[Company Information](index=3&type=section&id=Company%20Information) This section provides an overview of the company's board structure, committee members, registration details, and principal office information [Board and Committee Members](index=3&type=section&id=2.1%20Board%20and%20Committee%20Members) The company's board comprises executive directors Mr. Li Lap (Chairman), Mr. Li Ming Chun (Vice Chairman and CEO), Mr. Chow Hau Shing, and independent non-executive directors Mr. Shu Wah Tung, Mr. Wu Wai Bun, and Ms. Zhai Hui Ting - Executive Directors include Li Lap (Chairman), Li Ming Chun (Vice Chairman and CEO), Chow Hau Shing[3](index=3&type=chunk) - Independent Non-Executive Directors include Shu Wah Tung, Wu Wai Bun, Zhai Hui Ting[3](index=3&type=chunk) - Ms. Zhai Hui Ting was appointed as a member of the Nomination Committee on June 19, 2025[3](index=3&type=chunk) [Registration and Office Information](index=3&type=section&id=2.2%20Registration%20and%20Office%20Information) The company is incorporated in Bermuda, with its head office and principal place of business in Cosco Tower, Sheung Wan, Hong Kong - The company is incorporated in Bermuda, with stock code **00093**[3](index=3&type=chunk) - Head office and principal place of business are located at Units 2107-08, 21st Floor, Cosco Tower, 183 Queen's Road Central, Sheung Wan, Hong Kong[3](index=3&type=chunk) - Major banks include The Hongkong and Shanghai Banking Corporation Limited, Hang Seng Bank Limited, Bank of China (Hong Kong) Limited, Dah Sing Bank Limited, DBS Bank (Hong Kong) Limited, and Standard Chartered Bank (Hong Kong) Limited[4](index=4&type=chunk) [Business Review](index=4&type=section&id=Business%20Review) This section reviews the Group's financial performance, key profit drivers, business segment performance, and credit risk assessment policies [Financial Performance Overview](index=4&type=section&id=3.1%20Financial%20Performance%20Overview) For the six months ended June 30, 2025, the Group's revenue reached HK$159,338 thousand, with profit for the period at HK$18,888 thousand, showing growth compared to the prior year 2025 H1 Financial Performance | Indicator | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | YoY Change (Thousand HKD) | | :--- | :--- | :--- | :--- | | Revenue | 159,338 | 116,981 | +42,357 | | Profit for the period | 18,888 | 14,709 | +4,179 | - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[5](index=5&type=chunk) [Key Profit Drivers](index=4&type=section&id=3.2%20Key%20Profit%20Drivers) Profit growth for the period was primarily driven by a significant increase in interest income from financial lending business, partially offset by net impairment losses on loans and interest receivables and fair value losses on investment properties Profit Drivers | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | Change (Thousand HKD) | | :--- | :--- | :--- | :--- | | Interest income from financial lending | 155,498 | 116,187 | +39,311 | | Net impairment losses on loans and interest receivables | (67,195) | (43,530) | (23,665) | | Fair value loss on investment properties | (400) | (3,000) | +2,600 | [Business Segment Performance](index=5&type=section&id=3.3%20Business%20Segment%20Performance) The Group primarily operates in property development and investment and financial lending, with the latter showing strong growth in active customer numbers and revenue [Property Development and Investment](index=5&type=section&id=3.3.1%20Property%20Development%20and%20Investment) Property sales at Wing Sing Plaza in Zhongshan, Guangdong, were unsatisfactory, with no residential units sold in the first half, and rental income decreased by approximately 5% year-on-year - Property sales at Wing Sing Plaza in Zhongshan were unsatisfactory, with no sales transactions approved and recorded in the government system during the first half[8](index=8&type=chunk) - For the six months ended June 30, 2025, rental income from Wing Sing Plaza decreased by approximately **5%** compared to the prior year[8](index=8&type=chunk) - As of June 30, 2025, **56** residential units remained unsold, of which **3** were leased out[8](index=8&type=chunk) [Financial Lending](index=5&type=section&id=3.3.2%20Financial%20Lending) The financial lending business performed strongly, primarily offering unsecured revolving and installment loans via the X Wallet app, leading to significant growth in active customer numbers and revenue - Active unsecured loan customer numbers increased from **15,523** as of December 31, 2024, to **16,851** as of June 30, 2025[10](index=10&type=chunk) Unsecured Loan Revenue | Indicator | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Unsecured loan revenue | 135,931 | 94,845 | - Unsecured loans have an annual interest rate ranging from **25% to 