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** |

設計都會有限公司 / 2025年中期報告 目錄 2 公司資料 3 管理層討論及分析 7 中期簡明綜合損益及其他全面收益表 9 中期簡明綜合財務狀況表 11 中期簡明綜合權益變動表 13 中期簡明綜合現金流量表 15 中期簡明綜合財務報表附註 30 其他資料 公司資料 董事會 執行董事 阮友仁先生 （主席兼行政總裁） Wee Ai Quey女士 王秋華女士 吳志光先生 （主席） 林文正先生 林瑞慶先生 阮友仁先生 黃勤順先生 提名委員會 非執行董事 高泉泰先生 林瑞慶先生 獨立非執行董事 林文正先生 吳志光先生 黃勤順先生 審核委員會 林文正先生 （主席） 吳志光先生 林瑞慶先生 高泉泰先生 黃勤順先生 薪酬委員會 阮友仁先生 （主席） 林文正先生 吳志光先生 高泉泰先生 黃勤順先生 公司秘書 余康怡女士 授權代表 阮友仁先生 余康怡女士 核數師 新加坡Ernst & Young LLP 認可公眾利益實體核數師 開曼群島註冊辦事處 Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman KY1–1111, Cayman Islands 新加坡主要營業地 ...

香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 告 之 內 容 概 不 負 責，對其準確性或完整性亦不發表任何聲明，並明確表示概不會就本公告全部或 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。 本公司謹此根據上市規則第17.07 (1) (d)及17.12 (1) (a)條就本公司股份獎勵計劃（「該 計劃」）提供以下額外資料。 截至二零二四年十二月三十一日止年度，根據該計劃授出的股份詳情如下： 緊接股份歸屬日期（ 即二零二四年一月十一日 ）前股份收市價為0.640港元。 上述補充資料對二零二四年年報所載的其他資料並無影響。除上文所披露者外， 二零二四年年報的所有其他資料維持不變。 China Parenting Network Holdings Limited 中 國 育 兒 網 絡 控 股 有 限 公 司 （股份代號：1736） （於開曼群島註冊成立之有限公司） 有關二零二四年年報的補充公告 茲提述中國育兒網絡控股有限公司（「本公司」，連同其附屬公司統稱「本集團」）截 至二零二四年十二月三十一日止年度的年報（「二零二四年年報」） ...

```markdown [Definitions](index=3&type=section&id=I.%20Definitions) [Glossary of Terms](index=3&type=section&id=I.1%20Glossary%20of%20Terms) This section defines key terms and abbreviations used in the interim report for clarity and consistency - The report defines several key terms, including the '2021-2024 Overseas Supply Framework Agreement', 'Acquisition', 'China Tobacco' or 'CNTC Group', 'China Tobacco International Group', and 'ESG', to ensure clarity and consistency of the report content[5](index=5&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) [Company Information](index=7&type=section&id=II.%20Company%20Information) [Board of Directors and Management](index=7&type=section&id=II.1%20Board%20of%20Directors%20and%20Management) This section lists the company's board members, senior management, and committee compositions - The Chairman of the Board and Non-executive Director is **Shao Yan**, and the General Manager is **Dai Jiahui**[11](index=11&type=chunk) - The Chairman of the Audit Committee is **Zou Xiaolei**, the Chairman of the Remuneration Committee is **Zou Xiaolei**, the Chairman of the Nomination Committee is **Shao Yan**, the Chairman of the Connected Transaction Control Committee is **Wang Xinhua**, and the Chairman of the Strategic Development Committee is **Shao Yan**[11](index=11&type=chunk) [Basic Company Information](index=8&type=section&id=II.2%20Basic%20Company%20Information) This section provides the company's basic registration and listing information Basic Company Information | Metric | Details | | :--- | :--- | | Stock Short Name | China Tobacco Hong Kong | | Stock Code | 6055 | | Headquarters and Principal Place of Business | Unit 1002, 10/F, Tower A, China Life Center, One Harbour Gate, 18 Hung Luen Road, Hung Hom, Kowloon, Hong Kong | | Auditor | KPMG | | Company Website | www.ctihk.com.hk | [Company Profile and Group Structure](index=9&type=section&id=III.%20Company%20Profile%20and%20Group%20Structure) [Company Overview](index=9&type=section&id=III.1%20Company%20Overview) China Tobacco Hong Kong, listed in 2019, is the sole tobacco business listed company within the China Tobacco system - China Tobacco Hong Kong is the sole tobacco business listed company within the China Tobacco system, listed on the Stock Exchange in June 2019[14](index=14&type=chunk) - The company's business covers new tobacco products, cigarettes, leaf tobacco, and cigars, with market coverage in over **50 countries and regions** including East Asia, Southeast Asia, North and South America, and Central and Eastern Europe[14](index=14&type=chunk) - The company will continue to uphold the development philosophy of 'respecting the market, rules, and investors', cultivate core businesses, pursue cross-border M&A, and enhance market value[14](index=14&type=chunk) [Group Structure](index=9&type=section&id=III.2%20Group%20Structure) This section outlines China Tobacco Hong Kong's equity structure and its role in various tobacco businesses - China Tobacco General Corporation holds **72.29%** equity in China Tobacco Hong Kong through China Tobacco International Group[15](index=15&type=chunk) - China Tobacco Hong Kong's businesses include leaf tobacco import, leaf tobacco export, cigarette export, new tobacco products export, and Brazil operations[15](index=15&type=chunk) - Brazil operations are managed by CBT, with China Tobacco Brazil holding **51%** equity and Alliance One Brazil holding **49%**[15](index=15&type=chunk)[16](index=16&type=chunk) [Financial Highlights](index=10&type=section&id=IV.%20Financial%20Highlights) [Key Financial Data](index=10&type=section&id=IV.1%20Key%20Financial%20Data) For H1 2025, revenue grew **18.5%** to **HKD 10.32 billion**, net profit rose **9.8%** to **HKD 706 million**, with EPS of **HKD 1.02** Key Financial Data for the Six Months Ended June 30, 2025 | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 10,316,249 | 8,704,047 | 18.5% | | Gross Profit | 946,476 | 964,215 | -1.8% | | Profit for the period attributable to equity holders of the Company | 706,353 | 643,341 | 9.8% | | Earnings Per Share (HKD) | 1.02 | 0.93 | - | | Interim Dividend Per Share (HKD) | 0.19 | 0.15 | 26.7% | | Cash and Cash Equivalents and Short-term Bank Deposits | 3,975,052 | 2,808,865 | 41.5% | | Net Assets | 3,700,825 | 3,143,484 | 17.7% | | Return on Net Assets | 21.7% | 23.8% | -2.1pp | | Current Ratio | 1.52 | 1.42 | 10pp | - The Board declared an interim dividend of **HKD 0.19 per share**, a **26.7%** year-on-year increase, to reward shareholders and share development achievements[19](index=19&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=V.%20Management%20Discussion%20and%20Analysis) [Overall Operating Results](index=11&type=section&id=V.1%20Overall%20Operating%20Results) In H1 2025, revenue reached **HKD 10.32 billion** (+18.5%) and net profit **HKD 706.4 million** (+9.8%) amid complex global conditions 2025 H1 Overall Operating Results | Metric | Amount (HKD) | Y-o-Y Growth | | :--- | :--- | :--- | | Operating Revenue | 10.32 billion | 18.5% | | Profit attributable to equity holders of the Company | 706.4 million | 9.8% | - Leaf tobacco import business: Closely monitor international trade, ensure timely arrival of imported leaf tobacco, enhance synergy with subsidiaries, and secure stable raw material supply[21](index=21&type=chunk) - Leaf tobacco export business: Seize market supply-demand changes, optimize pricing strategies, enhance profitability; strengthen source synergy, significantly increase Brazil source sales; expand business in non-exclusive operating regions[21](index=21&type=chunk) - Cigarette export business: Expand self-operated business scale, deepen cooperation with duty-free retailers, optimize business structure and product portfolio, and increase introduction of new product specifications[21](index=21&type=chunk) - New tobacco products export business: Actively respond to geopolitical conflicts and regulatory changes, guide suppliers to accelerate product innovation and R&D, and strengthen overseas intellectual property protection[21](index=21&type=chunk) - Brazil operations: Expand raw tobacco procurement areas, increase procurement scale in non-China markets, enhance resource integration and allocation capabilities; expand sales regions and customer base, improve CBT's ESG governance effectiveness[21](index=21&type=chunk) - Operational management: Adhere to lean management, promote business-finance integration, improve capital utilization, control operating costs, and perfect risk prevention and control mechanisms[21](index=21&type=chunk) - ESG management: Initially establish an ESG strategic system supported by 'green development', 'people-oriented', 'community embeddedness', and 'supply chain management', enhancing ESG governance effectiveness and information disclosure quality[24](index=24&type=chunk) [Business Operations Review](index=12&type=section&id=V.2%20Business%20Operations%20Review) This section reviews H1 2025 operational performance across key business segments, analyzing revenue, volume, and gross profit changes [Leaf Tobacco Import Business](index=12&type=section&id=V.2.1%20Leaf%20Tobacco%20Import%20Business) H1 2025 leaf tobacco import revenue grew **23.5%** to **HKD 8.399 billion**, but gross profit fell **7.7%** to **HKD 687.2 million** due to rising costs Leaf Tobacco Import Business Performance | Metric | H1 2025 | Y-o-Y Change | | :--- | :--- | :--- | | Import Volume | 97,881 tons | +2.5% | | Operating Revenue | 8,398.9 million HKD | +23.5% | | Gross Profit | 687.2 million HKD | -7.7% | - Revenue increase was mainly due to higher overall average selling prices of leaf tobacco products during the period compared to the same period last year[23](index=23&type=chunk) - Gross profit decline was mainly due to supply-demand dynamics, where the increase in cost of leaf tobacco purchased from CBT exceeded the increase in average selling price, leading to a decrease in gross profit margin[23](index=23&type=chunk) [Leaf Tobacco Export Business](index=13&type=section&id=V.2.2%20Leaf%20Tobacco%20Export%20Business) H1 2025 leaf tobacco export revenue grew **25.9%** to **HKD 1.156 billion**, with gross profit up **124.1%** to **HKD 63.1 million** Leaf Tobacco Export Business Performance | Metric | H1 2025 | Y-o-Y Change | | :--- | :--- | :--- | | Export Volume | 38,476 tons | +12.7% | | Operating Revenue | 1,155.6 million HKD | +25.9% | | Gross Profit | 63.1 million HKD | +124.1% | - Significant performance growth was mainly due to strengthened alignment between supply and demand, active expansion into new markets and customers, and precise grasp of market supply-demand trends, continuous optimization of pricing strategies, effectively increasing average selling prices and gross profit margins[26](index=26&type=chunk) [Cigarette Export Business](index=13&type=section&id=V.2.3%20Cigarette%20Export%20Business) H1 2025 cigarette export volume fell **7.9%**, but revenue rose **0.8%** to **HKD 551.8 million**, and gross profit increased **16.8%** to **HKD 141.8 million** Cigarette Export Business Performance | Metric | H1 2025 | Y-o-Y Change | | :--- | :--- | :--- | | Export Volume | 1,018,523 thousand sticks | -7.9% | | Operating Revenue | 551.8 million HKD | +0.8% | | Gross Profit | 141.8 million HKD | +16.8% | - Sales volume decline was mainly affected by shipping rhythm, while revenue and gross profit growth benefited from continuous efforts to expand self-operated channels and introduce new products catering to market demand, effectively enhancing the profitability of the cigarette business[28](index=28&type=chunk) [New Tobacco Products Export Business](index=14&type=section&id=V.2.4%20New%20Tobacco%20Products%20Export%20Business) H1 2025 new tobacco products export saw significant declines in volume, revenue, and gross profit due to geopolitical conflicts and regulatory changes New Tobacco Products Export Business Performance | Metric | H1 2025 | Y-o-Y Change | | :--- | :--- | :--- | | Export Volume | 81,330 thousand sticks | -65.4% | | Operating Revenue | 14.6 million HKD | -66.5% | | Gross Profit | 0.8 million HKD | -62.4% | - Performance decline was mainly due to adverse impacts of geopolitical conflicts on the supply chain, leading to reduced outbound volume in key markets[29](index=29&type=chunk) - Changes in target market regulatory policies, where suppliers' production equipment failed to meet product access requirements in a timely manner, significantly reduced the efficiency of product entry into target markets[29](index=29&type=chunk) [Brazil Operations](index=14&type=section&id=V.2.5%20Brazil%20Operations) H1 2025 Brazil operations saw export volume drop **34.8%** to **7,928 tons**, revenue fell **50.3%** to **HKD 195.3 million**, and gross profit declined **21.0%** to **HKD 53.6 million** Brazil Operations Performance | Metric | H1 2025 | Y-o-Y Change | | :--- | :--- | :--- | | Export Volume | 7,928 tons | -34.8% | | Operating Revenue | 195.3 million HKD | -50.3% | | Gross Profit | 53.6 million HKD | -21.0% | - Performance decline was mainly due to extreme weather conditions during the planting season, leading to a year-on-year decrease in the quantity of leaf tobacco products available for sale[31](index=31&type=chunk) - Changes in product structure, with a significant year-on-year increase in the sales proportion of higher gross profit margin but lower average selling price leaf tobacco by-products[31](index=31&type=chunk) [Outlook for H2 2025](index=15&type=section&id=V.3%20Outlook%20for%20H2%202025) In H2 2025, the company will focus on high-quality business development and enhanced corporate governance for sustainable shareholder returns - Adhere to the 'outward and inward' development strategy, leverage international capital platform advantages, gather industry resources, explore potential market opportunities, and enhance core competitiveness[33](index=33&type=chunk) - Continuously strengthen supply chain resilience, respond to international leaf tobacco supply fluctuations, enhance stability of imported high-quality leaf tobacco supply, expand business development space, and improve profitability of the leaf tobacco business[33](index=33&type=chunk) - Strengthen research on the duty-free cigarette market, deepen collaborative marketing with duty-free retailers, optimize business structure, tap into channel potential, and accelerate the overseas expansion of domestic cigars[33](index=33&type=chunk) - Actively respond to geopolitical conflicts, strengthen cooperation between production and sales, promote innovation and R&D of new tobacco products and improvement of supplier production equipment, and optimize cooperation models and pricing strategies in key markets[33](index=33&type=chunk) - Brazil operations adhere to the 'three improvements and one control' development approach, optimizing raw tobacco procurement regional layout, expanding sales channels, enriching product categories, and increasing cigar leaf sales volume[33](index=33&type=chunk) - Continuously build a systematic ESG indicator evaluation system, respond to the Stock Exchange's new climate information disclosure requirements, conduct greenhouse gas emission inventories, and deepen corporate social responsibility practices[33](index=33&type=chunk) - Accelerate digital transformation, optimize integrated management processes, enhance human resource information management, strengthen analytical and forecasting capabilities, focus on financing cost control, and improve internal control mechanisms[34](index=34&type=chunk) [Financial Review](index=16&type=section&id=V.4%20Financial%20Review) This section reviews H1 2025 financial performance, analyzing key metrics like revenue, gross profit, net profit, EPS, liquidity, and gearing ratio [Revenue, Cost of Sales, and Gross Profit](index=16&type=section&id=V.4.1%20Revenue,%20Cost%20of%20Sales,%20and%20Gross%20Profit) H1 2025 revenue grew **18.5%** to **HKD 10.316 billion**, cost of sales rose **21.1%**, and gross profit decreased **1.8%** to **HKD 946.5 million** Revenue, Cost of Sales, and Gross Profit | Metric | H1 2025 (million HKD) | H1 2024 (million HKD) | Y-o-Y Change | | :--- | :--- | :--- | | Revenue | 10,316.2 | 8,704.0 | +18.5% | | Cost of sales | 9,369.8 | 7,739.8 | +21.1% | | Gross Profit | 946.5 | 964.2 | -1.8% | - Revenue growth was primarily driven by increases in leaf tobacco import, cigarette export, and leaf tobacco export businesses[35](index=35&type=chunk) - Gross profit decline was mainly attributable to the leaf tobacco import business and Brazil operations[35](index=35&type=chunk) [Net Other Income](index=16&type=section&id=V.4.2%20Net%20Other%20Income) H1 2025 net other income increased **5.2%** to **HKD 72.0 million**, driven by higher interest income from short-term bank deposits Net Other Income | Metric | H1 2025 (million HKD) | H1 2024 (million HKD) | Y-o-Y Change | | :--- | :--- | :--- | | Net other income | 72.0 | 68.4 | +5.2% | - Mainly due to increased interest income driven by the larger scale of short-term bank deposits[35](index=35&type=chunk) [Administrative and Other Operating Expenses](index=16&type=section&id=V.4.3%20Administrative%20and%20Other%20Operating%20Expenses) H1 2025 administrative and other operating expenses rose **6.1%** to **HKD 79.5 million**, mainly due to increased staff and professional fees Administrative and Other Operating Expenses | Metric | H1 2025 (million HKD) | H1 2024 (million HKD) | Y-o-Y Change | | :--- | :--- | :--- | | Administrative and other operating expenses | 79.5 | 74.9 | +6.1% | | Of which: Staff costs | 34.2 | - | - | | Of which: Depreciation and amortization of intangible assets | 20.9 | - | - | | Of which: Professional fees | 4.8 | - | - | - Increase in administrative and other operating expenses was mainly due to higher staff costs and professional fees resulting from the Group's expanded operating activities[36](index=36&type=chunk) [Finance Costs](index=16&type=section&id=V.4.4%20Finance%20Costs) H1 2025 finance costs significantly decreased by **28.2%** to **HKD 82.9 million**, primarily due to lower CBT bank borrowings and interest rates Finance Costs | Metric | H1 2025 (million HKD) | H1 2024 (million HKD) | Y-o-Y Change | | :--- | :--- | :--- | | Finance costs | 82.9 | 115.5 | -28.2% | - Significant decrease in finance costs was mainly due to lower scale and interest rates of CBT's bank borrowings[37](index=37&type=chunk) [Profit for the Period and Profit Attributable to Equity Holders of the Company](index=17&type=section&id=V.4.5%20Profit%20for%20the%20Period%20and%20Profit%20Attributable%20to%20Equity%20Holders%20of%20the%20Company) H1 2025 profit for the period grew **6.3%** to **HKD 722.6 million**, with profit attributable to equity holders up **9.8%** to **HKD 706.4 million** Profit for the Period | Metric | H1 2025 (million HKD) | H1 2024 (million HKD) | Y-o-Y Change | | :--- | :--- | :--- | | Profit for the period | 722.6 | 679.7 | +6.3% | | Profit for the period attributable to equity holders of the Company | 706.4 | 643.3 | +9.8% | - Growth in profit for the period and profit attributable to equity holders of the Company was primarily driven by increased cigarette export and leaf tobacco export businesses, and lower finance costs[39](index=39&type=chunk) [Earnings Per Share](index=17&type=section&id=V.4.6%20Earnings%20Per%20Share) H1 2025 basic and diluted EPS increased to **HKD 1.02** from **HKD 0.93**, reflecting enhanced profitability Earnings Per Share | Metric | H1 2025 (HKD) | H1 2024 (HKD) | | :--- | :--- | :--- | | Basic and diluted earnings per share | 1.02 | 0.93 | - As no potential dilutive ordinary shares were issued, the diluted earnings per share presented is the same as the basic earnings per share[41](index=41&type=chunk) [Liquidity, Financial Resources, and Gearing Ratio](index=17&type=section&id=V.4.7%20Liquidity,%20Financial%20Resources,%20and%20Gearing%20Ratio) As of June 30, 2025, total assets were **HKD 10.003 billion**, with strong liquidity and a gearing ratio of **0.69** Liquidity and Financial Resources | Metric | June 30, 2025 (million HKD) | December 31, 2024 (million HKD) | | :--- | :--- | :--- | | Total Assets | 10,002.8 | 9,816.7 | | Cash and Cash Equivalents and Short-term Bank Deposits | 3,975.1 | 2,857.6 | | Total Liabilities | 6,301.9 | 6,629.4 | | Gearing Ratio | 0.69 | 0.94 | | Current Ratio | 1.52 | 1.43 | - The Board believes the Group has sufficient resources to support its operations and meet its foreseeable capital expenditures[42](index=42&type=chunk) - The Group adopts a prudent treasury policy, implements strict cash risk management, with cash surpluses primarily in USD and HKD short-term deposits[42](index=42&type=chunk) [Net Current Assets](index=17&type=section&id=V.4.8%20Net%20Current%20Assets) As of June 30, 2025, net current assets increased to **HKD 3.244 billion** from **HKD 2.838 billion** at year-end 2024 Net Current Assets | Metric | June 30, 2025 (million HKD) | December 31, 2024 (million HKD) | | :--- | :--- | :--- | | Net current assets | 3,244.1 | 2,837.8 | [Foreign Exchange Risk](index=17&type=section&id=V.4.9%20Foreign%20Exchange%20Risk) The Group primarily transacts in USD and BRL, with CBT's functional currency in USD but most costs in BRL - The Group primarily enters into transactions in USD and Brazilian Real, with CBT's functional currency being USD, but most costs and expenses are paid in Brazilian Real[44](index=44&type=chunk) - For H1 2025, the Group did not enter into any hedging arrangements but will continue to closely monitor foreign exchange risk[44](index=44&type=chunk) [Pledge of Assets](index=18&type=section&id=V.4.10%20Pledge%20of%20Assets) As of June 30, 2025, the Group had no pledged assets - As of June 30, 2025, the Group had no pledged assets[45](index=45&type=chunk) [Contingent Liabilities](index=18&type=section&id=V.4.11%20Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities[46](index=46&type=chunk) [Review of Continuing Connected Transactions](index=19&type=section&id=VI.