[Company Information](index=3&type=section&id=Company%20Information) This section provides essential corporate details, including board composition, registration, key contacts, and stock information [Board of Directors](index=3&type=section&id=Board%20of%20Directors) This section lists the composition of the company's Board of Directors, including executive, independent non-executive, and non-executive directors, along with members of various board committees - The Board of Directors comprises Executive Directors Li Zhenjiang (Chairman), Xin Yunxia, Li Huimin, Independent Non-executive Directors Liao Shunhui, Yao Yian, Wang Guihua, and Non-executive Director Zhou Wencheng[5](index=5&type=chunk) - The company has an Audit Committee, Remuneration Committee, Nomination Committee, and Corporate Social Responsibility and Sustainable Development Committee, each with a clearly defined membership structure[5](index=5&type=chunk) [Registered Office and Principal Place of Business](index=3&type=section&id=Registered%20Office%20and%20Principal%20Place%20of%20Business) This section provides information on the company's registered office, head office, and principal place of business in Hong Kong, clarifying its legal registration and main operational addresses - The company's registered office is located at Cricket Square, Cayman Islands, and its head office is in Luancheng, Shijiazhuang, Hebei Province, China[5](index=5&type=chunk)[6](index=6&type=chunk) - The principal place of business in Hong Kong is Room 3109, 31st Floor, Central Plaza, 18 Harbour Road, Wan Chai, Hong Kong[6](index=6&type=chunk) [Principal Share Registrar and Transfer Office](index=4&type=section&id=Principal%20Share%20Registrar%20and%20Transfer%20Office) This section lists the company's share registrars in the Cayman Islands and Hong Kong, facilitating share-related operations for investors - The principal share registrar is Suntera (Cayman) Limited, and the Hong Kong share registrar is Hong Kong Central Securities Registrars Limited[6](index=6&type=chunk) [Principal Bankers and Legal Advisers](index=4&type=section&id=Principal%20Bankers%20and%20Legal%20Advisers) This section provides information on the company's main partner banks and legal advisers, showcasing its financial and legal support system - Principal bankers include The Hongkong and Shanghai Banking Corporation Limited, The Bank of East Asia, Limited, Bank of China Jinzhu West Road Branch, Lhasa City, Tibet, and China Construction Bank Luancheng Branch, Shijiazhuang, Hebei Province[6](index=6&type=chunk) - Legal advisers include Woo Kwan Lee & Lo, Hong Kong Lawyers, and Conyers Dill & Pearman, Cayman, Cayman Islands Lawyers[6](index=6&type=chunk) [Stock Code and Website](index=4&type=section&id=Stock%20Code%20and%20Website) This section specifies the company's stock code on the Hong Kong Stock Exchange and its official websites, enabling investors to access company information - The company's stock code is **2877**, listed on the Main Board of The Stock Exchange of Hong Kong Limited[6](index=6&type=chunk) - The company's websites are www.shineway.com.hk and www.shineway.com[6](index=6&type=chunk) [Interim Results Highlights](index=5&type=section&id=Interim%20Results%20Highlights) This report outlines key financial performance for the six months ended June 30, 2025, showing decreased revenue and gross margin, but stable net profit and declared interim dividends due to cost control and increased investment income [Interim Results Highlights](index=5&type=section&id=Interim%20Results%20Highlights) This report outlines key financial performance for the six months ended June 30, 2025, showing decreased revenue and gross margin, but stable net profit and declared interim dividends due to cost control and increased investment income | Indicator | H1 2025 (RMB '000) | YoY Change | | :--- | :--- | :--- | | Revenue | 1,652,698 | -20.8% | | Gross Margin | 72.2% | -3.1 percentage points | | Profit for the Period | 614,663 | -1.9% | | Earnings Per Share | RMB 0.81 | -2.4% | | Net Cash from Operating Activities | 566,319 | +0.4% | | Second Interim Dividend | RMB 0.11 per share | N/A | [Company Overview](index=6&type=section&id=Company%20Overview) This section provides an overview of the Group's core business, product portfolio, and market focus [Main Business and Products](index=6&type=section&id=Main%20Business%20and%20Products) This section describes China Shineway Pharmaceutical Group Limited's core business in R&D, production, and sales of modern traditional Chinese medicine injections, soft capsules, granules, and TCM formula granules, primarily for the Chinese market, listing key products and therapeutic areas - The Group primarily engages in the research, development, production, and sale of modern traditional Chinese medicine injections, soft capsules, granule products, and traditional Chinese medicine formula granules, with products mainly sold in the Chinese market[8](index=8&type=chunk) - In the first half of 2025, the revenue ratio of prescription drugs to OTC drugs was approximately **89.3%** and **10.7%**, respectively, with products covering eight major therapeutic areas including cardiovascular and cerebrovascular, respiratory, digestive, pediatric, orthopedic, tonifying, nervous system, and gynecological conditions[8](index=8&type=chunk) - Key products include Qingkailing Injection, Shuxuening Injection, Shenmai Injection, Wufu Xinnaoqing Soft Capsule, Traditional Chinese Medicine Formula Granules, Huoxiang Zhengqi Soft Capsule, Xiaoer Qingfei Huatan Granules, Synovitis Granules, and Qingkailing Soft Capsule[9](index=9&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the Group's operational performance, financial position, and strategic initiatives for the reporting period [Performance Overview](index=7&type=section&id=Performance%20Overview) In the first half of 2025, the Group's sales decreased by 20.8% year-on-year, with a decline in gross margin, but net profit only slightly decreased by 1.9% through stringent cost control and increased investment income - In the first half of 2025, the Group's sales decreased by **20.8%** to **RMB 1,652,698,000**, and the gross margin fell from **75.3%** to **72.2%**[10](index=10&type=chunk) - Net profit only slightly decreased by **1.9%** to **RMB 614,663,000**, primarily due to enhanced cost control (selling and distribution costs decreased by **20.7%**, administrative expenses decreased by **12.9%**) and increased investment income[10](index=10&type=chunk)[11](index=11&type=chunk) - The net profit margin increased from **30.0%** in the same period last year to **37.2%**[11](index=11&type=chunk) - Net cash from operating activities slightly increased by **0.4%** to **RMB 566,319,000**, with free cash flow of approximately **RMB 465,705,000**[11](index=11&type=chunk) [Sales Overview by Dosage Form](index=8&type=section&id=Sales%20Overview%20by%20Dosage%20Form) The Group's total sales significantly decreased by 20.8% in the first half of 2025, with most dosage forms experiencing declines, particularly injections, while oral products remain a key development strategy 2025 H1 Sales by Dosage Form | Dosage Form | H1 2025 Sales (RMB '000) | YoY Change | 2025 Sales Share | | :--- | :--- | :--- | :--- | | Injections | 565,628 | -27.4% | 34.2% | | Soft Capsules | 217,383 | -24.7% | 13.2% | | Granules | 272,695 | -21.0% | 16.5% | | TCM Formula Granules | 487,717 | -12.1% | 29.5% | | Others | 109,275 | -8.1% | 6.6% | | **Total Sales** | **1,652,698** | **-20.8%** | **100.0%** | - Oral products accounted for **65.8%** of total sales, while injection products accounted for **34.2%**, with the Group continuing to prioritize the expansion of oral preparations as a key development strategy[12](index=12&type=chunk) [Injection Products](index=8&type=section&id=Injection%20Products) Sales of injection products decreased by 27.4% year-on-year, mainly due to significant reductions in sales of core products such as Qingkailing Injection and Shenmai Injection - Qingkailing Injection sales decreased by **50.1%**, and Shenmai Injection decreased by **21.0%**[13](index=13&type=chunk) - Shuxuening Injection, Guanxining Injection, and Danshen Injection sales decreased by **6.3%**, **9.6%**, and **24.6%**, respectively[13](index=13&type=chunk) [Soft Capsule Products](index=8&type=section&id=Soft%20Capsule%20Products) Total sales of soft capsule products decreased by 24.7%, primarily due to significant reductions in Wufu Xinnaoqing Soft Capsule, Huoxiang Zhengqi Soft Capsule, and Qingkailing Soft Capsule sales, though exclusive products Jiangzhi Tongluo Soft Capsule and Dantong Tongnao Soft Capsule achieved growth - Wufu Xinnaoqing Soft Capsule sales decreased by **67.4%**, Huoxiang Zhengqi Soft Capsule by **16.0%**, and Qingkailing Soft Capsule by **24.6%**[13](index=13&type=chunk) - Exclusive products Jiangzhi Tongluo Soft Capsule and Dantong Tongnao Soft Capsule recorded sales growth of **16.5%** and **15.2%**, respectively[13](index=13&type=chunk) [Granule Products](index=8&type=section&id=Granule%20Products) Sales of granule products decreased by 21.0% year-on-year, mainly affected by significant reductions in sales of respiratory medications Phenolamine Caffeine Granules and Xiaoer Qingfei Huatan Granules, but exclusive product Shujin Tongluo Granules achieved growth - Phenolamine Caffeine Granules sales decreased by **40.1%**, and Xiaoer Qingfei Huatan Granules by **57.8%**[13](index=13&type=chunk) - Exclusive product Shujin Tongluo Granules sales grew by **43.8%**[13](index=13&type=chunk) [TCM Formula Granules](index=8&type=section&id=TCM%20Formula%20Granules) Sales of TCM formula granules decreased by 12.1%, primarily due to the Group's risk management measures, temporarily suspending shipments to hospitals and primary healthcare institutions with overdue accounts receivable, and intensified market competition - Sales decreased by **12.1%**, mainly due to increased overdue accounts receivable, leading the Group to suspend shipments to institutions that did not meet risk management requirements[13](index=13&type=chunk) [Essential Medicines](index=9&type=section&id=Essential%20Medicines) The Group has 18 regularly produced medicines listed in the National Essential Medicines List, but overall sales of essential medicines decreased by 30.7% in the period, accounting for 35.2% of total Group sales, with national policies expected to drive future growth - The Group has **18** regularly produced medicines listed in the National Essential Medicines List, including Qingkailing Injection and Shenmai Injection[14](index=14&type=chunk) - In the first half of 2025, overall sales of essential medicines decreased by **30.7%** to **RMB 582,080,000**, accounting for **35.2%** of the Group's total sales[14](index=14&type=chunk) - The National Health Commission emphasizes improving the national drug system, implementing grassroots drug linkage services, and revising the "National Essential Medicines List Management Measures," which is expected to drive sustained growth in essential medicines[15](index=15&type=chunk)[16](index=16&type=chunk) [Prescription and OTC Drug Sales Analysis](index=10&type=section&id=Prescription%20and%20OTC%20Drug%20Sales%20Analysis) In the first half of 2025, sales of both prescription and OTC drugs declined, with significant drops in TCM formula granules and respiratory/cardiovascular injection prescription drugs, but exclusive oral prescription drugs maintained growth 2025 H1 Sales by Drug Category and Efficacy | Category | H1 2025 Sales (RMB '000) | Sales Share | Sales Change | | :--- | :--- | :--- | :--- | | TCM Formula Granules | 487,717 | 29.5% | -12.1% | | Respiratory Prescription Drugs | 264,410 | 16.0% | -47.6% | | Cardiovascular and Cerebrovascular Injection Prescription Drugs | 294,462 | 17.8% | -14.9% | | Exclusive Oral Prescription Drugs | 266,627 | 16.1% | +3.6% | | Other Prescription Drugs | 162,726 | 9.9% | -15.2% | | **Total Prescription Drugs** | **1,475,942** | **89.3%** | **-20.4%** | | **Total OTC Drugs** | **176,756** | **10.7%** | **-24.0%** | | **Total Sales** | **1,652,698** | **100%** | **-20.8%** | [TCM Formula Granules (Sales Analysis)](index=10&type=section&id=TCM%20Formula%20Granules%20%28Sales%20Analysis%29) Sales of TCM formula granules decreased by 12.1%, primarily due to overdue accounts receivable risk management and intensified market competition; the Group is reorganizing its team and expanding market development - Sales decreased by **12.1%** to **RMB 487,717,000**, accounting for **29.5%** of total sales, ranking among the top five listed companies for TCM formula granules nationwide[18](index=18&type=chunk) - The sales decline was attributed to risk management for overdue accounts receivable and price competition from new suppliers[19](index=19&type=chunk) - The Group plans to reorganize its formula granule business unit team, increase national market personnel, and prioritize developing hospital markets in 10 other provinces beyond Hebei and Yunnan[19](index=19&type=chunk) - The two major production bases in Shijiazhuang, Hebei, and Chuxiong, Yunnan, have an annual output value of **RMB 5 billion**, with plans to expand capacity based on market development[20](index=20&type=chunk) [Respiratory Prescription Drugs](index=11&type=section&id=Respiratory%20Prescription%20Drugs) Sales of respiratory prescription drugs significantly decreased by 47.6%, mainly due to high social inventory post-pandemic, weak demand from a slowing macroeconomy, and active inventory adjustments by terminal channels; the Group's self-developed 'JC Capsule' has completed Phase III clinical trials and is expected to obtain production approval in the second half of the year, adding new momentum to this area - Sales significantly decreased by **47.6%** to **RMB 264,410,000**, accounting for **16.0%** of overall sales[21](index=21&type=chunk) - Qingkailing Injection and Phenolamine Caffeine Granules sales significantly decreased by **50.1%** and **40.1%**, respectively[21](index=21&type=chunk) - The sales decline was mainly due to a high inventory base post-pandemic, weak demand from a slowing macroeconomy, and inventory adjustments by medical institutions[21](index=21&type=chunk) - The self-developed "JC Capsule" for upper respiratory tract infections has completed Phase III clinical trials and is expected to obtain a production license in the second half of 2025[21](index=21&type=chunk) [Cardiovascular and Cerebrovascular Injection Prescription Drugs](index=12&type=section&id=Cardiovascular%20and%20Cerebrovascular%20Injection%20Prescription%20Drugs) Sales of cardiovascular and cerebrovascular injection prescription drugs experienced a negative growth of 14.9%, primarily due to the national centralized procurement 'dual control' policy, which led to a significant decline in hospital procurement demand - Sales experienced negative growth of **14.9%** to **RMB 294,462,000**, accounting for **17.8%** of overall sales[22](index=22&type=chunk) - Shenmai Injection and Shuxuening Injection sales decreased by **21.0%** and **6.3%**, respectively[22](index=22&type=chunk) - The sales decline was mainly due to the national centralized procurement "dual control" policy, leading to reduced hospital procurement demand[22](index=22&type=chunk) [Exclusive Oral Prescription Drugs](index=12&type=section&id=Exclusive%20Oral%20Prescription%20Drugs) Sales of exclusive oral prescription drugs grew against the trend by 3.6%, with Jiangzhi Tongluo Soft Capsule, Dantong Tongnao Soft Capsule, and Shujin Tongluo Granules performing exceptionally; Qihuang Tongmi Soft Capsule and Dantong Tongnao Soft Capsule received expert consensus and guideline recommendations, further enhancing their clinical status and market potential - Exclusive oral prescription drug sales increased by **3.6%**, accounting for **16.1%** of overall sales[23](index=23&type=chunk)[24](index=24&type=chunk) - Jiangzhi Tongluo Soft Capsule, Dantong Tongnao Soft Capsule, and Shujin Tongluo Granules grew by **16.5%**, **15.2%**, and **43.8%**, respectively[23](index=23&type=chunk) - Qihuang Tongmi Soft Capsule was recommended by the "Expert Consensus on Integrated Traditional Chinese and Western Medicine Diagnosis and Treatment of Functional Constipation (2025)," effective for functional constipation by invigorating qi, nourishing blood, and moistening the intestines[24](index=24&type=chunk) - Dantong Tongnao Soft Capsule was included in the "Guidelines for Rational Drug Use in Cerebrovascular Diseases," effectively promoting neurological recovery, improving microcirculation in ischemic areas, and providing anti-ischemic reperfusion injury effects[25](index=25&type=chunk) - The Group will continue to increase evidence-based medicine research, terminal investment, and academic promotion for its exclusive products[26](index=26&type=chunk) [OTC Drugs](index=13&type=section&id=OTC%20Drugs) Overall sales of OTC drugs decreased by 24.0% year-on-year, mainly due to a high base from public and pharmacy stockpiling post-pandemic, and reduced consumer confidence affected by a slowing macroeconomy - Overall OTC drug sales decreased by **24.0%** year-on-year[27](index=27&type=chunk) - Huoxiang Zhengqi Soft Capsule and Qingkailing Soft Capsule declined by **16.0%** and **24.6%**, respectively, while Xiaoer Qingfei Huatan Granules sales decreased by **57.8%**[27](index=27&type=chunk) - The sales reduction was mainly due to a high post-pandemic stockpiling base and reduced consumer confidence affected by a slowing macroeconomy[27](index=27&type=chunk) [Research and Development and Innovation](index=14&type=section&id=Research%20and%20Development%20and%20Innovation) The Group continues to increase R&D investment, focusing on chronic disease treatment, especially areas without Western medicine solutions, to develop innovative traditional Chinese medicines; multiple new drugs are in clinical trials, with 'Q-B-Q-F Concentrated Pills' in Phase III, and 'Sailuotong Capsule' and 'JC Capsule' having completed Phase III, expected to submit production license applications by year-end - The Group continues to strengthen R&D investment, precisely targeting the development of modern traditional Chinese medicine new drugs with unique efficacy, focusing on chronic disease treatment areas[28](index=28&type=chunk) - The exclusive innovative drug "Q-B-Q-F Concentrated Pills" is in Phase III clinical trials[28](index=28&type=chunk) - "Sailuotong Capsule" and "JC Capsule" have completed Phase III clinical trials, with