48%**, with a weighted average annual interest rate of approximately **38%**, and a maximum limit of **HK$1,500,000**[9](index=9&type=chunk)[10](index=10&type=chunk) - Mortgage loans have an annual interest rate ranging from **12% to 24%**, with a weighted average annual interest rate of approximately **16%**, and a maximum limit of **HK$100,000,000**[11](index=11&type=chunk) - As of June 30, 2025, there were **66** mortgage loan customers, with the top **10** customers accounting for **73%** of total mortgage loans receivable; there were **16,851** unsecured loan customers, with the top **10** customers accounting for **1%** of total unsecured loans receivable[11](index=11&type=chunk) [Credit Risk Assessment Policy](index=6&type=section&id=3.4%20Credit%20Risk%20Assessment%20Policy) The Group maintains stringent credit risk assessment policies for both secured and unsecured loans, measuring expected credit losses and writing off loans overdue by more than 90 days - Secured loan approval requires reviewing applicant credit history, property type, valuation, loan-to-value ratio, and market conditions[12](index=12&type=chunk) - X Wallet unsecured revolving loan approval is automated, based on big data, credit scoring models, and TransUnion credit reports[12](index=12&type=chunk) - As of June 30, 2025, impairment provision for loans and interest receivables was **HK$107,253 thousand**[13](index=13&type=chunk) - Loans overdue by more than **90** days are considered defaulted, with a total of approximately **HK$47,819 thousand** in loans and interest receivables written off[14](index=14&type=chunk) [Liquidity and Financial Resources](index=7&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains ample cash, with working capital primarily sourced from shareholder loans, bank borrowings, capital and reserves, and operating cash flow, facing RMB-related foreign exchange risks without hedging instruments - The Group has ample cash and no significant capital expenditure commitments[16](index=16&type=chunk) - Working capital sources include shareholder loans, bank borrowings, capital and reserves, and cash generated from operations[16](index=16&type=chunk) - The Group faces foreign exchange risk primarily related to RMB but has not arranged financial instruments for hedging purposes[16](index=16&type=chunk) [Internal Control Procedures](index=7&type=section&id=Internal%20Control%20Procedures) The Group has established comprehensive internal control procedures covering credit approval, loan collection, and recoverability review to ensure robust risk management [Credit Approval Procedures](index=7&type=section&id=5.1%20Credit%20Approval%20Procedures) The Group implements detailed credit approval processes for secured loans, X Wallet's automated unsecured revolving loans, and credit department-approved unsecured installment loans - Secured loans require credit specialists to collect information, obtain preliminary valuations from independent property valuers, and credit managers to determine loan amounts and interest rates based on internal policies[17](index=17&type=chunk) - X Wallet unsecured revolving loan credit approval is automatically processed by the system, retrieving credit reports and performing risk scoring via API[18](index=18&type=chunk) - Unsecured installment loans approved by the credit department undergo initial review by credit specialists, with credit managers reviewing and determining loan terms based on applicant information and internal guidelines[18](index=18&type=chunk) [Loan Collection and Recoverability Review](index=8&type=section&id=5.2%20Loan%20Collection%20and%20Recoverability%20Review) The Group has established a system for identifying and reviewing overdue loan accounts, closely monitored by directors and senior management, with full provisioning for loans overdue by more than 90 days - The Group has a system to identify and review overdue loan accounts, with daily reports reviewed by directors and senior management[19](index=19&type=chunk) - The account management department is responsible for loan collection, including calling customers, issuing overdue payment notices, and engaging external collection agencies when necessary[19](index=19&type=chunk) - Loan assets overdue for more than **90** days are considered defaulted, and a full provision is made for the related outstanding loans[19](index=19&type=chunk) [Orders](index=8&type=section&id=Orders) Due to the nature of its business, the Group had no orders as of June 30, 2025, and no plans to launch new products or services - As of June 30, 2025, the Group had no orders[20](index=20&type=chunk) - The Group had no new products or services to be launched at the end of the period[20](index=20&type=chunk) [Employees and Remuneration