstream slaughtering annual capacity: Approximately **2.35 million heads**[11](index=11&type=chunk) - Downstream processed meat products annual capacity: Approximately **20,000 tonnes**[11](index=11&type=chunk) - Capacity stability: Consistent with December 31, 2024[11](index=11&type=chunk) [Financial Review and Key Performance Indicators](index=5&type=section&id=Financial%20Review%20and%20Key%20Performance%20Indicators) The Group's H1 2025 revenue significantly decreased to HK$255 million, with loss attributable to equity holders increasing to HK$11 million, despite an improved gross margin - H1 2025 revenue: **HK$255 million** (H1 2024: HK$539 million), a **52.6% year-on-year decrease**[12](index=12&type=chunk) - Loss attributable to equity holders: **HK$11 million** (H1 2024: HK$10 million)[12](index=12&type=chunk) - Basic and diluted loss per share: **HK$0.006** (unchanged from H1 2024)[12](index=12&type=chunk) [Revenue](index=6&type=section&id=Revenue) Total revenue for H1 2025 was HK$255 million, a 52.6% year-on-year decrease, driven by significant declines in upstream business and a shift towards low-temperature processed products Total Revenue | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Year-on-year Change | | :-------- | :--------------------- | :--------------------- | :------------------ | | Revenue | 255,353 | 538,975 | -52.6% | [Chilled and Frozen Meat](index=6&type=section&id=Chilled%20and%20Frozen%20Meat) Upstream business sales revenue significantly decreased by 77.7% to HK$70 million, with chilled meat sales down 80.1% and its proportion of total revenue falling from 50% to 21% - Upstream business total sales revenue: **HK$70 million** (H1 2024: HK$312 million), a **77.7% year-on-year decrease**[14](index=14&type=chunk) - Chilled meat sales: **HK$54 million** (H1 2024: HK$270 million), an **80.1% year-on-year decrease**[14](index=14&type=chunk) - Chilled meat as a percentage of total revenue: **21%** (H1 2024: 50%)[14](index=14&type=chunk) - Frozen meat sales: **HK$16 million** (H1 2024: HK$42 million), a **61.9% year-on-year decrease**[14](index=14&type=chunk) [Processed Meat Products](index=6&type=section&id=Processed%20Meat%20Products) Processed meat product sales decreased by 18.1% to HK$185 million, with low-temperature processed meat revenue growing by 20.7% and its share of total revenue significantly increasing to 73% - Processed meat product sales: **HK$185 million** (H1 2024: HK$227 million), an **18.1% year-on-year decrease**[15](index=15&type=chunk) - Low-temperature processed meat revenue: **HK$185 million** (H1 2024: HK$154 million), a **20.7% year-on-year increase**[15](index=15&type=chunk) - Low-temperature processed meat as a percentage of total revenue: **73%** (H1 2024: 28%)[15](index=15&type=chunk) - High-temperature processed meat revenue: **None** in H1 2025 (H1 2024: HK$73 million), due to expiration of plant lease agreements[15](index=15&type=chunk) [Gross Profit and Gross Margin](index=6&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Total gross profit decreased to HK$58 million, but the overall gross margin improved to 22.9% due to a strategic focus on higher-margin downstream businesses - Total gross profit: **HK$58 million** (H1 2024: HK$76 million), a **22.7% year-on-year decrease**[16](index=16&type=chunk) - Overall gross margin: **22.9%** (H1 2024: 14.0%), an **8.9 percentage point increase**[16](index=16&type=chunk) - Upstream business gross margin: **1.5%** (H1 2024: 1.4%), a **0.1 percentage point increase**[16](index=16&type=chunk) - Low-temperature processed meat products gross margin: **30.9%** (H1 2024: 37.2%), a **6.3 percentage point decrease** due to increased raw material costs[16](index=16&type=chunk) [Other Net Loss / Income](index=6&type=section&id=Other%20Net%20Loss%20%2F%20Income) The Group recorded an other net loss of HK$2.2 million, primarily due to reduced government subsidies and gains from asset disposals - Other net loss: **HK$2.2 million** (H1 2024: net income of HK$1.8 million)[17](index=17&type=chunk) Composition of Other Net (Loss) / Income | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :------------------------- | :--------------------- | :--------------------- | | Government subsidies | – | 468 | | Gain on disposal of property, plant and equipment | – | 2,031 | | Other expenses | (2,431) | (981) | [Operating Expenses](index=7&type=section&id=Operating%20Expenses) Operating expenses decreased by 20.1% to HK$52 million due to lower sales volume, but their proportion of revenue increased to 20.5% - Total operating expenses: **HK$52 million** (H1 2024: HK$66 million), a **20.1% year-on-year decrease**[18](index=18&type=chunk) - Operating expenses as a percentage of revenue: **20.5%** (H1 2024: 12.2%)[18](index=18&type=chunk) - Reason for decrease: Lower sales volume led to reduced sales-related direct expenses[18](index=18&type=chunk) [Operating