the goal of submitting production license applications by the end of this year[28](index=28&type=chunk) - R&D expenses accounted for **3.0%** of total sales revenue during the period, and future efforts will focus on developing innovative traditional Chinese medicines in advantageous areas such as cardiovascular and cerebrovascular diseases, pediatric diseases, orthopedic diseases, gynecological diseases, and geriatric diseases[28](index=28&type=chunk) - The "Research and Application of Shan Zha Ye and Formula Granules, a Characteristic Traditional Chinese Medicine Material in Hebei" project won the Third Prize of Hebei Provincial Science and Technology Progress Award, solving the problem of unclear material basis and lack of quality control standards for Shan Zha Ye formula granules[29](index=29&type=chunk) [Ancient Classic Prescriptions](index=15&type=section&id=Ancient%20Classic%20Prescriptions) The Group actively promotes the inheritance and innovation of traditional Chinese medicine, developing and researching over 100 new drugs transformed from ancient classic prescriptions; the self-developed 'Shaoyao Gancao Tang Granules' has been approved for market by the NMPA, becoming the first classic prescription approved in 2025, while Phase II clinical trials for 'Yigong San Granules' for chronic anemia are progressing well - The Group is developing and researching over **100** new drugs transformed from ancient classic prescriptions and accelerating the registration application for multiple traditional Chinese medicine classic prescription new drugs[30](index=30&type=chunk) - The self-developed "Shaoyao Gancao Tang Granules" received market approval from the National Medical Products Administration, becoming the first classic prescription approved in 2025 and the Group's second approved classic prescription[30](index=30&type=chunk) - Phase II clinical trials for "Yigong San Granules," a Class 1.1 new traditional Chinese medicine for chronic anemia, are progressing smoothly, with no clear traditional Chinese medicine for chronic anemia currently on the market[30](index=30&type=chunk) [Policy Environment](index=15&type=section&id=Policy%20Environment) In the first half of 2025, the state introduced multiple policies supporting the high-quality development of the traditional Chinese medicine industry, including deepening the '14th Five-Year Plan' for TCM development, enhancing TCM quality and technological innovation, incorporating innovative and high-value TCM drugs into medical insurance, and promoting TCM resources to grassroots medical care, providing strong support for TCM enterprises' development - In January 2025, the National Administration of Traditional Chinese Medicine Directors' Meeting deployed key tasks including deepening the "14th Five-Year Plan" for TCM development, promoting the construction of a TCM standard system, and enhancing TCM quality and technological innovation[32](index=32&type=chunk) - In March 2025, the National Healthcare Security Administration announced that innovative drugs and high-value traditional Chinese medicine drugs would be included in medical insurance policy adjustments and management, supporting TCM innovation[32](index=32&type=chunk) - The government work report at the National People's Congress and Chinese People's Political Consultative Conference in 2025 explicitly proposed accelerating the review and approval of innovative traditional Chinese medicine drugs and promoting TCM technological innovation[33](index=33&type=chunk) - In June 2025, the National Health Commission promoted optimizing community and grassroots TCM service systems and enhancing TCM basic public health service capabilities, driving TCM enterprises to expand markets at the grassroots level[34](index=34&type=chunk) [Eight Key Products Win Bids in National Centralized Procurement of Proprietary Chinese Medicines](index=16&type=section&id=Eight%20Key%20Products%20Win%20Bids%20in%20National%20Centralized%20Procurement%20of%20Proprietary%20Chinese%20Medicines) Eight of the Group's key products, including Qingkailing Injection, Shuxuening Injection, and Shenmai Injection, successfully won bids in the national centralized procurement of proprietary Chinese medicines, covering cardiovascular and cerebrovascular, respiratory, and digestive therapeutic areas, which will enhance the Group's market coverage and sales potential - Eight of the Group's key products, including Qingkailing Injection, Shuxuening Injection, and Shenmai Injection, won bids in the national centralized procurement of proprietary Chinese medicines[35](index=35&type=chunk) - The中标 products cover therapeutic areas such as cardiovascular and cerebrovascular diseases, respiratory system diseases, and digestive system diseases, all of which are commonly used medical insurance and essential drug varieties[35](index=35&type=chunk) - Winning the bids will make the products more compliant with DRGs/DIP payment requirements, increasing terminal market demand, market coverage, and sales potential[36](index=36&type=chunk) [Financial Performance Analysis](index=17&type=section&id=Financial%20Performance%20Analysis) This section details the Group's financial indicators for the first half of 2025, explaining the reasons for decreased profit but improved net profit margin - In the first half of 2025, revenue decreased by **20.8%** year-on-year, with sales of injections, soft capsules, granules, and TCM formula granules all declining[37](index=37&type=chunk) - Prescription drugs and OTC drugs accounted for **89.3%** and **10.7%** of revenue, respectively[37](index=37&type=chunk) [Cost of Sales](index=17&type=section&id=Cost%20of%20Sales) In the first half of 2025, the cost of sales was RMB 459,092,000, accounting for 27.8% of revenue, with direct materials representing 66.8% of total production costs - Cost of sales was **RMB 459,092,000**, accounting for **27.8%** of revenue[38](index=38&type=chunk) - Direct materials, direct labor, and other production costs accounted for **66.8%**, **14.3%**, and **18.9%** of total production costs, respectively[38](index=38&type=chunk) [Operating Gross Margin](index=17&type=section&id=Operating%20Gross%20Margin) The overall gross margin for the first half of 2025 was 72.2%, a decrease from 75.3% in the same period last year, mainly due to rising raw material procurement costs and the impact of centralized procurement on drug prices - The overall gross margin was **72.2%**, compared to **75.3%** in the same period last year[39](index=39&type=chunk) - The average gross margin for injections, soft capsules, granules, and TCM formula granules all decreased[39](index=39&type=chunk) [Other Income](index=17&type=section&id=Other%20Income) Other income primarily includes enterprise development funds of RMB 156,300,000, mainly from government-provided research activities and investment-related enterprise development funds - Other income primarily consisted of enterprise development funds of **RMB 156,300,000** (H1 2024: RMB 162,297,000)[40](index=40&type=chunk) [Investment Income](index=17&type=section&id=Investment%20Income) Investment income significantly increased, mainly from interest income on bank deposits and structured deposits of RMB 119,821,000 and income from financial product investments of RMB 98,469,000 - Total investment income was **RMB 218,290,000** (H1 2024: RMB 121,173,000)[41](index=41&type=chunk)[89](index=89&type=chunk) - Interest income from bank deposits and structured deposits was **RMB 119,821,000**, and income from financial product investments was **RMB 98,469,000**[41](index=41&type=chunk) [Other Gains and Losses](index=18&type=section&id=Other%20Gains%20and%20Losses) In the first half of 2025, a net exchange gain of RMB 32,843,000 was recorded, primarily due to changes in the exchange rates of the Australian dollar and Hong Kong dollar against the RMB - A net exchange gain of **RMB 32,843,000** was recorded (H1 2024: RMB 19,118,000), mainly due to changes in the exchange rates of the Australian dollar and Hong Kong dollar against the RMB[42](index=42&type=chunk) [Impairment of Financial Assets](index=18&type=section&id=Impairment%20of%20Financial%20Assets) In the first half of 2025, there was a reversal of impairment for trade receivables of RMB 2,706,000 and an impairment of RMB 871,000 for trade receivables secured by bank bills - Reversal of impairment for trade receivables was **RMB 2,706,000** (H1 2024: impairment of RMB 4,788,000)[43](index=43&type=chunk) - Impairment for trade receivables secured by bank bills was **RMB 871,000** (H1 2024: reversal of impairment of RMB 502,000)[43](index=43&type=chunk) [Selling and Distribution Costs](index=18&type=section&id=Selling%20and%20Distribution%20Costs) Selling and distribution costs decreased by 20.7% year-on-year, primarily due to the Group's enhanced cost control, reduced market development, marketing management, and promotional expenses, as well as a decrease in sales personnel and salaries - Selling and distribution costs decreased by **20.7%**, accounting for **39.2%** of revenue (H1 2024: 39.2%)[44](index=44&type=chunk) - The cost reduction was mainly due to decreased expenses for market development, marketing management, and market promotion, as well as a reduction in sales personnel and salaries[44](index=44&type=chunk) [Administrative Expenses](index=18&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 12.9% year-on-year, accounting for approximately 7.7% of revenue, mainly comprising administrative staff salaries, social insurance, depreciation of property, plant and equipment, and amortization of intangible assets - Administrative expenses decreased by **12.9%**, accounting for approximately **7.7%** of revenue (H1 2024: 7.0%)[45](index=45&type=chunk) - These primarily included administrative staff salaries and social insurance (accounting for **2.6%** of revenue) and depreciation and amortization expenses (accounting for **1.4%** of revenue)[45](index=45&type=chunk) [Research and Development Costs](index=18&type=section&id=Research%20and%20Development%20Costs) In the first half of 2025, research and development costs accounted for approximately 3.0% of revenue, an increase from 2.1% in the same period last year - Research and development costs accounted for approximately **3.0%** of revenue (H1 2024: 2.1%)[46](index=46&type=chunk) [Taxation](index=18&type=section&id=Taxation) Total taxation for the first half of 2025 was RMB 160,015,000, with the effective tax rate decreasing from 27.3% in the same period last year to 20.7%, mainly due to reduced withholding tax on dividends distributed by domestic subsidiaries - Total taxation was **RMB 160,015,000**, with the effective tax rate decreasing from **27.3%** to **20.7%**[47](index=47&type=chunk) - The decrease in tax rate was mainly due to reduced withholding tax on dividends distributed by domestic subsidiaries[47](index=47&type=chunk) [Profit for the Period](index=18&type=section&id=Profit%20for%20the%20Period) Net profit for the first half of 2025 was RMB 614,663,000, a year-on-year decrease of 1.9%, primarily due to increased raw material procurement costs and the impact of centralized procurement on drug prices, leading to reduced revenue and gross profit - Net profit was **RMB 614,663,000**, a year-on-year decrease of **1.9%**[48](index=48&type=chunk) - The decrease in profit was mainly due to increased raw material procurement costs and the impact of centralized procurement on drug prices, leading to reduced revenue and gross profit[48](index=48&type=chunk) [Financial Position and Liquidity](index=19&type=section&id=Financial%20Position%20and%20Liquidity) The Group maintains a robust financial position with ample bank balances and cash to support future development, while trade receivables turnover increased, inventory turnover extended, and the debt-to-capital ratio decreased [Interim Dividend](index=19&type=section&id=Interim%20Dividend) The Board resolved to declare a second interim dividend of RMB 0.11 per share for 2025, totaling RMB 83,094,000, payable on September 26, 2025 - A second interim dividend of **RMB 0.11 per share** for 2025 was declared, totaling **RMB 83,094,000**[49](index=49&type=chunk) - Together with the first interim dividend, total dividends paid to shareholders in 2025 amounted to **RMB 0.47 per share**[11](index=11&type=chunk) - The dividend will be paid in HKD cash, converted at a specified exchange rate to **HKD 0.120 per share**[50](index=50&type=chunk) [Share Capital Structure](index=19&type=section&id=Share%20Capital%20Structure) As of June 30, 2025, the Group's capital structure and issued share capital remained unchanged compared to December 31, 2024 - As of June 30, 2025, the Group's capital structure and issued share capital remained unchanged[52](index=52&type=chunk) [Liquidity and Financial Resources](index=19&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's bank balances and cash amounted to RMB 6,860,819,000, an increase from the end of 2024, indicating a strong financial position - As of June 30, 2025, bank balances and cash amounted to **RMB 6,860,819,000** (December 31, 2024: RMB 6,140,153,000)[53](index=53&type=chunk) - Of this, **RMB 4,390,659,000** was denominated in RMB, with the remainder in HKD, AUD, and USD[53](index=53&type=chunk) - The Directors believe the Group's financial position is robust, with sufficient financial resources to meet future development needs[54](index=54&type=chunk) [Trade Receivables and Trade Receivables Secured by Bank Bills](index=19&type=section&id=Trade%20Receivables%20and%20Trade%20Receivables%20Secured%20by%20Bank%20Bills) As of June 30, 2025, trade receivables increased by 0.8%, while trade receivables secured by bank bills decreased by 5.9%; the turnover period for trade receivables extended to 99.9 days, and for trade receivables secured by bank bills, it shortened to 31.2 days - Trade receivables increased by **0.8%**, while trade receivables secured by bank bills decreased by **5.9%**[55](index=55&type=chunk) - The turnover period for trade receivables was **99.9 days** (H1 2024: 69.7 days), and for trade receivables secured by bank bills, it was **31.2 days** (H1 2024: 41.9 days)[55](index=55&type=chunk) [Inventories](index=20&type=section&id=Inventories) As of June 30, 2025, inventories decreased by 11.2% compared to the end of 2024; the finished goods inventory turnover period extended to 110.0 days - Inventories decreased by **11.2%** compared to December 31, 2024[56](index=56&type=chunk) - The finished goods inventory turnover period was **110.0 days** (H1 2024: 98.0 days)[57](index=57&type=chunk) [Property, Plant and Equipment](index=20&type=section&id=Property%2C%20Plant%20and%20Equipment) In the first half of 2025, the Group added approximately RMB 59,126,000 in construction in progress and purchased other property, plant and equipment totaling RMB 19,063,000; depreciation expense was RMB 69,511,000 - Approximately **RMB 59,126,000** was added to construction in progress, and other property, plant and equipment totaling **RMB 19,063,000** was purchased[58](index=58&type=chunk) - Depreciation expense was **RMB 69,511,000** (H1 2024: RMB 75,634,000)[58](index=58&type=chunk) [Intangible Assets](index=20&type=section&id=Intangible%20Assets) Intangible assets primarily refer to patent rights and production licenses with definite useful lives, with amortization expense of RMB 4,424,000 - Amortization expense for intangible assets was **RMB 4,424,000**[59](index=59&type=chunk) [Goodwill](index=20&type=section&id=Goodwill) Goodwill primarily arose from equity acquisitions of several subsidiaries between 2005 and 2021 - Goodwill arose from equity acquisitions of Shineway Pharmaceutical Marketing Co, Ltd, Shineway Pharmaceutical (Zhangjiakou) Co, Ltd, Shineway Pharmaceutical (Sichuan) Co, Ltd, Shineway Pharmaceutical Group (Shandong) Co, Ltd, Yunnan Shineway Shiprui Pharmaceutical Co, Ltd, and Shineway Pharmaceutical (Kunming) Co, Ltd in 2005, 2010, 2014, 2015, and 2021, respectively[60](index=60&type=chunk) [Trade Payables](index=20&type=section&id=Trade%20Payables) The turnover period for trade payables was 146.0 days, a reduction from 167.2 days in the same period last year - The turnover period for trade payables was **146.0 days** (H1 2024: 167.2 days)[61](index=61&type=chunk) [Bank Borrowings](index=20&type=section&id=Bank%20Borrowings) As of June 30, 2025, bank borrowings amounted to RMB 328,477,000, primarily for daily operations, with a debt-to-capital ratio of 4.2% - Bank borrowings amounted to **RMB 328,477,000** (December 31, 2024: RMB 330,000,000)[62](index=62&type=chunk) - Borrowings bear interest at a range of 61 to 200 basis points below the prime lending rate and are repayable within one to two years[62](index=62&type=chunk) - The debt-to-capital ratio was **4.2%** (December 31, 2024: 4.4%)[62](index=62&type=chunk) [Other Operating Information](index=21&type=section&id=Other%20Operating%20Information) This section provides information on the Group's employees, exchange rate risk, contingent liabilities, significant investments, and asset pledges [Employees](index=21&type=section&id=Employees) As of June 30, 2025, the Group's employee count was 2,867, a decrease from 3,220 at the end of 2024; the Group provides fair compensation and benefits - As of June 30, 2025, the number of employees was **2,867** (December 31, 2024: 3,220)[63](index=63&type=chunk) - The Group's remuneration policy is fair, referencing market conditions and individual performance, and provides medical insurance, retirement benefits, and other perks[63](index=63&type=chunk) [Exposure to Exchange Rate Fluctuations](index=21&type=section&id=Exposure%20to%20Exchange%20Rate%20Fluctuations) The vast majority of the Group's operating transactions and liabilities are denominated in RMB and HKD, with bank deposits primarily in RMB, HKD, and AUD; a net exchange gain was recorded in the first half of 2025, with no foreign exchange contracts or other hedging instruments during the period - The Group's operating transactions and liabilities are primarily denominated in RMB and HKD, with bank deposits mainly in RMB, HKD, and AUD[64](index=64&type=chunk) - In the first half of 2025, a net exchange gain arose from changes in the exchange rates of RMB against HKD and AUD[64](index=64&type=chunk) - As of June 30, 2025, there were no foreign exchange contracts or other financial derivative instruments for hedging purposes[64](index=64&type=chunk) [Contingent