Policy](index=9&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 124 staff, with a remuneration policy based on performance, qualifications, and capabilities, offering various benefits - As of June 30, 2025, the Group employed a total of **124** staff[21](index=21&type=chunk) - Employee benefits include insurance, provident fund schemes, and discretionary bonuses[21](index=21&type=chunk) - Directors' remuneration is reviewed by the Remuneration Committee with reference to operating results, individual performance, and market data[21](index=21&type=chunk) [Prospects](index=9&type=section&id=Prospects) The Group's prospects include economic outlook, strategic development of X Wallet into a comprehensive financial services platform, market promotion, product innovation, and prudent risk management [Economic Outlook and Group Strategy](index=9&type=section&id=8.1%20Economic%20Outlook%20and%20Group%20Strategy) Hong Kong's economy is expected to remain challenging in the second half of 2025, while the Group aims to develop X Wallet into a comprehensive financial services platform - Hong Kong's economic conditions are expected to remain challenging in the second half of 2025, affected by global economic uncertainties, inflationary pressures, and political instability[22](index=22&type=chunk) - Management believes the continued growth of X Wallet will enable the Group to develop into a comprehensive financial services platform, offering a wider range of services[22](index=22&type=chunk) [Marketing and Product Innovation](index=9&type=section&id=8.2%20Marketing%20and%20Product%20Innovation) In July 2025, the Group launched a major brand promotion campaign for X Wallet and introduced AI-driven lending service X Cash.AI and "Buy Now, Pay Later" service X Pay - In July 2025, the Group launched a major brand promotion campaign for X Wallet with the theme "Seize the Opportunity! Outperform 99.9% of People!"[22](index=22&type=chunk) - Introduced AI-driven lending service X Cash.AI (5-second instant approval) and innovative payment service X Pay (3-installment interest-free payment)[23](index=23&type=chunk) - Developed a media deployment strategy covering MTR stations, outdoor online shopping, TV channels, and online social media to enhance visibility[23](index=23&type=chunk) [Risk Management and Future Outlook](index=9&type=section&id=8.3%20Risk%20Management%20and%20Future%20Outlook) The Group will actively assess its loan portfolio and risk control measures, implement strict loan application standards, and enhance its risk pricing model, while avoiding new property market investments in China - The Group will actively assess its loan portfolio and risk control measures, implementing strict loan application standards to minimize default risk[23](index=23&type=chunk) - The Group will adhere to core risk management principles and is committed to enhancing its risk pricing model[23](index=23&type=chunk) - Due to the downturn in the China property market, management will not explore new investment opportunities in the property market in the short term[25](index=25&type=chunk) [Directors' Interests in Shares and Share Options](index=10&type=section&id=Directors'%20Interests%20in%20Shares%20and%20Share%20Options) As of June 30, 2025, Directors Mr. Li Lap and Mr. Li Ming Chun held significant interests in the company's shares, primarily through family trusts and controlled corporations, with Mr. Chow Hau Shing holding a smaller personal interest Directors' Long Positions in the Company's Shares (As of June 30, 2025) | Director Name | Total Number of Shares | Percentage of Total Issued Shares | | :--- | :--- | :--- | | Mr. Li Lap | 1,252,752,780 | 46.96% | | Mr. Li Ming Chun | 1,962,752,780 | 73.58% | | Mr. Chow Hau Shing | 7,150,000 | 0.27% | - The interests of Mr. Li Lap and Mr. Li Ming Chun are primarily held by Lee & Leung (B.V.I.) Limited, which is wholly owned by Lee & Leung Family Investment Limited, which in turn is wholly owned by HSBC International Trustee Limited (as trustee of the Lee & Leung Family Trust)[26](index=26&type=chunk) - Earth Axis Investment Limited, indirectly controlled by Mr. Li Ming Chun, holds **710,000,000** shares[26](index=26&type=chunk) Directors' Long Positions in Shares of Other Associated Corporations (As of June 30, 2025) | Director Name | Subsidiary Name | Total Number of Shares | Percentage of Total Issued Non-Voting Deferred Shares | | :--- | :--- | :--- | :--- | | Mr. Li Lap | Lee's Plastic Manufacturing Company Limited | 500,000 | 100% | | Mr. Li Lap | Timely Electronics Limited | 10,000 | 100% | [Substantial Shareholders](index=12&type=section&id=Substantial%20Shareholders) As of June 30, 2025, the company's substantial shareholders included Lee & Leung (B.V.I.) Limited and its associates, Earth Axis Investment