%20Review%20of%20Continuing%20Connected%20Transactions) [Connected Persons](index=19&type=section&id=VI.1%20Connected%20Persons) This section identifies China Tobacco Hong Kong's connected persons, including China Tobacco and Alliance One Group - Connected persons at the issuer level include China Tobacco General Corporation and China Tobacco International Group and their respective subsidiaries[48](index=48&type=chunk) - Connected persons at the subsidiary level are the Alliance One Group, as it holds **49%** of CBT's total issued share capital through Alliance One Brazil[49](index=49&type=chunk) [Overview of Continuing Connected Transactions](index=19&type=section&id=VI.2%20Overview%20of%20Continuing%20Connected%20Transactions) H1 2025 continuing connected transactions with issuer-level parties totaled **HKD 8.403 billion** in revenue and **HKD 1.985 billion** in procurement Continuing Connected Transaction Amounts | Transaction Type | Total Revenue (million HKD) | % of Total Revenue | Total Procurement (million HKD) | % of Total Procurement | | :--- | :--- | :--- | :--- | :--- | | Continuing connected transactions at issuer level | 8,402.8 | 81.5% | 1,985.1 | 27.4% | | Continuing connected transactions at subsidiary level | 302.5 | 2.9% | 1,056.6 | 14.6% | - In determining the prices and terms of connected transactions, the pricing policies set out in the exclusive operation and long-term supply framework agreements, and the guidelines under the Listing Rules, have been complied with[50](index=50&type=chunk) [Details of Continuing Connected Transactions](index=20&type=section&id=VI.3%20Details%20of%20Continuing%20Connected%20Transactions) This section details continuing connected transactions, including parties, pricing, annual caps, and actual amounts for various businesses [Sales Transactions for Leaf Tobacco Import Business](index=20&type=section&id=VI.3.1%20Sales%20Transactions%20for%20Leaf%20Tobacco%20Import%20Business) The company sells imported leaf tobacco to China Tobacco International under an exclusive agreement, with H1 2025 sales of **HKD 8.399 billion** - The contracting parties are the Company and China Tobacco International, with an indefinite agreement term[52](index=52&type=chunk)[53](index=53&type=chunk) - The pricing policy is P = A × 1.06, meaning a **6%** markup on the procurement price from suppliers (or **3%** for a small portion of specific cigarette brand leaf tobacco)[53](index=53&type=chunk) Sales Transactions for Leaf Tobacco Import Business Amount | Metric | H1 2025 (million HKD) | | :--- | :--- | | Transaction Amount | 8,398.9 | | % of Total Leaf Tobacco Import Revenue | 100% | [Procurement Transactions for Leaf Tobacco Export Business](index=21&type=section&id=VI.3.2%20Procurement%20Transactions%20for%20Leaf%20Tobacco%20Export%20Business) The company procures leaf tobacco from China Tobacco entities for export, with H1 2025 procurement of **HKD 1.080 billion** - The contracting parties are the Company and various entities under China Tobacco General Corporation, with an indefinite agreement term[56](index=56&type=chunk)[57](index=57&type=chunk) - The pricing policy is P = A × (1 – applicable markup ratio), where the applicable markup ratio is no less than **1%**, **2%**, or **4%**, depending on product variety, annual output, average selling price, customer, and supplier[58](index=58&type=chunk)[59](index=59&type=chunk) Procurement Transactions for Leaf Tobacco Export Business Amount | Metric | H1 2025 (million HKD) | | :--- | :--- | | Transaction Amount | 1,080.2 | | % of Total Leaf Tobacco Export Procurement | 98.9% | [Procurement Transactions for Cigarette Export Business](index=23&type=section&id=VI.3.3%20Procurement%20Transactions%20for%20Cigarette%20Export%20Business) The company procures duty-free cigarettes from China Tobacco entities for export, with H1 2025 procurement of **HKD 303.1 million** - The contracting parties are the Company and various entities under China Tobacco General Corporation, with an indefinite agreement term[63](index=63&type=chunk)[64](index=64&type=chunk)[66](index=66&type=chunk) - Pricing for high-end and other first-class duty-free cigarettes, according to Document No. 250, shall not be lower than **35%** or **45%** of the domestic ex-tax transfer price[68](index=68&type=chunk)[70](index=70&type=chunk) - Prices for other duty-free cigarettes are determined through fair negotiation and are not subject to government-mandated price floors[71](index=71&type=chunk) Procurement Transactions for Cigarette Export Business Amount | Metric | H1 2025 (million HKD) | | :--- | :--- | | Transaction Amount | 303.1 | | % of Total Cigarette Export Procurement | 99.4% | [Procurement Transactions for New Tobacco Products Export Business](index=26&type=section&id=VI.3.4%20Procurement%20Transactions%20for%20New%20Tobacco%20Products%20Export%20Business) The company procures new tobacco products from China Tobacco entities for export, with H1 2025 procurement of **HKD 13.8 million** - The contracting parties are the Company and various entities under China Tobacco General Corporation, with an indefinite agreement term[74](index=74&type=chunk)[75](index=75&type=chunk) - The pricing policy is P = A × (1 – applicable markup ratio), with the current markup ratio being at least **1%**[77](index=77&type=chunk)[78](index=78&type=chunk) Procurement Transactions for New Tobacco Products Export Business Amount | Metric | H1 2025 (million HKD) | | :--- | :--- | | Transaction Amount | 13.8 | | % of Total New Tobacco Products Export Procurement | 100% | [Procurement Transactions for Leaf Tobacco Import Business (Specific)](index=28&type=section&id=VI.3.5%20Procurement%20Transactions%20for%20Leaf%20Tobacco%20Import%20Business%20(Specific)) The company procures leaf tobacco from China Tobacco International (North America) under a 2024-2026 framework agreement - The contracting parties are the Company and China Tobacco International (North America), with an agreement term from November 17, 2024, to December 31, 2026[81](index=81&type=chunk)[86](index=86&type=chunk) - The pricing policy, according to Document No. 135, is that the Company shall add a **6%** markup to the procurement price when selling leaf tobacco products to China Tobacco International[85](index=85&type=chunk) Procurement Transactions for Leaf Tobacco Import Business Amount and Annual Cap | Metric | H1 2025 (million HKD) | 2025 Annual Cap (million HKD) | | :--- | :--- | :--- | | Transaction Amount | 575.7 | 1,210.9 | | % of Total Leaf Tobacco Import Procurement | 10.1% | - | [Agency Business for Leaf Tobacco Sales](index=30&type=section&id=VI.3.6%20Agency%20Business%20for%20Leaf%20Tobacco%20Sales) The company acts as an agent for leaf tobacco export for China Tobacco entities, earning **HKD 3.9 million** in H1 2025 commissions - The contracting parties are the Company and various entities under China Tobacco General Corporation, with an agreement term from November 17, 2024, to December 31, 2026[90](index=90&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - Commission rates are determined based on the Company's invested resources and the unit price of the relevant leaf tobacco products, typically higher for lower unit price products, and are expected to be no less than **1%** of the contract amount (excluding cut tobacco)[95](index=95&type=chunk) Agency Business for Leaf Tobacco Sales Transaction Amount and Annual Cap | Metric | H1 2025 (million HKD) | 2025 Annual Cap (million HKD) | | :--- | :--- | :--- | | Transaction Amount (Commission) | 3.9 | 5.4 | | % of Total Leaf Tobacco Export Revenue | 0.3% | - | [Sales and Procurement Transactions with Alliance One Group](index=32&type=section&id=VI.3.7%20Sales%20and%20Procurement%20Transactions%20with%20Alliance%20One%20Group) The Group engages in tobacco sales and procurement with Alliance One Group under extended framework agreements [Tobacco Sales Framework Agreement](index=33&type=section&id=VI.3.7.1%20Tobacco%20Sales%20Framework%20Agreement) The company sells leaf tobacco to Alliance One International, with H1 2025 sales of **HKD 237.5 million** against an annual cap of **HKD 701 million** - The contracting parties are the Company and Alliance One International, with the agreement term extended to December 31, 2025[101](index=101&type=chunk)[103](index=103&type=chunk) - Pricing policy is fair negotiation, considering factors such as leaf tobacco quantity and quality, procurement costs (raw materials, utilities, plant rent, freight, warehousing, staff costs), seasonal demand, and past sales prices[103](index=103&type=chunk) Tobacco Sales Framework Agreement Transaction Amount and Annual Cap | Metric | H1 2025 (million HKD) | 2025 Annual Cap (million HKD) | | :--- | :--- | :--- | | Transaction Amount | 237.5 | 701.0 | [CBT Tobacco Sales Framework Agreement](index=34&type=section&id=VI.3.7.2%20CBT%20Tobacco%20Sales%20Framework%20Agreement) CBT sells leaf tobacco to Alliance One International, with H1 2025 sales of **HKD 64.9 million** against an annual cap of **HKD 1.203 billion** - The contracting parties are CBT and Alliance One International, with the agreement term extended to December 31, 2025[106](index=106&type=chunk)[108](index=108&type=chunk) - Pricing policy is fair negotiation, considering factors such as leaf tobacco quantity and quality, CBT procurement costs (raw materials, utilities, plant rent, freight, warehousing, staff costs), seasonal demand, applicable exchange rates, and taxes[110](index=110&type=chunk) CBT Tobacco Sales Framework Agreement Transaction Amount and Annual Cap | Metric | H1 2025 (million HKD) | 2025 Annual Cap (million HKD) | | :--- | :--- | :--- | | Transaction Amount | 64.9 | 1,203.1 | [Tobacco Procurement Framework Agreement](index=35&type=section&id=VI.3.7.3%20Tobacco%20Procurement%20Framework%20Agreement) The company procures leaf tobacco from Alliance One International, with H1 2025 procurement of **HKD 974.7 million** against an annual cap of **HKD 2.585 billion** - The contracting parties are the Company and Alliance One International, with the agreement term extended to December 31, 2025[113](index=113&type=chunk)[115](index=115&type=chunk) - Pricing policy is fair negotiation, considering factors such as leaf tobacco quantity and quality, procurement costs (raw materials, utilities, plant rent, freight, warehousing, staff costs), seasonal demand, and past procurement prices[115](index=115&type=chunk) Tobacco Procurement Framework Agreement Transaction Amount and Annual Cap | Metric | H1 2025 (million HKD) | 2025 Annual Cap (million HKD) | | :--- | :--- | :--- | | Transaction Amount | 974.7 | 2,585.1 | [CBT Tobacco and Services Procurement Framework Agreement](index=36&type=section&id=VI.3.7.4%20CBT%20Tobacco%20and%20Services%20Procurement%20Framework%20Agreement) CBT procures agricultural materials, leaf tobacco, and processing services from Alliance One Brazil - The contracting parties are CBT and Alliance One Brazil, with the agreement term extended to December 31, 2025[118](index=118&type=chunk)[120](index=120&type=chunk)[122](index=122&type=chunk) - Agricultural material procurement price is Alliance One Brazil's procurement price plus a fixed markup of approximately **2.5%**[122](index=122&type=chunk) - Leaf tobacco procurement prices are determined through fair negotiation, referencing quantity, quality, market conditions, and prices from independent third-party suppliers[122](index=122&type=chunk) - Processing services are charged at a fixed fee of approximately **BRL 1.192 per kilogram** of processed leaf tobacco[122](index=122&type=chunk) CBT Tobacco and Services Procurement Framework Agreement Transaction Amount and Annual Cap | Metric | H1 2025 (million HKD) | 2025 Annual Cap (million HKD) | | :--- | :--- | :--- | | Transaction Amount | 81.9 | 302.2 | [Procurement Transactions for Export of Leaf Tobacco to Non-Exclusive Operating Regions](index=38&type=section&id=VI.3.8%20Procurement%20Transactions%20for%20Export%20of%20Leaf%20Tobacco%20to%20Non-Exclusive%20Operating%20Regions) The company procures leaf tobacco from China Tobacco entities for export to non-exclusive regions, with H1 2025 procurement of **HKD 12.3 million** - The contracting parties are the Company and various entities under China Tobacco General Corporation, with an agreement term from November 27, 2024, to November 26, 2027[125](index=125&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - The pricing policy is P = A × (1 – applicable markup ratio), where the applicable markup ratio is no less than **1%**, **2%**, or **4%**, depending on product variety, annual output, average selling price, customer, and supplier[130](index=130&type=chunk)[132](index=132&type=chunk) Procurement Transactions for Export of Leaf Tobacco to Non-Exclusive Operating Regions Amount and Annual Cap | Metric | H1 2025 (million HKD) | 2025 Annual Cap (million HKD) | | :--- | :--- | :--- | | Transaction Amount | 12.3 | 60.9 | [Procurement Transactions for Export of Cigarettes to New Specific Regions](index=40&type=section&id=VI.3.9%20Procurement%20Transactions%20for%20Export%20of%20Cigarettes%20to%20New%20Specific%20Regions) The company procures cigarettes from China Tobacco entities for export to new regions, with H1 2025 procurement of **HKD 0** - The contracting parties are the Company and relevant entities under China Tobacco General Corporation, with an agreement term from April 8, 2024, to December 31, 2026[135](index=135&type=chunk)[137](index=137&type=chunk) - Pricing for high-end and other first-class duty-free cigarettes, according to Document No. 250, shall not be lower than **35%** or **45%** of the domestic ex-tax transfer price[140](index=140&type=chunk)[141](index=141&type=chunk) - Prices for other duty-free cigarettes are determined through fair negotiation, and procurement prices for taxed market cigarettes are also determined through fair negotiation, referencing factors similar to duty-free cigarettes[142](index=142&type=chunk)[143](index=143&type=chunk) Procurement Transactions for Export of Cigarettes to New Specific Regions Amount and Annual Cap | Metric | H1 2025 (million HKD) | 2025 Annual Cap (million HKD) | | :--- | :--- | :--- | | Transaction Amount | 0 | 66.3 | [Confirmation and Review Opinion of Independent Non-Executive Directors](index=44&type=section&id=VI.4%20Confirmation%20and%20Review%20Opinion%20of%20Independent%20Non-Executive%20Directors) Independent non-executive directors confirmed that continuing connected transactions were fair, reasonable, and in the Group's and shareholders' best interests - Independent non-executive directors confirmed that continuing connected transactions were entered into in the ordinary and usual course of business of the Group[152](index=152&type=chunk) - Confirmed that transactions were entered into on normal commercial terms or terms more favorable to the Group, and in accordance with the agreements governing such transactions, whose terms are fair and reasonable and in the overall interests of the shareholders[152](index=152&type=chunk) - The review included reviewing financial information, sampling transaction documents, reviewing independent financial advisor reports, holding Connected Transaction Control Committee meetings, and inquiring about management's control measures[151](index=151&type=chunk) [Review Opinion of Independent Financial Advisor](index=45&type=section&id=VI.5%20Review%20Opinion%20of%20Independent%20Financial%20Advisor) Independent financial advisor confirmed continuing connected transactions were fair, reasonable, and in the Group's and shareholders' best interests - Independent financial advisor Somerley Capital Limited confirmed that permanent continuing connected transactions were entered into in the ordinary and usual course of business of the Group, on normal commercial terms or terms more favorable to the Group, and whose terms are fair and reasonable and in the overall interests of the Group and its shareholders[154](index=154&type=chunk)[155](index=155&type=chunk) - Somerley also confirmed that fixed-term continuing connected transactions and continuing connected transactions with Alliance One Group met the above standards[155](index=155&type=chunk) - The review included obtaining and reviewing transaction documents, discussing with management, inquiring about internal control measures, and comparing markup ratios with industry peers[154](index=154&type=chunk) [Other Information](index=46&type=section&id=VII.