Liabilities](index=21&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[65](index=65&type=chunk) [Significant Investments Held, Major Acquisitions and Disposals, and Plans for Future Major Investments or Capital Assets](index=21&type=section&id=Significant%20Investments%20Held%2C%20Major%20Acquisitions%20and%20Disposals%2C%20and%20Plans%20for%20Future%20Major%20Investments%20or%20Capital%20Assets) In the first half of 2025, the Group held no significant investments, nor were there any major acquisitions or disposals, and the Board had not authorized any plans for significant investments or increases in capital assets - There were no significant investments, acquisitions, or disposals during the period[66](index=66&type=chunk) - As of June 30, 2025, the Board had not authorized any plans for significant investments or increases in capital assets[66](index=66&type=chunk) [Pledge of Group Assets](index=21&type=section&id=Pledge%20of%20Group%20Assets) As of June 30, 2025, the Group had no assets pledged - As of June 30, 2025, the Group had no assets pledged[67](index=67&type=chunk) [Other Information](index=22&type=section&id=Other%20Information) This section covers details regarding directors' and substantial shareholders' interests, share schemes, securities transactions, corporate governance, and audit committee activities [Directors' and Chief Executive's Interests in Shares](index=22&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20in%20Shares) As of June 30, 2025, Mr. Li Zhenjiang held 66.12% of the company's shares through a discretionary trust, with Mr. Li Huimin and Ms. Xin Yunxia also holding minor stakes Directors' and Chief Executive's Interests in Shares | Director Name | Capacity | Number of Shares Held (shares) | Approximate Percentage of Company Shares | | :--- | :--- | :--- | :--- | | Li Zhenjiang | Founder of a discretionary trust | 546,802,990 | 66.12% | | Li Huimin | Beneficial owner | 1,020,000 | 0.12% | | Xin Yunxia | Beneficial owner | 540,000 | 0.07% | - Mr. Li Zhenjiang is deemed to have an interest in **546,802,990 shares**, which are held by Full Wealth Investment Limited, a company wholly owned by the trustee of the Li Family 2004 Trust[68](index=68&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=22&type=section&id=Directors%27%20Rights%20to%20Acquire%20Shares%20or%20Debentures) Save for the share option scheme and share award scheme disclosures, neither the company, its holding company, nor any of its subsidiaries entered into any arrangements during the period that would enable directors to acquire benefits by purchasing shares or debentures - During the period, neither the company, its holding company, nor any of its subsidiaries participated in any arrangements that would enable directors to acquire benefits by purchasing shares or debentures, except for the share option scheme and share award scheme[70](index=70&type=chunk) [Substantial Shareholders](index=23&type=section&id=Substantial%20Shareholders) As of June 30, 2025, Full Wealth Investment Limited and BH Corporate Services Ltd were the company's substantial shareholders, each holding 546,802,990 shares, representing approximately 66.12% of the company's share capital Substantial Shareholders' Interests | Shareholder Name | Capacity | Number of Shares Held (shares) | Approximate Percentage of Company Share Capital | | :--- | :--- | :--- | :--- | | Full Wealth Investment Limited | Beneficial owner | 546,802,990 | 66.12% | | BH Corporate Services Ltd | Trustee of a discretionary trust | 546,802,990 | 66.12% | - The shareholdings of Full Wealth and BH Corporate Services Ltd overlap, as BH Corporate Services Ltd, as trustee of the Li Family 2004 Trust, owns all issued shares of Full Wealth[72](index=72&type=chunk) [Share Option Scheme](index=23&type=section&id=Share%20Option%20Scheme) The company's share option scheme adopted on May 29, 2015, expired on May 28, 2025, with no outstanding options at the beginning or end of the period, and no options granted, exercised, cancelled, or lapsed during the period - The 2015 Share Option Scheme expired on May 28, 2025[74](index=74&type=chunk) - There were no outstanding options at the beginning or end of the period, nor were any share options granted, exercised, cancelled, or lapsed during the period[74](index=74&type=chunk) [Employee Share Award Scheme](index=24&type=section&id=Employee%20Share%20Award%20Scheme) The company adopted a share award scheme on March 26, 2018, to recognize employee contributions and attract talent; as of the end of the reporting period, the trustee held 71,600,000 shares, but no shares had been awarded to eligible employees since the adoption date - The Share Award Scheme was adopted on March 26, 2018, to recognize employee contributions and to incentivize and attract talent[75](index=75&type=chunk) - As of the end of the reporting period, the trustee held **71,600,000 shares**[75](index=75&type=chunk) - No shares have been awarded to eligible employees under the scheme since its adoption date[75](index=75&type=chunk) [Purchase, Sale or Redemption of Securities](index=24&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Securities) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's securities - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's securities[76](index=76&type=chunk) [Compliance with Corporate Governance Code](index=24&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during the first half of 2025, except for the deviation where the Chairman and CEO roles are held by the same person, which the Board believes facilitates business strategy execution and maximizes operational efficiency, and will be reviewed periodically - The company complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules during the first half of 2025, except for the deviation from Code Provision C.2.1[77](index=77&type=chunk) - The deviation is that the roles of Chairman and Chief Executive Officer are combined and held by Mr. Li Zhenjiang, which the Board believes facilitates the execution of business strategies and maximizes operational efficiency[77](index=77&type=chunk) [Compliance with Model Code](index=25&type=section&id=Compliance%20with%20Model%20Code) The company has adopted the Model Code as its code of conduct for directors' securities transactions, and all directors confirmed compliance with the Model Code during the first half of 2025 after inquiry - The company has adopted the Model Code as its code of conduct for directors' securities transactions[79](index=79&type=chunk) - All Directors confirmed, after inquiry, that they have complied with the Model Code throughout the first half of 2025[79](index=79&type=chunk) [Changes in Directors' Information](index=25&type=section&id=Changes%20in%20Directors%27%20Information) Independent Non-executive Director Ms. Wang Guihua was appointed as a member of the company's Nomination Committee on June 10, 2025 - Independent Non-executive Director Ms. Wang Guihua was appointed as a member of the company's Nomination Committee on June 10, 2025[80](index=80&type=chunk) [Audit Committee](index=25&type=section&id=Audit%20Committee) The company's Audit Committee has reviewed the accounting principles and policies adopted by the Group, as well as the unaudited condensed consolidated results for the six months ended June 30, 2025, with management and external auditors - The Audit Committee has reviewed the Group's accounting principles and policies, as well as the unaudited condensed consolidated results for the first half of 2025[82](index=82&type=chunk) [Closure of Register of Members](index=25&type=section&id=Closure%20of%20Register%20of%20Members) The company will suspend registration of shareholders from September 11 to September 12, 2025, to determine eligibility for the second interim dividend for 2025 - The register of members will be closed from September 11 to September 12, 2025, to determine eligibility for the second interim dividend[83](index=83&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=26&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) This section presents the independent review report on the condensed consolidated financial statements for the period [Review Report on Condensed Consolidated Financial Statements](index=26&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) Deloitte Touche Tohmatsu conducted a review of the condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements 2410 and found no matters that would lead them to believe the statements were not prepared, in all material respects, in accordance with International Accounting Standard 34 - The auditor, Deloitte Touche Tohmatsu, has reviewed the condensed consolidated financial statements[85](index=85&type=chunk) - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, and no audit opinion was expressed[86](index=86&type=chunk) - The auditor did not note any matters that would lead them to believe the condensed consolidated financial statements were not prepared, in all material respects, in accordance with International Accounting Standard 34[87](index=87&type=chunk) [Condensed Consolidated Financial Statements](index=27&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the Group's condensed consolidated financial statements, including statements of profit or loss, financial position, changes in equity, and cash flows, along with explanatory notes [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=27&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group reported revenue of RMB 1,652,698,000 and profit for the period of RMB 614,663,000 for the first half of 2025, with basic and diluted earnings per share both at RMB 0.81 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (For the six months ended June 30, 2025) | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue | 1,652,698 | 2,086,695 | | Cost of Sales | (459,092) | (514,511) | | Gross Profit | 1,193,606 | 1,572,184 | | Other Income | 162,059 | 168,985 | | Investment Income | 218,290 | 121,173 | | Other Gains and Losses | 29,418 | 14,206 | | Reversal (Provision) for Impairment Loss on Financial Assets, Net | 1,835 | (4,286) | | Selling and Distribution Costs | (647,836) | (817,369) | | Administrative Expenses | (126,452) | (145,212) | | Research and Development Costs | (50,378) | (44,746) | | Finance Costs | (5,864) | (2,852) | | Profit Before Tax | 774,678 | 862,083 | | Taxation | (160,015) | (235,604) | | **Profit and Total Comprehensive Income for the Period** | **614,663** | **626,479** | | Basic Earnings Per Share | RMB 0.81 | RMB 0.83 | | Diluted Earnings Per Share | RMB 0.81 | RMB 0.83 | [Condensed Consolidated Statement of Financial Position](index=28&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets less current liabilities were RMB 7,959,575,000, and net assets were RMB 7,809,623,000; non-current assets primarily comprised property, plant and equipment and goodwill, while current assets were dominated by bank balances and cash Condensed Consolidated Statement of Financial Position Summary (As of June 30, 2025) | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 1,225,148 | 1,219,402 | | Intangible Assets | 18,906 | 23,323 | | Goodwill | 165,956 | 165,956 | | Deferred Tax Assets | 24,727 | 34,326 | | **Current Assets** | | | | Inventories | 722,369 | 813,190 | | Trade Receivables | 915,803 | 908,115 | | Trade Receivables Secured by Bank Bills | 276,312 | 293,762 | | Prepayments, Deposits and Other Receivables | 77,197 | 93,283 | | Financial Assets at Fair Value Through Profit or Loss | 100,419 | 350,020 | | Bank Balances and Cash | 6,860,819 | 6,140,153 | | **Current Liabilities** | | | | Trade Payables | 373,676 | 367,046 | | Trade Payables Secured by Bank Bills | 4,000 | 35,918 | | Other Payables and Accruals | 1,555,916 | 1,508,955 | | Bank Borrowings | 300,000 | 330,000 | | **Net Current Assets** | **6,524,838** | **6,148,527** | | **Net Assets** | **7,809,623** | **7,466,904** | [Condensed Consolidated Statement of Changes in Equity](index=30&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, the Group's total equity was RMB 7,809,623,000, with profit and total comprehensive income for the period at RMB 614,663,000 and dividends paid at RMB 271,944,000 Condensed Consolidated Statement of Changes in Equity Summary (For the six months ended June 30, 2025) | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Total Equity at Beginning of Period | 7,466,904 | 7,034,768 | | Profit and Total Comprehensive Income for the Period | 614,663 | 626,479 | | Dividends Paid | (271,944) | (324,822) | | **Total Equity at End of Period** | **7,809,623** | **7,336,425** | [Condensed Consolidated Statement of Cash Flows](index=31&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In the first half of 2025, the Group's net cash from operating activities was RMB 566,319,000, net cash from investing activities was RMB 414,957,000, net cash used in financing activities was RMB 283,573,000, and cash and cash equivalents at period-end totaled RMB 6,860,819,000 Condensed Consolidated Statement of Cash Flows Summary (For the six months ended June 30, 2025) | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 566,319 | 564,116 | | Net Cash from Investing Activities | 414,957 | 79,591 | | Net Cash Used in Financing Activities | (283,573) | (301,741) | | Net Increase in Cash and Cash Equivalents | 697,703 | 341,966 | | Cash and Cash Equivalents at End of Period | 6,860,819 | 6,234,974 | [Notes to the Condensed Consolidated Financial Statements](index=32&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, explaining the basis of preparation, significant accounting policies, revenue and segment information, investment income, taxation, and other financial disclosures [General Information](index=32&type=section&id=General%20Information) The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and the Listing Rules, presented in RMB - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[99](index=99&type=chunk) - The financial statements are presented in the company's functional currency, RMB[100](index=100&type=chunk) [Significant Accounting Policies](index=32&type=section&id=Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies and methods of computation consistent with the 2024 annual consolidated financial statements; amendments to IFRS accounting standards were first applied this period but had no significant impact - The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies consistent with the 2024 annual consolidated financial statements[101](index=101&type=chunk) - Amendments to IFRS accounting standards (IAS 21 (Amendment) Lack of Exchangeability) were first applied this period but had no significant impact on the financial position and performance[102](index=102&type=chunk) [Revenue and Segment Information](index=33&type=section&id=Revenue%20and%20Segment%20Information) The Group operates a single segment business involving the research, development, manufacturing, and trading of traditional Chinese medicine products, primarily selling to external customers in China (including Hong Kong) - The Group operates a single operating segment engaged in the research, development, manufacturing, and trading of traditional Chinese medicine products[103](index=103&type=chunk) - Key products include injections, soft capsules, granules, traditional Chinese medicine formula granules, and others, primarily sold to external customers in China (including Hong Kong)[104](index=104&type=chunk) [Investment Income](index=33&type=section&id=Investment%20Income) Investment income primarily includes interest on bank deposits, interest on structured deposits, and income from financial product investments, with a significant increase in financial product investment income Investment Income Composition (For the six months ended June 30, 2025) | Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Interest on Bank Deposits | 117,876 | 109,937 | | Interest on Structured Deposits | 1,945 | 6,619 | | Income from Financial Product Investments | 98,469 | 4,617 | | **Total** | **218,290** | **121,173** | - Income from financial product investments significantly increased from **RMB 4,617 thousand** in the same period of 2024 to **RMB 98,469 thousand**[105](index=105&type=chunk) [Taxation](index=34&type=section&id=Taxation) Taxation includes PRC enterprise income tax, under-provision in prior years, and withholding tax on distributed profits of PRC subsidiaries; the decrease in effective tax rate is mainly due to reduced withholding tax Taxation Composition (For the six months ended June 30, 2025) | Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | PRC Enterprise Income Tax | 97,329 | 144,053 | | Under-provision in Prior Years | 5,763 | 7,979 | | Withholding Tax on Distributed Profits of PRC Subsidiaries | 70,287 | 81,752 | | Deferred Tax | (13,364) | 1,820 | | **Total** | **160,015** | **235,604** | - Certain subsidiaries operating in western China and recognized as high-tech enterprises enjoy a preferential enterprise income tax rate of **15%**[107](index=107&type=chunk) - The direct holding companies of PRC subsidiaries enjoy a withholding tax rate of **5%**[107](index=107&type=chunk) [Profit for the Period (Notes)](index=35&type=section&id=Profit%20for%20the%20Period%20%28Notes%29) Profit for the period is stated after deducting (crediting) amortization of intangible assets, depreciation of property, plant and equipment, enterprise development funds, net exchange gains, and gain on disposal of property, plant and equipment Profit for the Period Adjustment Items (For the six months ended June 30, 2025) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Amortization of Intangible Assets | 4,424 | 5,044 | | Depreciation of Property, Plant and Equipment | 69,511 | 75,634 | | Enterprise Development Funds (credited to other income) | (156,300) | (162,297) | | Net Exchange Gains (credited to other gains and losses) | (32,843) | (19,118) | | (Gain) Loss on Disposal of Property, Plant and Equipment | (7,619) | 255 | - Enterprise development funds include unconditional grants of **RMB 147,797,000** and deferred income related to research activities and development projects of **RMB 8,503,000**[109](index=109&type=chunk) [Dividends (Notes)](index=35&type=section&id=Dividends%20%28Notes%29) Dividends of RMB 271,944,000 (2025 first interim dividend) were recognized in the first half of 2025, and a second interim dividend of RMB 0.11 per share for 2025 was declared after the reporting period Dividends Recognized and Declared (For the six months ended June 