Limited, Cosmo Telecommunication Inc., and East Glory Trading Limited Substantial Shareholders' Shareholdings (As of June 30, 2025) | Shareholder Name | Capacity | Number of Ordinary Shares | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Lee & Leung (B.V.I.) Limited | Beneficial owner | 1,252,752,780 | 46.96% | | Earth Axis Investment Limited | Beneficial owner | 710,000,000 | 26.62% | | Cosmo Telecommunication Inc. | Beneficial owner | 151,202,960 | 5.67% | | East Glory Trading Limited | Beneficial owner | 103,397,540 | 3.88% | - Lee & Leung (B.V.I.) Limited, Lee & Leung Family Investment Limited, and HSBC International Trustee Limited (as trustee of the Lee & Leung Family Trust) all hold **46.96%** shares, with Ms. Leung Lai Ping as the trust beneficiary[28](index=28&type=chunk)[33](index=33&type=chunk) - Earth Axis Investment Limited is wholly owned by Easy Finance Holdings Limited, which is indirectly controlled by Mr. Li Ming Chun[28](index=28&type=chunk)[33](index=33&type=chunk) - Cosmo Telecommunication Inc. is wholly owned by Ms. Jing Xiao Ju[28](index=28&type=chunk)[33](index=33&type=chunk) - East Glory Trading Limited is wholly owned by Master Winner Limited, which is wholly owned by Mr. Yuan Qinghua[28](index=28&type=chunk)[33](index=33&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=13&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%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 listed securities - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[30](index=30&type=chunk) [Subsequent Events](index=13&type=section&id=Subsequent%20Events) Details of events occurring after the end of the reporting period are set out in Note 24 to the interim condensed consolidated financial information - Details of subsequent events after the end of the reporting period are set out in Note 24 to the interim condensed consolidated financial information[31](index=31&type=chunk) [Corporate Governance](index=13&type=section&id=Corporate%20Governance) The company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during the reporting period, with specific provisions for director retirement by rotation - The company has complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025[32](index=32&type=chunk) - Under the company's Bye-laws, the Chairman and Managing Director are not subject to retirement by rotation but are required to stand for re-election every three years; other directors are required to retire by rotation at least once every three years[34](index=34&type=chunk) [Changes in Directors' Information](index=14&type=section&id=Changes%20in%20Directors'%20Information) There were no other changes in directors' information requiring disclosure under Rules 13.51(2)(a) to (e) and (g) of the Listing Rules - There were no other changes in directors' information requiring disclosure under Rules 13.51(2)(a) to (e) and (g) of the Listing Rules[35](index=35&type=chunk) [Directors' Securities Transactions](index=14&type=section&id=Directors'%20Securities%20Transactions) The company adopted the Model Code in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions and confirmed all directors complied with it during the reporting period - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions[36](index=36&type=chunk) - All directors complied with the Model Code during the six months ended June 30, 2025[36](index=36&type=chunk) - The Board has also established written guidelines for senior management regarding dealings in the company's securities, with terms no less stringent than the Model Code[37](index=37&type=chunk) [Audit Committee](index=14&type=section&id=Audit%20Committee) The company's Audit Committee reviewed the Group's adopted accounting principles and practices, and discussed audit, internal control, and financial reporting matters, including the interim report - The Audit Committee has reviewed the accounting principles and practices adopted by the Group[38](index=38&type=chunk) - The Audit Committee has discussed audit, internal control, and financial reporting matters, including the review of the interim report for the six months ended June 30, 2025[38](index=38&type=chunk) [Review Report on Interim Financial Information](index=15&type=section&id=Review%20Report%20on%20Interim%20Financial%20Information) PricewaterhouseCoopers reviewed the Group's interim financial information for the six months ended June 30, 2025, concluding that nothing came to their attention to suggest the interim financial information was not prepared in all material respects in accordance with HKAS 34 - PricewaterhouseCoopers has reviewed the Group's interim financial information for the six months ended June 30, 2025[40](index=40&type=chunk) - A review is substantially less in scope than an audit, and consequently, no audit