%20Other%20Information) [Interim Dividend](index=46&type=section&id=VII.1%20Interim%20Dividend) The Board declared an interim dividend of **HKD 0.19 per share** for H1 2025, an increase from **HKD 0.15** last year Interim Dividend | Metric | H1 2025 (HKD/share) | H1 2024 (HKD/share) | | :--- | :--- | :--- | | Interim Dividend Per Share | 0.19 | 0.15 | - Share transfer registration will be suspended from Thursday, September 11, 2025, to Tuesday, September 16, 2025, to determine eligibility for the interim dividend[157](index=157&type=chunk) [Material Investments, Acquisitions, and Disposals](index=46&type=section&id=VII.2%20Material%20Investments,%20Acquisitions,%20and%20Disposals) For H1 2025, the Group held no material investments and undertook no significant acquisitions or disposals of subsidiaries or associates - The Group held no material investments during the six months ended June 30, 2025[158](index=158&type=chunk) - The Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ended June 30, 2025[159](index=159&type=chunk) [Capital Expenditure](index=46&type=section&id=VII.3%20Capital%20Expenditure) For H1 2025, the Group had no plans for material investments or capital assets - For the six months ended June 30, 2025, the Group had no plans for material investments or capital assets[160](index=160&type=chunk) [Employees](index=46&type=section&id=VII.4%20Employees) As of June 30, 2025, the Group had **56 employees** in Hong Kong and **256** in Brazil, with staff costs of **HKD 62.5 million** Employee Numbers and Costs | Region | June 30, 2025 (Number of Employees) | December 31, 2024 (Number of Employees) | | :--- | :--- | :--- | | Hong Kong | 56 | 53 | | Brazil (excluding seasonal workers) | 256 | 265 | | Staff Costs (million HKD) | 62.5 | 63.1 | - The Group strives to provide employees with market-competitive compensation, reviewing remuneration annually based on market trends, years of service, professional experience, and performance appraisals[161](index=161&type=chunk) - The Group provides induction training to all employees and specific additional professional training based on job responsibilities[161](index=161&type=chunk) [Events After Reporting Period](index=46&type=section&id=VII.5%20Events%20After%20Reporting%20Period) The Board declared an interim dividend of **HKD 0.19 per share** for H1 2025, with no other material post-reporting period events - The Board declared an interim dividend of **HKD 0.19 per share** for the six months ended June 30, 2025[162](index=162&type=chunk) - Other than the above, there were no other material events after June 30, 2025, requiring disclosure by the Group[163](index=163&type=chunk) [Use of Net Proceeds from Initial Public Offering](index=47&type=section&id=VII.6%20Use%20of%20Net%20Proceeds%20from%20Initial%20Public%20Offering) IPO net proceeds were **HKD 904 million**; **HKD 420.3 million** remains, to be used by June 30, 2027, for investments and development Use of Net Proceeds from Initial Public Offering | Purpose | Approx. % of Total | Actual Net Proceeds (million HKD) | Unused Amount as of Jan 1, 2025 (million HKD) | Amount Used from Jan 1 to June 30, 2025 (million HKD) | Unused Amount as of June 30, 2025 (million HKD) | Expected Timeline for Remaining Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Investments and acquisitions complementing the Group's business | 45% | 406.8 | 81.4 | – | 81.4 | Remaining funds to be used by June 30, 2027 | | Support for the Group's continuous business development | 20% | 180.8 | 165.1 | 4.1 | 161.0 | Remaining funds to be used by June 30, 2027 | | Strategic business cooperation with other international tobacco companies, including exploring and developing emerging tobacco markets | 20% | 180.8 | 178.6 | 0.7 | 177.9 | Remaining funds to be used by June 30, 2027 | | General working capital | 10% | 90.4 | – | – | – | N/A | | Improvement of the Group's procurement and sales resource management and optimization of its operational management | 5% | 45.2 | 4.5 | 4.5 | – | N/A | | **Total** | **100%** | **904.0** | **429.6** | **9.3** | **420.3** | - | - Net proceeds were approximately **HKD 904 million**, with **HKD 9.3 million** used and **HKD 420.3 million** remaining[165](index=165&type=chunk)[166](index=166&type=chunk) - Remaining funds are expected to be utilized by June 30, 2027, primarily for investments and acquisitions, business development, and strategic cooperation[166](index=166&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures](index=48&type=section&id=VII.7%20Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares,%20and%20Debentures) As of June 30, 2025, no directors or chief executives held interests or short positions in the company's shares or debentures - As of June 30, 2025, no directors or chief executives of the Company held any interests or short positions in any shares, underlying shares, or debentures of the Company or its associated corporations[167](index=167&type=chunk) [Rights of Directors, Chief Executive, and Employees to Acquire Shares](index=48&type=section&id=VII.8%20Rights%20of%20Directors,%20Chief%20Executive,%20and%20Employees%20to%20Acquire%20Shares) For H1 2025, no arrangements were made for directors, chief executives, or their families to acquire shares or debentures for profit - For the six months ended June 30, 2025, neither the Company, its holding company, nor any subsidiary of its holding company made any arrangements for directors, chief executives, or their close associates to acquire benefits by acquiring shares or debentures[168](index=168&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=48&type=section&id=VII.9%20Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, China Tobacco International Group beneficially owned **72.29%** of the company's shares, making China Tobacco a major shareholder Long Positions of Substantial Shareholders in the Company's Shares and Underlying Shares | Shareholder Name | Nature of Interest | Ordinary Shares Held | % of Total Issued Shares | | :--- | :--- | :--- | :--- | | China Tobacco International Group | Beneficial Owner | 500,010,000 | 72.29% | | China Tobacco General Corporation | Controlled Corporation Interest | 500,010,000 | 72.29% | - China Tobacco General Corporation directly controls one-third or more of the voting rights at China Tobacco International Group's general meetings, thus China Tobacco International Group's interests are deemed as China Tobacco General Corporation's interests[169](index=169&type=chunk) [Changes in Directors' Biographical Details](index=49&type=section&id=VII.10%20Changes%20in%20Directors'%20Biographical%20Details) At the AGM on June 20, 2025, **Shao Yan** was re-elected as non-executive director, and **Wang Chengrui** and **Mao Zilu** as executive directors - **Mr. Shao Yan** was re-elected as a non-executive director, and **Mr. Wang Chengrui** and **Ms. Mao Zilu** were re-elected as executive directors[172](index=172&type=chunk) [Purchase, Sale, or Redemption of the Company's Listed Securities](index=49&type=section&id=VII.11%20Purchase,%20Sale,%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For H1 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities - For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[173](index=173&type=chunk) [Audit Committee](index=49&type=section&id=VII.12%20Audit%20Committee) The Audit Committee reviewed the H1 2025 unaudited interim results, accounting standards, and discussed internal controls and financial reporting - The Audit Committee reviewed the Group's unaudited consolidated interim results for the six months ended June 30, 2025, and accounting standards, and discussed internal control and financial reporting matters[174](index=174&type=chunk) [Compliance with Code Provisions of Corporate Governance Code](index=49&type=section&id=VII.13%20Compliance%20with%20Code%20Provisions%20of%20Corporate%20Governance%20Code) For H1 2025, the company complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules - The Company complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules[175](index=175&type=chunk) [Compliance with Model Code](index=49&type=section&id=VII.14%20Compliance%20with%20Model%20Code) The company adopted the Model Code for directors' securities transactions, with all directors confirming compliance during the reporting period - The Company adopted the Model Code set out in Appendix C3 of the Listing Rules to regulate directors' securities transactions[176](index=176&type=chunk) - All directors confirmed compliance with the standards set out in the Model Code for the six months ended June 30, 2025[176](index=176&type=chunk) [Appendix D2 of the Listing Rules](index=49&type=section&id=VII.15%20Appendix%20D2%20of%20the%20Listing%20Rules) The company confirms no material changes to existing information regarding Appendix D2, paragraph 32 of the Listing Rules, other than as disclosed - The Company confirmed that there were no material changes to the existing information regarding matters listed in paragraph 32 of Appendix D2 of the Listing Rules compared to the Company's 2024 annual report disclosures[177](index=177&type=chunk) [Independent Auditor's Review Report](index=50&type=section&id=VIII.%20Independent%20Auditor's%20Review%20Report) [Review Conclusion](index=50&type=section&id=VIII.1%20Review%20Conclusion) KPMG reviewed the H1 2025 interim financial report, concluding no material non-compliance with HKAS 34 - KPMG reviewed this interim financial report in accordance with Hong Kong Standard on Review Engagements 2410[178](index=178&type=chunk)[179](index=179&type=chunk) - The review concluded that nothing has come to their attention that causes them to believe the interim financial report as of June 30, 2025, is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[180](index=180&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=51&type=section&id=IX.%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) [Overview of Profit or Loss and Comprehensive Income](index=51&type=section&id=IX.1%20Overview%20of%20Profit%20or%20Loss%20and%20Comprehensive%20Income) H1 2025 revenue was **HKD 10.316 billion**, gross profit **HKD 946.5 million**, and profit attributable to equity holders **HKD 706.4 million** Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the six months ended June 30) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Revenue | 10,316,249 | 8,704,047 | | Cost of sales | (9,369,773) | (7,739,832) | | Gross Profit | 946,476 | 964,215 | | Net other income | 71,973 | 68,426 | | Administrative and other operating expenses | (79,450) | (74,862) | | Operating profit | 938,999 | 957,779 | | Finance costs | (82,902) | (115,463) | | Profit before tax | 856,097 | 842,316 | | Income tax | (133,537) | (162,614) | | Profit for the period | 722,560 | 679,702 | | Profit for the period attributable to equity holders of the Company | 706,353 | 643,341 | | Profit for the period attributable to non-controlling interests | 16,207 | 36,361 | | Total comprehensive income for the period | 727,976 | 669,530 | | Earnings per share (HKD) | 1.02 | 0.93 | [Consolidated Statement of Financial Position](index=52&type=section&id=X.%20Consolidated%20Statement%20of%20Financial%20Position) [Overview of Assets, Liabilities, and Equity](index=52&type=section&id=X.1%20Overview%20of%20Assets,%20Liabilities,%20and%20Equity) As of June 30, 2025, total non-current assets were **HKD 534.1 million**, current assets **HKD 9.469 billion**, and net assets **HKD 3.701 billion** Consolidated Statement of Financial Position (as of June 30, 2025) | Metric | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Non-current assets | 534,137 | 444,363 | | Current assets | 9,468,623 | 9,372,292 | | Inventories | 3,289,012 | 5,425,745 | | Trade and other receivables (current) | 2,204,559 | 1,055,593 | | Cash and cash equivalents | 1,231,374 | 517,466 | | Short-term bank deposits | 2,743,678 | 2,340,108 | | Current liabilities | 6,224,545 | 6,534,481 | | Bank borrowings | 2,491,975 | 2,947,744 | | Net current assets | 3,244,078 | 2,837,811 | | Net assets | 3,700,825 | 3,187,270 | | Total equity | 3,700,825 | 3,187,270 | [Consolidated Statement of Changes in Equity](index=54&type=section&id=XI.%20Consolidated%20Statement%20of%20Changes%20in%20Equity) [Overview of Changes in Equity](index=54&type=section&id=XI.1%20Overview%20of%20Changes%20in%20Equity) H1 2025 equity attributable to owners increased to **HKD 3.503 billion**, driven by profit and other comprehensive income Consolidated Statement of Changes in Equity (for the six months ended June 30) | Metric | Balance as of Jan 1, 2025 (thousand HKD) | Profit for the Period (thousand HKD) | Other Comprehensive Income (thousand HKD) | Dividends Approved in Prior Year (thousand HKD) | Balance as of June 30, 2025 (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total equity attributable to equity holders of the Company | 3,005,174 | 706,353 | 5,416 | (214,421) | 3,502,522 | | Non-controlling interests | 182,096 | 16,207 | – | – | 198,303 | | **Total** | **3,187,270** | **722,560** | **5,416** | **(214,421)** | **3,700,825** | [Condensed Consolidated Statement of Cash Flows](index=56&type=section&id=XII.%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) [Overview of Cash Flows](index=56&type=section&id=XII.1%20Overview%20of%20Cash%20Flows) H1 2025 net cash from operating activities was **HKD 1.641 billion**, with a net increase in cash and cash equivalents of **HKD 718.7 million** Condensed Consolidated Statement of Cash Flows (for the six months ended June 30) | Activity | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Net cash from operating activities | 1,641,444 | 414,603 | | Net cash used in investing activities | (377,009) | (335,650) | | Net cash (used in)/from financing activities | (545,776) | 44,035 | | Net increase in cash and cash equivalents | 718,659 | 122,988 | | Cash and cash equivalents at June 30 | 1,231,374 | 711,567 | [Notes to the Financial Statements](index=57&type=section&id=XIII.%20Notes%20to%20the%20Financial%20Statements) [General Information](index=57&type=section&id=XIII.1%20General%20Information) China Tobacco International (HK) is a Hong Kong-listed company, with China Tobacco as its ultimate controlling entity, engaged in various tobacco businesses - The Company was listed on June 12, 2019, with China Tobacco International Group Limited as its direct parent company and China Tobacco General Corporation as its ultimate controlling company[193](index=193&type=chunk) - The Group's principal businesses include leaf tobacco export, leaf tobacco import, cigarette export, new tobacco products export, and Brazil operations[194](index=194&type=chunk) [Basis of Preparation](index=58&type=section&id=XIII.2%20Basis%20of%20Preparation) This interim financial report is prepared under HKEX Listing Rules and HKAS 34, reviewed by KPMG, using consistent accounting policies - This 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[195](index=195&type=chunk) - The interim financial report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[195](index=195&type=chunk) - Management is required to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts when preparing the report[195](index=195&type=chunk) [Changes in Accounting Policies](index=58&type=section&id=XIII.3%20Changes%20in%20Accounting%20Policies) The Group applied HKAS 21 amendments on foreign exchange, with no material impact due to the absence of non-convertible foreign currency transactions - The Group has applied the amendments to Hong Kong Accounting Standard 21 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability' for this accounting period[197](index=197&type=chunk) - As the Group did not undertake any foreign currency transactions where one foreign currency is not exchangeable into another, these amendments had no material impact on this interim report[197](index=197&type=chunk) [Revenue and Segment Reporting](index=59&type=section&id=XIII.4%20Revenue%20and%20Segment%20Reporting) This section details the Group's revenue sources and segment reporting, categorized by product/service lines and geographical regions [Revenue](index=59&type=section&id=XIII.4.1%20Revenue) H1 2025 customer contract revenue totaled **HKD 10.316 billion**, primarily from leaf tobacco sales and mainland China Customer Contract Revenue by Major Product and Service Line (for the six months ended June 30) | Product/Service Line | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Leaf tobacco product sales | 9,745,783 | 8,112,880 | | Cigarette sales | 551,775 | 547,323 | | New tobacco product sales | 14,598 | 43,517 | | Services rendered | 4,093 | 327 | | **Total** | **10,316,249** | **8,704,047** | Revenue by Region (for the six months ended June 30) | Region | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Mainland China | 8,836,606 | 7,256,648 | | Republic of Indonesia | 927,803 | 716,963 | | Hong Kong | 162,462 | 94,137 | | Brazil | 141,299 | 200,339 | | Socialist Republic of Vietnam | 125,180 | 131,777 | | Republic of the Philippines | 23,747 | 18,803 | | Arab Republic of Egypt | 13,716 | 48,608 | | United Arab Emirates | – | 58,942 | | Other | 85,436 | 177,830 | | **Total** | **10,316,249** | **8,704,047** | [Segment Reporting](index=60&type=section&id=XIII.4.2%20Segment%20Reporting) The Group manages and reports five segments: leaf tobacco export/import, cigarette export, new tobacco products export, and Brazil operations - The Group's five reportable segments are: leaf tobacco export business, leaf tobacco import business, cigarette export business, new tobacco products export business, and Brazil operations[206](index=206&type=chunk) - Segment assets primarily include trade and other receivables and inventories, while segment liabilities primarily include trade and other payables and contract liabilities[205](index=205&type=chunk) Reportable Segment Results (for the six months ended June 30, 2025) | Segment | Revenue (thousand HKD) | Gross Profit (thousand HKD) | Assets (thousand HKD) | Liabilities (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Leaf Tobacco Export Business | 1,155,640 | 63,129 | 191,616 | 376,165 | | Leaf Tobacco Import Business | 8,398,894 | 687,162 | 4,306,869 | 2,756,577 | | Cigarette Export Business | 551,775 | 141,831 | 230,342 | 116,369 | | New Tobacco Products Export Business | 14,598 | 780 | 1,459 | 6,604 | | Brazil Operations | 195,342 | 53,574 | 940,884 | 58,617 | | Unallocated | – | – | 4,331,590 | 2,987,603 | | **Total** | **10,316,249** | **946,476** | **10,002,760** | **6,301,935** | [Net Other Income](index=62&type=section&id=XIII.5%20Net%20Other%20Income) H1 