30, 2025) | Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Dividends Recognized as Distributed During the Period | 271,944 | 324,822 | | Dividends Declared After the Reporting Period | 83,094 | 83,094 | - The second interim dividend for 2025 of **RMB 0.11 per share**, totaling **RMB 83,094,000**, is payable on September 26, 2025[112](index=112&type=chunk) [Earnings Per Share](index=36&type=section&id=Earnings%20Per%20Share) Basic and diluted earnings per share for the first half of 2025 were both RMB 0.81, calculated based on profit attributable to owners of the company and the weighted average number of ordinary shares outstanding (less shares held under the share award scheme) Earnings Per Share Calculation Data (For the six months ended June 30, 2025) | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company for the Period | 614,663 | 626,479 | | Weighted Average Number of Ordinary Shares Outstanding (less shares held under share award scheme) | 755,400,000 | 755,400,000 | - Basic and diluted earnings per share were both **RMB 0.81**[89](index=89&type=chunk) [Property, Plant and Equipment (Notes)](index=36&type=section&id=Property%2C%20Plant%20and%20Equipment%20%28Notes%29) In the first half of 2025, the Group added RMB 59,126,000 in construction in progress and acquired other property, plant and equipment totaling RMB 19,063,000; right-of-use assets of RMB 574,000 were recognized during the period - **RMB 59,126,000** was added to construction in progress, and other property, plant and equipment totaling **RMB 19,063,000** was acquired[114](index=114&type=chunk) - Property, plant and equipment with a carrying amount of **RMB 3,505,000** was disposed of, resulting in a gain on disposal of **RMB 7,619,000**[114](index=114&type=chunk) - Right-of-use assets of **RMB 574,000** and lease liabilities of **RMB 574,000** were recognized during the period[114](index=114&type=chunk) [Goodwill (Notes)](index=36&type=section&id=Goodwill%20%28Notes%29) As of June 30, 2025, the carrying amount of the Group's goodwill was RMB 165,956,000, allocated to a single cash-generating unit primarily engaged in the research, development, manufacturing, and trading of pharmaceutical products - The carrying amount of goodwill was **RMB 165,956,000**, allocated to a single cash-generating unit primarily engaged in the research, development, manufacturing, and trading of pharmaceutical products[115](index=115&type=chunk) [Trade Receivables / Trade Receivables Secured by Bank Bills (Notes)](index=37&type=section&id=Trade%20Receivables%20%2F%20Trade%20Receivables%20Secured%20by%20Bank%20Bills%20%28Notes%29) As of June 30, 2025, total trade receivables amounted to RMB 950,242,000, and total trade receivables secured by bank bills amounted to RMB 278,883,000 Trade Receivables and Trade Receivables Secured by Bank Bills (As of June 30, 2025) | Category | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade Receivables (net of provision) | 915,803 | 908,115 | | Trade Receivables Secured by Bank Bills (net of provision) | 276,312 | 293,762 | | **Total** | **1,192,115** | **1,201,877** | Ageing Analysis of Trade Receivables and Trade Receivables Secured by Bank Bills (As of June 30, 2025) | Ageing | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Within 6 months | 819,560 | 853,487 | | Over 6 months but within 1 year | 207,169 | 202,754 | | Over 1 year but within 2 years | 125,534 | 119,971 | | Over 2 years | 39,852 | 25,665 | | **Total** | **1,192,115** | **1,201,877** | [Reversal (Provision) for Impairment Loss on Financial Assets under Expected Credit Loss Model, Net](index=38&type=section&id=Reversal%20%28Provision%29%20for%20Impairment%20Loss%20on%20Financial%20Assets%20under%20Expected%20Credit%20Loss%20Model%2C%20Net) In the first half of 2025, there was a reversal of impairment loss on trade receivables of RMB 2,706,000 and a provision for impairment loss on trade receivables secured by bank bills of RMB 871,000 Reversal (Provision) for Impairment Loss on Financial Assets, Net (For the six months ended June 30, 2025) | Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Reversal of Impairment Loss on Trade Receivables | (2,706) | 4,788 | | Provision for Impairment Loss on Trade Receivables Secured by Bank Bills | 871 | (502) | | **Net** | **(1,835)** | **4,286** | [Trade Payables / Trade Payables Secured by Bank Bills (Notes)](index=38&type=section&id=Trade%20Payables%20%2F%20Trade%20Payables%20Secured%20by%20Bank%20Bills%20%28Notes%29) As of June 30, 2025, total trade payables amounted to RMB 373,676,000, and trade payables secured by bank bills amounted to RMB 4,000,000 Trade Payables and Trade Payables Secured by Bank Bills (As of June 30, 2025) | Category | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade Payables | 373,676 | 367,046 | | Trade Payables Secured by Bank Bills | 4,000 | 35,918 | | **Total** | **377,676** | **402,964** | Ageing Analysis of Trade Payables (As of June 30, 2025) | Ageing | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Within 6 months | 291,304 | 367,950 | | Over 6 months but within 1 year | 74,878 | 25,369 | | Over 1 year but within 2 years | 8,925 | 7,500 | | Over 2 years but within 3 years | 952 | 620 | | Over 3 years | 1,617 | 1,525 | | **Total** | **377,676** | **402,964** | [Bank Borrowings (Notes)](index=39&type=section&id=Bank%20Borrowings%20%28Notes%29) In the first half of 2025, the Group obtained new bank loans of RMB 328,477,000 and repaid RMB 330,000,000; new loans are interest-bearing at preferential rates and repayable within one to two years - In the first half of 2025, new bank loans of **RMB 300,000,000** and **RMB 28,477,000** were obtained, and bank loans of **RMB 330,000,000** were repaid[123](index=123&type=chunk) - New loans bear interest at 200 basis points and 61 basis points below the prime lending rate, respectively, and are repayable within one and two years[123](index=123&type=chunk) [Share Capital (Notes)](index=39&type=section&id=Share%20Capital%20%28Notes%29) As of June 30, 2025, the company's authorized, issued, and fully paid share capital remained unchanged, with 827,000,000 shares issued at a par value of HKD 0.10 each Share Capital Information (As of June 30, 2025) | Category | Number of Shares ('000) | Amount | | :--- | :--- | :--- | | Authorized Share Capital (par value HKD 0.10 per share) | 5,000,000 | HKD 500,000 | | Issued and Fully Paid Share Capital (par value HKD 0.10 per share) | 827,000 | HKD 82,700 | | **Presented in Financial Statements as (RMB '000)** | | **87,662** | - The company's authorized, issued, and fully paid s

2025 中期報告 INTERIM 2025 REPORT 靈寶黃金集團股份有限公 司 Lingbao Gold Group C o mpan y Ltd. INTERIM REPORT 2025 中期報告 目錄 2 公司資料 4 管理層討論及分析 17 其他資料 24 審閱報告 25 簡明綜合損益表 26 簡明綜合損益及其他全面收益表 27 簡明綜合財務狀況表 29 簡明綜合權益變動表 30 簡明綜合現金流量表 32 簡明中期財務報告附註 二零二五年中期報告 靈寶黃金集團股份有限公司 2 公司資料 董事 執行董事 陳建正先生 （董事長） 邢江澤先生 （副董事長） 何成群先生 （總裁） 吳黎明先生 趙理女士 非執行董事 張飛虎先生 王冠然先生 獨立非執行董事 楊志達先生 薄少川先生 郭新生先生 陳聰發先生 監事 楊石磊先生 劉皓天先生 郭許讓先生 趙兵兵先生 戰略委員會 陳建正先生 （主席） 邢江澤先生 何成群先生 吳黎明先生 趙理女士 薄少川先生 審核委員會 楊志達先生 （主席） 張飛虎先生 陳聰發先生 薄少川先生 郭新生先生 提名委員會 國際核數師 香港立信德豪會計師事務所有限公司 於《會計及財務匯報局條 ...

[Company Information](index=3&type=section&id=Company%20Information) Provides key corporate governance details, including board composition, company secretary, and committee structures [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) Outlines the composition of the Board of Directors, including executive, non-executive, and independent non-executive members, and the chairs of key committees - Board members include Mr. Meng Yan (Executive Director, Chairman), Mr. Wu Yingzheng (Executive Director, CEO & CFO), Mr. Chen Hanyang and Mr. Yang Li (Non-executive Directors), and Ms. Su Yanxue, Mr. Cai Zhenlong, and Ms. Liu Xia (Independent Non-executive Directors)[7](index=7&type=chunk) - The Audit Committee is chaired by Ms. Liu Xia, the Remuneration Committee by Ms. Su Yanxue, and the Nomination Committee by Mr. Cai Zhenlong[7](index=7&type=chunk) [Company Contact and Professional Advisors](index=3&type=section&id=Company%20Contact%20and%20Professional%20Advisors) Provides essential contact information and details of professional service providers, including registered office, headquarters, auditors, and principal banks - The company's registered office is in the Cayman Islands, with its headquarters and principal place of business in Dongguan City, Guangdong Province, PRC[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) - The auditor is KPMG, and the legal counsel is Reed Smith Richards Butler LLP[10](index=10&type=chunk) - The Hong Kong share registrar is Computershare Hong Kong Investor Services Limited, and principal bankers include The Hongkong and Shanghai Banking Corporation Limited and China Merchants Bank Co, Ltd[10](index=10&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) Analyzes the company's operational performance, financial position, and strategic outlook for the reporting period [Business Review](index=5&type=section&id=Business%20Review) Reviews the company's significant business growth in H1 2025, driven by increased customer orders for precision optical modules - The Group is a supplier of precision optical modules for electronic mobile devices, engaged in the design, development, manufacturing, and sale of modules and system integration products for smartphones, multimedia tablets, intelligent driving, and other mobile devices[12](index=12&type=chunk) - The Group continues to focus on technological innovation and product upgrades, actively expanding into emerging markets and multi-dimensional application scenarios, and deepening strategic collaboration with partners to achieve steady business growth[12](index=12&type=chunk) 2025 H1 Key Financial Performance | Indicator | 2025 H1 (million USD) | 2024 H1 (million USD) | YoY Growth | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,360.3 | 585.9 | 132.2% | Increased customer orders, including new rear camera modules | | Profit for the period | 67.4 | 16.6 | 306.0% | Driven by business growth | [Outlook and Future Strategies](index=6&type=section&id=Outlook%20and%20Future%20Strategies) Details strategies for R&D investment, new product commercialization, supply chain optimization, and leveraging AI for emerging market opportunities - Global economic growth is projected to slow to **2.4%** (from 2.9% in 2024), with global trade growth expected to plummet from 3.3% to 1.6%, as tariffs, trade policy uncertainties, high interest rates, and fiscal space constraints continue to impact investment and production activities[15](index=15&type=chunk) - The company will continue to increase R&D investment, promote new product mass production and supply chain optimization, and deepen collaboration with domestic and international partners to consolidate its competitive advantage in the global market[15](index=15&type=chunk) - The integration of AI technology will drive the iteration and update of terminal products such as smartphones and multimedia tablets, accelerating the demand for high-precision optical components[16](index=16&type=chunk) - The convergence of AI with emerging technologies like AR/VR, LiDAR, and robotics will drive new application scenarios, bringing breakthroughs in smart terminals, intelligent driving, and smart cities, with the global LiDAR market size projected to expand at a **CAGR of 14.7% to 3.795 billion USD by 2031**[16](index=16&type=chunk)[17](index=17&type=chunk) - The company will actively deploy MicroLED display technology and related components to seize market opportunities arising from display technology innovation[18](index=18&type=chunk) - The company will continue to strengthen the cultivation and recruitment of key high-end talent teams to meet the demands of business expansion and rapid growth[18](index=18&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=8&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) Assesses the company's strong financial position, marked by increased net current assets, total equity, and cash, with improved gearing Financial Position Overview as of June 30, 2025 | Indicator | June 30, 2025 (million USD) | December 31, 2024 (million USD) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 1,436.7 | 1,442.6 | -0.4% | | Net Current Assets | 360.8 | 270.3 | +33.5% | | Total Equity | 600.4 | 523.7 | +14.6% | | Unpledged Cash and Cash Equivalents | 404.0 | 113.3 | +256.6% | | Total Bank Facilities | 911.5 | 831.9 | +9.6% | | Utilized Bank Facilities | 266.5 | N/A | N/A | | Gearing Ratio | -9.9% | 12.8% | Significantly improved | - The Company and its controlling shareholder provided guarantees for bank facilities totaling **912 million USD** (December 31, 2024: 832 million USD)[20](index=20&type=chunk) - The Group's gearing ratio was **-9.9%**, primarily due to an increase in cash and cash equivalents[21](index=21&type=chunk) [Pledged Group Assets](index=8&type=section&id=Pledged%20Group%20Assets) Reports an increase in pledged deposits, primarily used to secure bank loans from Chinese banks Pledged Deposits | Indicator | June 30, 2025 (million USD) | December 31, 2024 (million USD) | Change | | :--- | :--- | :--- | :--- | | Pledged Deposits | 21.0 | 10.5 | +100% | - Pledged deposits primarily refer to deposits provided to obtain certain bank loans in China[22](index=22&type=chunk) [Capital Expenditure and Commitments](index=8&type=section&id=Capital%20Expenditure%20and%20Commitments) Reports a decrease in capital expenditure but an increase in contracted capital commitments for advanced camera module equipment Capital Expenditure and Commitments | Indicator | 2025 H1 (million USD) | 2024 H1 (million USD) | Change | | :--- | :--- | :--- | :--- | | Capital Expenditure | 44.4 | 105.3 | -57.8% | | Contracted Capital Commitments (end of period) | 14.0 | 9.4 | +48.9% | - Capital expenditure primarily reflects the purchase of additional equipment to produce more sophisticated flip-chip camera modules[23](index=23&type=chunk) - The Group intends to fund planned future capital expenditure through a combination of cash flows from operating activities, bank borrowings, and potential fundraising activities[23](index=23&type=chunk) [Currency Risk](index=9&type=section&id=Currency%20Risk) Addresses currency exposure from transactions in USD, HKD, RMB, and KRW, noting no hedging activities during the reporting period - The Group's currency risk primarily arises from receivables, payables, and cash balances denominated in HKD, RMB, and KRW[24](index=24&type=chunk) - Product sales and purchases are mainly settled in USD, while some purchases, labor, and other operating costs are settled in RMB and KRW[24](index=24&type=chunk) - For the six months ended June 30, 2025, the Group did not use any forward foreign exchange contracts or other derivative instruments to hedge currency fluctuations[24](index=24&type=chunk) [Overview of Investments and Liabilities](index=9&type=section&id=Overview%20of%20Investments%20and%20Liabilities) States no significant investments, acquisitions, disposals, contingent liabilities, or future capital asset plans during the period - For the six months ended June 30, 2025, the Group did not hold any significant investments or undertake any material acquisitions or disposals of subsidiaries, associates, and joint ventures[25](index=25&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities[26](index=26&type=chunk) - As of June 30, 2025, the Group had no plans for any significant investments and capital assets[27](index=27&type=chunk) [Human Resources](index=9&type=section&id=Human%20Resources) Notes an increase in employee headcount and staff costs, with continued investment in talent development, training, and incentive programs Human Resources Overview | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of Employees | 6,728 | 6,035 | +11.5% | | Total Staff Costs (excluding directors' emoluments) | 61.8 million USD | 52.0 million USD | +18.8% | - The Group provides employees with accommodation, recreation, dining, and training facilities, with training covering human resources policies, health and safety, and management skills[28](index=28&type=chunk) - The Group terminated the 2015 Share Option Scheme and adopted a new Share Option Scheme in 2021, with **672,000 share options exercised** during the reporting period[29](index=29&type=chunk) - The Board approved the adoption of a Share Award Scheme on March 21, 2024, with **400,000 share awards lapsed** and **13,220,000 share awards remaining unexercised** during the reporting period[30](index=30&type=chunk) [Supplementary Information](index=11&type=section&id=Supplementary%20Information) Provides additional disclosures on directors' and major shareholders' interests, share option and award schemes, and corporate governance [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations](index=11&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20its%20Associated%20Corporations) Discloses directors' and chief executive's long positions in the company's shares and underlying shares, mainly from share options and awards Directors' Long Positions in Shares and Underlying Shares of the Company (June 30, 2025) | Name | Position | Nature of Interest | Number of Shares or Underlying Shares of the Company | Percentage of Total Issued Shares of the Company | | :--- | :--- | :--- | :--- | :--- | | Mr. Meng Yan | Executive Director, Chairman | Beneficial Interest (Share Options) | 2,197,000 | 0.25% | | Mr. Wu Yingzheng | Executive Director, CEO & CFO | Beneficial Interest (Share Options) | 1,763,000 | 0.20% | | Mr. Chen Hanyang | Non-executive Director | Beneficial Interest (Share Options) | 1,480,000 | 0.17% | | Mr. Yang Li | Non-executive Director | Beneficial Interest (Share Options) | 1,120,000 | 0.13% | Directors' Long Positions in Shares and Underlying Shares of Associated Corporations (June 30, 2025) | Name | Position | Nature of Interest | Number of Shares or Underlying Shares | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Mr. Meng Yan | Executive Director, Chairman | Beneficial Interest (Share Awards) | 14,773,575 | 1.07% | | Mr. Wu Yingzheng | Executive Director, CEO & CFO | Beneficial Interest (Share Awards) | 3,161,875 | 0.23% | | Mr. Chen Hanyang | Non-executive Director | Beneficial Interest (Share Awards) | 6,632,732 | 0.48% | | Mr. Yang Li | Non-executive Director | Beneficial Interest (Share Awards) | 7,121,694 | 0.52% | [Substantial Shareholders' Interests and Short Positions in Shares, Underlying Shares and Debentures](index=13&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) Details