Results](index=7&type=section&id=Operating%20Results) The Group's operating profit significantly decreased to HK$4 million from HK$12 million in the prior period - Operating profit: **HK$4 million** (H1 2024: HK$12 million)[19](index=19&type=chunk) [Net Finance Costs](index=7&type=section&id=Net%20Finance%20Costs) Net finance costs decreased by 23.7% to HK$19 million, mainly due to lower interest rates on some bank borrowings and no longer accruing overdue interest - Net finance costs: **HK$19 million** (H1 2024: HK$25 million), a **23.7% year-on-year decrease**[20](index=20&type=chunk) - Reason for decrease: Lower interest rates on some bank borrowings and no longer accruing overdue interest and penalties[20](index=20&type=chunk) [Income Tax](index=7&type=section&id=Income%20Tax) Income tax expense was HK$0.004 million, compared to a credit of HK$0.05 million in the prior period - Income tax expense: **HK$0.004 million** (H1 2024: credit of HK$0.05 million)[21](index=21&type=chunk) [Loss Attributable to Equity Holders of the Company](index=7&type=section&id=Loss%20Attributable%20to%20Equity%20Holders%20of%20the%20Company) The loss attributable to equity holders of the Company expanded to HK$11 million, compared to HK$10 million in the prior period - Loss attributable to equity holders of the Company: **HK$11 million** (H1 2024: HK$10 million)[22](index=22&type=chunk) [Financial Resources](index=7&type=section&id=Financial%20Resources) Cash and cash equivalents decreased to HK$21 million, with HK$438 million in outstanding bank borrowings, mostly due within one year, and net cash outflow for debt repayment and operations - Cash and cash equivalents: **HK$21 million** (December 31, 2024: HK$41 million), a **decrease of approximately HK$20 million**[23](index=23&type=chunk) - Outstanding bank borrowings: **HK$438 million** (December 31, 2024: HK$444 million), of which **HK$376 million** is due within one year[23](index=23&type=chunk) - Fixed-rate debt ratio: **95%** (December 31, 2024: 94%)[24](index=24&type=chunk) - Reason for net cash outflow: Primarily for repayment of bank borrowings and operating activities[24](index=24&type=chunk) - Capital expenditure: **HK$1.3 million** (H1 2024: HK$10 million)[24](index=24&type=chunk) [Breach of Loan Agreements](index=8&type=section&id=Breach%20of%20Loan%20Agreements) The Group failed to meet covenants for HK$349 million in bank borrowings, which are overdue, but management is actively negotiating with banks to mitigate immediate repayment risks - Bank borrowings in breach of covenants: **HK$349 million** (December 31, 2024: HK$344 million)[25](index=25&type=chunk) - Overdue borrowings and accrued interest: **HK$272 million** (December 31, 2024: HK$251 million)[25](index=25&type=chunk) - Restructuring plan: Related debts are part of the consolidated restructuring described in the company's 2021 and 2022 financial reports[26](index=26&type=chunk) - Management response: Actively communicating with a state-owned commercial bank to discuss extension, renewal, and/or revision of loan terms[27](index=27&type=chunk) - Risk assessment: The Board assesses that the risk of immediate repayment demands due to overdue borrowings is controllable and will not have a material adverse impact on the going concern ability[27](index=27&type=chunk) [Assets and Liabilities](index=9&type=section&id=Assets%20and%20Liabilities) Total assets decreased to HK$621 million, with total liabilities at HK$1.351 billion, resulting in a net liability position, though non-current assets support operations - Total assets: **HK$621 million** (December 31, 2024: HK$645 million), a **decrease of HK$24 million**[28](index=28&type=chunk) - Total liabilities: **HK$1.351 billion** (December 31, 2024: HK$1.353 billion), a **decrease of HK$2 million**[28](index=28&type=chunk) - Property, plant and equipment: **HK$195 million** (December 31, 2024: HK$199 million), a **decrease of HK$3 million**[28](index=28&type=chunk) - Net liability position: Recorded a net liability position, but holds approximately **HK$235 million** in non-current assets[29](index=29&type=chunk) - Net current liabilities: **HK$902 million** (December 31, 2024: HK$872 million)[29](index=29&type=chunk) - Net liabilities: **HK$729 million** (December 31, 2024: HK$708 million)[29](index=29&type=chunk) - Board confidence: Believes the Group has sufficient financial resources to support operations and fulfill financial obligations[30](index=30&type=chunk) [Pledge of Assets](index=10&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, approximately HK$12 million in trade receivables were pledged as collateral for HK$23 million in bank borrowings - Carrying value of pledged trade receivables: **HK$12 million** (December 31, 2024: HK$17 million)[34](index=34&type=chunk) - Total pledged bank borrowings: **HK$23 million** (December 31, 2024: HK$27 million)[34](index=34&type=chunk) [Significant