2025 net other income was **HKD 71.973 million**, mainly from interest income of **HKD 80.940 million** Net Other Income (for the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Net exchange (loss)/gain | (8,967) | 1,877 | | Interest income | 80,940 | 66,549 | | **Total** | **71,973** | **68,426** | [Profit Before Tax](index=63&type=section&id=XIII.6%20Profit%20Before%20Tax) This section details expenses deducted from profit before tax, including finance costs, depreciation, amortization, and inventory costs [Finance Costs](index=63&type=section&id=XIII.6.1%20Finance%20Costs) H1 2025 finance costs totaled **HKD 82.902 million**, primarily from bank borrowing interest of **HKD 72.852 million** Finance Costs (for the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Interest on bank borrowings | 72,852 | 101,615 | | Interest on lease liabilities | 946 | 70 | | Interest on provision | 113 | 58 | | Other finance costs | 8,991 | 13,720 | | **Total** | **82,902** | **115,463** | [Other Items](index=63&type=section&id=XIII.6.2%20Other%20Items) H1 2025 depreciation was **HKD 10.957 million**, intangible asset amortization **HKD 15.445 million**, and inventory costs **HKD 9.359 billion** Other Items (for the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Depreciation | 10,957 | 8,525 | | Amortization of intangible assets | 15,445 | 15,451 | | Short-term lease expenses | 1,001 | 1,290 | | Reversal of impairment loss on trade and other receivables | (707) | (949) | | Cost of inventories | 9,359,356 | 7,715,854 | [Income Tax](index=64&type=section&id=XIII.7%20Income%20Tax) This section details the Group's income tax components, including Hong Kong profits tax, overseas tax, deferred tax, and Pillar Two assessment [Income Tax in the Consolidated Financial Statements](index=64&type=section&id=XIII.7.1%20Income%20Tax%20in%20the%20Consolidated%20Financial%20Statements) H1 2025 income tax totaled **HKD 133.5 million**, comprising Hong Kong profits tax, overseas tax, and deferred tax reversal Income Tax (for the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Current tax – Hong Kong profits tax | 106,246 | 82,669 | | Current tax – Overseas | 113,539 | – | | Deferred tax | (86,248) | 79,945 | | **Total** | **133,537** | **162,614** | - Hong Kong profits tax provision is calculated at **16.5%** of the estimated assessable profits for the period[215](index=215&type=chunk) - The applicable tax rates for Brazilian corporate income tax and social contribution tax are **25%** and **9%**, respectively[215](index=215&type=chunk) [Pillar Two Income Tax](index=64&type=section&id=XIII.7.2%20Pillar%20Two%20Income%20Tax) The Group is subject to OECD Pillar Two rules from January 1, 2025, with an initial assessment indicating no material impact on financial statements - The Group is subject to the global anti-base erosion model rules ('Pillar Two Model Rules') issued by the Organisation for Economic Co-operation and Development[216](index=216&type=chunk) - From January 1, 2025, the Group is subject to Pillar Two income tax in the Hong Kong Special Administrative Region and Brazil[217](index=217&type=chunk) - The Group has initially assessed the potential impact of Pillar Two income tax expense and considers its impact on the consolidated financial statements not material[217](index=217&type=chunk) [Dividends](index=64&type=section&id=XIII.8%20Dividends) The 2024 final dividend of **HKD 0.31 per share** was paid, and an H1 2025 interim dividend of **HKD 0.19 per share** was declared Dividend Distribution | Dividend Type | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | 2024 final dividend (per share) | 0.31 | 0.32 | | 2024 final dividend (total) | 214,421,000 | 221,338,000 | | H1 2025 interim dividend (per share) | 0.19 | 0.15 | | H1 2025 interim dividend (total) | 131,419,000 | 103,752,000 | [Earnings Per Share](index=65&type=section&id=XIII.9%20Earnings%20Per%20Share) H1 2025 basic EPS was **HKD 1.02**, calculated from profit attributable to ordinary shareholders and weighted average shares outstanding Earnings Per Share (for the six months ended June 30) | Metric | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Basic and diluted earnings per share | 1.02 | 0.93 | | Profit attributable to ordinary equity holders of the Company (thousand HKD) | 706,353 | 643,341 | | Weighted Average Number of Ordinary Shares Issued | 691,680,000 | 691,680,000 | - As no potential dilutive ordinary shares were issued, the diluted earnings per share presented is the same as the basic earnings per share[221](index=221&type=chunk) [Inventories](index=65&type=section&id=XIII.10%20Inventories) As of June 30, 2025, and December 31, 2024, the Group's inventories primarily comprised leaf tobacco in warehouses and in transit - The Group's inventories primarily comprise leaf tobacco in warehouses and in transit during the sales process[222](index=222&type=chunk) [Trade and Other Receivables](index=65&type=section&id=XIII.11%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables were **HKD 2.272 billion**, with most expected to be recovered within one year Trade and Other Receivables (as of June 30, 2025) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Trade receivables | 1,674,316 | 610,985 | | Bills receivable | 20,214 | 127,855 | | Deposits, prepayments and other receivables | 319,987 | 101,912 | | Advances to producers | 164,095 | 201,438 | | Value-added tax and other recoverable taxes | 92,933 | 50,415 | | **Total** | **2,271,545** | **1,092,605** | | Current portion | 2,204,559 | 1,055,593 | | Non-current portion | 66,986 | 37,012 | Aging Analysis of Trade Receivables and Bills Receivable (by invoice date) | Aging | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within 30 days | 1,611,415 | 71,136 | | 31 to 90 days | 34,421 | 401,163 | | Over 90 days | 48,694 | 266,541 | | **Total** | **1,694,530** | **738,840** | - Trade receivables are generally due within **30 to 180 days** from the invoice date, and the Group generally does not hold any collateral for the balances[225](index=225&type=chunk) [Cash and Cash Equivalents and Short-term Bank Deposits](index=67&type=section&id=XIII.12%20Cash%20and%20Cash%20Equivalents%20and%20Short-term%20Bank%20Deposits) As of June 30, 2025, cash and cash equivalents totaled **HKD 1.231 billion**, with short-term bank deposits of **HKD 2.744 billion** Cash and Cash Equivalents and Short-term Bank Deposits (as of June 30, 2025) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Cash and bank balances | 640,552 | 364,268 | | Certificates of deposit | 590,822 | 153,198 | | **Cash and cash equivalents** | **1,231,374** | **517,466** | | Short-term deposits with original maturity over three months | 2,743,678 | 2,340,108 | | **Total** | **3,975,052** | **2,857,574** | - Certificates of deposit have original maturity dates of less than three months and are held to meet short-term cash commitments[227](index=227&type=chunk) [Trade and Other Payables and Contract Liabilities](index=67&type=section&id=XIII.13%20Trade%20and%20Other%20Payables%20and%20Contract%20Liabilities) As of June 30, 2025, trade and other payables and contract liabilities totaled **HKD 3.576 billion**, with most due within one year Trade and Other Payables

Company Information [Board of Directors and Committees](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E5%A7%94%E5%93%A1%E6%9C%83) This section details the composition of the Board of Directors and its committees, outlining the company's governance structure - Mr. Sun Tao serves as the company's Chairman and Chief Executive Officer[3](index=3&type=chunk) - The company has established Audit, Remuneration, and Nomination Committees to ensure effective corporate governance[3](index=3&type=chunk) [Company Basic Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) This section provides essential company details, including registration, operations, stock information, and key professional contacts - The company's stock code is **2512**, and its official website is **www.cloudcsp.com**[3](index=3&type=chunk) - The registered office is in the Cayman Islands, with headquarters and principal place of business in Wuxi, Jiangsu Province, China[3](index=3&type=chunk)[4](index=4&type=chunk) - The auditor is **Ernst & Young**[4](index=4&type=chunk) Financial Highlights [Key Financial Indicators](index=5&type=section&id=%E6%A0%B8%E5%BF%83%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) For the six months ended June 30, 2025, the company reported a 10.03% revenue increase and an 18.97% profit growth, maintaining stable earnings per share | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 406,759 | 369,696 | 10.03 | | Gross Profit | 47,690 | 47,110 | 1.23 | | Profit Before Tax | 16,507 | 14,850 | 11.16 | | Profit for the Period | 14,923 | 12,543 | 18.97 | | Earnings Per Share (RMB) | 0.03 | 0.03 | — | Management Discussion and Analysis [Business Review](index=6&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%BE) In H1 2025, the company shifted its focus to scenario-based edge computing and AI services, launching new offerings, achieving market recognition, and driving R&D innovation - Business focus expanded from building edge computing infrastructure to developing scenario-based edge computing applications and deep integration with various industries, strengthening the core strategy of 'Edge Cloud + AI Services'[7](index=7&type=chunk) - Established a '10-kilometer low-latency computing service circle' covering over **2,000** districts and counties nationwide, building a comprehensive technology stack spanning MaaS and SaaS layers[7](index=7&type=chunk) - Successfully launched EdgeAIStation service, Lingjing Cloud large model private deployment solution, and computing power scheduling solution[8](index=8&type=chunk) - Received multiple accolades, including being recognized as a Top 20 Chinese Edge Computing Enterprise for three consecutive years and inclusion in the '2025 Government Industry Xinchuang Ecosystem Map'[9](index=9&type=chunk) - R&D efforts focused on real-time video stream intelligent analysis technology and advancing cloud-edge collaborative intelligent IoT systems, with a H2 focus on service quality and AI large model research[9](index=9&type=chunk) [Outlook](index=7&type=section&id=%E5%89%8D%E6%99%AF) The company plans to focus on intelligent computing service expansion, R&D, ecosystem partnerships, and a 'government-enterprise dual-driven' model, leveraging national strategic initiatives - New business expansion will focus on intelligent computing services, providing comprehensive computing resources and processing capabilities, including hardware consulting, deployment, network enhancement, platform construction, equipment procurement, technical support, and leasing services[10](index=10&type=chunk) - Technology R&D will optimize multimodal AI large models for edge computing scenarios, develop products related to computing power, AI models, and data services, building a full-stack technology system from IaaS to SaaS[11](index=11&type=chunk) - Strengthen ecosystem partnerships, co-establish edge AI laboratories with universities, and collaborate with renowned hardware manufacturers and vertical industry participants to build a comprehensive ecosystem[12](index=12&type=chunk) - Build a 'government-enterprise dual-driven' business model, with government support for AI industry development and enterprise-side provision of secure, customized intelligent assistants and AI models[13](index=13&type=chunk) [Financial Overview](index=8&type=section&id=%E8%B4%A2%E5%8A%A1%E6%A6%82%E8%A7%88) H1 revenue grew by **10.0%** driven by IDC and edge computing services, while gross margin slightly declined; profit for the period increased by **18.97%** due to lower listing expenses and improved cost management Segment Revenue (RMB thousand) | Service Type | H1 2025 | Share (%) | H1 2024 | Share (%) | | :--- | :--- | :--- | :--- | :--- | | IDC Solution Services | 376,077 | 92.5 | 348,699 | 94.3 | | Edge Computing Services | 29,228 | 7.2 | 20,997 | 5.7 | | Other Services | 1,454 | 0.3 | — | — | | **Total Revenue** | **406,759** | **100.0** | **369,696** | **100.0** | - Revenue from IDC solution services increased by **7.9%** to **RMB376.1 million**, primarily due to regular business expansion[16](index=16&type=chunk) - Revenue from edge computing services significantly increased by **39.0%** to **RMB29.2 million**, mainly driven by growing market demand for EdgeCDN services and new customer acquisition[17](index=17&type=chunk) - Cost of sales increased by **11.3%** to **RMB359.1 million**, with edge computing services' cost of sales growing by **47.9%**, primarily due to rising unit prices for bandwidth resources and significant revenue growth[19](index=19&type=chunk)[21](index=21&type=chunk) - Overall gross profit margin decreased from approximately **12.7%** to approximately **11.7%**, mainly due to strategic price adjustments for IDC solution services and increased bandwidth procurement costs for edge computing services[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - Other income and gains decreased by **11.6%** to **RMB3.8 million**, primarily due to a reduction in government grants received[26](index=26&type=chunk) - Selling and distribution expenses decreased by **13.9%** to **RMB3.1 million**, and administrative expenses decreased by **17.6%** to **RMB17.3 million**, mainly attributable to strengthened internal management controls and no listing expenses incurred during the reporting period[27](index=27&type=chunk)[28](index=28&type=chunk) - R&D expenses increased by **38.8%** to **RMB9.3 million**, primarily due to higher staff costs from an expanded R&D team and increased depreciation expenses for R&D equipment purchases[29](index=29&type=chunk) - Profit for the period increased by **18.97%** to **RMB14.9 million**, mainly benefiting from reduced listing expenses and the Group's strengthened internal controls over cost management[34](index=34&type=chunk) [Liquidity and Financial Resources](index=10&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) Trade receivables and payables increased due to business expansion, while cash and cash equivalents slightly decreased; the gearing ratio remained reasonable under prudent treasury management - Trade receivables increased to **RMB300.5 million** (end of 2024: RMB235.0 million), primarily due to revenue growth[35](index=35&type=chunk) - Prepayments, other receivables, and other assets increased to **RMB225.8 million** (end of 2024: RMB216.0 million), mainly due to purchase discounts provided by suppliers[36](index=36&type=chunk) - Trade payables increased to **RMB216.3 million** (end of 2024: RMB199.6 million), primarily attributable to business expansion[37](index=37&type=chunk) - Cash and cash equivalents amounted to **RMB348.1 million** (end of 2024: RMB371.0 million)[39](index=39&type=chunk) Debt Situation (RMB thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Interest-bearing Bank Borrowings | 294,567 | 262,811 | | Lease Liabilities | 262 | 494 | | **Total Debt** | **294,829** | **263,305** | - The gearing ratio increased from **0.6 times** as of December 31, 2024, to approximately **0.7 times** as of June 30, 2025[43](index=43&type=chunk) [Exchange Rate Fluctuation Risk and Future Plans](index=12&type=section&id=%E5%8C%AF%E7%8E%87%E6%B3%A2%E5%8B%95%E9%A2%A8%E9%9A%AA%E5%8F%8A%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) The company faces RMB/HKD exchange rate risk, with management monitoring and considering hedging; no major investments or disposals occurred, but future opportunities will be explored - The Group's business is primarily conducted in RMB, while non-RMB assets and liabilities are denominated in HKD; exchange rate fluctuations may impact operating results, and management will continue to monitor and consider hedging measures[44](index=44&type=chunk) - During the reporting period, the Group did not undertake any significant investments, acquisitions, or disposals, nor did it pledge any assets[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) - Other than as disclosed, the Group has no future plans for significant investments and capital assets but will continue to explore investment opportunities beneficial to shareholders as a whole[48](index=48&type=chunk) Other Information [Directors' and Major Shareholders' Interests](index=13&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%88%96%E5%85%B6%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E7%9A%84%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E4%B8%AD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) This section details directors' and major shareholders' interests in the company's shares, with Mr. Sun Tao holding **75%** through Ru Yi IT as the controlling shareholder Shareholdings of Directors and Chief Executive | Director Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Sun Tao ('Mr. Sun') | Interest in Controlled Corporation | 345,000,000 | 75.0% | Major Shareholders' Shareholdings | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Ru Yi IT | Beneficial Owner | 345,000,000 | 75% | - Mr. Sun Tao beneficially and wholly owns Ru Yi IT and is deemed to be interested in the **345,000,000** shares held by Ru Yi IT, representing approximately **75%** of the company's issued share capital[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) [Use of Proceeds from Global Offering](index=14&type=section&id=%E5%85%A8%E7%90%83%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%9A%84%E7%94%A8%E9%80%94) Net proceeds from the global offering totaled approximately **HKD336.8 million**, with **HKD49.1 million** utilized by June 30, 2025, for business improvements, edge computing upgrades, talent, R&D, and working capital - The net proceeds from the global offering amounted to approximately **HKD336.8 million**[53](index=53&type=chunk) Use and Application of Net Proceeds from Global Offering (HKD'000) | Purpose | Approximate Allocation | Approximate Percentage | Amount Utilized During Reporting Period | Unutilized Amount as of June 30 | | :--- | :--- | :--- | :--- | :--- | | Existing Business Improvement and Operational Development | 160,654 | 47.7 | 14,096 | 114,327 | | Full Implementation and Upgrade of Our Edge Computing Services | 62,308 | 18.5 | 17,437 | 3,344 | | Recruitment of Talent for IDC Solution Services and Edge Computing Services Operations | 43,110 | 12.8 | 6,478 | 29,161 | | R&D Collaboration with Universities and Research Institutions | 37,048 | 11.0 | 171 | 26,246 | | Working Capital and General Corporate Purposes | 33,680 | 10.0 | 10,932 | 11,912 | | **Total** | **336,800** | **100.0** | **49,114** | **184,990** | - As of June 30, 2025, approximately **HKD49.1 million** of net proceeds has been utilized, with **HKD184.99 million** remaining unutilized[54](index=54&type=chunk) [Employee Remuneration and Relations](index=15&type=section&id=%E5%83%B1%E5%93%A1%E8%96%AA%E9%85%AC%E5%8F%8A%E9%97%9C%E4%BF%82) As of June 30, 2025, the Group employed **121** staff, with total employee expenses increasing by **17.3%**, supported by comprehensive training and a share award scheme - As of June 30, 2025, the Group had a total of **121** employees[55](index=55&type=chunk) - For the six months ended June 30, 2025, total staff costs (including directors' emoluments) were approximately **RMB17.6 million**, an increase of **17.3%** from RMB15.0 million in the same period last year[55](index=55&type=chunk) - The Group has established comprehensive training programs covering corporate culture, employee rights and responsibilities, team building, professional conduct, and work performance[55](index=55&type=chunk) [Share Award Scheme](index=15&type=section&id=%E8%82%A1%E4%BB%BD%E7%8D%8E%E5%8B%B5%E8%A8%88%E5%8A%83) A post-IPO restricted share unit scheme was adopted to incentivize and retain talent by aligning employee and shareholder interests, valid for ten years, with no awards granted to date - The Board adopted and approved a share award scheme on May 14, 2024, aiming to provide selected participants with opportunities to acquire ownership interests in the company and to incentivize and retain them to serve the Group[56](index=56&type=chunk)[57](index=57&type=chunk) - The total number of relevant awarded shares granted under the scheme shall not exceed **10%** of the company's issued shares immediately following listing (i.e., **46,000,000** shares)[57](index=57&type=chunk) - The post-IPO restricted share unit scheme is valid for **ten (10) years** from the listing date, and as of the date of this report, no awarded shares have been granted, exercised, cancelled, lapsed, or remain outstanding under the scheme[58](index=58&type=chunk)[59](index=59&type=chunk) [Corporate Governance](index=16&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The company adheres to the Model Code and Corporate Governance Code principles, with the combined Chairman and CEO role deemed beneficial for efficiency, subject to safeguards and regular review - The company has made specific inquiries to all directors regarding any non-compliance with the Model Code, and all directors have confirmed compliance with the required standards therein[61](index=61&type=chunk) - The company has applied the principles of the Corporate Governance Code and complied with all applicable code provisions, except for the roles of Chairman and Chief Executive Officer being held by Mr. Sun Tao, which deviates from code provision C.2.1[62](index=62&type=chunk) - The Board believes that Mr. Sun Tao's dual role benefits the Group's business prospects and operational efficiency, and the presence of three independent non-executive directors provides independent perspectives, ensuring a sufficient balance of power within the Board[62](index=62&type=chunk) - The Board will regularly review whether it is necessary to appoint different individuals to serve as Chairman and Chief Executive Officer[62](index=62&type=chunk) [Other Important Matters](index=17&type=section&id=%E5%85%B6%E4%BB%96%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A0%85) No listed securities were purchased, sold, or redeemed, nor was an interim dividend declared; the Audit Committee reviewed interim results and confirmed compliance with contractual arrangements - During the reporting period, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[63](index=63&type=chunk) - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025[64](index=64&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim results for the reporting period, deeming them prepared in accordance with applicable accounting standards and the Listing Rules, without any objections[65](index=65&type=chunk) - The Board has reviewed the overall performance of the contractual arrangements and believes that the Group has complied with the contractual arrangements in all material respects during the reporting period and up to the date of this interim report[66](index=66&type=chunk) [Events After Reporting Period](index=18&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E5%BE%8C%E7%BA%8C%E4%BA%8B%E4%BB%B6) Post-reporting period, the company raised approximately **HKD228 million** from a new share subscription for business enhancement and expansion, and formed a joint venture with Shannon Semiconductor for intelligent computing services - On July 18, 2025, the company entered into subscription agreements with two subscribers to issue and subscribe for a total of **45,985,000** new shares at a subscription price of **HKD4.98** per share[67](index=67&type=chunk) - The subscription was completed on August 18, 2025, with the company receiving total net proceeds of approximately **HKD228,000,000**, intended for enhancing core business, business expansion, establishing proprietary intelligent computing centers, and supplementing working capital[68](index=68&type=chunk) - On August 12, 2025, Wuxi Lingjing Cloud Information Technology Co., Ltd., a subsidiary of the company, entered into a joint venture agreement with Shannon Semiconductor Technology Co., Ltd. to establish a joint venture to explore the intelligent computing services market, with Wuxi Lingjing Cloud holding a **75%** interest[69](index=69&type=chunk) Financial Statements [Condensed Consolidated Interim Statement of Profit or Loss](index=19&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, revenue was **RMB406.8 million**, profit for the period was **RMB14.9 million**, and basic and diluted EPS was **RMB0.03** Condensed Consolidated Interim Statement of Profit or Loss Summary (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 406,759 | 369,696 | | Cost of Sales | (359,069) | (322,586) | | Gross Profit | 47,690 | 47,110 | | Other Income and Gains | 3,754 | 4,321 | | Selling and Distribution Expenses | (3,147) | (3,639) | | Administrative Expenses | (17,289) | (20,963) | | R&D Expenses | (9,270) | (6,683) | | Impairment Loss on Financial Assets | (1,690) | (2,335) | | Other Expenses | (40) | (20) | | Finance Costs | (3,501) | (2,941) | | Profit Before Tax | 16,507 | 14,850 | | Income Tax Expense | (1,584) | (2,307) | | **Profit for the Period** | **14,923** | **12,543** | | Profit Attributable to Owners of the Parent | 14,687 | 12,320 | | Profit Attributable to Non-controlling Interests | 236 | 223 | | Basic and Diluted Earnings Per Share (RMB) | 0.03 | 0.03 | [Condensed Consolidated Interim Statement of Comprehensive Income](index=20&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, total comprehensive income was **RMB13.1 million**, a decrease primarily due to exchange differences on foreign operations translation Condensed Consolidated Interim Statement of Comprehensive Income Summary (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the Period | 14,923 | 12,543 | | Other Comprehensive Income (net of tax) | (1,854) | 4,409 | | **Total Comprehensive Income for the Period** | **13,069** | **16,952** | | Attributable to Owners of the Parent | 12,833 | 16,729 | | Attributable to Non-controlling Interests | 236 | 223 | - In H1 2025, exchange differences on translation of foreign operations resulted in a net other comprehensive loss of **RMB4,937 thousand**, compared to a gain of RMB4,409 thousand in H1 2024[74](index=74&type=chunk) [Condensed Consolidated Interim Statement of Financial Position](index=21&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, total assets reached **RMB960.8 million**, with current assets forming a large portion; equity attributable to owners of the parent increased to **RMB415.3 million**, and total current liabilities were **RMB541.8 million** Condensed Consolidated Interim Statement of Financial Position Summary (RMB thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Non-current Assets | 85,593 | 89,219 | | Current Assets | 875,158 | 822,187 | | **Total Assets** | **960,751** | **911,406** | | **EQUITY** | | | | Equity Attributable to Owners of the Parent | 415,275 | 402,442 | | Non-controlling Interests | 3,714 | 3,478 | | **Total Equity** | **418,989** | **405,920** | | **LIABILITIES** | | | | Non-current Liabilities | — | 9 | | Current Liabilities | 541,762 | 505,477 | | **Total Liabilities** | **541,762** | **505,486** | | **Total Equity and Liabilities** | **960,751** | **911,406** | - Net current assets increased from **RMB316.7 million** as of December 31, 2024, to **RMB333.4 million** as of June 30, 2025[75](index=75&type=chunk) [Condensed Consolidated Interim Statement of Changes in Equity](index=22&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) Equity attributable to owners of the parent increased from **RMB402.4 million** (end of 2024) to **RMB415.3 million** (June 30, 2025), primarily due to profit for the period Changes in Equity Attributable to Owners of the Parent (RMB thousand) | Metric | December 31, 2024 (Audited) | Profit for the Period | Exchange Fluctuation Reserve | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | | Share Capital | 33 | — | — | 33 | | Share Premium | 332,265 | — | — | 332,265 | | Merger Reserve | 31,104 | — | — | 31,104 | | Statutory Surplus Reserve | 11,133 | — | — | 11,133 | | Exchange Fluctuation Reserve | 6,349 | — | (1,854) | 4,495 | | Retained Profits | 21,558 | 14,687 | — | 36,245 | | **Total** | **402,442** | **14,687** | **(1,854)** | **415,275** | - Profit for the period was **RMB14,687 thousand**, significantly contributing to equity attributable to owners of the parent[76](index=76&type=chunk) [Condensed Consolidated Interim Statement of Cash Flows](index=24&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, net cash flow from operating activities was **negative RMB54.4 million**, investing activities **positive RMB5.3 million**, and financing activities **positive RMB28.0 million**, leading to a decrease in period-end cash Condensed Consolidated Interim Statement of Cash Flows Summary (RMB thousand) | Activity Type | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash Flows Used in Operating Activities | (54,411) | (397,793) | | Net Cash Flows From/(Used in) Investing Activities | 5,281 | (24,915) | | Net Cash Flows From Financing Activities | 28,023 | 420,597 | | **Net Decrease in Cash and Cash Equivalents** | **(21,107)** | **(2,111)** | | Cash and Cash Equivalents at End of Period | 348,055 | 164,639 | - Net cash flows used in operating activities amounted to **RMB(54,411) thousand**, primarily impacted by an increase in trade receivables[77](index=77&type=chunk) - Net cash flows from investing activities amounted to **RMB5,281 thousand**, mainly benefiting from the repayment of long-term receivables[77](index=77&type=chunk) - Net cash flows from financing activities amounted to **RMB28,023 thousand**, primarily from new bank loans less repayment of bank loans and interest paid[78](index=78&type=chunk) Notes to the Condensed Consolidated Interim Financial Information [Company Information and Basis of Presentation](index=25&type=section&id=1.%20%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Incorporated in the Cayman Islands, the company primarily provides IDC and edge computing services in mainland China; interim financials are prepared under IAS 34 and should be read with annual statements - The company was incorporated as a limited liability company in the Cayman Islands on **December 10, 2021**[79](index=79&type=chunk) - The Group is principally engaged in providing Internet Data Centre (IDC) solution services, edge computing services, and other services in mainland China[79](index=79&type=chunk) - The condensed consolidated interim financial information for the six months ended June 30, 2025, has been prepared in accordance with **International Accounting Standard 34**[80](index=80&type=chunk) [Changes in Accounting Policies and Disclosures](index=25&type=section&id=3.%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E7%9A%84%E8%AE%8A%E5%8B%95%E5%8F%8A%E6%8A%AB%E9%9C%B2) Accounting policies for interim financials are consistent with annual statements, except for the first-time adoption of revised IAS 21 'Lack of Exchangeability,' which had no material impact - The accounting policies adopted in the preparation of the condensed consolidated interim financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024, except for the first-time adoption of the following revised International Financial Reporting Standards for the financial information of the current period[81](index=81&type=chunk) - Revised **IAS 21 'Lack of Exchangeability'** had no impact on the condensed consolidated interim financial information, as the currencies used for transactions by the Group and the functional currencies used by Group entities for translation to the Group's presentation currency are exchangeable[82](index=82&type=chunk) [Operating Segments and Geographical Information](index=25&type=section&id=4.%20%E7%B6%93%E7%87%9F%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group operates as a single reportable segment providing IDC and edge computing services in mainland China, with all revenue and non-current assets originating domestically, thus no further segment or geographical analysis is presented - The Group is principally a provider of IDC solution services, edge computing services, and other services in mainland China[83](index=83&type=chunk) - As the Group has only one reportable operating segment, no further operating segment analysis is presented[83](index=83&type=chunk) - During the reporting period, all of the Group's revenue was derived from customers located in mainland China, and all of the Group's non-current assets were located in mainland China; therefore, no further geographical information is presented in accordance with **IFRS 8**[84](index=84&type=chunk) [Details of Revenue, Other Income and Gains](index=26&type=section&id=5.%20%E6%94%B6%E7%9B%8A%E3%80%81%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) Total revenue from customer contracts was **RMB406.8 million**, mainly from IDC and edge computing services; other income, including government grants and interest, saw a significant year-on-year decrease in grants Breakdown of Revenue from Contracts with Customers (RMB thousand) | Type of Goods or Services | H1 2025 | H1 2024 | | :--- | :--- | :--- | | IDC Solution Services | 376,077 | 348,699 | | Edge Computing Services | 29,228 | 20,997 | | Other Services | 1,454 | — | | **Total** | **406,759** | **369,696** | Analysis of Other Income and Gains (RMB thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Government Grants | 372 | 3,502 | | Bank Interest Income | 255 | 198 | | Interest Income from Long-term Receivables | 2,921 | 621 | | Others | 206 | — | | **Total** | **3,754** | **4,321** | - Government grants significantly decreased from **RMB3,502 thousand** in H1 2024 to **RMB372 thousand** in H1 2025[86](index=86&type=chunk) [Components of Profit Before Tax](index=27&type=section&id=6.%20%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) Profit before tax is impacted by cost of sales, depreciation, R&D, employee benefits, and financial asset impairment; listing expenses were **zero** this period, down from **RMB7,507 thousand** last year - Cost of services provided was **RMB359,069 thousand**, and depreciation of property, plant and equipment was **RMB4,197 thousand**[87](index=87&type=chunk) - R&D expenses amounted to **RMB9,270 thousand**, and total employee benefit expenses were **RMB17,594 thousand**[87](index=87&type=chunk) - Impairment loss on financial assets was **RMB1,690 thousand**, bank interest income was **RMB(255) thousand**, and interest income from long-term receivables was **RMB(2,921) thousand**[87](index=87&type=chunk) - No listing expenses were incurred during the reporting period, compared to **RMB7,507 thousand** in the corresponding period of 2024[87](index=87&type=chunk) [Finance Costs and Income Tax](index=28&type=section&id=7.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Finance costs, mainly bank borrowing interest, increased by **20.7%**; income tax expense decreased by **30.4%**, primarily due to lower listing expenses Analysis of Finance Costs (RMB thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest on Bank Borrowings | 3,490 | 2,915 | | Interest on Lease Liabilities | 11 | 26 | | **Total** | **3,501** | **2,941** | Analysis of Income Tax Expense (RMB thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Current | 1,974 | 2,331 | | Deferred | (390) | (24) | | **Total** | **1,584** | **2,307** | - The decrease in income tax expense was mainly due to the reduction in listing expenses, which was one of the bases for determining income tax expense[33](index=33&type=chunk) [Dividends and Earnings Per Share](index=28&type=section&id=9.%20%E8%82%A1%E6%81%AF) No interim dividend was distributed or proposed; basic and diluted EPS was **RMB0.03**, calculated based on profit attributable to ordinary equity holders and weighted average shares - No interim dividend was distributed or proposed to ordinary shareholders of the company for the six months ended June 30, 2025[91](index=91&type=chunk) Earnings Per Share Calculation (RMB thousand/share) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit Attributable to Ordinary Equity Holders of the Parent | 14,687 | 12,320 | | Weighted Average Number of Ordinary Shares Outstanding During the Period | 460,000,000 | 382,083,333 | | **Basic and Diluted Earnings Per Share (RMB)** | **0.03** | **0.03** | [Notes to Statement of Financial Position Items](index=29&type=section&id=11.%20%E7%89%A9%E6%A5%AD%E3%80%81%E6%A9%9F%E5%99%A8%E5%8F%8A%E8%A8%AD%E5%82%99) This section details changes and composition of property, plant and equipment, other non-current assets, trade receivables, prepayments, other receivables, other assets, trade payables, and interest-bearing bank borrowings - For the six months ended June 30, 2025, the Group acquired property, plant and equipment at a cost of **RMB12,099 thousand**, and disposed of assets with a net book value of RMB6 thousand, resulting in a net loss on disposal of **RMB5 thousand**[94](index=94&type=chunk) - As of June 30, 2025, net long-term receivables within other non-current assets amounted to **RMB42,205 thousand**, of which **RMB23,859 thousand** were long-term receivables due within one year[95](index=95&type=chunk) Ageing Analysis of Trade Receivables (RMB thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 year | 259,898 | 191,579 | | 1 to 2 years | 40,587 | 43,463 | | **Total** | **300,485** | **235,042** | - Prepayments, other receivables, and other assets totaled **RMB225,847 thousand**, with prepayments amounting to **RMB159,707 thousand**[97](index=97&type=chunk) Ageing Analysis of Trade Payables (RMB thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 year | 212,626 | 199,048 | | 1 to 2 years | 3,683 | 550 | | **Total** | **216,309** | **199,598** | - Total interest-bearing bank borrowings amounted to **RMB294,567 thousand**, all unsecured and due within one year, with effective interest rates ranging from **1.80% to 3.00%**[99](index=99&type=chunk) - Issued and fully paid share capital comprised **460,000,000** ordinary shares with a par value of **RMB32,722 thousand**[101](index=101&type=chunk) [Commitments and Related Party Transactions](index=31&type=section&id=18.