opinion is expressed[41](index=41&type=chunk) - The review concluded that nothing has come to the auditor's attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[43](index=43&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=17&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue was HK$159,338 thousand, profit for the period was HK$18,888 thousand, and basic and diluted earnings per share were HK$0.71 cents Summary of Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 159,338 | 116,981 | | Operating profit | 33,555 | 21,505 | | Profit for the period attributable to owners of the company | 18,888 | 14,709 | | Total comprehensive income for the period | 20,235 | 4,201 | | Basic earnings per share (HK cents) | 0.71 | 0.55 | - Net impairment losses on loans and interest receivables were **HK$67,195 thousand**, an increase from **HK$43,530 thousand** in the prior year[45](index=45&type=chunk) - Finance costs significantly increased to **HK$8,934 thousand** from **HK$1,123 thousand** in the prior year[45](index=45&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=18&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were HK$1,465,351 thousand, total equity was HK$1,113,189 thousand, and total liabilities were HK$352,162 thousand, with notable shifts in loans and borrowings Summary of Interim Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Total assets | 1,465,351 | 1,400,616 | | Total equity | 1,113,189 | 1,092,954 | | Total liabilities | 352,162 | 307,662 | | Non-current loans and interest receivables | 687,622 | 600,166 | | Current loans and interest receivables | 237,882 | 309,793 | | Non-current bank borrowings | 215,000 | 112,000 | | Current loan from a shareholder | 97,582 | - | | Non-current loan from a shareholder | - | 160,439 | - Non-current loans and interest receivables increased from **HK$600,166 thousand** to **HK$687,622 thousand**[47](index=47&type=chunk) - A loan from a shareholder shifted from the non-current portion (**HK$160,439 thousand**) to current liabilities (**HK$97,582 thousand**)[48](index=48&type=chunk) - Non-current bank borrowings increased from **HK$112,000 thousand** to **HK$215,000 thousand**[48](index=48&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=20&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the company increased to HK$1,113,189 thousand, driven by profit for the period and exchange differences, partially offset by property revaluation loss Summary of Interim Condensed Consolidated Statement of Changes in Equity | Indicator | June 30, 2025 (Thousand HKD) | Jan 1, 2025 (Thousand HKD) | | :--- | :--- | :--- | | Total equity | 1,113,189 | 1,092,954 | | Profit for the period | 18,888 | - | | Exchange differences on translating overseas operations | 2,167 | - | | Revaluation loss on leasehold land and buildings | (820) | - | - Retained earnings increased from **HK$84,508 thousand** at the beginning of the period to **HK$103,396 thousand**[49](index=49&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=21&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group's cash and cash equivalents increased by HK$35,164 thousand, with operating activities generating cash inflow and financing activities contributing significantly Summary of Interim Condensed Consolidated Statement of Cash Flows | Indicator | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Net cash inflow from operating activities | 9,140 | (88,515) | | Net cash outflow from investing activities | (2,162) | 2,203 | | Net cash inflow from financing activities | 28,186 | 114,150 | | Net increase in cash and cash equivalents | 35,164 | 27,838 | | Cash and cash equivalents at end of period | 157,787 | 129,313 | - Cash flow from operating activities shifted from an outflow in the prior year to an inflow, indicating improved operational performance[50](index=50&type=chunk) - In financing activities, shareholder advances were **HK$30,000 thousand**, repayment of shareholder loans was **HK$93,000 thousand**, and proceeds from bank borrowings were **HK$100,000 thousand**[50](index=50&type=chunk) [Notes to the Interim Condensed Consolidated Financial Information](index=22&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes to the interim condensed consolidated financial information, covering general information, accounting policies, risk management, and specific financial statement items [1. General Information](index=22&type=section&id=1.