substantial shareholders' interests in the company's shares and underlying shares, including pledged shares Substantial Shareholders' Interests (June 30, 2025) | Shareholder Name | Nature of Interest | Number of Shares or Underlying Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Luxvisions Innovation Technology Limited | Beneficial Interest | 607,455,760 | 70.39% (Long Position) | | Luxvisions Innovation Technology Limited | Beneficial Interest | 551,229,760 | 63.88% (Short Position, Pledged) | | Ms. Wang Laichun | Interest in Controlled Corporation | 607,455,760 | 70.39% (Long Position) | | Ms. Wang Laichun | Interest in Controlled Corporation | 551,229,760 | 63.88% (Short Position, Pledged) | - Luxvisions Innovation Technology Limited is the indirect controlling company of the Company, with some of its shares pledged as security for bank financing[38](index=38&type=chunk) [Share Option Scheme](index=14&type=section&id=Share%20Option%20Scheme) Outlines the share option scheme, detailing changes in outstanding options and the total shares available for issuance to eligible participants - The Company adopted a new Share Option Scheme on May 5, 2021, aiming to incentivize and reward eligible participants for their contributions to the Group[37](index=37&type=chunk) - During the reporting period, the Company did not grant any new share options to any eligible participants under the Share Option Scheme[37](index=37&type=chunk) Share Option Movements (Six months ended June 30, 2025) | Indicator | Outstanding as of January 1, 2025 | Exercised | Cancelled | Lapsed | Outstanding as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total | 26,524,000 | 672,000 | 274,000 | 180,000 | 25,398,000 | - The vesting conditions for share options are linked to the grantee's performance appraisal results; if the appraisal result is grade D, the Board may cancel all exercisable share options[41](index=41&type=chunk) - As of June 30, 2025, the total number of shares available for issue under the Share Option Scheme was **46,184,880 shares**, representing approximately **5.4%** of the Company's issued shares[29](index=29&type=chunk) [Share Award Scheme](index=17&type=section&id=Share%20Award%20Scheme) Describes the share award scheme, noting no new awards but some lapsed awards, with a significant number remaining unexercised - The Share Award Scheme aims to incentivize the Group's employees, enhance their performance and efficiency, and retain and attract suitable talent for the Group's further development[44](index=44&type=chunk) - During the reporting period, the Company did not grant any awarded shares to employees under the Share Award Scheme[45](index=45&type=chunk) Share Award Movements (Six months ended June 30, 2025) | Indicator | Outstanding as of January 1, 2025 | Granted | Cancelled | Lapsed | Outstanding as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total | 13,620,000 | — | — | 400,000 | 13,220,000 | - The vesting period for share awards is five years, with **20% vesting annually**, and vesting conditions are also linked to the grantee's performance appraisal results[48](index=48&type=chunk)[50](index=50&type=chunk) - As of June 30, 2025, the number of awarded shares available for grant under the Share Award Scheme's authorized limit remained at **71,692,480 shares**[49](index=49&type=chunk) [Interim Dividend](index=19&type=section&id=Interim%20Dividend) The Board does not recommend an interim dividend to support future market adaptation and investments in new products - The Board does not recommend the payment of any interim dividend for the reporting period (2024: nil)[52](index=52&type=chunk) - This decision aims to ensure the Group maintains its leading position in the optical business, in response to future market changes and investments required for new product development[52](index=52&type=chunk) [Corporate Governance and Board Responsibilities](index=19&type=section&id=Corporate%20Governance%20and%20Board%20Responsibilities) Confirms full compliance with corporate governance codes and directors' securities dealing standards, with the Board providing strategic leadership - The Company has fully complied with the Corporate Governance Code set out in Appendix C1 to the Listing Rules during the reporting period[54](index=54&type=chunk)[55](index=55&type=chunk) - The Audit Committee has reviewed the accounting principles and policies adopted by the Group and the unaudited interim financial report for the reporting period, confirming that the financial statements are fairly presented[56](index=56&type=chunk) - All Directors confirmed full compliance with the Model Code for Securities Transactions by Directors of Listed Issuers throughout the reporting period[57](index=57&type=chunk) - The Board is responsible for the overall strategic leadership and planning of the Company, retaining decision-making authority on significant matters while delegating day-to-day operational authority and responsibilities to senior management[60](index=60&type=chunk)[61](index=61&type=chunk) [Material Events After the Reporting Period](index=19&type=section&id=Material%20Events%20After%20the%20Reporting%20Period) States that no material events requiring disclosure occurred after the end of the reporting period - No material events affecting the Company or any of its subsidiaries occurred after the end of the reporting period that require disclosure in this interim report[58](index=58&type=chunk) [Review Report to the Board of Directors of Cowell e Holdings Inc.](index=21&type=section&id=Review%20Report%20to%20the%20Board%20of%20Directors%20of%20Cowell%20e%20Holdings%20Inc.) Presents the independent review report on the interim financial information, outlining the scope and conclusion [Introduction and Scope of Review](index=21&type=section&id=Introduction%20and%20Scope%20of%20Review) KPMG reviewed the interim financial report prepared under IAS 34, emphasizing that the review scope is less than an audit - The auditor has reviewed the interim financial report for the six months ended June 30, 2025, which was prepared in accordance with International Accounting Standard 34[62](index=62&type=chunk) - The review primarily involved inquiries of personnel responsible for financial and accounting matters and applying analytical and other review procedures, but its scope is substantially less than an audit, thus no audit opinion is expressed[63](index=63&type=chunk) [Conclusion](index=21&type=section&id=Conclusion) Concludes that no matters were identified suggesting the interim financial report was not prepared in accordance with IAS 34 - Based on the review, the auditor did not note any matters that caused them to believe that the interim financial report as of June 30, 2025, was not prepared in all material respects in accordance with International Accounting Standard 34[64](index=64&type=chunk) [Consolidated Financial Statements](index=22&type=section&id=Consolidated%20Financial%20Statements) Presents the company's consolidated financial performance, position, equity changes, and cash flows for the reporting period [Consolidated Statement of Profit or Loss](index=22&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) Reports significant growth in revenue, gross profit, operating profit, and profit for the period, resulting in higher earnings per share Consolidated Statement of Profit or Loss Summary (Six months ended June 30) | Indicator | 2025 (thousand USD) | 2024 (thousand USD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,360,302 | 585,934 | +132.2% | | Cost of Sales | (1,204,625) | (514,400) | +134.2% | | Gross Profit | 155,677 | 71,534 | +117.6% | | Operating Profit | 94,703 | 25,476 | +271.7% | | Profit Before Tax | 85,016 | 17,307 | +391.2% | | Profit for the Period | 67,403 | 16,609 | +305.8% | | Profit Attributable to Equity Shareholders of the Company | 67,398 | 16,039 | +320.2% | | Basic Earnings Per Share | $0.078 | $0.019 | +310.5% | | Diluted Earnings Per Share | $0.075 | $0.018 | +316.7% | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=23&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Shows substantial increases in profit for the period and total comprehensive income, positively impacted by exchange differences Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (Six months ended June 30) | Indicator | 2025 (thousand USD) | 2024 (thousand USD) | Change | | :--- | :--- | :--- | :--- | | Profit for the Period | 67,403 | 16,609 | +305.8% | | Exchange Differences on Translation of Financial Statements | 4,040 | (4,706) | From negative to positive | | Other Comprehensive Income for the Period | 4,028 | (4,714) | From negative to positive | | Total Comprehensive Income for the Period | 71,431 | 11,895 | +500.5% | | Total Comprehensive Income Attributable to Equity Shareholders of the Company | 71,395 | 11,369 | +528.0% | [Consolidated Statement of Financial Position](index=24&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) Presents increased net current assets and total equity, a slight decrease in total assets, and a significant rise in cash and cash equivalents Consolidated Statement of Financial Position Summary (As of June 30) | Indicator | June 30, 2025 (thousand USD) | December 31, 2024 (thousand USD) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 402,183 | 407,473 | -1.3% | | Current Assets | 1,034,487 | 1,035,081 | -0.1% | | Inventories | 203,601 | 315,185 | -35.4% | | Trade and Other Receivables | 329,092 | 434,708 | -24.3% | | Cash and Cash Equivalents | 403,974 | 113,349 | +256.4% | | Current Liabilities | 673,719 | 764,777 | -11.9% | | Trade and Other Payables | 375,000 | 536,553 | -30.1% | | Net Current Assets | 360,768 | 270,304 | +33.5% | | Total Equity | 600,393 | 523,655 | +14.6% | [Consolidated Statement of Changes in Equity](index=26&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) Illustrates a significant increase in total equity attributable to shareholders, driven by profit for the period and share-based transactions Consolidated Statement of Changes in Equity Summary (Six months ended June 30) | Indicator | Balance as of January 1, 2025 (thousand USD) | Profit for the Period (thousand USD) | Other Comprehensive Income (thousand USD) | Total Comprehensive Income (thousand USD) | Balance as of June 30, 2025 (thousand USD) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Attributable to Equity Shareholders of the Company | 516,533 | 67,398 | 3,997 | 71,395 | 593,235 | | Non-controlling Interests | 7,122 | 5 | 31 | 36 | 7,158 | | Total Equity | 523,655 | 67,403 | 4,028 | 71,431 | 600,393 | - Equity movements for the period include proceeds from shares issued under the Share Option Scheme of **374 thousand USD** and payments for shares purchased for the Share Award Scheme of **4,907 thousand USD**[74](index=74&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=28&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Reports a positive shift in operating cash flow, decreased investing cash flow, and increased financing cash flow, boosting net cash increase Condensed Consolidated Statement of Cash Flows Summary (Six months ended June 30) | Indicator | 2025 (thousand USD) | 2024 (thousand USD) | Change | | :--- | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 186,130 | (44,599) | From negative to positive | | Net Cash Generated from Investing Activities | 45,136 | 106,589 | -57.6% | | Net Cash Generated from Financing Activities | 58,475 | 24,842 | +135.4% | | Net Increase in Cash and Cash Equivalents | 289,741 | 86,832 | +233.7% | | Cash and Cash Equivalents as of June 30 | 403,974 | 182,057 | +121.9% | - The significant improvement in operating cash flow is the primary reason for the substantial increase in cash and cash equivalents this period[75](index=75&type=chunk) - In investing activities, payments for the purchase of property, plant, and equipment significantly decreased, while proceeds from maturity of bank deposits declined[75](index=75&type=chunk) [Notes to the Unaudited Interim Financial Report](index=29&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) Provides detailed explanations and disclosures supporting the unaudited interim financial statements [Basis of Preparation and Changes in Accounting Policies](index=29&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) Outlines the basis of preparation under HKEX Listing Rules and IAS 34, including IAS 21 amendments and equity accounting for associates - This interim financial report is prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34, and has been reviewed by KPMG[77](index=77&type=chunk)[78](index=78&type=chunk) - The Group has applied the amendments to International Accounting Standard 21, "The Effects of Changes in Foreign Exchange Rates — Lack of Exchangeability," which did not have a material impact[79](index=79&type=chunk) - Interests in associates are accounted for using the equity method, initially recognized at cost and subsequently adjusted for the Group's share of profit or loss and other comprehensive income[81](index=81&type=chunk) [Revenue and Segment Reporting](index=31&type=section&id=Revenue%20and%20Segment%20Reporting) Reports the group's main business, significant revenue concentration from its largest customer, and geographical revenue breakdown - The Group's principal business is the manufacturing and sale of camera modules and optical components[82](index=82&type=chunk) Revenue Contribution from Largest Customer | Indicator | 2025 H1 (thousand USD) | 2024 H1 (thousand USD) | Percentage of Total Revenue (2025) | | :--- | :--- | :--- | :--- | | Revenue from Largest Customer | 1,334,437 | 547,773 | 98.1% | Customer Revenue by Geographical Region (Six months ended June 30) | Region | 2025 (thousand USD) | 2024 (thousand USD) | | :--- | :--- | :--- | | People's Republic of China (including Hong Kong) | 1,230,772 | 502,951 | | Republic of Korea | 600 | 1,239 | | India | 59,673 | 56,205 | | Vietnam | 69,257 | 25,539 | | **Total** | **1,360,302** | **585,934** | [Operating Seasonality](index=32&type=section&id=Operating%20Seasonality) Notes higher sales in the fourth quarter due to holiday retail demand, resulting in lower first-half revenue and segment results - The Group typically records higher sales in the fourth quarter compared to other quarters of the year, due to increased retail demand for products during holiday seasons[85](index=85&type=chunk) - The Group generally records lower revenue and segment results in the first half of the year compared to the second half[85](index=85&type=chunk) [Profit Before Tax and Income Tax Expense](index=32&type=section&id=Profit%20Before%20Tax%20and%20Income%20Tax%20Expense) Reports increased profit before tax and income tax expense, detailing tax components and applicable corporate tax rates by region Profit Before Tax Components (Six months ended June 30) | Item | 2025 (thousand USD) | 2024 (thousand USD) | | :--- | :--- | :--- | | Finance Costs | 9,572 | 8,169 | | Amortization | 248 | 364 | | Depreciation | 32,203 | 16,057 | | Research and Development Costs (excluding depreciation and amortization) | 54,330 | 36,361 | | Interest Income | (4,497) | (5,872) | | Net Loss/(Gain) on Disposal of Property, Plant and Equipment | 3,134 | (21) | Income Tax Expense (Six months ended June 30) | Item | 2025 (thousand USD) | 2024 (thousand USD) | | :--- | :--- | :--- | | Current Tax — Hong Kong Profits Tax | 7,099 | 234 | | Current Tax — Outside Hong Kong | (50) | 422 | | Withholding Tax on Dividend Income Outside Hong Kong | 10,000 | — | | Deferred Tax | 564 | 42 | | **Income Tax Expense** | **17,613** | **698** | - Hong Kong Profits Tax provision is based on an estimated annual effective tax rate of **16.5%**, with some subsidiaries applying a two-tiered profits tax rate regime[87](index=87&type=chunk) - Chinese high-tech enterprises are subject to a corporate income tax rate of **15%**, while other Chinese subsidiaries are subject to **25%**. Korean subsidiaries are subject to statutory corporate tax rates ranging from **9% to 24%**[88](index=88&type=chunk) - The Group has applied the temporary mandatory relief from deferred tax accounting for top-up tax and will account for the tax as current tax when it arises[90](index=90&type=chunk) [Earnings Per Share](index=34&type=section&id=Earnings%20Per%20Share) Shows a substantial increase in both basic and diluted earnings per share, indicating improved profitability Earnings Per Share (Six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Basic Earnings Per Share | $0.078 | $0.019 | | Diluted Earnings Per Share | $0.075 | $0.018 | - Basic earnings per share are calculated based on profit attributable to ordinary equity shareholders of the Company of **67,398,000 USD** and the weighted average number of ordinary shares outstanding during the interim period of **861,664,000 shares**[91](index=91&type=chunk) [Property, Plant and Equipment](index=34&type=section&id=Property%2C%20Plant%20and%20Equipment) Reports changes in property, plant, and equipment, including new right-of-use assets, acquisitions, and disposals, and customer-provided machinery Property, Plant and Equipment Movements (Six months ended June 30) | Item | 2025 (thousand USD) | 2024 (thousand USD) | | :--- | :--- | :--- | | Additions to Right-of-Use Assets | 3,494 | 1,574 | | Disposals of Right-of-Use Assets | 1,548 | — | | Cost of Items of Plant and Equipment Acquired | 30,166 | 112,090 | | Net Book Value of Items of Plant and Equipment Disposed | 4,656 | 157 | | Loss/(Gain) on Disposal of Plant and Equipment | 3,181 (Loss) | (21) (Gain) | - A customer provided machinery to the Group with an original purchase cost of **111,382,000 USD**, which is not recognized as an asset of the Group[95](index=95&type=chunk) [Trade and Other Receivables](index=35&type=section&id=Trade%20and%20Other%20Receivables) Indicates a decrease in total trade and other receivables, with the majority of trade receivables due within one month Ageing Analysis of Trade and Other Receivables (As of June 30) | Ageing | 2025 (thousand USD) | 2024 (thousand USD) | | :--- | :--- | :--- | | Within 1 month | 309,443 | 404,582 | | Over 1 to 2 months | 2,334 | 238 | | Over 2 to 3 months | 561 | 237 | | Over 3 months | 353 | 194 | | **Total Trade Receivables** | **312,691** | **405,251** | | Other Receivables and Prepayments | 16,401 | 29,457 | | **Total** | **329,092** | **434,708** | - Trade receivables are due within **30 to 90 days** from the invoice date[97](index=97&type=chunk) [Bank