Investments, Acquisitions and Disposals of Subsidiaries and Associates, and Plans for Major Investments or Capital Asset Purchases](index=10&type=section&id=Significant%20Investments%2C%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates%2C%20and%20Plans%20for%20Major%20Investments%20or%20Capital%20Asset%20Purchases) The Group had no significant investments, acquisitions, or disposals of subsidiaries/associates, nor any plans for major investments or capital asset purchases during the reporting period - Significant investments and M&A: No significant investments or major acquisitions and disposals of subsidiaries and associates during the reporting period[35](index=35&type=chunk) - Future plans: No plans for major investments or capital asset purchases as of the reporting date[35](index=35&type=chunk) [Contingent Liabilities](index=10&type=section&id=Contingent%20Liabilities) A PRC bank has sued a subsidiary for immediate repayment of HK$349 million in bank borrowings, which the Group is actively negotiating to resolve - Major litigation: A PRC bank demands immediate repayment of approximately **HK$349 million** in bank borrowings from a Group subsidiary[36](index=36&type=chunk) - Management response: The Group is negotiating with the bank to resolve these litigations[36](index=36&type=chunk) - Other contingent liabilities: No other significant litigations or contingent liabilities beyond those disclosed above[36](index=36&type=chunk) [Exchange Rate Fluctuation Risk and Hedging](index=10&type=section&id=Exchange%20Rate%20Fluctuation%20Risk%20and%20Hedging) The Group's operations are primarily settled in RMB, which is subject to exchange controls, and it continuously monitors foreign exchange risk to maintain it within a controllable range - Primary settlement currency: RMB[37](index=37&type=chunk) - Foreign exchange control: RMB is subject to foreign exchange control and is not freely convertible[37](index=37&type=chunk) - Risk management: Continuously monitors foreign exchange risk, considering exchange rate trends and cash flow needs to ensure risk is controllable[37](index=37&type=chunk) [Human Resources](index=11&type=section&id=Human%20Resources) The Group's headcount decreased to approximately 600 employees, with total staff costs of HK$26 million, while maintaining a people-oriented approach to employee welfare and development - Total employees: Approximately **600** (December 31, 2024: approximately 1,000)[38](index=38&type=chunk) - Total staff costs: **HK$26 million** (H1 2024: HK$35 million)[38](index=38&type=chunk) - Staff costs as a percentage of revenue: **10.1%** (H1 2024: 6.4%)[38](index=38&type=chunk) - Human resources strategy: Safeguards employees' legal rights, provides competitive salaries, performance bonuses, and social insurance, optimizes training programs, and establishes fair promotion mechanisms[38](index=38&type=chunk) [Environmental Protection and Performance](index=11&type=section&id=Environmental%20Protection%20and%20Performance) The Group prioritizes sustainable development, integrating green and low-carbon principles into its governance and operations, and is committed to a comprehensive green transformation - Core philosophy: Sustainable development, actively fulfilling corporate social responsibility[39](index=39&type=chunk) - Implementation measures: Optimizes energy structure, improves energy efficiency, promotes green office concepts, and advocates green travel[39](index=39&type=chunk) - Future outlook: Comprehensively promotes the company's transformation towards low-carbon and green operations[39](index=39&type=chunk) [Other Information](index=12&type=section&id=Other%20Information) This section covers interim dividends, directors' and major shareholders' interests, share option schemes, corporate governance, and audit committee reviews [Interim Dividend](index=12&type=section&id=Interim%20Dividend) The Board resolved not to declare an interim dividend for the reporting period - Interim dividend declaration: **None** (H1 2024: None)[41](index=41&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=12&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, no directors or chief executives held any disclosable interests or short positions in the company's securities - Directors' and Chief Executive's interests: As of June 30, 2025, none held any disclosable interests or short positions in shares, underlying shares, or debentures[42](index=42&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=12&type=section&id=Substantial%20Shareholders%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) Willie Holdings Limited and its associated parties, Mr. Zhu Yicai and Ms. Wu Xueqin, are substantial shareholders, holding 25.82% of the company's issued shares Substantial Shareholders' Interests | Name / Designation | Nature | Number of Shares | Approximate Percentage of Issued Shares | | :---------------------- | :----- | :--------------- | :-------------------------------------- | | Willie Holdings Limited | Long | 470,699,900 | 25.82% | | Zhu Yicai | Long | 470,699,900 | 25.82% | | Wu Xueqin | Long | 470,699,900 | 25.82% | - Relationship: Mr. Zhu Yicai and his spouse Ms. Wu Xueqin respectively hold **93.41%** and **6.59%** equity interests in Willie Holdings[43](index=43&type=chunk) [Share Option Scheme](index=13&type=section&id=Share%20Option%20Scheme) The new share option scheme, adopted on August 7, 2015, has expired without any options granted, exercised, lapsed, or cancelled during the reporting period - New Share Option Scheme adoption date: **August 7, 2015**[45](index=45&type=chunk) - Number of share options authorized for grant (beginning/end of period): **182,275,565 shares**[47](index=47&type=chunk) - Outstanding share options: **None** at the beginning and end of the reporting period[47](index=47&type=chunk) - Share option activities (during the reporting period): **None** granted/exercised/lapsed/cancelled[47](index=47&type=chunk) - New Share Option Scheme status: Expired, no share options granted since adoption[47](index=47&type=chunk) [Corporate Governance](index=14&type=section&id=Corporate%20Governance) The company adheres to high corporate governance standards, with a five-member board and committees, but the Chairman and CEO roles are combined, which the Board deems beneficial - Governance principles: Integrity, transparency, openness, and efficiency[50](index=50&type=chunk) - Board composition: Five directors, with Audit, Remuneration, and Nomination Committees[50](index=50&type=chunk) - Risk management and internal control: Systems established to safeguard assets, manage risks, and maintain proper records[50](index=50&type=chunk) - Non-compliance with Code Provision C.2.1: Roles of Chairperson and Chief Executive Officer are combined and held by Ms. Zhu Yuan[51](index=51&type=chunk) - Board explanation: Believes this arrangement facilitates business strategy formulation and execution, and the Board's experienced members, with over half being independent non-executive directors, ensure a balance of power[51](index=51&type=chunk) - Future plan: To identify and appoint a suitable Chief Executive Officer in the long term[51](index=51&type=chunk) [Standard Code for Securities Transactions by Directors](index=15&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted the Standard Code for directors' securities transactions, and all directors complied with its provisions during the reporting period - Code of conduct: Adopted the 'Standard Code'[52](index=52&type=chunk) - Compliance: All directors complied with the 'Standard Code' during the reporting period[52](index=52&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=15&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the reporting period - Listed securities transactions: Neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period[53](index=53&type=chunk) [Audit Committee](index=15&type=section&id=Audit%20Committee) The Audit Committee reviewed the Group's accounting standards, internal controls, risk management, and financial reporting, including the unaudited interim results - Responsibilities: Reviews accounting standards and practices, discusses internal controls, risk management, and financial reporting matters[54](index=54&type=chunk) - Review scope: Includes the Group's unaudited interim results for the reporting period[54](index=54&type=chunk) [Significant Events Affecting the Group After the Reporting Period](index=15&type=section&id=Significant%20Events%20Affecting%20the%20Group%20After%20the%20Reporting%20Period) No significant events affecting the Group occurred from June 30, 2025, up to the date of this report - Significant events: No significant events affecting the Group occurred from June 30, 2025, up to the reporting date[55](index=55&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=16&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group's loss for H1 2025 widened to HK$15.2 million, with revenue significantly down by 52.6%, despite an improved gross margin Key Financial Data (H1 2025 vs H1 2024) | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Year-on-year Change | | :-------------------------------------- | :--------------------- | :--------------------- | :------------------ | | Revenue | 255,353 | 538,975 | -52.6% | | Cost of sales | (196,967) | (463,472) | -57.5% | | Gross profit | 58,386 | 75,503 | -22.7% | | Operating results | 3,755 | 11,606 | -67.6% | | Net finance costs | (18,958) | (24,842) | -23.7% | | Loss for the period | (15,207) | (13,191) | +15.3% | | Loss attributable to equity holders of the Company | (10,803) | (10,069) | +7.3% | | Basic and diluted loss per share (HK$) | (0.006) | (0.006) | 0% | - Total comprehensive income for the period: **HK$(21,591) thousand** (H1 2024: HK$(48,120) thousand)[59](index=59&type=chunk) [Consolidated Statement of Financial Position](index=18&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were HK$621 million, with total liabilities at HK$1.351 billion, indicating a persistent net liability position Key Financial Position Data (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :-------------------------------------- | :--------------------------- | :------------------------------- | | Non-current assets | 234,976 | 238,720 | | Current assets | 386,352 | 406,233 | | Current liabilities | 1,288,795 | 1,278,594 | | Net current liabilities | (902,443) | (872,361) | | Net liabilities | (729,187) | (707,596) | | Total equity attributable to equity holders of the Company | (715,968) | (704,841) | - Cash and cash equivalents: **HK$20,694 thousand** (December 31, 2024: HK$40,983 thousand)[61](index=61&type=chunk) - Bank borrowings (current): **HK$375,990 thousand** (December 31, 2024: HK$369,922 thousand)[61](index=61&type=chunk) [Consolidated Statement of Changes in Equity](index=20&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) The Group's total equity decreased from HK$(707.596) million to HK$(729.187) million, primarily due to the total comprehensive loss for the period - Total equity (end of period): **HK$(729,187) thousand** (June 30, 2024: HK$(737,499) thousand)[65](index=65&type=chunk) - Total equity attributable to equity holders of the Company (end of period): **HK$(715,968) thousand** (June 30, 2024: HK$(727,067) thousand)[65](index=65&type=chunk) - Total comprehensive income for the period: **HK$(21,591) thousand** (H1 2024: HK$(48,120) thousand)[65](index=65&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) The Group experienced a net decrease of HK$19.478 million in cash and cash equivalents, primarily due to net outflows from operating and financing activities - Net decrease in cash and cash equivalents: **HK$(19,478) thousand** (H1 2024: HK$(7,384) thousand)[66](index=66&type=chunk) - Net cash used in operating activities: **HK$(5,236) thousand** (H1 2024: HK$(33) thousand)[66](index=66&type=chunk) - Net cash used in investing activities: **HK$(312) thousand** (H1 2024: HK$(5,882) thousand)[66](index=66&type=chunk) - Net cash used in financing activities: **HK$(13,930) thousand** (H1 2024: HK$(1,469) thousand), primarily for repayment of bank borrowings[66](index=66&type=chunk) - Cash and cash equivalents at June 30: **HK$20,694 thousand** (H1 2024: HK$31,666 thousand)[66](index=66&type=chunk) [Notes to the Unaudited Interim Financial Report](index=22&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) This section provides detailed explanations and disclosures for the unaudited interim financial report, covering accounting policies, financial instruments, and related party transactions [1. Reporting Entity](index=22&type=section&id=1.%20Reporting%20Entity) China Yurun Food Group Limited, incorporated in Bermuda, presents its interim financial report covering the company and its subsidiaries - Place of incorporation: **Bermuda**[68](index=68&type=chunk) - Scope of report: The Company and its subsidiaries[68](index=68&type=chunk) [2. Basis of Preparation](index=22&type=section&id=2.%20Basis%20of%20Preparation) The interim financial report is prepared under IAS 34 and HKEX Listing Rules, highlighting significant going concern uncertainties due to net loss, net current liabilities, and overdue bank borrowings - Preparation standards: **IAS 34** and Appendix D2 of the **Listing Rules**[69](index=69&type=chunk) - Going concern uncertainties: As of June 30, 2025, the Group recorded a net loss of **HK$15,207 thousand**, net current liabilities of **HK$902,443 thousand**, and net liabilities of **HK$729,187 thousand**[70](index=70&type=chunk) - Bank borrowing status: Bank borrowings of **HK$437,710 thousand**, of which **HK$348,827 thousand** plus accrued interest of **HK$271,858 thousand** are overdue and in breach of covenants[70](index=70&type=chunk) - Management plans: (i) Negotiate with banks for updated financing terms and waivers; (ii) Bank borrowings to be ultimately settled as part of a consolidated restructuring; (iii) Seek additional new financing[72](index=72&type=chunk)[73](index=73&type=chunk) - Going concern effectiveness: Depends on the successful outcome of the aforementioned plans and measures[72](index=72&type=chunk) [3. Changes in Accounting Policies](index=24&type=section&id=3.%20Changes%20in%20Accounting%20Policies) The Group adopted new or revised IFRSs, including amendments to IAS 21 and IFRS 1, which had no material impact on the interim financial report - Adoption of new/revised standards: Amendments to **IAS 21** and **IFRS 1**[75](index=75&type=chunk) - Impact: No material impact on the interim financial report[75](index=75&type=chunk) [4. Revenue and Segment Information](index=24&type=section&id=4.