%20General%20Information) The company, incorporated in Bermuda, primarily engages in property investment and development in China and Hong Kong, and financial lending in Hong Kong, with Lee & Leung Family Investment Limited as its ultimate parent company - The company primarily engages in property investment and development in China and Hong Kong, and financial lending in Hong Kong[52](index=52&type=chunk) - The company's ultimate parent company is Lee & Leung Family Investment Limited, incorporated in the British Virgin Islands[52](index=52&type=chunk) - The interim condensed consolidated financial information is unaudited, presented in Thousand HKD, and was reviewed by the Audit Committee and approved for publication by the Board on August 28, 2025[53](index=53&type=chunk) [2. Basis of Preparation](index=22&type=section&id=2.%20Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in accordance with Appendix D2 of the Listing Rules and HKAS 34 "Interim Financial Reporting" and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024 - The interim condensed consolidated financial information is prepared in accordance with Appendix D2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[54](index=54&type=chunk) - It should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024, which have been prepared in accordance with Hong Kong Financial Reporting Standards[54](index=54&type=chunk) [3. Accounting Policies](index=22&type=section&id=3.%20Accounting%20Policies) The interim condensed consolidated financial statements are prepared on a historical cost basis, with certain assets measured at fair value, and the application of revised standards had no significant impact on financial position or performance - The interim condensed consolidated financial statements are prepared on a historical cost basis, except for leasehold land and buildings, investment properties, and financial assets at fair value through profit or loss, which are stated at fair value at each reporting period end[55](index=55&type=chunk) - The application of amendments to HKAS 21 and HKFRS 1 "Lack of Exchangeability" during the period had no impact on the Group's financial position and performance[56](index=56&type=chunk) - Several new and revised standards not yet effective are listed, including HKFRS 18 "Presentation and Disclosure in Financial Statements" (effective January 1, 2027)[57](index=57&type=chunk) [4. Accounting Estimates and Judgements](index=23&type=section&id=4.%20Accounting%20Estimates%20and%20Judgements) The significant judgements, estimates, and assumptions made by management in preparing the interim condensed consolidated financial information are consistent with those applied in the annual consolidated financial statements for the year ended December 31, 2024 - The significant judgements, estimates, and assumptions made by management in preparing the interim condensed consolidated financial information are the same as those applied in the annual consolidated financial statements for the year ended December 31, 2024[58](index=58&type=chunk) [5. Financial Risk Management](index=24&type=section&id=5.%20Financial%20Risk%20Management) The Group faces market risk (foreign exchange risk, interest rate risk), credit risk, and liquidity risk, with risk management policies remaining unchanged since December 31, 2024, and fair value measurements using a three-level hierarchy - The Group's business activities are exposed to market risk (including foreign exchange risk and cash flow and fair value interest rate risk), credit risk, and liquidity risk[60](index=60&type=chunk) - There have been no changes in risk management policies since December 31, 2024[61](index=61&type=chunk) - The carrying amounts of financial assets and financial liabilities are reasonable approximations of their fair values, and fair value measurements use a three-level hierarchy[63](index=63&type=chunk)[64](index=64&type=chunk) [6. Segment Information](index=25&type=section&id=6.%20Segment%20Information) The Group's chief operating decision maker reviews the results of two reportable segments: property development and investment, and financial lending, with Hong Kong contributing the vast majority of external customer revenue - The Group has two reportable segments: property development and investment (sale and leasing of properties in China) and financial lending (provision of mortgage and personal loans in Hong Kong)[66](index=66&type=chunk)[67](index=67&type=chunk) Segment Results (For the six months ended June 30, 2025) | Segment | Revenue (Thousand HKD) | Segment Results (Thousand HKD) | | :--- | :--- | :--- | | Property development and investment | 755 | (946) | | Financial lending | 155,498 | 30,006 | | Total | 159,338 | 29,060 | Revenue from External Customers (By geographical area) | Region | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Hong Kong | 155,498 | 116,187 | | China | 3,840 | 794 | | Total | 159,338 | 116,981 | - For the six months ended June 30, 2025, no single customer contributed **10%** or more of the Group's revenue[75](index=75&type=chunk) [7. Revenue, Other Income and Other Losses, Net](index=29&type=section&id=7.