Deposits and Cash and Cash Equivalents](index=35&type=section&id=Bank%20Deposits%20and%20Cash%20and%20Cash%20Equivalents) Shows a significant increase in bank and cash on hand, with a decrease in bank deposits maturing over three months Bank Deposits and Cash and Cash Equivalents (As of June 30) | Item | 2025 (thousand USD) | 2024 (thousand USD) | | :--- | :--- | :--- | | Bank and Cash on Hand | 403,974 | 113,349 | | Bank Deposits with Maturity Over 3 Months at Deposit Date | 76,831 | 161,371 | [Trade and Other Payables](index=36&type=section&id=Trade%20and%20Other%20Payables) Indicates a decrease in total trade and other payables, with a larger proportion of trade payables due within one month Ageing Analysis of Trade and Other Payables (As of June 30) | Ageing | 2025 (thousand USD) | 2024 (thousand USD) | | :--- | :--- | :--- | | Within 1 month | 338,260 | 205,379 | | Over 1 to 3 months | 252 | 119,648 | | Over 3 to 6 months | 3,134 | 152,029 | | **Total Trade Payables** | **341,646** | **477,056** | | Accrued Expenses and Other Payables | 33,354 | 59,497 | | **Total** | **375,000** | **536,553** | [Capital and Reserves](index=36&type=section&id=Capital%20and%20Reserves) Explains changes in capital and reserves, impacted by share option and award schemes, including exercises, lapses, and share purchases - For the six months ended June 30, 2025, **672,000 share options were exercised** under the Share Option Scheme, and **454,000 share options lapsed/were cancelled**[100](index=100&type=chunk) - For the six months ended June 30, 2025, **400,000 share awards lapsed**, and no share awards were granted, vested, cancelled, or exercised under the Share Award Scheme[100](index=100&type=chunk) - For the six months ended June 30, 2025, the trustee purchased and withheld **2,000,000 ordinary shares** of the Company, totaling approximately **4,907,000 USD**, for the Share Award Scheme[101](index=101&type=chunk) [Commitments](index=37&type=section&id=Commitments) Reports an increase in contracted capital commitments not yet provided for as of June 30, 2025 Capital Commitments (As of June 30) | Item | 2025 (thousand USD) | 2024 (thousand USD) | | :--- | :--- | :--- | | Contracted Capital Commitments | 13,961 | 9,433 | [Material Related Party Transactions](index=37&type=section&id=Material%20Related%20Party%20Transactions) Details significant related party transactions, including management remuneration, sales, purchases, equipment, services, and bank financing guarantees Key Management Personnel Remuneration (Six months ended June 30) | Item | 2025 (thousand USD) | 2024 (thousand USD) | | :--- | :--- | :--- | | Salaries and Other Short-term Benefits | 918 | 346 | Material Transactions with Related Parties (Six months ended June 30) | Transaction Type | Related Party | 2025 (thousand USD) | 2024 (thousand USD) | | :--- | :--- | :--- | :--- | | Sales of Goods | Indirect Holding Company and its Subsidiaries | 2,252 | 1,420 | | Sales of Goods | Non-controlling Interests | 22,895 | 35,394 | | Purchases of Raw Materials | Indirect Holding Company and its Subsidiaries | 6,043 | 9,418 | | Purchases of Raw Materials | Associated Companies | 71,874 | 4,061 | | Acquisition of Equipment | Associated Companies | 1,156 | 4,033 | | Purchase of Services | Indirect Holding Company and its Subsidiaries | 71 | — | | Purchase of Services | Associated Companies | 713 | — | | Provision of Services | Indirect Holding Company and its Subsidiaries | 1,379 | — | | Provision of Services | Associated Companies | 943 | — | - As of June 30, 2025, the Company and its controlling shareholder provided guarantees for bank facilities totaling **912 million USD** (December 31, 2024: 832 million USD)[106](index=106&type=chunk)

[Definitions](index=3&type=section&id=Definitions) This section provides definitions of key terms used throughout the report to ensure clarity and consistent understanding [Corporate Information](index=8&type=section&id=Corporate%20Information) This section details the company's governance structure, including its board, committees, and key administrative contacts and locations [Board of Directors](index=8&type=section&id=Board%20of%20Directors) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with Mr. Yang Bin serving as Chairman and Co-Chief Executive Officer - Mr. Yang Bin serves as Chairman and Co-Chief Executive Officer, and Mr. Zhang Danqi was appointed Executive Director and Co-Chief Executive Officer on December 28, 2024, assisting Mr. Yang in leading the Group's development[10](index=10&type=chunk)[11](index=11&type=chunk)[126](index=126&type=chunk) [Committees](index=8&type=section&id=Committees) The company has an Audit Committee, Remuneration Committee, and Nomination Committee, each chaired by an independent non-executive director to ensure governance independence and professionalism - Mr. Chan Yiu Kwong serves as Chairman of the Audit Committee, Mr. Chan Wah as Chairman of the Remuneration Committee, and Mr. Cheung Lap Man as Chairman of the Nomination Committee[10](index=10&type=chunk)[11](index=11&type=chunk) [Key Contacts and Locations](index=8&type=section&id=Key%20Contacts%20and%20Locations) Ms. Au Wai Ching is the Company Secretary, with the registered office in the Cayman Islands, headquarters in Beijing, China, and a principal place of business in Hong Kong - Ms. Au Wai Ching is the Company Secretary, and Mr. Yang Bin and Ms. Au Wai Ching are authorized representatives[11](index=11&type=chunk) - The company's registered office is in the Cayman Islands, headquarters in Beijing, China, and principal place of business in Hong Kong at 40/F, Dah Sing Financial Centre, 248 Queen's Road East, Wan Chai[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) [Financial Performance Highlights](index=11&type=section&id=Financial%20Performance%20Highlights) This section provides a summary of the company's key financial results and dividend policy for the interim period [Interim Results](index=11&type=section&id=Interim%20Results) In the 2025 interim period, loss and other comprehensive income attributable to owners of the Company significantly increased, and basic loss per share expanded, reflecting operational pressures 2025 Interim Key Financial Summary | Indicator | 2025 Interim (RMB) | 2024 Interim (RMB) | Change | | :--- | :--- | :--- | :--- | | Loss and other comprehensive income attributable to owners of the Company | 11.9 million | 4.1 million | Increased by 190.2% | | Basic loss per share | 0.0052 | 0.0018 | Increased by 188.9% | [Interim Dividend](index=11&type=section&id=Interim%20Dividend) The Board resolved not to declare an interim dividend for 2025, consistent with the 2024 interim period - The Board resolved not to declare any interim dividend for the 2025 interim period[17](index=17&type=chunk)[19](index=19&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the company's business performance, strategic direction, and detailed financial results for the reporting period [Business Review](index=12&type=section&id=Business%20Review) In H1 2025, the live e-commerce industry shifted from traffic to capability competition, with the healthy food sector showing resilience, while the company's revenue declined and gross profit margin contracted due to strategic investments - The live e-commerce industry is accelerating its shift from traffic competition to capability competition, with platform algorithms favoring vertical content and the healthy food sector showing resilience[20](index=20&type=chunk)[24](index=24&type=chunk) - The company focuses on deepening supply chain capabilities and incubating its own brand ecosystem, building a flexible and collaborative industrial network, especially in the food and beverage category[20](index=20&type=chunk)[21](index=21&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - The private label segment focuses on convenient nutritional needs in fast-paced lifestyles, optimizing product experience through user testing, and initially forming a product matrix prototype[22](index=22&type=chunk)[25](index=25&type=chunk) 2025 Interim Business Performance | Indicator | 2025 Interim | 2024 Interim | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 18.6 million | 20.2 million | Decreased by 8.2% | | Gross profit margin | - | - | Decreased by 10.9 percentage points | - The decrease in revenue and contraction in gross profit margin are mainly due to supply chain capability building and product R&D being in a value accumulation period, as well as rising industry traffic costs[23](index=23&type=chunk)[25](index=25&type=chunk) [Strategic Outlook](index=13&type=section&id=Strategic%20Outlook) The company will deepen its "User + Data + Innovation + Supply + Sharing" strategic framework, focusing on dual-engine implementation and three fundamental certainties to achieve breakthrough growth after industry transformation - Deepen the "User + Data + Innovation + Supply + Sharing" five-dimensional strategic framework, shifting capabilities towards value transformation[26](index=26&type=chunk)[27](index=27&type=chunk) - **Implementation focuses on dual engines:** * Build a dynamic demand perception system, penetrating life scenarios from transaction touchpoints * Accelerate the marketization of reserve products, deploying "instantly available" light health consumption closed-loops in supermarkets and convenience stores * Explore open collaboration of production capacity, channels, and data resources to reduce the marginal cost of industrial innovation[28](index=28&type=chunk)[29](index=29&type=chunk) - **Deepen three fundamental certainties:** * Break the dichotomy of cost and quality with supply chain resilience * Define product evolution direction with user-oriented innovation * Reshape the efficiency of people-goods-place matching with technology-driven performance[28](index=28&type=chunk)[29](index=29&type=chunk) - Management will maintain strategic focus, safeguard the capability building cycle, and anticipate breakthrough growth after the industry's deep transformation phase[26](index=26&type=chunk)[27](index=27&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) The Group's total revenue for the 2025 interim period decreased by **8.2%** to **RMB 18.6 million** year-on-year, primarily due to strategic transformation, leading to reduced marketing service income and an incubating private label business, while cost of sales increased by **8.4%**, resulting in a **33.5%** decline in gross profit and a contraction in gross profit margin to **28.7%**, with operating losses reducing total equity and net current assets, though the gearing ratio improved [Revenue](index=14&type=section&id=Revenue) Total revenue for the 2025 interim period was approximately **RMB 18.6 million**, a year-on-year decrease of **8.2%**, mainly due to the Group's strategic shift towards strengthening supply chain control and private label development, which has not yet fully translated into revenue Revenue Details (RMB'000) | Category | 2025 (RMB'000) | Percentage of Total Revenue | 2024 (RMB'000) | Percentage of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Marketing Services | 15,514 | 83.5% | 19,484 | 96.3% | | Of which: Online Marketing | 12,028 | 64.7% | 19,484 | 96.3% | | Offline Marketing | 3,486 | 18.8% | – | – | | Private Label | 2,999 | 16.1% | – | – | | Others | 71 | 0.4% | 757 | 3.7% | | **Total** | **18,584** | **100.0%** | **20,241** | **100.0%** | - Total revenue decreased by approximately **8.2%** year-on-year, mainly due to the Group's strategic shift from brand agency operations to upstream industrial chain extension, strengthening independent and controllable supply chain capabilities and private label product matrix construction, which has not yet fully translated into revenue in the short term[31](index=31&type=chunk)[32](index=32&type=chunk) [Cost of Sales](index=15&type=section&id=Cost%20of%20Sales) Cost of sales for the 2025 interim period was approximately **RMB 13.3 million**, an **8.4%** year-on-year increase, primarily due to increased investment in the private label business incubation and higher offline marketing costs Cost of Sales (RMB'000) | Indicator | 2025 Interim (RMB'000) | 2024 Interim (RMB'000) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Cost of Sales | 13,258 | 12,233 | Increased by 8.4% | - The increase in cost of sales is mainly due to increased investment during the private label business incubation period and higher offline marketing business costs[33](index=33&type=chunk)[37](index=37&type=chunk) [Gross Profit and Gross Profit Margin](index=15&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit for the 2025 interim period was approximately **RMB 5.3 million**, a **33.5%** year-on-year decrease, with the gross profit margin contracting to **28.7%** from **39.6%** in the prior year, primarily due to reduced total revenue and increased costs Gross Profit and Gross Profit Margin (RMB'000) | Indicator | 2025 Interim (RMB'000) | 2024 Interim (RMB'000) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Gross Profit | 5,326 | 8,008 | Decreased by 33.5% | | Gross Profit Margin | 28.7% | 39.6% | Decreased by 10.9 percentage points | - The decrease in gross profit and gross profit margin is mainly due to reduced total revenue and increased costs[34](index=34&type=chunk)[38](index=38&type=chunk) [Expenses](index=15&type=section&id=Expenses) Selling and distribution expenses for the 2025 interim period slightly increased by **2.3%** to **RMB 5.0 million**, while administrative expenses rose by **6.3%** to **RMB 7.6 million**, primarily due to higher rent and renovation costs Key Expenses (RMB'000) | Expense Category | 2025 Interim (RMB'000) | 2024 Interim (RMB'000) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 5,023 | 4,908 | Increased by 2.3% | | Administrative Expenses | 7,624 | 7,170 | Increased by 6.3% | - The increase in administrative expenses is mainly due to higher rent and renovation costs[36](index=36&type=chunk)[40](index=40&type=chunk) [Income Tax Expenses](index=16&type=section&id=Income%20Tax%20Expenses) No income tax expense was incurred in the 2025 interim period due to corporate losses, while two of the Group's high-tech subsidiaries in China enjoy a preferential **15%** income tax rate - No income tax expense was incurred in the 2025 interim period, primarily due to corporate losses[41](index=41&type=chunk)[45](index=45&type=chunk) - Two of the Group's subsidiaries in China are approved as high-tech enterprises, enjoying a preferential income tax rate of **15%**[41](index=41&type=chunk)[45](index=45&type=chunk) [Financial Positions](index=16&type=section&id=Financial%20Positions) As at June 30, 2025, total equity was approximately **RMB 38.7 million**, a decrease from year-end 2024, primarily due to operating losses, with net current assets also declining due to reduced cash at bank and in hand Financial Position Summary (RMB'000) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Total Equity | 38,700 | 50,500 | Decreased by 23.37% | | Net Current Assets | 34,100 | 45,700 | Decreased by 25.38% | - The decrease in total equity is mainly due to losses generated from operating activities[42](index=42&type=chunk)[46](index=46&type=chunk) - The decrease in net current assets is mainly due to a reduction in cash at bank and in hand[42](index=42&type=chunk)[46](index=46&type=chunk) [Liquidity and Financial Resources](index=16&type=section&id=Liquidity%20and%20Financial%20Resources) As at June 30, 2025, cash at bank and in hand was approximately **RMB 25.1 million**, a decrease from year-end 2024, primarily used for operating activities Cash and Cash Equivalents (RMB'000) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Cash at bank and in hand | 25,100 | 35,800 | Decreased by 29.89% | - The decrease in cash is mainly due to payments for operating activities[43](index=43&type=chunk)[47](index=47&type=chunk) [Capital Structure](index=16&type=section&id=Capital%20Structure) The Group primarily funds its operations with cash generated from operations, with its capital structure comprising net debt and equity attributable to owners of the Company, which management continuously reviews to maintain an optimal balance - The Group primarily funds its operations with cash generated from operations[44](index=44&type=chunk)[48](index=48&type=chunk) - The capital structure comprises net debt (net of cash and cash equivalents) and equity attributable to owners of the Company[49](index=49&type=chunk)[55](index=55&type=chunk) - The Directors continuously review the capital structure and consider balancing the overall capital structure through dividend payments, new share issues and repurchases, and new debt issuance or redemption of existing debt[50](index=50&type=chunk)[55](index=55&type=chunk) Total Capital (RMB'000) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Total Capital | 38,721 | 50,522 | Decreased by 23.36% | [Borrowings](index=17&type=section&id=Borrowings) As at June 30, 2025, the company had no bank borrowings, consistent with year-end 2024 - As at June 30, 2025, the Company had no bank borrowings[52](index=52&type=chunk)[56](index=56&type=chunk) [Material Events After the Reporting Period](index=17&type=section&id=Material%20Events%20After%20the%20Reporting%20Period) There have been no material events for the Group from June 30, 2025, up to the date of this interim report - There have been no material events for the Group from June 30, 2025, up to the date of this interim report[53](index=53&type=chunk)[57](index=57&type=chunk) [Gearing Ratio](index=17&type=section&id=Gearing%20Ratio) As at June 30, 2025, the gearing ratio was **7.9%**, a decrease from **13.2%** at year-end 2024, primarily due to a reduction in contract liabilities and other payables Gearing Ratio | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing Ratio | 7.9% | 13.2% | Decreased by 5.3 percentage points | - The decrease in gearing ratio is mainly due to a reduction in contract liabilities and other payables[54](index=54&type=chunk)[58](index=58&type=chunk) [Capital Expenditure](index=18&type=section&id=Capital%20Expenditure) The Group incurred no significant capital expenditure during the 2025 and 2024 interim periods - The Group had no significant capital expenditure during the 2025 and 2024 interim periods[59](index=59&type=chunk)[64](index=64&type=chunk) [Significant Investments Held/Future Plans for Material Investments or Capital