%20Revenue%20and%20Segment%20Information) The Group's revenue primarily comes from chilled and frozen meat and processed meat products, with total revenue significantly decreasing in H1 2025 Segment Revenue (H1 2025 vs H1 2024) | Segment | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :----------------------- | :--------------------- | :--------------------- | | Chilled and Frozen Meat | 69,781 | 312,426 | | Processed Meat Products | 185,572 | 226,549 | | **Total** | **255,353** | **538,975** | Segment Results (H1 2025 vs H1 2024) | Segment | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :----------------------- | :--------------------- | :--------------------- | | Chilled and Frozen Meat | (12,225) | (22,510) | | Processed Meat Products | 22,037 | 40,189 | | **Total Reported Segment Results** | **9,812** | **17,679** | - Unallocated head office and corporate expenses: **HK$(6,057) thousand** (H1 2024: HK$(6,073) thousand)[78](index=78&type=chunk) [5. Seasonality of Operations](index=25&type=section&id=5.%20Seasonality%20of%20Operations) The Group's operations are subject to seasonal fluctuations, with demand for processed meat products typically peaking before the Lunar New Year - Seasonal impact: Demand for processed meat products peaks before the Lunar New Year (January or February)[79](index=79&type=chunk) [6. Other Net (Loss) / Income](index=25&type=section&id=6.%20Other%20Net%20%28Loss%29%20%2F%20Income) The Group recorded an other net loss of HK$2.164 million in H1 2025, mainly due to reduced government subsidies and gains from asset disposals Composition of Other Net (Loss) / Income | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :------------------------- | :--------------------- | :--------------------- | | Government subsidies | – | 468 | | Gain on disposal of property, plant and equipment | – | 2,031 | | Other expenses | (2,431) | (981) | | **Total** | **(2,164)** | **1,809** | [7. Loss Before Income Tax](index=26&type=section&id=7.%20Loss%20Before%20Income%20Tax) The Group's loss before income tax widened to HK$15.203 million, influenced by net finance costs, staff costs, and other items - Loss before income tax: **HK$(15,203) thousand** (H1 2024: HK$(13,236) thousand)[58](index=58&type=chunk) [7(a) Net Finance Costs](index=26&type=section&id=7%28a%29%20Net%20Finance%20Costs) Net finance costs for H1 2025 decreased, primarily comprising interest on bank borrowings and lease liabilities, despite ongoing issues with overdue borrowings and litigation Composition of Net Finance Costs | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :------------------------- | :--------------------- | :--------------------- | | Interest on bank borrowings | 18,936 | 23,836 | | Interest on lease liabilities | 18 | 1,038 | | Bank charges | 30 | 56 | | Net foreign exchange (gain) / loss | (11) | 57 | | Interest income from bank deposits | (15) | (145) | | **Total** | **18,958** | **24,842** | - Bank borrowings in breach of covenants: **HK$348,827 thousand**, plus accrued interest of **HK$271,858 thousand**, are overdue[81](index=81&type=chunk) - Litigation status: A PRC bank initiated litigation against a subsidiary, demanding immediate repayment of **HK$348,827 thousand** in bank borrowings[84](index=84&type=chunk) - Judged outstanding bank borrowings: **HK$437,726 thousand** (December 31, 2024: HK$416,664 thousand)[84](index=84&type=chunk) [7(b) Staff Costs](index=27&type=section&id=7%28b%29%20Staff%20Costs) Total staff costs for H1 2025 decreased, primarily consisting of salaries, wages, other benefits, and contributions to defined contribution retirement plans Total Staff Costs | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :--------------------------------- | :--------------------- | :--------------------- | | Salaries, wages and other benefits | 24,230 | 32,421 | | Contributions to defined contribution retirement plans | 1,469 | 2,276 | | **Total** | **25,699** | **34,697** | [7(c) Other Items](index=27&type=section&id=7%28c%29%20Other%20Items) This section details other significant items affecting loss before income tax, including cost of inventories, impairment losses on trade receivables, and depreciation Other Key Items (H1 2025 vs H1 2024) | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :--------------------------------- | :--------------------- | :--------------------- | | Cost of inventories | 196,967 | 463,472 | | (Reversal of) / write-down of inventories | (49) | 484 | | Impairment losses on trade receivables | 10,109 | 5,245 | | Depreciation of property, plant and equipment | 8,956 | 14,208 | [8. Income Tax Expense / (Credit)](index=28&type=section&id=8.