%20%E6%89%BF%E6%93%94) The Group had no significant contractual commitments at period-end; total key management personnel remuneration was **RMB3,702 thousand** - As of June 30, 2025, and December 31, 2024, the Group had no significant contractual commitments[102](index=102&type=chunk) Key Management Personnel Remuneration (RMB thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Short-term Employee Benefits | 3,436 | 4,294 | | Pension Scheme Contributions | 266 | 287 | | **Total** | **3,702** | **4,581** | [Fair Value of Financial Instruments](index=32&type=section&id=20.%20%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E7%9A%84%E5%85%AC%E5%B9%B3%E5%80%BC%E5%8F%8A%E5%85%AC%E5%B9%B3%E5%80%BC%E5%B1%A4%E7%B4%9A) The carrying amounts of the Group's financial instruments approximate fair values due to short-term maturities; the finance department manages fair value measurement policies, reviewed regularly with the Audit Committee - The carrying amounts of the Group's financial instruments approximate their fair values, primarily due to their short-term maturities[104](index=104&type=chunk) - The Group's finance department, led by the finance manager, is responsible for determining policies and procedures for fair value measurement of financial instruments, with valuation procedures and results discussed twice annually with the Audit Committee[104](index=104&type=chunk) [Events After the Reporting Period](index=33&type=section&id=21.%20%E6%9C%89%E9%97%9C%E6%9C%9F%E9%96%93%E5%BE%8C%E4%BA%8B%E9%A0%85) Post-reporting period, the company raised approximately **HKD228 million** from a new share subscription for business enhancement and expansion, and formed a joint venture with Shannon Semiconductor for intelligent computing services - On July 18, 2025, the company entered into subscription agreements with two subscribers to subscribe for a total of **45,985,000** subscription shares at a subscription price of **HKD4.98** per share[106](index=106&type=chunk) - The subscription was completed on August 18, 2025, with the subscription shares issued to subscribers at the subscription price, yielding total net proceeds of approximately **HKD228,000,000**[107](index=107&type=chunk) - On August 12, 2025, Wuxi Lingjing Cloud Information Technology Co., Ltd., a subsidiary of the company, entered into a joint venture agreement with Shannon Semiconductor Technology Co., Ltd. to establish a joint venture with a registered capital of **RMB120 million** to explore the intelligent computing services market[108](index=108&type=chunk) Definitions [Definitions of Terms](index=33&type=section&id=%E6%9C%AF%E8%AF%AD%E5%AE%9A%E4%B9%89) This section defines key terms used throughout the report, including AI, Board, CDN, edge computing, global offering, and IDC services, for clear comprehension - The report defines key business and technical terms such as **AI**, **CDN**, **edge computing services**, and **IDC solution services**[110](index=110&type=chunk) - Definitions for entities and roles such as the **Company**, the **Group**, **controlling shareholder**, and **Directors** are clarified[110](index=110&type=chunk)[111](index=111&type=chunk)

[COMPANY INFORMATION](index=2&type=section&id=COMPANY%20INFORMATION) This section provides essential corporate details including board members, auditors, legal advisors, principal banks, share registrar, listing information, registered and principal offices, and investor relations contacts [Directors and Company Secretary](index=3&type=section&id=Directors) This section discloses the names of the company's board members (executive, non-executive, independent non-executive directors) and the company secretary - Executive Directors include Mr. Zhu Changyu (Chairman and Managing Director) and Mr. Wang Yong[5](index=5&type=chunk) - The Company Secretary is Ms. Zhao Ruixue[6](index=6&type=chunk) [Auditor, Legal Advisors, and Principal Bankers](index=3&type=section&id=Independent%20Auditor) This section lists the company's independent auditor, legal advisors, and principal bankers, all of which are reputable professional institutions - The independent auditor is Shinewing (HK) CPA Limited[6](index=6&type=chunk) - Principal bankers include Bank of China (Hong Kong) Limited, Industrial and Commercial Bank of China (Asia) Limited, Shanghai Pudong Development Bank Co., Ltd., Agricultural Bank of China Limited, and Bank of Communications (Hong Kong) Limited[6](index=6&type=chunk) [Share Registrar and Listing Information](index=4&type=section&id=PRINCIPAL%20SHARE%20REGISTRAR%20AND%20TRANSFER%20OFFICE) This section provides the company's principal share registrar, Hong Kong branch address, and listing information (stock code 00517) on the Hong Kong Stock Exchange - The Hong Kong branch share registrar is Tricor Secretaries Limited[8](index=8&type=chunk) - The company's ordinary shares are listed on The Stock Exchange of Hong Kong Limited, stock code 00517[9](index=9&type=chunk) [Registered and Principal Offices](index=4&type=section&id=REGISTERED%20OFFICE) This section specifies the company's registered office in Bermuda and its principal place of business in Hong Kong - The registered office is located at Clarendon House, Bermuda[9](index=9&type=chunk) - The principal place of business is located at 47th Floor, Cosco Tower, 183 Queen's Road Central, Hong Kong[9](index=9&type=chunk) [Investor Relations and Financial Calendar](index=5&type=section&id=INVESTOR%20RELATIONS) This section provides investor relations contact information and announces dates for the 2025 Annual General Meeting, interim and annual results, and 2025 interim dividend payment details - The 2025 interim dividend of **HKD 33 cents per share** will be paid on September 25, 2025[12](index=12&type=chunk) - The 2025 Annual General Meeting is scheduled for May 30, 2025[12](index=12&type=chunk) [MANAGEMENT DISCUSSION AND ANALYSIS](index=6&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section provides an overview of the company's financial performance, operational highlights, and future outlook for the reporting period [Financial Review](index=6&type=section&id=Financial%20Review) In H1 2025, profit attributable to equity holders increased by 26% to HKD 487 million, with revenue up 10% to HKD 1.93 billion, driven by shipping services. Gross profit rose 24%, and operating profit surged 84% H1 2025 Key Financial Indicators | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Profit attributable to equity holders | 487,223 | 388,041 | +26% | | Basic and diluted earnings per share | 33.24 HK cents | 26.47 HK cents | +26% | | Revenue | 1,934,118 | 1,752,887 | +10% | | Shipping services revenue | 1,928,259 | 1,667,279 | +16% | | General trading revenue | 5,859 | 85,608 | -93% | | Gross profit | 498,803 | 401,628 | +24% | | Gross profit margin | 26% | 23% | +3 percentage points | | Operating profit | 250,363 | 135,886 | +84% | - Financial income decreased by **19%** year-on-year to **HKD 113 million**, primarily due to lower deposit interest rates[24](index=24&type=chunk)[29](index=29&type=chunk) - Share of profit from joint ventures increased by **20%** year-on-year to **HKD 179 million**, mainly from COSCO Jotun Marine Coatings (Hong Kong) Limited[32](index=32&type=chunk)[36](index=36&type=chunk) [Financial Resources and Liquidity](index=9&type=section&id=Financial%20Resources%20and%20Liquidity) As of June 30, 2025, equity attributable to equity holders increased by 3% to HKD 8.13 billion, with total cash and deposits at HKD 6.09 billion and zero gearing ratio, indicating a robust financial position Financial Resources and Liquidity as of June 30, 2025 | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Equity attributable to equity holders and reserves | 8,130,506 | 7,872,586 | +3% | | Total cash and deposits | 6,091,510 | 5,943,477 | +2.5% | | Gearing ratio | 0 | 0 | No change | | Cash return rate | 3.75% | 4.58% | -0.83 percentage points | - The Group had no undrawn or unutilised short-term borrowings, with total trade-related credit facilities of **HKD 499 million**, of which **HKD 20.976 million** was utilized[40](index=40&type=chunk)[41](index=41&type=chunk) [Financial Risk Management](index=10&type=section&id=Financial%20Risk%20Management) The Group primarily faces foreign exchange risks (RMB and USD), managed through regular assessment and forward foreign exchange contracts, with strict control over derivative financial instruments, while RMB conversion is subject to government controls - Major foreign exchange risks arise from **RMB and USD**[43](index=43&type=chunk)[45](index=45&type=chunk) - Foreign exchange risks are managed through regular assessment and forward foreign exchange contracts, with strict control over derivative financial instruments[43](index=43&type=chunk)[45](index=45&type=chunk) - The conversion of Chinese Renminbi into foreign currencies is subject to the rules and regulations of the Chinese government's foreign exchange control[43](index=43&type=chunk)[45](index=45&type=chunk) [Employees](index=10&type=section&id=Employees) As of June 30, 2025, the Group (excluding joint ventures/associates) had 797 employees, with 201 in Hong Kong, and total employee benefit expenses for the period increased by 9.5% to HKD 253 million Employee Data and Benefit Expenses | Indicator | June 30, 2025 | December 31, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total employees | 797 | 809 | -1.5% | | Hong Kong employees | 201 | 201 | No change | | Employee benefit expenses (HKD thousands) | 253,458 | 231,390 | +9.5% | - The share option scheme was adopted on April 9, 2020, with multiple tranches of options granted and an exercise period extending to 2026-2027[44](index=44&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) [Interim Dividend](index=11&type=section&id=Interim%20Dividend) The Board declared an interim dividend of HKD 33.0 cents per share for H1 2025, a 24.5% increase from HKD 26.5 cents in H1 2024, payable on September 25, 2025 Interim Dividend Details | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Interim dividend per share | 33.0 HK cents | 26.5 HK cents | +24.5% | | Payment date | September 25, 2025 | - | - | - For dividend entitlement, the register of members will be closed from September 11 to September 16, 2025 (both dates inclusive)[56](index=56&type=chunk)[58](index=58&type=chunk) [Review of Business Operations](index=12&type=section&id=Review%20of%20Business%20Operations) H1 2025 saw increased global economic downside risks and a 57.9% drop in new shipbuilding orders, yet the core shipping services business's profit before tax grew 26%, while general trading revenue fell 93% due to the asphalt business exit - Global new shipbuilding orders in H1 2025 decreased by **57.9%** year-on-year to **46.78 million deadweight tonnes**, the lowest for the same period since 2020[57](index=57&type=chunk)[60](index=60&type=chunk) - Container ships became the main force in the new shipbuilding market, with order volume increasing by **27.2%** year-on-year, and alternative fuel vessel orders continuously rising to **41.5%** of the total[57](index=57&type=chunk)[60](index=60&type=chunk) - Profit before tax for the core shipping services business achieved a year-on-year growth of **26%**[61](index=61&type=chunk)[63](index=63&type=chunk) - General trading business revenue decreased by **93%** year-on-year, with asphalt sales volume down **92%**, reflecting the Group's successful gradual exit from the asphalt business[92](index=92&type=chunk)[96](index=96&type=chunk) [Core Business — Shipping Services](index=13&type=section&id=1.%20Core%20Business%20—%20Shipping%20Services) Shipping services revenue increased by 16% to HKD 1.928 billion, with profit before tax up 26% to HKD 411 million, driven by growth in ship trading agency and coatings production and sales Shipping Services Financial Performance | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,928,259 | 1,667,279 | +16% | | Profit before tax | 410,991 | 326,762 | +26% | [Ship Trading Agency Services](index=14&type=section&id=1.1%20Ship%20Trading%20Agency%20Services) Ship trading agency services revenue increased by 97% to HKD 97.79 million, with profit before tax up 124% to HKD 81.81 million, benefiting from significant growth in new vessel deliveries and orders Ship Trading Agency Services Key Data | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue (HKD thousands) | 97,791 | 49,554 | +97% | | Profit before tax (HKD thousands) | 81,809 | 36,525 | +124% | | New vessel deliveries (vessels) | 22 | 10 | +120% | | New vessel orders (vessels) | 58 | 19 | +205% | [Insurance Brokerage Services](index=14&type=section&id=1.2%20Insurance%20Brokerage%20Services) Insurance brokerage services revenue increased by 7% to HKD 119 million, with profit before tax up 11% to HKD 83.84 million, driven by an expanded client base and rising hull, P&I, and war risk insurance rates Insurance Brokerage Services Key Data | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 119,639 | 111,633 | +7% | | Profit before tax | 83,841 | 75,808 | +11% | - The client base further expanded, market share increased, and hull, P&I, and war risk insurance rates all saw significant increases[73](index=73&type=chunk)[75](index=75&type=chunk) [Supply of Marine Equipment and Spare Parts](index=15&type=section&id=1.3%20Supply%20of%20Marine%20Equipment%20and%20Spare%20Parts) Revenue from marine equipment and spare parts supply decreased by 3% to HKD 886 million, with profit before tax down 5% to HKD 54.1 million, due to shipping market volatility, tariff trade wars, and customer procurement controls Marine Equipment and Spare Parts Supply Key Data | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 886,183 | 909,982 | -3% | | Profit before tax | 54,103 | 56,853 | -5% | - Continued volatility in the shipping market, coupled with the negative impact of tariff trade wars, led to major customers controlling procurement volumes and tightening procurement prices, putting pressure on gross profit margins[77](index=77&type=chunk) [Production and Sale of Coatings](index=16&type=section&id=1.4%20Production%20and%20Sale%20of%20Coatings) Coatings business revenue increased by 38% to HKD 823 million, with profit before tax up 20% to HKD 204 million, driven by a 94% surge in container coatings sales and 19% growth in marine coatings sales, benefiting from new vessel deliveries and cost control Coatings Production and Sales Key Data | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue (HKD thousands) | 822,892 | 595,777 | +38% | | Profit before tax (HKD thousands) | 204,138 | 169,697 | +20% | | Container coatings sales volume (tonnes) | 28,723 | 14,790 | +94% | | Marine coatings sales volume (liters) | 69,186,000 | 58,367,000 | +19% | | Share of profit from COSCO Jotun (HKD thousands) | 171,319 | 141,466 | +21% | - The increase in container coatings sales volume was mainly influenced by factors such as port congestion, increased container vessel detours, and replacement of old containers[80](index=80&type=chunk)[83](index=83&type=chunk) - Sales volume of heavy-duty anti-corrosion coatings for industrial use increased by **4%** year-on-year, benefiting from sustained increases in domestic infrastructure construction investment[85](index=85&type=chunk)[87](index=87&type=chunk) [Intelligent Shipping Services](index=17&type=section&id=1.5%20Intelligent%20Shipping%20Services) Intelligent shipping services revenue increased by 427% to HKD 1.754 million, but still incurred a pre-tax loss of HKD 12.9 million, primarily because Green Smart Shipping Services is in its initial investment and product development phase Intelligent Shipping Services Key Data | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,754 | 333 | +427% | | Profit/(Loss) before tax | (12,900) | (12,121) | Loss widened | - The loss was mainly due to Green Smart Shipping Services still being in its initial investment and product development phase[91](index=91&type=chunk)[94](index=94&type=chunk) [General Trading](index=18&type=section&id=2.