%20Revenue,%20Other%20Income%20and%20Other%20Losses,%20Net) For the six months ended June 30, 2025, the Group's revenue primarily came from interest income from financial lending, with other income including handling fees and bank interest, and net other losses mainly from asset impairment recoveries and unrealized exchange losses Revenue Composition (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Interest income from financial lending business | 155,498 | 116,187 | | Rental income from properties held for sale | 755 | 794 | | Information technology service income | 3,085 | - | | **Total Revenue** | **159,338** | **116,981** | Other Income Composition (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Bank interest income | 99 | 404 | | Handling fee income | 875 | 320 | | Information technology service income | - | 1,727 | | Miscellaneous income | 419 | 22 | | **Total Other Income** | **1,393** | **2,473** | Other Losses, Net Composition (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Recovery of asset impairment provisions | (533) | (2,273) | | Net unrealized exchange (losses) / gains | (326) | 249 | | Fair value gains on financial assets at fair value through profit or loss | 21 | 3 | | **Total Other Losses, Net** | **(838)** | **(1,794)** | [8. Profit for the Period](index=30&type=section&id=8.%20Profit%20for%20the%20Period) Profit for the period includes depreciation, amortization, and expenses related to short-term leases, with property, plant and equipment depreciation at HK$3,703 thousand and intangible asset amortization at HK$668 thousand Items Included in "Other Operating Expenses" (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 3,703 | 2,010 | | Amortization of intangible assets | 668 | 672 | | Expenses relating to short-term leases | 185 | 136 | [9. Finance Costs](index=31&type=section&id=9.%20Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs significantly increased to HK$8,934 thousand, primarily due to increased interest expenses on bank borrowings and amortization of loan arrangement fees Finance Costs Composition (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Interest expense on lease liabilities | 329 | 51 | | Interest expense on loan from a shareholder | 1,240 | 1,072 | | Interest expense on bank borrowings | 5,365 | - | | Amortisation of loan arrangement fees | 2,000 | - | | **Total Finance Costs** | **8,934** | **1,123** | [10. Net Impairment Losses on Loans and Interest Receivables](index=31&type=section&id=10.%20Net%20Impairment%20Losses%20on%20Loans%20and%20Interest%20Receivables) For the six months ended June 30, 2025, net impairment losses on loans and interest receivables amounted to HK$67,195 thousand, an increase from the prior year, partially offset by recoveries of previously written-off loans and interest Net Impairment Losses on Loans and Interest Receivables (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Net impairment provision | 69,888 | 45,458 | | Recovery of previously written-off loans and interest receivables | (2,693) | (1,928) | | **Total Net Impairment Losses** | **67,195** | **43,530** | [11. Income Tax Expense](index=32&type=section&id=11.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense was HK$5,733 thousand, primarily contributed by Hong Kong profits tax, partially offset by deferred income tax Income Tax Expense Composition (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | China corporate income tax | 2 | 55 | | Hong Kong profits tax | 7,828 | 6,311 | | Deferred income tax | (2,097) | (693) | | **Total Income Tax Expense** | **5,733** | **5,673** | [12. Earnings Per Share](index=32&type=section&id=12.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, profit attributable to owners of the company was HK$18,888 thousand, with basic earnings per share of HK$0.71 cents, and diluted earnings per share being the same Earnings Per Share Calculation (For the six months ended June 30, 2025) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Profit attributable to owners of the company (Thousand HKD) | 18,888 | 14,709 | | Weighted average number of ordinary shares in issue (Thousand shares) | 2,667,643 | 2,667,643 | | Basic earnings per share (HK cents) | 0.71 | 0.55 | - For the six months ended June 30, 2025, there were no potential dilutive ordinary shares in issue, thus diluted earnings per share were the same as basic earnings per share[86](index=86&type=chunk) [13. Property, Plant and Equipment and Investment Properties](index=33&type=section&id=13.