Assets, and Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=18&type=section&id=Significant%20Investments%20Held%2FFuture%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets%2C%20and%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) For the six months ended June 30, 2025, the Group had no significant investments or material acquisitions and disposals, and no future plans for material investments or capital assets - For the six months ended June 30, 2025, the Group had no significant investments or material acquisitions and disposals of subsidiaries, associates, and joint ventures[60](index=60&type=chunk)[65](index=65&type=chunk) - As of the date of this interim report, the Group has no future plans for material investments or capital assets[61](index=61&type=chunk)[65](index=65&type=chunk) [Charge on Assets](index=18&type=section&id=Charge%20on%20Assets) As at June 30, 2025, no property, plant and equipment were pledged - As at June 30, 2025, no property, plant and equipment were pledged[62](index=62&type=chunk)[66](index=66&type=chunk) [Foreign Exchange Risk](index=18&type=section&id=Foreign%20Exchange%20Risk) The Group's primary operations are in China, with revenue and costs denominated in RMB, and while there are no current hedging plans, management monitors foreign exchange risks and considers hedging when necessary - The Group's principal business operations are located in China, with major revenue and costs denominated in RMB[63](index=63&type=chunk)[67](index=67&type=chunk) - The Group currently has no foreign currency hedging plans, but management monitors foreign exchange fluctuation risks and considers hedging significant foreign exchange fluctuation risks when necessary[63](index=63&type=chunk)[67](index=67&type=chunk) [Contingent Liabilities and Guarantees](index=19&type=section&id=Contingent%20Liabilities%20and%20Guarantees) As at June 30, 2025, the company had no significant contingent liabilities, guarantees, or any material claims or litigations recorded - As at June 30, 2025, the Company had no significant contingent liabilities, guarantees, or any material claims or litigations against it[68](index=68&type=chunk)[72](index=72&type=chunk) [Employees and Remuneration Policies](index=19&type=section&id=Employees%20and%20Remuneration%20Policies) Total employee remuneration for the six months ended June 30, 2025, was approximately **RMB 7.5 million**, a decrease from the prior year, with remuneration policies based on performance, experience, and capabilities, supported by restricted share schemes to incentivize and retain talent Total Employee Remuneration (RMB'000) | Indicator | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Total Employee Remuneration | 7,500 | 8,100 | Decreased by 7.41% | - Employee remuneration is determined based on performance, experience, and capabilities, including salaries, bonuses, allowances, and retirement benefit schemes[70](index=70&type=chunk)[73](index=73&type=chunk) - The Company adopted a Restricted Share Unit Scheme on August 14, 2018, and a Restricted Share Award Scheme on May 7, 2020, to recognize, incentivize, and retain employees[71](index=71&type=chunk)[73](index=73&type=chunk) [Other Information](index=20&type=section&id=Other%20Information) This section covers various disclosures including directors' and substantial shareholders' interests, share incentive schemes, capital movements, and compliance with governance codes [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or Any of Its Associated Corporations](index=20&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20Any%20of%20Its%20Associated%20Corporations) As at June 30, 2025, Mr. Yang Bin held company shares through controlled corporations and a trustee, while Mr. Zhang Danqi and Ms. Shi Hui held relevant shares as trust beneficiaries, with all interests being long positions Directors' and Chief Executive's Shareholdings (As at June 30, 2025) | Director Name | Nature of Interest | Number of Ordinary Shares Interested | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Yang Bin | Interest in Controlled Corporation | 737,771,914 | 32.08% | | Mr. Yang Bin | Trustee | 206,066,614 | 8.96% | | Mr. Zhang Danqi | Beneficiary of Trust | 2,773,333 | 0.12% | | Ms. Shi Hui | Beneficiary of Trust | 13,483,256 | 0.59% | - All interests shown are long positions, calculated based on the total number of **2,300,000,000** issued shares as at June 30, 2025[81](index=81&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=22&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As at June 30, 2025, Evan Global, ESOP Holdings, BLUEFOCUS INTERNATIONAL, BlueFocus, Chengdu Hongdao, Mr. Yang Zhenghong, Hongdao Investment, Beijing Dongfang Hongdao Asset Management Co., Ltd., Summer Holdings Limited, and Ms. Chen Xiaona were substantial shareholders, holding varying percentages of shares or underlying shares Substantial Shareholders' Shareholdings (As at June 30, 2025) | Name | Nature of Interest | Number of Ordinary Shares | Number of Underlying Shares under 2018 RSU Scheme | Number of Underlying Shares under 2020 RSAS | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | :--- | :--- | :--- | | Evan Global | Beneficial Owner | 737,771,914 | – | – | 32.08% | | Evan Global | Interest in Controlled Corporation | – | 206,066,614 | – | 8.96% | | ESOP Holdings | Beneficial Owner | – | 206,066,614 | – | 8.96% | | BLUEFOCUS INTERNATIONAL | Beneficial Owner | 328,629,450 | – | – | 14.29% | | BlueFocus | Interest in Controlled Corporation | 328,629,450 | – | – | 14.29% | | Chengdu Hongdao | Beneficial Owner | 207,618,771 | – | – | 9.03% | | Mr. Yang Zhenghong | Interest in Controlled Corporation; Interest of Party to Agreement | 207,618,771 | – | – | 9.03% | | Hongdao Investment | Interest of Party to Agreement | 207,618,771 | – | – | 9.03% | | Beijing Dongfang Hongdao Asset Management Co., Ltd. | Interest of Party to Agreement | 207,618,771 | – | – | 9.03% | | Summer Holdings Limited | Beneficial Owner | 151,797,422 | – | – | 6.60% | | Ms. Chen Xiaona | Interest in Controlled Corporation | 151,797,422 | – | – | 6.60% | | Ms. Chen Xiaona | Beneficial Owner | – | 8,611,808 | 19,416,876 | 1.22% | - All interests shown are long positions, calculated based on the total number of **2,300,000,000** issued shares as at June 30, 2025[87](index=87&type=chunk) [2018 Restricted Share Unit Scheme](index=26&type=section&id=2018%20RSU%20Scheme) The 2018 Restricted Share Unit Scheme, adopted on August 14, 2018, aimed to incentivize management and employees, with granted but unvested units cancelled and converted to restricted shares under the 2020 scheme on April 13, 2021 - The 2018 Restricted Share Unit Scheme was adopted on August 14, 2018, to incentivize directors, senior management, and employees, and to attract and retain talent[91](index=91&type=chunk)[92](index=92&type=chunk)[95](index=95&type=chunk) - The scheme has a validity period of ten years, with approximately **2 years and 11 months** remaining as of the date of this interim report[94](index=94&type=chunk)[96](index=96&type=chunk) - On April 13, 2021, granted but unvested restricted share units were cancelled and converted into restricted shares under the 2020 Restricted Share Award Scheme on April 15, 2021[97](index=97&type=chunk)[101](index=101&type=chunk) - As at January 1, 2025, and June 30, 2025, **186,114,266** restricted share units were available for grant, with no shares issued during the reporting period[99](index=99&type=chunk)[101](index=101&type=chunk) [2020 Restricted Share Award Scheme](index=28&type=section&id=2020%20RSAS) The 2020 Restricted Share Award Scheme, adopted on May 7, 2020, aims to provide equity opportunities and incentives for employees to achieve performance targets, with a ten-year validity and a maximum award of **230,000,000** shares - The 2020 Restricted Share Award Scheme was adopted on May 7, 2020, to provide employees with opportunities to acquire proprietary interests in the Company and offer additional incentives to achieve performance targets[103](index=103&type=chunk)[107](index=107&type=chunk) - The scheme has a validity period of ten years, with approximately **4 years and 8 months** remaining as of the date of this interim report[104](index=104&type=chunk)[107](index=107&type=chunk) - The maximum number of shares that can be awarded is **230,000,000**, representing **10%** of the issued shares on the adoption date[106](index=106&type=chunk)[108](index=108&type=chunk) - During the reporting period, no restricted shares were granted, vested, lapsed, or cancelled[111](index=111&type=chunk)[114](index=114&type=chunk) - As at January 1, 2025, and June 30, 2025, **167,976,085** restricted shares were available for grant, representing approximately **7.30%** of the total issued shares[112](index=112&type=chunk)[115](index=115&type=chunk) [Movements in Share Capital](index=30&type=section&id=Movements%20in%20Share%20Capital) There were no movements in the company's share capital during the reporting period - There were no movements in the Company's share capital during the reporting period[117](index=117&type=chunk)[122](index=122&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=30&type=section&id=Purchase%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the company nor its subsidiaries repurchased, sold, or redeemed any listed securities during the 2025 interim period, and no treasury shares were held as at June 30, 2025 - Neither the Company nor its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities during the 2025 interim period[118](index=118&type=chunk)[123](index=123&type=chunk) - As at June 30, 2025, the Company held no treasury shares[118](index=118&type=chunk)[123](index=123&type=chunk) [Interim Dividend](index=30&type=section&id=Interim%20Dividend) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025[119](index=119&type=chunk)[124](index=124&type=chunk) [Compliance with Corporate Governance Code](index=30&type=section&id=Compliance%20with%20CG%20Code) The company has complied with all applicable provisions of the Corporate Governance Code, with the exception of the Chairman also serving as Co-Chief Executive Officer, an arrangement the Board deems beneficial with effective checks and balances - The Company has complied with all applicable code provisions in Part 2 of the Corporate Governance Code, except for a deviation from code provision C.2.1, which stipulates that the roles of chairman and chief executive should be separate[120](index=120&type=chunk)[125](index=125&type=chunk) - Mr. Yang Bin holds both the Chairman and Co-Chief Executive Officer roles, an arrangement the Board believes benefits Group management, with senior management and Board operations providing effective checks and balances on his power and authority[126](index=126&type=chunk)[129](index=129&type=chunk) [Model Code for Securities Transactions by Directors](index=31&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance during the 2025 interim period - The Company has adopted the Model Code as set out in Appendix C3 of the Listing Rules as its own code of conduct for directors' securities transactions[128](index=128&type=chunk)[131](index=131&type=chunk) - Following specific enquiries with all Directors, they have confirmed compliance with the Model Code during the 2025 interim period[128](index=128&type=chunk)[131](index=131&type=chunk) [Sufficiency of Public Float](index=32&type=section&id=Sufficiency%20of%20Public%20Float) Based on available information, the company maintained a sufficient public float during the reporting period - Based on publicly available information and to the best of the Directors' knowledge, the Company maintained a sufficient public float during the reporting period[132](index=132&type=chunk)[137](index=137&type=chunk) [Changes in Directors' and Chief Executive's Information](index=32&type=section&id=Changes%20in%20Directors'%20and%20Chief%20Executive's%20Information) No other information is required to be disclosed under Listing Rule 13.51B(1) from the date of the 2024 annual report up to the date of this interim report - No other information is required to be disclosed under Rule 13.51B(1) of the Listing Rules from the date of the 2024 annual report up to the date of this interim report[133](index=133&type=chunk)[138](index=138&type=chunk) [Compliance with Laws and Regulations](index=32&type=section&id=Compliance%20with%20Laws%20and%20Regulations) For the six months ended June 30, 2025, the company complied with relevant laws and regulations and was not involved in any material legal proceedings - For the six months ended June 30, 2025, the Company complied with relevant laws and regulations that have a significant impact on it[134](index=134&type=chunk)[139](index=139&type=chunk) - For the six months ended June 30, 2025, the Company was not involved in any material legal proceedings[134](index=134&type=chunk)[139](index=139&type=chunk) [Audit Committee](index=32&type=section&id=Audit%20Committee) The Audit Committee comprises three independent non-executive directors, with Mr. Chan Yiu Kwong serving as Chairman and possessing appropriate accounting and financial management expertise - The Audit Committee comprises three independent non-executive Directors: Mr. Chan Yiu Kwong, Mr. Chan Wah, and Mr. Cheung Lap Man[135](index=135&type=chunk)[140](index=140&type=chunk) - Mr. Chan Yiu Kwong, the Chairman of the Audit Committee, possesses appropriate accounting and relevant financial management expertise[135](index=135&type=chunk)[140](index=140&type=chunk) [Review of the Interim Financial Information](index=32&type=section&id=Review%20of%20the%20Interim%20Financial%20Information) The unaudited condensed consolidated interim financial information for the 2025 interim period has been reviewed by the Audit Committee, which confirmed its compliance with applicable accounting standards, though it was not reviewed by the external auditor - The unaudited condensed consolidated interim financial information for the 2025 interim period has been reviewed by the Audit Committee but not by the Company's external auditor[136](index=136&type=chunk)[141](index=141&type=chunk) - The Audit Committee is satisfied that the Company's unaudited financial information has been prepared in accordance with applicable accounting standards and has no disagreement with the accounting treatments adopted[136](index=136&type=chunk)[141](index=141&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=33&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the interim condensed consolidated statement of profit or loss and other comprehensive income, detailing the company's financial performance for the period [Profit or Loss Overview](index=33&type=section&id=Profit%20or%20Loss%20Summary) For the six months ended June 30, 2025, the company recorded a loss of **RMB 11.853 million**, a significant increase from the **RMB 4.122 million** loss in the prior year, primarily due to decreased revenue, increased cost of sales and administrative expenses, and expected credit losses on financial assets Key Profit or Loss Statement Data (RMB'000) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Revenue | 18,584 | 20,241 | | Cost of Sales | (13,258) | (12,233) | | Gross Profit | 5,326 | 8,008 | | Other income and other net gains | (262) | 922 | | Selling and distribution expenses | (5,023) | (4,908) | | Administrative expenses | (7,624) | (7,170) | | Expected credit losses on financial assets | (4,270) | – | | Loss before income tax | (11,853) | (4,122) | | Loss for the period | (11,853) | (4,122) | | Basic and diluted loss per share | (0.0052) | (0.0018) | [Interim Condensed Consolidated Statement of Financial Position](index=34&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section provides an overview of the company's assets, liabilities, and equity as at the reporting date [Assets and Liabilities Overview](index=34&type=section&id=Assets%20and%20Liabilities%20Overview) As at June 30, 2025, the Group's total assets were **RMB 42.021 million**, a decrease from **RMB 58.172 million** at year-end 2024, with total equity reducing to **RMB 38.721 million** and net current assets at **RMB 34.107 million**, primarily due to a decrease in cash and cash equivalents Key Financial Position Statement Data (RMB'000) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Non-current assets | 4,614 | 4,817 | | Current assets | 37,407 | 53,355 | | Current liabilities | 3,300 | 7,650 | | Net current assets | 34,107 | 45,705 | | Net assets | 38,721 | 50,522 | | Total equity | 38,721 | 50,522 | - The decrease in current assets is mainly due to a reduction in inventories, trade receivables, deposits, prepayments and other receivables, and cash and cash equivalents[143](index=143&type=chunk) - The decrease in current liabilities is mainly due to a reduction in trade payables, contract liabilities, and accruals and other payables[143](index=143&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=35&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section outlines the changes in the company's equity attributable to owners for the reporting period [Equity Movements](index=35&type=section&id=Equity%20Movements) For the six months ended June 30, 2025, total equity attributable to owners of the Company decreased from **RMB 50.522 million** at year-end 2024 to **RMB 38.721 million**, primarily due to a loss for the period of **RMB 11.853 million** Summary of Equity Movements (RMB'000) | Indicator | Balance at December 31, 2024 and January 1, 2025 (RMB'000) | Loss and total comprehensive income for the period (RMB'000) | Employee share trust contributions (RMB'000) | Balance at June 30, 2025 (RMB'000) | | :--- | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company | 50,522 | (11,853) | 52 | 38,721 | - The decrease in total equity is mainly due to a loss for the period of **RMB 11.853 million**[144](index=144&type=chunk) - Employee share trust contributions amounted to **RMB 52 thousand**[144](index=144&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=37&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section presents the condensed consolidated statement of cash flows, detailing the cash inflows and outflows from operating, investing, and financing activities [Cash Flow Overview](index=37&type=section&id=Cash%20Flow%20Summary) For the six months ended June 30, 2025, net cash used in operating activities was **RMB 10.843 million**, net cash generated from investing activities was **RMB 0.156 million**, and cash and cash equivalents decreased to **RMB 25.130 million** at period-end Key Cash Flow Statement