%20General%20Trading) General trading revenue significantly decreased by 93% to HKD 5.859 million, with asphalt sales volume down 92%, reflecting the Group's gradual exit from the asphalt business. Profit before tax was HKD 15.113 million, mainly due to the reversal of impairment provisions for trade receivables General Trading Key Data | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue (HKD thousands) | 5,859 | 85,608 | -93% | | Asphalt sales volume (tonnes) | 1,641 | 20,285 | -92% | | Profit before tax (HKD thousands) | 15,113 | 9,209 | +64% | | Share of profit from Zhejiang Six Brothers Rope Co., Ltd. (HKD thousands) | 6,144 | 7,402 | -17% | - The significant decrease in asphalt sales volume indicates the Group's successful progress in gradually exiting the asphalt business[92](index=92&type=chunk)[96](index=96&type=chunk) - The increase in profit before tax was mainly due to the reversal of impairment provisions for trade receivables[92](index=92&type=chunk)[96](index=96&type=chunk) [Prospects](index=19&type=section&id=Prospects) H2 2025 global economy faces risks from fading tariff front-loading effects and trade policy uncertainties, yet IMF upgraded growth forecasts. Shipbuilding orders are expected to temporarily decline, but long-term drivers remain, with green transformation and innovation offering strategic opportunities. The company will focus on "Intelligent Shipping Services Platform" and "Marine New Energy Platform" development - The global economy in H2 2025 faces risks from the fading of tariff front-loading effects and trade policy uncertainties[100](index=100&type=chunk)[101](index=101&type=chunk) - The IMF upgraded its 2025 global economic growth forecast to **3.0%** (0.2 percentage points higher than the April forecast) and global trade volume growth forecast to **2.6%** (0.9 percentage points higher than the April forecast)[100](index=100&type=chunk)[101](index=101&type=chunk) - New shipbuilding orders are expected to experience a temporary decline, but long-term drivers such as geopolitical conflicts, carbon neutrality goals, and environmental regulations will continue to promote industry transformation and upgrading[102](index=102&type=chunk)[104](index=104&type=chunk)[106](index=106&type=chunk) - The company will focus on developing an "Intelligent Shipping Services Platform" and a "Marine New Energy Platform" to build a technology-driven shipping services company[104](index=104&type=chunk)[107](index=107&type=chunk) [Subsequent Events](index=20&type=section&id=Subsequent%20Events) As of the report date, no significant events affecting the Group have occurred since June 30, 2025 - No significant events affecting the Group have occurred since June 30, 2025, and up to the date of this report[105](index=105&type=chunk)[108](index=108&type=chunk) [FINANCIAL INFORMATION](index=20&type=section&id=FINANCIAL%20INFORMATION) This section presents the condensed consolidated interim financial information, including review reports, income statements, statements of comprehensive income, financial position, changes in equity, cash flows, and detailed notes [Report on Review of Interim Financial Information](index=21&type=section&id=Report%20on%20Review%20of%20Interim%20Financial%20Information) Independent auditor Shinewing (HK) CPA Limited reviewed the condensed consolidated interim financial information for the six months ended June 30, 2025, finding no material discrepancies, but noted the review scope is less than an audit, thus no audit opinion is expressed - Based on the review, the auditor found no matters that caused them to believe the Group's interim financial information was not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[115](index=115&type=chunk)[116](index=116&type=chunk) - The scope of a review is substantially less than an audit conducted in accordance with Hong Kong Standards on Auditing, and consequently does not enable the auditor to obtain assurance that they would become aware of all significant matters that might be identified in an audit, thus no audit opinion is expressed[113](index=113&type=chunk) - Comparative figures for the corresponding period in 2024 were reviewed by another auditor, while the comparative statement of financial position as of December 31, 2024, was audited by the same auditor who expressed an unmodified opinion[115](index=115&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) [Condensed Consolidated Income Statement](index=23&type=section&id=Condensed%20Consolidated%20Income%20Statement) The condensed consolidated income statement for the six months ended June 30, 2025, shows Group revenue of HKD 1.934 billion, gross profit of HKD 499 million, operating profit of HKD 250 million, profit for the period of HKD 495 million, and profit attributable to equity holders of HKD 487 million Condensed Consolidated Income Statement Summary (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 1,934,118 | 1,752,887 | | Cost of sales | (1,435,315) | (1,351,259) | | Gross profit | 498,803 | 401,628 | | Management fee income | 42,277 | 36,256 | | Other income and gains — net | 63,560 | 13,627 | | Selling, administrative and general expenses | (354,277) | (315,625) | | Operating profit | 250,363 | 135,886 | | Finance income — net | 112,146 | 138,940 | | Share of profit of joint ventures | 178,709 | 149,636 | | Share of profit of associates | 8,616 | 11,083 | | Profit before income tax | 549,834 | 435,545 | | Income tax expense | (55,209) | (43,117) | | Profit for the period | 494,625 | 392,428 | | Profit attributable to equity holders of the Company | 487,223 | 388,041 | | Basic and diluted earnings per share (HK cents) | 33.24 | 26.47 | [Condensed Consolidated Statement of Comprehensive Income](index=24&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The condensed consolidated statement of comprehensive income for the six months ended June 30, 2025, shows profit for the period of HKD 495 million, other comprehensive income of HKD 91.647 million, total comprehensive income of HKD 586 million, with HKD 573 million attributable to equity holders Condensed Consolidated Statement of Comprehensive Income Summary (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Profit for the period | 494,625 | 392,428 | | Other comprehensive income/(loss) | 91,647 | (9,618) | | Total comprehensive income for the period | 586,272 | 382,810 | | Total comprehensive income attributable to equity holders of the Company | 573,104 | 380,922 | [Condensed Consolidated Statement of Financial Position](index=25&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets increased to HKD 9.932 billion, total equity to HKD 8.480 billion, and total liabilities to HKD 1.451 billion, with a significant increase in non-current bank deposits Condensed Consolidated Statement of Financial Position Summary (As of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | **ASSETS** | | | | Non-current assets | 2,809,714 | 1,770,027 | | Current assets | 7,122,183 | 7,563,543 | | **TOTAL ASSETS** | **9,931,897** | **9,333,570** | | **EQUITY** | | | | Equity attributable to equity holders of the Company and reserves | 8,130,506 | 7,872,586 | | Non-controlling interests | 349,921 | 336,753 | | **TOTAL EQUITY** | **8,480,427** | **8,209,339** | | **LIABILITIES** | | | | Non-current liabilities | 89,907 | 89,142 | | Current liabilities | 1,361,563 | 1,035,089 | | **TOTAL LIABILITIES** | **1,451,470** | **1,124,231** | - Non-current bank deposits increased from zero as of December 31, 2024, to **HKD 1.033 billion** as of June 30, 2025[126](index=126&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=27&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) The condensed consolidated statement of changes in equity shows total equity attributable to equity holders increased from HKD 7.873 billion at the beginning of the period to HKD 8.131 billion as of June 30, 2025, primarily due to profit and comprehensive income for the period Condensed Consolidated Statement of Changes in Equity Summary (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Equity attributable to equity holders of the Company and reserves at beginning of period | 7,872,586 | 7,839,455 | | Profit for the period | 487,223 | 388,041 | | Other comprehensive income/(loss) | 85,881 | (7,119) | | Dividends paid | (315,184) | (256,545) | | Equity attributable to equity holders of the Company and reserves at end of period | 8,130,506 | 7,963,832 | [Condensed Consolidated Statement of Cash Flows](index=29&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) The condensed consolidated cash flow statement for the six months ended June 30, 2025, shows net cash generated from operating activities of HKD 324 million, net cash used in investing activities of HKD 2.216 billion, and net cash used in financing activities of HKD 317 million, resulting in a net decrease of HKD 2.210 billion in cash and cash equivalents Condensed Consolidated Statement of Cash Flows Summary (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 323,643 | 22,515 | | Net cash used in investing activities | (2,216,171) | 344,092 | | Net cash used in financing activities | (317,263) | (259,109) | | Net decrease/(increase) in cash and cash equivalents | (2,209,791) | 107,498 | | Cash and cash equivalents at end of period | 2,237,604 | 2,038,714 | - Net cash outflow from investing activities significantly increased, primarily due to an increase of **HKD 2.29 billion** in cash deposits with maturities exceeding three months[137](index=137&type=chunk) [Notes to the Unaudited Condensed Consolidated Interim Financial Information](index=30&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section details the Group's accounting policies, financial risk management, key accounting estimates, revenue and segment information, composition and changes in various financial metrics, and material related party transactions, providing supplementary information for understanding the financial statements [General Information](index=31&type=section&id=1%20GENERAL%20INFORMATION) This section introduces COSCO SHIPPING International (Hong Kong) Co., Ltd. and its subsidiaries (the Group), primarily engaged in shipping services and general trading, with the company registered in Bermuda, listed on the HKEX, and its ultimate holding company being China COSCO Shipping Corporation Limited - The Group is principally engaged in the provision of shipping services and general trading[141](index=141&type=chunk)[143](index=143&type=chunk) - The Company's ultimate holding company is China COSCO Shipping Corporation Limited, a state-owned enterprise established in the People's Republic of China[141](index=141&type=chunk)[144](index=144&type=chunk) [Basis of Preparation and Accounting Policies](index=31&type=section&id=2%20BASIS%20OF%20PREPARATION%20AND%20ACCOUNTING%20POLICIES) This interim financial information is prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, with accounting policies consistent with the 2024 annual financial statements, and the first-time adoption of HKAS 21 amendments. HKFRS 18, effective in 2027, will impact financial statement presentation - This interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix D2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[146](index=146&type=chunk) - The first-time adoption of the amendments to HKAS 21 "Lack of Exchangeability" had no significant impact on financial performance and financial position[149](index=149&type=chunk)[151](index=151&type=chunk) - HKFRS 18 will be effective for annual periods beginning on or after January 1, 2027, and will affect the presentation of the consolidated income statement and consolidated statement of comprehensive income[154](index=154&type=chunk)[158](index=158&type=chunk)[160](index=160&type=chunk) [Financial Risk Management](index=35&type=section&id=3%20FINANCIAL%20RISK%20MANAGEMENT) The Group faces market risks (foreign currency, interest rate, price), credit risk, and liquidity risk. There were no significant changes in contractual undiscounted cash outflows for financial liabilities. Fair value measurements use Level 1 (quoted prices in active markets) and Level 3 (unobservable inputs) methods, with investment properties revalued by independent valuers - The Group's operations expose it to various financial risks: market risk (including foreign currency risk, interest rate risk, and price risk), credit risk, and liquidity risk[161](index=161&type=chunk)[162](index=162&type=chunk) - Fair value measurements use Level 1 (quoted prices in active markets for identical assets or liabilities) and Level 3 (inputs for the asset or liability are not based on observable market data) methods[165](index=165&type=chunk) - Investment properties are revalued by independent qualified valuers who are not related to the Group[183](index=183&type=chunk)[184](index=184&type=chunk) [Critical Accounting Estimates and Judgements](index=40&type=section&id=4%20CRITICAL%20ACCOUNTING%20ESTIMATES%20AND%20JUDGEMENTS) Management made judgments, estimates, and assumptions in preparing the interim financial information, consistent with those applied in the 2024 annual financial statements - The critical judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty in preparing this unaudited condensed consolidated interim financial information are consistent with those applied in the Group's annual financial statements for the year ended December 31, 2024[187](index=187&type=chunk)[188](index=188&type=chunk) [Revenue and Segment Information](index=41&type=section&id=5%20REVENUE%20AND%20SEGMENT%20INFORMATION) Group revenue primarily derives from coatings sales, marine equipment and spare parts sales, ship trading agency commissions, and insurance brokerage commissions. The report discloses revenue, operating profit, assets, and liabilities by reportable segments including coatings, marine equipment and spare parts, ship trading agency, insurance brokerage, intelligent shipping services, and general trading H1 2025 Revenue Composition (HKD thousands) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Coatings sales | 822,892 | 595,777 | | Marine equipment and spare parts sales | 886,183 | 909,982 | | Ship trading agency commission income | 97,791 | 49,554 | | Insurance brokerage commission income | 119,639 | 111,633 | | Intelligent shipping services | 1,754 | 333 | | General trading | 5,859 | 85,608 | | **Total Revenue** | **1,934,118** | **1,752,887** | - Management reviews the business from a product perspective and has identified reportable segments including coatings, marine equipment and spare parts, ship trading agency, insurance brokerage, intelligent shipping services, and general trading based on these reporting criteria[195](index=195&type=chunk)[196](index=196&type=chunk) [Other Income and Gains — Net](index=50&type=section&id=6%20OTHER%20INCOME%20AND%20GAINS%20—%20NET) For the six months ended June 30, 2025, other income and gains net was HKD 63.56 million, a significant year-on-year increase of 366%, primarily due to higher net exchange gains Other Income and Gains — Net (HKD thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Other income — net | 7,254 | 8,756 | | Other gains — net | 56,306 | 4,871 | | **Total** | **63,560** | **13,627** | - Net exchange gains turned from a loss of **HKD 7.309 million** in the corresponding period of 2024 to a gain of **HKD 56.382 million** in 2025, which is the main reason for the significant increase in other income and gains net[218](index=218&type=chunk) [Operating Profit](index=51&type=section&id=7%20OPERATING%20PROFIT) Operating profit is stated after deducting employee benefit expenses of HKD 253 million, short-term lease-related expenses of HKD 20.923 million, and depreciation and amortization expenses of HKD 19.469 million Operating Profit Deductions (HKD thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Employee benefit expenses | 253,458 | 231,390 | | Short-term lease-related expenses | 20,923 | 16,863 | | Depreciation and amortization | 19,469 | 17,854 | [Finance Income — Net](index=51&type=section&id=8%20FINANCE%20INCOME%20—%20NET) For the six months ended June 30, 2025, net finance income was HKD 112 million, primarily from bank deposit interest, but total finance income decreased by 19% year-on-year to HKD 113 million, mainly due to lower deposit interest rates Finance Income — Net (HKD thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest income from bank deposits | 110,025 | 134,869 | | Total finance income | 112,872 | 140,095 | | Total finance costs | (726) | (1,155) | | **Finance income — net** | **112,146** | **138,940** | - The decrease in finance income was primarily due to lower deposit interest rates[29](index=29&type=chunk) [Income Tax Expenses](index=52&type=section&id=9%20INCOME%20TAX%20EXPENSES) For the six months ended June 30, 2025, income tax expense was HKD 55.209 million, mainly comprising Hong Kong profits tax, PRC enterprise income tax, and other overseas taxes. The Group adopted the mandatory exemption for Pillar Two income taxes Income Tax Expense Composition (HKD thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Hong Kong profits tax | 16,409 | 15,917 | | PRC enterprise income tax | 34,140 | 13,327 | | Other overseas taxes | 3,764 | 4,246 | | Net deferred income tax expense | 1,376 | 9,038 | | **Total income tax expense** | **55,209** | **43,117** | - The Group has adopted the mandatory temporary exemption for Pillar Two income taxes and will account for Pillar Two income taxes when they arise as current tax for the period[229](index=229&type=chunk)[231](index=231&type=chunk) [Earnings Per Share](index=53&type=section&id=10%20EARNINGS%20PER%20SHARE) For the six months ended June 30, 2025, basic and diluted earnings per share were HKD 33.24 cents, calculated based on profit attributable to equity holders of HKD 487 million and 1.466 billion weighted average ordinary shares Earnings Per Share Calculation | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to equity holders of the Company (HKD thousands) | 487,223 | 388,041 | | Weighted average number of ordinary shares in issue (shares) | 1,465,971,429 | 1,465,971,429 | | Basic and diluted earnings per share (HK cents) | 33.24 | 26.47 | - There were no potential dilutive ordinary shares in issue for the current and prior periods[230](index=230&type=chunk)[233](index=233&type=chunk) [Dividend](index=54&type=section&id=11%20DIVIDEND) The Board declared an interim dividend of HKD 0.330 per share for the six months ended June 30, 2025, totaling HKD 484 million, an increase from HKD 0.265 per share in the corresponding period of 2024 Interim Dividends Declared | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Interim dividend per share | 0.330 HKD | 0.265 HKD | | Total amount | 483,771 | 388,482 | - The final dividend of **HKD 315 million** for the year ended December 31, 2024, was paid in June 2025[237](index=237&type=chunk)[238](index=238&type=chunk) [Capital Expenditure](index=55&type=section&id=12%20CAPITAL%20EXPENDITURE) As of June 30, 2025, the Group's total net book value of intangible assets, property, plant and equipment, right-of-use assets, and investment properties was HKD 734 million, with total additions of HKD 11.307 million during the period Capital Expenditure Movement (HKD thousands) | Item | January 1, 2025 | Additions | Depreciation and amortization | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Intangible assets | 359,764 | 526 | (5,929) | 355,365 | | Property, plant and equipment | 195,902 | 10,577 | (11,759) | 198,461 | | Right-of-use assets | 42,257 | 204 | (2,851) | 40,236 | | Investment properties | 136,367 | – | – | 139,598 | | **Total** | **734,290** | **11,307** | **(20,539)** | **733,660** | [Financial Assets at Fair Value Through Other Comprehensive Income](index=55&type=section&id=13%20FINANCIAL%20ASSETS%20AT%20FAIR%20VALUE%20THROUGH%20OTHER%20COMPREHENSIVE%20INCOME) As of June 30, 2025, financial assets at fair value through other comprehensive income primarily consisted of equity securities listed in Hong Kong, with their market value increasing to HKD 113 million Financial Assets at Fair Value Through Other Comprehensive Income (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Market value of equity securities listed in Hong Kong | 113,448 | 84,772 | [Inventories](index=56&type=section&id=14%20INVENTORIES) As of June 30, 2025, the Group's total inventories amounted to HKD 238 million, a decrease from HKD 402 million as of December 31, 2024, mainly due to a reduction in finished goods Inventories Composition (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | 46,598 | 49,682 | | Work in progress | 