%20Income%20Tax%20Expense%20%2F%20%28Credit%29) Income tax expense was HK$4 thousand, with tax exemptions for certain operations in China and no taxable profits in Hong Kong, but a risk of being deemed a PRC resident enterprise - Total income tax expense / (credit): **HK$4 thousand** (H1 2024: HK$(45) thousand)[87](index=87&type=chunk) - Tax exemptions: No income tax in Bermuda and BVI; no taxable profits in Hong Kong; PRC enterprises engaged in primary processing of agricultural products are exempt from corporate income tax[87](index=87&type=chunk) - PRC resident enterprise risk: The Group may be deemed a PRC resident enterprise, subject to **25%** corporate income tax on its global income[87](index=87&type=chunk) [9. Other Comprehensive Income](index=28&type=section&id=9.%20Other%20Comprehensive%20Income) There were no tax implications for other comprehensive income during the six months ended June 30, 2025 - Tax impact: No tax impact[88](index=88&type=chunk) [10. Loss Per Share](index=29&type=section&id=10.%20Loss%20Per%20Share) Both basic and diluted loss per share for H1 2025 remained at HK$0.006, consistent with the prior period - Basic loss per share: **HK$(0.006)** (H1 2024: HK$(0.006))[88](index=88&type=chunk) - Diluted loss per share: **HK$(0.006)** (H1 2024: HK$(0.006)), same as basic loss per share due to no potential ordinary shares[89](index=89&type=chunk) [11. Property, Plant and Equipment](index=29&type=section&id=11.%20Property%2C%20Plant%20and%20Equipment) The carrying value of property, plant, and equipment was HK$195.170 million, with additions and disposals, and no impairment losses recognized - Additions: **HK$1,303 thousand** (H1 2024: HK$6,651 thousand)[91](index=91&type=chunk) - Carrying value of items disposed: **HK$(976) thousand** (H1 2024: HK$(1,694) thousand)[91](index=91&type=chunk) - Impairment assessment: No impairment losses recognized as recoverable amount exceeded carrying amount[91](index=91&type=chunk) [12. Inventories](index=30&type=section&id=12.%20Inventories) Total inventories significantly decreased to HK$28.814 million, primarily comprising finished goods, raw materials, and work-in-progress, with a reversal of inventory write-down - Total inventories: **HK$28,814 thousand** (December 31, 2024: HK$78,439 thousand)[92](index=92&type=chunk) Composition of Inventories (June 30, 2025) | Item | Amount (HK$ thousand) | | :---------- | :-------------------- | | Raw materials | 7,109 | | Work-in-progress | 1,784 | | Finished goods | 19,921 | - Reversal of inventory write-down: **HK$49 thousand** (December 31, 2024: inventory write-down of HK$1,019 thousand)[92](index=92&type=chunk) [13. Trade and Other Receivables](index=30&type=section&id=13.%20Trade%20and%20Other%20Receivables) Total trade and other receivables increased to HK$336.777 million, with net trade receivables at HK$85.896 million, and an increase in trade receivables aged over 180 days - Total trade and other receivables: **HK$336,777 thousand** (December 31, 2024: HK$286,749 thousand)[93](index=93&type=chunk) - Net trade receivables: **HK$85,896 thousand** (December 31, 2024: HK$85,013 thousand)[93](index=93&type=chunk) Trade Receivables Ageing Analysis (June 30, 2025) | Ageing | Amount (HK$ thousand) | | :------------ | :-------------------- | | Within 30 days | 66,569 | | 31 to 90 days | 910 | | 91 to 180 days | 21,357 | | Over 180 days | 15,209 | - Expected credit loss: **HK$(18,149) thousand** (December 31, 2024: HK$(7,997) thousand)[93](index=93&type=chunk) [14. Cash and Cash Equivalents](index=31&type=section&id=14.%20Cash%20and%20Cash%20Equivalents) Total cash and cash equivalents significantly decreased to HK$20.694 million, with most denominated in RMB, which is subject to foreign exchange controls - Total cash and cash equivalents: **HK$20,694 thousand** (December 31, 2024: HK$40,983 thousand)[95](index=95&type=chunk) Currency Composition (June 30, 2025) | Currency | Amount (HK$ thousand) | | :--------- | :-------------------- | | RMB | 18,818 | | USD | 296 | | EUR | 209 | | Other currencies | 1,371 | - RMB foreign exchange control: RMB is not freely convertible but can be exchanged through banks with licensed foreign exchange operations[95](index=95&type=chunk) [15. Trade and Other Payables](index=31&type=section&id=15.%20Trade%20and%20Other%20Payables) Total trade and other payables slightly increased to HK$912.190 million, with significant components including interest payable and litigation loss provisions - Total trade and other payables: **HK$912,190 thousand** (December 31, 2024: HK$908,023 thousand)[96](index=96&type=chunk) Key Components (June 30, 2025) | Item | Amount (HK$ thousand) | | :--------------------------------- | :-------------------- | | Total trade payables | 92,386 | | Customer deposits | 18,670 | | Contract liabilities | 17,465 | | Accrued salaries and welfare | 3,326 | | VAT payable | 67,752 | | Payables for acquisition of property, plant and equipment | 27,647 | | Provision for litigation losses | 64,271 | | Interest payable | 271,858 | | Other payables and accrued expenses | 348,815 | [16. Capital, Reserves and Dividends](index=32&type=section&id=16.