Data (RMB'000) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Net cash used in operating activities | (10,843) | (10,672) | | Net cash generated from/(used in) investing activities | 156 | 3,058 | | Net cash used in financing activities | – | – | | Net decrease in cash and cash equivalents | (10,687) | (7,614) | | Cash and cash equivalents at end of period | 25,130 | 30,558 | - Net cash generated from investing activities primarily came from interest income received, partially offset by cash paid for acquisition of a subsidiary[148](index=148&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=38&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining the accounting policies, significant judgments, and specific financial statement line items [General Information](index=38&type=section&id=General%20Information) The company was incorporated in the Cayman Islands on March 26, 2018, and listed on the Hong Kong Stock Exchange on March 14, 2019, with its principal business being investment holding and its subsidiaries primarily providing marketing services and other sales businesses in China - The Company was incorporated in the Cayman Islands on March 26, 2018, and listed on The Stock Exchange of Hong Kong Limited on March 14, 2019[149](index=149&type=chunk)[154](index=154&type=chunk) - The Company's principal business is investment holding, while its subsidiaries primarily provide marketing services and other sales businesses in China[150](index=150&type=chunk)[154](index=154&type=chunk) [Basis of Preparation](index=38&type=section&id=Basis%20of%20Preparation) The interim condensed consolidated financial statements are prepared in accordance with HKAS 34, using the same accounting policies as the 2024 annual financial statements, presented in RMB, and reviewed by the Audit Committee but not by the external auditor - These condensed consolidated interim financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[151](index=151&type=chunk)[155](index=155&type=chunk) - They have been prepared in accordance with the same accounting policies adopted in the 2024 annual financial statements, except for accounting policies related to new standards or interpretations effective for periods beginning on or after January 1, 2025[152](index=152&type=chunk)[155](index=155&type=chunk) - These condensed consolidated interim financial statements are unaudited but have been reviewed by the Audit Committee, though not by the Company's external auditor[157](index=157&type=chunk)[160](index=160&type=chunk) [Changes in Accounting Policies](index=39&type=section&id=Changes%20in%20Accounting%20Policies) Certain amendments to Hong Kong Financial Reporting Standards, issued by the HKICPA, became effective in the current accounting period but had no material impact on the Group's results or financial position - Amendments to Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants were first adopted in the Group's current accounting period but had no material impact on the Group's results and financial position[158](index=158&type=chunk)[161](index=161&type=chunk) [Use of Judgements and Estimates](index=40&type=section&id=Use%20of%20Judgements%20and%20Estimates) The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty in preparing these interim condensed consolidated financial statements are consistent with those applied in the 2024 annual financial statements - In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty are the same as those applied in the 2024 annual financial statements[162](index=162&type=chunk)[166](index=166&type=chunk) [Revenue and Segment Information](index=40&type=section&id=Revenue%20and%20Segment%20Information) The Group primarily operates in China, providing marketing services and other sales businesses, with management viewing the business as two operating segments; total revenue for the 2025 interim period was **RMB 18.584 million**, mainly from marketing services recognized at a point in time, and contract liabilities from advance billings amounted to **RMB 163 thousand** at period-end - The Group primarily engages in providing marketing services and other sales businesses in China, with management viewing the business as two operating segments[164](index=164&type=chunk)[167](index=167&type=chunk) Reportable Segment Revenue (RMB'000) | Category | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Marketing Services | 15,514 | 19,484 | | Other Sales | 3,070 | 757 | | **Total** | **18,584** | **20,241** | Reportable Segment (Loss)/Profit (RMB'000) | Category | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Marketing Services | (10,373) | (3,198) | | Other Sales | 754 | 757 | | **Total** | **(9,619)** | **(2,441)** | - All of the Group's revenue is derived from contracts with customers, primarily from marketing services and other sales businesses, recognized at a point in time[168](index=168&type=chunk)[169](index=169&type=chunk) Movements in Contract Liabilities (RMB'000) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Balance at January 1 | 1,033 | 2,591 | | Decrease due to revenue recognized during the period | (1,033) | (2,591) | | Increase due to billing in advance for marketing services activities | 163 | 1,033 | | Balance at June 30/December 31 | 163 | 1,033 | [Other Income and Other Net Gains](index=42&type=section&id=Other%20Income%20and%20Other%20Net%20Gains) Other income and other net gains for the 2025 interim period were negative **RMB 262 thousand**, primarily due to exchange losses, contrasting with positive gains in the prior year Other Income and Other Net Gains (RMB'000) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Net exchange gains | (609) | 651 | | Interest income | 170 | 317 | | Others | 177 | (46) | | **Total** | **(262)** | **922** | [Loss Before Income Tax](index=43&type=section&id=Loss%20Before%20Income%20Tax) Loss before income tax for the 2025 interim period was **RMB 11.853 million**, an increase from the prior year, mainly driven by expenses such as amortization of intangible assets, depreciation of property, plant and equipment, impairment provision for other receivables, and staff costs Components of Loss Before Income Tax (RMB'000) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Amortisation of intangible assets | 159 | 654 | | Depreciation of property, plant and equipment | 38 | 41 | | Impairment (reversal)/loss on trade receivables | (142) | – | | Impairment provision for other receivables | 4,412 | – | | Short-term lease expenses | 551 | 216 | | Staff costs (including directors' emoluments) | 7,508 | 8,129 | - Amortisation of intangible assets is included in "Administrative expenses" in the condensed consolidated statement of profit or loss and other comprehensive income[179](index=179&type=chunk) [Income Tax Expenses](index=44&type=section&id=Income%20Tax%20Expenses) No income tax expense was incurred in the 2025 interim period due to corporate losses, while two of the Group's high-tech subsidiaries in China are eligible for a preferential **15%** income tax rate - No income tax expense was incurred in the 2025 interim period, primarily due to corporate losses[181](index=181&type=chunk)[185](index=185&type=chunk) - Two of the Group's subsidiaries in China are approved as high-tech enterprises, eligible for a preferential income tax rate of **15%** for certain years[183](index=183&type=chunk)[185](index=185&type=chunk) [Dividends](index=44&type=section&id=Dividends) The Board resolved not to recommend or declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board resolved not to recommend or declare an interim dividend for the six months ended June 30, 2025[184](index=184&type=chunk)[186](index=186&type=chunk) [Loss Per Share](index=45&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, basic loss per share was **RMB 0.0052**, an increase from **RMB 0.0018** in the prior year, with diluted loss per share being consistent due to the absence of potentially dilutive ordinary shares Loss Per Share (RMB) | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Loss attributable to owners of the Company (RMB'000) | 11,853 | 4,122 | | Weighted average number of ordinary shares in issue (thousands) | 2,299,745 | 2,299,745 | | Basic loss per share (RMB per share) | 0.0052 | 0.0018 | - As there were no potentially dilutive ordinary shares for the six months ended June 30, 2025 and 2024, diluted loss per share was the same as basic loss per share[193](index=193&type=chunk) [Property, Plant and Equipment](index=46&type=section&id=Property%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group had no significant additions or disposals of property, plant and equipment - For the six months ended June 30, 2025 and 2024, the Group had no significant additions or disposals of property, plant and equipment[193](index=193&type=chunk) [Intangible Assets](index=47&type=section&id=Intangible%20Assets) For the six months ended June 30, 2025, the Group incurred no new costs for developing software - For the six months ended June 30, 2025, the Group incurred no new costs for developing software[194](index=194&type=chunk)[196](index=196&type=chunk) [Trade Receivables](index=47&type=section&id=Trade%20Receivables) As at June 30, 2025, net trade receivables were **RMB 2.383 million**, a decrease from year-end 2024, with the Group granting credit periods of **1 to 30 days** and applying a simplified approach for expected credit losses Trade Receivables (RMB'000) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade receivables | 3,625 | 2,521 | | Less: Loss allowance | (280) | (138) | | **Net** | **2,383** | **3,345** | Ageing Analysis of Trade Receivables (RMB'000) | Ageing | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 0–30 days | 1,832 | 3,345 | | 31–60 days | 18 | – | | 181–365 days | 533 | – | | **Total** | **2,383** | **3,345** | - The Group grants credit periods of **1 to 30 days** to customers and regularly reviews credit limits and periods[201](index=201&type=chunk)[203](index=203&type=chunk) Movements in Expected Credit Losses on Trade Receivables (RMB'000) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | At January 1 | 280 | 3,801 | | Reversal of impairment loss | (142) | 211 | | Amounts written off as uncollectible | – | (3,732) | | At June 30/December 31 | 138 | 280 | [Deposits, Prepayments and Other Receivables](index=49&type=section&id=Deposits%2C%20Prepayments%20and%20Other%20Receivables) As at June 30, 2025, net deposits, prepayments, and other receivables amounted to **RMB 9.350 million**, a decrease from year-end 2024, primarily due to changes in impairment provisions for other receivables Deposits, Prepayments and Other Receivables (RMB'000) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Deposits | 739 | 339 | | Prepayments | 6,381 | 9,628 | | Other receivables | 2,525 | 6,724 | | Less: Loss allowance | (295) | (3,290) | | **Total** | **9,350** | **13,401** | Movements in Expected Credit Losses on Other Receivables (RMB'000) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | At January 1 | 3,290 | 1,931 | | Impairment provision | 4,412 | 1,359 | | Amounts written off as uncollectible | (7,407) | – | | At June 30/December 31 | 295 | 3,290 | [Amounts Due From Shareholders](index=50&type=section&id=Amounts%20Due%20From%20Shareholders) Amounts due from shareholders are unsecured, interest-free, repayable on demand, and non-trade in nature - Amounts due from shareholders are unsecured, interest-free, repayable on demand, and non-trade in nature[209](index=209&type=chunk)[210](index=210&type=chunk) [Trade Payables](index=50&type=section&id=Trade%20Payables) As at June 30, 2025, trade payables amounted to **RMB 170 thousand**, a significant decrease from year-end 2024, with credit periods typically ranging from **1 to 60 days** Trade Payables (RMB'000) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade payables | 170 | 585 | - Credit periods for trade payables vary depending on terms agreed with different suppliers, generally ranging from **1 to 60 days**[212](index=212&type=chunk) Ageing Analysis of Trade Payables (RMB'000) | Ageing | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 0–30 days | 40 | 430 | | Over 365 days | 130 | 155 | | **Total** | **170** | **585** | [Accruals and Other Payables](index=51&type=section&id=Accruals%20and%20Other%20Payables) As at June 30, 2025, total accruals and other payables amounted to **RMB 2.967 million**, a significant decrease from **RMB 6.028 million** at year-end 2024 Accruals and Other Payables (RMB'000) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Salaries payable | 1,191 | 1,262 | | Accrued expenses | – | 1,100 | | Other payables | 1,776 | 3,666 | | **Total** | **2,967** | **6,028** | [Capital](index=51&type=section&id=Capital) As at June 30, 2025, the company had **2,300,000,000** issued shares with a par value of **RMB 1.967 million**, remaining unchanged from year-end 2024 Capital (RMB'000) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Number of shares | 2,300,000,000 | 2,300,000,000 | | Par value | 1,967 | 1,967 | [Material Related Parties Transactions](index=51&type=section&id=Material%20Related%20Parties%20Transactions) For the six months ended June 30, 2025, total remuneration for key management personnel was **RMB 2.455 million**, an increase from the prior year Key Management Personnel Remuneration (RMB'000) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Short-term employee benefits | 2,289 | 2,025 | | Post-employment benefits | 166 | 79 | | **Total** | **2,455** | **2,104** | [Financial Instruments](index=52&type=section&id=Financial%20Instruments) As at June 30, 2025, the Group's total carrying amount of financial assets was **RMB 34.753 million**, and financial liabilities was **RMB 1.830 million**, with unlisted equity investments measured at fair value under Level 3, influenced by market illiquidity discount rates Carrying Amounts of Financial Assets and Liabilities (RMB'000) | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Financial assets measured at amortised cost | 29,920 | 41,024 | | Financial assets at fair value through profit or loss | 4,533 | 4,539 | | **Total financial assets** | **34,753** | **45,563** | | Financial liabilities measured at amortised cost | 1,830 | 3,646 | | **Total financial liabilities** | **1,830** | **3,646** | - Fair value measurement of unlisted equity investments falls under Level 3 of the fair value hierarchy, with the valuation method being the market approach[236](index=236&type=chunk)[238](index=238&type=chunk) - A higher market illiquidity discount results in a lower fair value. An increase/decrease of **0.5%** in the market illiquidity discount would lead to a decrease/increase of **RMB 27,000/RMB 30,000** in the carrying amount[238](index=238&type=chunk)[239](index=239&type=chunk) Movements in Level 3 Fair Value Measurements (RMB'000) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | At January 1 | 4,539 | 8,208 | | Exchange gains during the year | (6) | 7 | | At June 30/December 31 | 4,533 | 4,539 | [Events After the End of the Reporting Period](index=57&type=section&id=Events%20After%20the%20End%20of%20the%20Reporting%20Period) As of the approval date of these financial statements, the Group had no material events after the reporting period requiring disclosure - As of the approval date of these financial statements, the Group had no material events after the reporting period requiring disclosure[244](index=244&type=chunk)[246](index=246&type=chunk)

www.neo-neon.com INTERIM REPORT 中期報告 CONTENTS 目錄 | | | Page | | --- | --- | --- | | | | 頁次 | | Corporate Information | 公司資料 | 2 | | Management Discussion and Analysis | 管理層討論及分析 | 6 | | Corporate Governance and Other Information | 企業管治及其他資料 | 20 | | Independent Review Report | 獨立審閱報告 | 39 | | Interim Condensed Consolidated Statement | 中期簡明綜合損益表 | 41 | | of Profit or Loss | | | | Interim Condensed Consolidated Statement | 中期簡明綜合全面收益表 | 42 | | of Comprehensive Income | | | | Interim Condensed Consolidated Sta ...

Everbright Grand Chin a Asse ts Limite d 光大永年有限公 司 Stock Code 股份代號 : 3699 (inco rpo rated in the British Virgin Isla nds with limited liability and transferred by way of co ntinuation into the Cayman Islands) （於英屬維爾京群島註冊成立並以存續方式在開曼群島註冊的有限公司） C017167 CMY CM MY CY CMY K ai17576565328_Everbright Grand China IR2025 Cover V01A 4.5mm.pdf 1 12/9/2025 下午1:55 CONTENTS 目錄 | Corporate Information | 公司資料 | 2 | | --- | --- | --- | | Management Discussion and Analysis | 管理層討論及分析 | 6 | | Disclosure of Interests | 權益披露 | 2 ...

Contents 目錄 | Corporate Information | 2 | | --- | --- | | 公司資料 | | | Management Discussion and Analysis | 5 | | 管理層討論及分析 | | | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | 18 | | 簡明綜合損益及其他全面收益表 | | | Condensed Consolidated Statement of Financial Position | 19 | | 簡明綜合財務狀況表 | | | Condensed Consolidated Statement of Changes in Equity | 20 | | 簡明綜合權益變動表 | | | Condensed Consolidated Statement of Cash Flows | 22 | | 簡明綜合現金流量表 | | | Notes to the Condensed Consolidated Interi ...

（於中華人民共和國註冊成立的股份有限公司） 重要提示 公司董事會、監事會及董事、監事、高級管理人員保證半年度報告內容的真實、準確、完整，不存在虛假記 載、誤導性陳述或重大遺漏，並承擔個別和連帶的法律責任。 公司負責人林傳輝先生、主管會計工作負責人孫曉燕女士及會計機構負責人（會計主管人員）余莉紅女士聲 明：保證本半年度報告中財務報告的真實、準確、完整。 公司所有董事均已出席了審議本次半年報的董事會會議。 公司按照國際會計準則編製的2025年半年度財務報告未經審計，但已經安永會計師事務所審閱。除特別說明 外，本報告所列數據以人民幣為單位。 本半年度報告涉及未來計劃等前瞻性陳述，不構成公司對投資者的實質承諾，投資者及相關人士均應當對此 保持足夠的風險認識，並且應當理解計劃、預測與承諾之間的差異。 本公司以中英文兩種語言編製本半年度報告。在對本報告的中英文版本理解上發生歧義時，以中文為準。 公司經營過程中面臨各類風險，主要包括：流動性風險、市場風險、信用風險、合規風險、操作風險、信息 技術風險、聲譽風險等。針對上述風險，公司建立並持續完善內部控制體系、合規及全面風險管理體系， 確保公司在風險可控、可測、可承受的範圍內 ...

2025 中 期 報 告 目錄 業務回顧 本集團為中國其中一家領先的企業數字化轉型服務提供商，憑藉豐富的企業級行業經驗與強大的研發創新能力，集團 廣泛採用雲計算、大數據和人工智能(AI)等新興技術，為行業客戶提供數字化產品、解決方案及專業資訊科技(IT)服務。 隨著中國市場企業級客戶在數字化應用的轉型逐步加深以及IT市場不斷變化，本集團積極調整自身業務方向。截至二零 二五年六月三十日止六個月期間（「本期間」），本集團重新審視業務模式，將智能健康管理業務與智能應用業務整合至 企業管理業務之下，集中為客戶提供企業管理服務，其中包括雲智和數智兩大產品。於本期間，在中國及美國之間緊 張的地緣政治局勢以及不可預測的國際貿易政策下，宏觀經濟狀況受到重大挑戰，而中國IT市場競爭亦越趨激烈，導致 本集團整體收入下降約13%。 | 財務摘要 | 2 | | --- | --- | | 管理層討論與分析 | 3 | | 企業管治及其他資料 | 9 | | 簡明綜合中期財務報表審閱報告 | 16 | | 簡明綜合損益及其他全面收益表 | 17 | | 簡明綜合財務狀況表 | 18 | | 簡明綜合權益變動表 | 19 | | 簡明 ...

2025 中期報告 股份代號 : 09985.HK （於開曼群島註冊成立的有限公司） Contents 目錄 2 Corporate Information 公司資料 5 Definitions 釋義 8 Management Discussion and Analysis 管理層討論與分析 33 Directors 董事 34 Corporate Governance and Other Information 企業管治及其他資料 48 Independent Review Report 獨立審閱報告 50 Interim Condensed Consolidated Statement of Profit or Loss 中期簡明合併損益表 51 Interim Condensed Consolidated Statement of Comprehensive Income 中期簡明合併綜合收益表 52 Interim Condensed Consolidated Statement of Financial Position 中期簡明合併財務狀況表 54 Interim Condensed Consol ...