1,449 | 803 | | Finished goods | 189,899 | 351,249 | | **Total** | **237,946** | **401,734** | [Trade and Other Receivables](index=56&type=section&id=15%20TRADE%20AND%20OTHER%20RECEIVABLES) As of June 30, 2025, total trade and other receivables amounted to HKD 1.822 billion, an increase from HKD 1.213 billion as of December 31, 2024. Net trade receivables increased to HKD 834 million, with HKD 605 million due within 90 days Trade and Other Receivables Composition (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net trade receivables | 834,347 | 524,080 | | Other receivables | 987,616 | 689,191 | | **Total** | **1,821,963** | **1,213,271** | Trade Receivables Ageing Analysis (HKD thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current–90 days | 604,979 | 363,793 | | 91–180 days | 177,269 | 87,919 | | Over 180 days | 52,099 | 72,368 | | **Total** | **834,347** | **524,080** | - Net impairment provision for trade receivables was **HKD 8.352 million**[254](index=254&type=chunk)[255](index=255&type=chunk) [Restricted Bank Deposits, Total Deposits and Cash and Cash Equivalents](index=58&type=section&id=16%20RESTRICTED%20BANK%20DEPOSITS,%20TOTAL%20DEPOSITS%20AND%20CASH%20AND%20CASH%20EQUIVALENTS) As of June 30, 2025, the Group's restricted bank deposits, total deposits, and cash and cash equivalents totaled HKD 6.092 billion, with USD deposits accounting for the largest share. Non-current bank deposits significantly increased to HKD 1.033 billion Cash and Deposits Composition (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Restricted bank deposits | 5,483 | 5,399 | | Non-current bank deposits | 1,032,677 | – | | Current deposits and cash and cash equivalents | 5,053,350 | 5,938,078 | | **Total** | **6,091,510** | **5,943,477** | Cash and Deposits Currency Composition (HKD thousands) | Currency | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | RMB | 795,348 | 740,929 | | HKD | 109,200 | 182,367 | | USD | 5,096,114 | 4,927,538 | | Others | 90,848 | 92,643 | | **Total** | **6,091,510** | **5,943,477** | [Share Capital](index=60&type=section&id=17%20SHARE%20CAPITAL) As of June 30, 2025, the company's issued and fully paid share capital was HKD 147 million, comprising 1.466 billion shares. Under the share option scheme, 456,210 share options lapsed during the period, with 7,822,280 options remaining unexercised at period-end Share Capital Information | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of issued and fully paid shares | 1,465,971,429 | 1,465,971,429 | | Share capital (HKD thousands) | 146,597 | 146,597 | Share Option Movement (options) | Grant Date | Unexercised as of January 1, 2025 | Lapsed during the period | Unexercised as of June 30, 2025 | | :--- | :--- | :--- | :--- | | April 28, 2020 | 6,663,300 | – | 6,663,300 | | October 6, 2020 | 701,400 | – | 701,400 | | April 7, 2021 | 913,790 | (456,210) | 457,580 | | **Total** | **8,278,490** | **(456,210)** | **7,822,280** | - The share option scheme aims to attract, retain, and motivate the Company's senior management and core employees, promoting the achievement of the Company's long-term strategic goals[265](index=265&type=chunk) [Trade and Other Payables, Contract Liabilities and Lease Liabilities](index=62&type=section&id=18%20TRADE%20AND%20OTHER%20PAYABLES,%20CONTRACT%20LIABILITIES%20AND%20LEASE%20LIABILITIES) As of June 30, 2025, total trade and other payables were HKD 1.073 billion, contract liabilities HKD 234 million, and lease liabilities HKD 14.721 million. Of trade payables, HKD 496 million were due within 90 days Trade and Other Payables, Contract Liabilities and Lease Liabilities (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 620,609 | 494,836 | | Other payables | 452,841 | 312,536 | | Contract liabilities | 233,501 | 203,303 | | Lease liabilities | 14,721 | 15,603 | | **Total** | **1,321,672** | **1,026,278** | Trade Payables Ageing Analysis (HKD thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current–90 days | 496,458 | 423,110 | | 91–180 days | 70,329 | 40,441 | | Over 180 days | 53,822 | 31,285 | | **Total** | **620,609** | **494,836** | [Capital Commitments](index=64&type=section&id=19%20CAPITAL%20COMMITMENTS) As of June 30, 2025, the Group's contracted but unprovided capital expenditure commitments totaled HKD 6.136 million, with capital commitments for investments in joint ventures amounting to HKD 3.408 million Capital Commitments (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Group capital expenditure commitments | 6,136 | 6,215 | | Capital commitments for investments in joint ventures | 3,408 | 4,292 | [Lease Commitments](index=64&type=section&id=20%20LEASE%20COMMITMENTS) As of June 30, 2025, the Group's total future minimum lease payments under non-cancellable short-term leases amounted to HKD 17.651 million Lease Commitments (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total future minimum lease payments | 17,651 | 25,633 | [Material Related Party Transactions](index=65&type=section&id=21%20MATERIAL%20RELATED%20PARTY%20TRANSACTIONS) The Group engages in various material related party transactions with its ultimate holding company, COSCO Shipping, and its subsidiaries, including sales of coatings, marine equipment and spare parts, provision of ship trading agency and insurance brokerage services, and purchases of raw materials, property leases, and service fees, all conducted under agreed terms and compliant with Listing Rules - The Group is controlled by China COSCO Shipping Corporation Limited, and its subsidiaries are defined as related parties[285](index=285&type=chunk)[286](index=286&type=chunk)[287](index=287&type=chunk) - Related party transactions include sales of coatings, marine equipment and spare parts, and provision of ship trading agency and insurance brokerage services to fellow subsidiaries[292](index=292&type=chunk)[294](index=294&type=chunk) - Related party transactions also include leasing properties, purchasing raw materials, and paying transportation and service fees to fellow subsidiaries[300](index=300&type=chunk)[301](index=301&type=chunk) - All material related party transactions were conducted in accordance with the terms of the governing agreements and complied with the disclosure requirements of Chapter 14A of the Listing Rules[297](index=297&type=chunk)[303](index=303&type=chunk) [OTHER INFORMATION](index=72&type=section&id=OTHER%20INFORMATION) This section provides additional corporate information, including details on share options, directors' and substantial shareholders' interests in securities, listed securities transactions, director information disclosure, and corporate governance practices [Share Options](index=73&type=section&id=SHARE%20OPTIONS) As of June 30, 2025, 7,822,280 share options remained unexercised under the company's share option scheme, with 456,210 options lapsing during the period due to expiry. The fair value of options is estimated using the "Binomial Option Pricing Model" Share Option Movement (options) | Grant Date | Unexercised as of January 1, 2025 | Lapsed during the period | Unexercised as of June 30, 2025 | | :--- | :--- | :--- | :--- | | April 28, 2020 | 6,663,300 | – | 6,663,300 | | October 6, 2020 | 701,400 | – | 701,400 | | April 7, 2021 | 913,790 | (456,210) | 457,580 | | **Total** | **8,278,490** | **(456,210)** | **7,822,280** | - The fair value of share options is estimated using the "Binomial Option Pricing Model," with key parameters including share price, exercise price, expected standard deviation of equity return, expected option life, expected dividend yield, and risk-free interest rate[321](index=321&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk) - The option category for former director Ms. Meng Xin changed after her resignation as Executive Director on January 24, 2025[316](index=316&type=chunk)[317](index=317&type=chunk) [Directors' Interests in Securities](index=75&type=section&id=Directors'%20Interests%20in%20Securities) As of June 30, 2025, directors held long positions in the company's equity derivatives related shares and in shares of associated corporation Piraeus Port Authority S.A - Directors held long positions in the Company's equity derivatives related shares, details of which are set out in the "Share Options" section[325](index=325&type=chunk)[327](index=327&type=chunk) Directors' Long Positions in Shares of Associated Corporations | Name of Director | Name of Associated Corporation | Nature of Interest | Total number of ordinary shares held | Approximate percentage of total issued shares | | :--- | :--- | :--- | :--- | :--- | | Mr. Kwong Chi Keung | COSCO SHIPPING Ports Limited | Beneficial owner | 250,000 | 0.0075% | [Substantial Shareholders](index=78&type=section&id=SUBSTANTIAL%20SHAREHOLDERS) As of June 30, 2025, COSCO Shipping, China Shipping Group Company Limited, and COSCO SHIPPING (Hong Kong) Co., Limited were all substantial shareholders, each holding 71.70% of the company's shares Substantial Shareholders' Shareholdings | Name of Shareholder | Capacity | Nature of Interest | Total number of ordinary shares held (long position) | Approximate percentage of total issued shares | | :--- | :--- | :--- | :--- | :--- | | COSCO Shipping | Interest in controlled corporation | Corporate interest | 1,051,183,486 | 71.70% | | China Shipping Group Company Limited | Interest in controlled corporation | Corporate interest | 1,051,183,486 | 71.70% | | COSCO SHIPPING (Hong Kong) | Beneficial owner | Beneficial interest | 1,051,183,486 | 71.70% | - COSCO SHIPPING (Hong Kong) is a wholly-owned subsidiary of COSCO Shipping, and its interest is deemed to be the interest of COSCO Shipping[335](index=335&type=chunk)[336](index=336&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=79&type=section&id=PURCHASE,%20SALE%20OR%20REDEMPTION%20OF%20LISTED%20SECURITIES) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any listed securities, and the company held no treasury shares - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025[339](index=339&type=chunk)[341](index=341&type=chunk) - The Company did not hold any treasury shares[339](index=339&type=chunk)[341](index=341&type=chunk) [Disclosure of Information on Directors](index=79&type=section&id=DISCLOSURE%20OF%20INFORMATION%20ON%20DIRECTORS) This section discloses changes in director information: Executive Director Mr. Zhu Changyu's appointment letter was updated, Non-executive Director Ms. Zhang Xueyan was appointed as a non-executive director of Piraeus Port Authority S.A., and Independent Non-executive Director Mr. Kwong Chi Keung retired from Piraeus Port Authority S.A - The appointment letter for Mr. Zhu Changyu, Executive Director, Chairman of the Board, and Managing Director, was updated, with his term commencing on May 30, 2025, and ending at the conclusion of the Company's 2027 Annual General Meeting[342](index=342&type=chunk) - Ms. Zhang Xueyan, a Non-executive Director, was appointed as a non-executive director of Piraeus Port Authority S.A., a fellow subsidiary of the Company, in July 2025[343](index=343&type=chunk) - Mr. Kwong Chi Keung, an Independent Non-executive Director, retired as an independent non-executive director of Piraeus Port Authority S.A. in July 2025[343](index=343&type=chunk) [Corporate Governance](index=79&type=section&id=Corporate%20Governance) The company is committed to high corporate governance standards and complied with Appendix C1 of the Listing Rules' Corporate Governance Code in H1 2025, with two deviations: Non-executive Director Ms. Zhang Xueyan's absence from the AGM and the roles of Board Chairman and Managing Director being held by the same person. The Audit Committee reviewed the interim financial information - The Company is committed to maintaining a high level of corporate governance through effective and timely disclosure of information by the Board and proactive implementation of investor relations programs[345](index=345&type=chunk)[347](index=347&type=chunk) - There were two deviations from the Corporate Governance Code: Non-executive Director Ms. Zhang Xueyan's inability to attend the Annual General Meeting, and the roles of Chairman of the Board and Managing Director being held by the same person[346](index=346&type=chunk)[348](index=348&type=chunk) - The Audit Committee, comprising three independent non-executive directors with an accountant as chairman, has reviewed the unaudited condensed consolidated interim financial information[349](index=349&type=chunk)[350](index=350&type=chunk) - The Company has adopted a code for securities transactions by directors and employees and confirmed that directors complied with the required standards set out in the Model Code and the Securities Code during the period[351](index=351&type=chunk)

Acquisition and Investments - Hans Group completed the acquisition of a 70% stake in Bravo Transport Holdings Limited on July 31, 2024, making it a non-wholly owned subsidiary[10]. - The acquisition of 54.44% of the total issued shares of BTHL is a significant investment for the group, with ongoing plans for material investments[94]. - Glorify acquired 700 BTHL Shares, representing 7% of total issued BTHL Shares, for a total consideration of $350 million (equivalent to $44.9 million) on December 3, 2021[104]. - On May 24, 2024, Glorify conditionally agreed to acquire 5,444.09 BTHL Shares, representing approximately 54.44% of total issued BTHL Shares, for a total consideration of $2,722,045,000[106]. - Following the completion of the acquisition on July 31, 2024, Glorify held 7,000 BTHL Shares, representing 70% of total issued BTHL Shares[107]. - Glorify issued 278,915,965 Consideration Shares to TWB Holdings, representing approximately 7.05% of the issued share capital of the Company as of July 31, 2024[111]. - As of December 31, 2024, the Group had a deferred payment of $2,000 million related to the acquisition, with $1,872 million settled by the Group[111]. - A new share charge over 51% of total issued BTHL Shares was established on July 31, 2024, as security for the deferred payment under the acquisition[114]. Financial Performance - In the first half of 2025, Hans Group recorded revenue exceeding HK$3.5 billion, a year-on-year increase of 3.7 times, driven by the acquisition of Citybus and Bravo Media[55]. - The Group's revenue for the first half of 2025 was $3.51 billion, a 373.1% increase compared to $741.3 million in the same period last year[64]. - Revenue from the transportation business amounted to $1.96 billion, representing a year-on-year increase of 9.5%[59]. - Total revenue for the six months ended June 30, 2025, was approximately $3,506.5 million, representing a remarkable increase of 373.1% compared to $741.3 million in the same period last year[71]. - Revenue from the sale of oil and petrochemical products reached HKD 1,266,966,000 for the six months ended June 30, 2025, compared to HKD 675,015,000 in the same period of 2024, representing an increase of 87.5%[169]. - Fare revenue for the six months ended June 30, 2025, was HKD 1,942,737,000, with no revenue reported in the same period of 2024[169]. - Bravo Media's revenue from the media and advertising business amounted to $200 million in the first half of the year[60]. Operational Metrics - DZIT generates income primarily through leasing storage tanks, with additional revenue from handling charges and ancillary services[19]. - Key performance indicators for DZIT include leaseout rates and cargo throughput, which directly impact revenue and operational efficiency[20]. - For the six months ended June 30, 2025, the leaseout rate for oil and petrochemical storage tanks remained stable at 91.7%, consistent with the prior year[25]. - DZIT's terminal maintained a lease-out rate of approximately 91.7%, the highest in the industry in the region[56]. - The terminal is strategically located in the Greater Bay Area, facilitating efficient distribution of refined oil and petrochemical products[17]. - The number of sale contracts entered in the trading business increased by 25.7% to 680 contracts, compared to 541 in the previous year[32]. - Sales volume of oil and petrochemical products surged by 46.8% to 160,000 metric tons, up from 109,000 metric tons in the same period last year[32]. Challenges and Losses - The net loss for the period was approximately $110.9 million, an increase of 428.7% compared to $21.0 million in 2024[65]. - The Group reported a net loss of approximately $110.9 million for the six months ended June 30, 2025, an increase of 428.7% compared to a net loss of $21.0 million in the same period last year[67]. - Loss for the period was HK$110,899,000, which is a substantial increase from a loss of HK$20,974,000 in 2024, reflecting increased finance costs and operational challenges[137]. - Total comprehensive income for the period was a loss of HK$100,890,000, compared to a loss of HK$85,032,000 in 2024, highlighting ongoing financial difficulties[137]. Cost and Liabilities - The Group's operating costs increased by 351.4% to $3.43 billion compared to $760.9 million in the previous year[64]. - Finance costs rose by 1,489.7% to $203.2 million, primarily due to liabilities related to deferred payments following the acquisition[65]. - Operating costs increased by 351.4% to approximately HK$3,434.4 million, primarily due to a $615.5 million rise in the cost of inventories sold[80]. - Current liabilities for bank and other loans increased to $370,248,000 as of June 30, 2025, compared to $290,161,000 at the end of 2024[197]. - Non-current liabilities for bank and other loans rose to $2,710,207,000 as of June 30, 2025, from $2,104,634,000 at the end of 2024[197]. Employee and Operational Changes - The Group has approximately 6,100 employees as of June 30, 2025, an increase from approximately 6,040 employees as of December 31, 2024[122]. - Staff costs for the six months ended June 30, 2025, amounted to $1,110,638,000, a significant increase from $25,176,000 in the same period of 2024[180]. - The company reported a significant increase in staff costs to HK$1,110,638,000 from HK$25,176,000 in 2024, reflecting expansion or restructuring efforts[136]. Future Outlook and Strategy - The Group aims to adapt to evolving market conditions and strengthen its competitive positioning to capture future growth opportunities[26]. - The Group is actively pursuing opportunities to enhance asset utilization, including developing approximately 150,000 square meters of vacant land for future expansion[12]. - The Group has entered into supplier contracts with diesel providers to secure fuel at stable pricing, mitigating fuel price risk[120]. - The Group remains confident in its financial resources to meet future debt obligations and support working capital and expansion needs[92].