%20Capital%2C%20Reserves%20and%20Dividends) The Directors do not recommend declaring an interim dividend for the six months ended June 30, 2025 and 2024 - Interim dividend: Directors do not recommend declaration[98](index=98&type=chunk) [17. Fair Value Measurement of Financial Instruments](index=32&type=section&id=17.%20Fair%20Value%20Measurement%20of%20Financial%20Instruments) The carrying amounts of financial instruments measured at cost or amortized cost did not materially differ from their fair values - Fair value and carrying amount difference: No material difference[98](index=98&type=chunk) [18. Capital Commitments Not Provided for in the Interim Financial Report](index=32&type=section&id=18.%20Capital%20Commitments%20Not%20Provided%20for%20in%20the%20Interim%20Financial%20Report) As of June 30, 2025, the Group had contracted capital commitments of HK$365.634 million - Contracted capital commitments: **HK$365,634 thousand** (December 31, 2024: HK$358,028 thousand)[98](index=98&type=chunk) [19. Contingent Liabilities](index=32&type=section&id=19.%20Contingent%20Liabilities) Aside from the significant litigation disclosed in Note 7(a), the Group is not involved in other material litigations, and non-material litigations are not expected to significantly impact financial performance - Significant litigation: No other significant litigation apart from that disclosed in Note 7(a)[98](index=98&type=chunk) - Non-material litigation: Management believes it will not have a material impact on financial position and performance[98](index=98&type=chunk) [20. Related Party Transactions and Balances](index=33&type=section&id=20.%20Related%20Party%20Transactions%20and%20Balances) The Group engages in various transactions and balances with related parties, including sales and purchases of goods, property leases, and land use rights, with Mr. Zhu Yicai as a key beneficial owner - Related party: Mr. Zhu Yicai is the beneficial shareholder, honorary chairman, and senior advisor of the Company, and holds beneficial interests in related companies[100](index=100&type=chunk) [20(a) Significant Related Party Transactions](index=33&type=section&id=20%28a%29%20Significant%20Related%20Party%20Transactions) The Group conducted sales and purchases of raw materials and finished goods with related parties, with a significant decrease in finished goods sales to related parties Sales and Purchases of Raw Materials and Finished Goods (H1 2025 vs H1 2024) | Transaction Type | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :------------------------------- | :--------------------- | :--------------------- | | Sales of raw materials to related companies | 29 | 72 | | Sales of finished goods to related companies | 2,012 | 114,624 | | Purchases of raw materials from related companies | 1,929 | 1,713 | - Rent payments: **None** paid or payable to related companies in H1 2025 (H1 2024: HK$1,540 thousand)[100](index=100&type=chunk) - Assets provided by related parties: Certain related parties provided properties and land use rights to the Group, with a carrying value of **HK$30,618 thousand**[100](index=100&type=chunk) [20(b) Amounts Due from Related Parties](index=34&type=section&id=20%28b%29%20Amounts%20Due%20from%20Related%20Parties) Trade receivables from related companies amounted to HK$34.530 million, unsecured, interest-free, and expected to be recovered within one year - Trade receivables from related companies: **HK$34,530 thousand** (December 31, 2024: HK$34,530 thousand)[101](index=101&type=chunk) - Terms: Unsecured, interest-free, and expected to be recovered within one year[101](index=101&type=chunk) [20(c) Amounts Due to Related Parties](index=34&type=section&id=20%28c%29%20Amounts%20Due%20to%20Related%20Parties) Trade payables to related companies were HK$12.927 million, and other payables were HK$247.102 million, both unsecured, interest-free, and without fixed repayment terms Amounts Due to Related Companies (June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--------------------------------- | :--------------------------- | :------------------------------- | | Trade payables to related companies | 12,927 | 12,927 | | Other payables to related companies | 247,102 | 237,052 | - Terms: Unsecured, interest-free, and without fixed repayment terms[102](index=102&type=chunk) [20(d) Key Management Personnel Compensation](index=34&type=section&id=20%28d%29%20Key%20Management%20Personnel%20Compensation) Total key management personnel compensation for H1 2025 was HK$1.311 million, including salaries, other emoluments, and retirement benefit plan contributions Total Key Management Personnel Compensation | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :--------------------------------- | :--------------------- | :--------------------- | | Salaries and other emoluments | 1,286 | 1,292 | | Contributions to retirement benefit plans | 25 | 26 | | **Total** | **1,311** | **1,318** |