%20Property,%20Plant%20and%20Equipment%20and%20Investment%20Properties) As of June 30, 2025, the net book value of property, plant and equipment was HK$203,599 thousand, and investment properties were HK$46,600 thousand, with revaluation and fair value losses recorded during the period Net Book Value of Property, Plant and Equipment and Investment Properties (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Property, plant and equipment | 203,599 | 205,516 | | Investment properties | 46,600 | 47,000 | - Leasehold land and buildings are accounted for using the revaluation model, and investment properties are accounted for using the fair value model[88](index=88&type=chunk) - For the six months ended June 30, 2025, there was a revaluation loss of **HK$820 thousand** on leasehold land and buildings and a fair value loss of **HK$400 thousand** on investment properties[89](index=89&type=chunk)[90](index=90&type=chunk) - Valuations were performed by Brightway Surveyors & Valuers Limited, an independent professional qualified valuer, using the direct comparison approach[89](index=89&type=chunk)[91](index=91&type=chunk) - As of June 30, 2025, the unit selling price per square foot for leasehold land and buildings was **HK$64,900**, and for investment properties was **HK$19,900**[91](index=91&type=chunk) [14. Intangible Assets](index=36&type=section&id=14.%20Intangible%20Assets) As of June 30, 2025, the net book value of intangible assets was HK$9,951 thousand, primarily comprising brand names and club memberships, with new memberships added and amortization expense recorded during the period Net Book Value of Intangible Assets (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Mobile application | - | - | | Brand names | 7,191 | 7,859 | | Club memberships | 2,760 | - | | **Total** | **9,951** | **7,859** | - New club memberships of **HK$2,760 thousand** were added during the period[93](index=93&type=chunk) - Amortization expense was **HK$668 thousand**, recognized in "Other operating expenses" in the interim condensed consolidated statement of profit or loss[93](index=93&type=chunk) [15. Loans and Interest Receivables](index=36&type=section&id=15.%20Loans%20and%20Interest%20Receivables) As of June 30, 2025, total loans and interest receivables were HK$1,032,757 thousand, with a net amount of HK$925,504 thousand after deducting impairment provisions, and a significant portion of personal loans being unsecured Loans and Interest Receivables Composition (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Property mortgage loans | 251,530 | 342,227 | | Personal loans | 781,227 | 658,983 | | **Total** | **1,032,757** | **1,001,210** | | Less: Impairment provision | (107,253) | (91,251) | | **Net** | **925,504** | **909,959** | - Personal loans and interest receivables of **HK$781,227 thousand** are unsecured[95](index=95&type=chunk) Ageing Analysis of Loans and Interest Receivables (As of June 30, 2025) | Ageing | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Not overdue | 878,440 | 865,309 | | Overdue 1 to 30 days | 57,377 | 39,152 | | Overdue 31 to 60 days | 5,955 | 5,069 | | Overdue 61 to 90 days | 9,538 | 38,249 | | Overdue over 90 days | 81,447 | 53,431 | | **Total** | **1,032,757** | **1,001,210** | [16. Share Capital](index=38&type=section&id=16.%20Share%20Capital) As of June 30, 2025, the company's authorized share capital was 2,800,000 thousand shares with a par value of HK$0.08 per share, and issued and fully paid share capital was 2,667,643 thousand shares, remaining unchanged from December 31, 2024 Share Capital Structure (As of June 30, 2025) | Item | Number (Thousand shares) | Par Value (Thousand HKD) | | :--- | :--- | :--- | | Authorized ordinary shares | 2,800,000 | 224,000 | | Issued and fully paid ordinary shares | 2,667,643 | 213,411 | [17. Financial Assets at Fair Value Through Profit or Loss](index=38&type=section&id=17.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the Group held equity securities for trading amounting to HK$110 thousand, denominated in HKD and classified as current assets Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Equity securities held for trading | 110 | 89 | - Financial assets are listed instruments denominated in HKD and classified as current assets[99](index=99&type=chunk) [18. Other Payables and Accrued Expenses](index=38&type=section&id=18.%20Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2025, total other payables and accrued expenses were HK$12,527 thousand, a decrease from December 31, 2024, mainly due to reduced accrued audit fees and employee benefit expenses Other Payables and Accrued Expenses Composition (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Rental deposits | 70 | 77 | | Accrued audit fees | 1,535 | 2,285 | | Accrued employee benefit expenses | 1,951 | 3,662 | | Other payables and accrued expenses | 8,971 | 10,070 | | **Total** | **12,527** | **16,094** | [19. Loan from a Shareholder](index=39&type=section&id=19.%20Loan%20from%20a%20Shareholder) The company entered into a loan agreement with shareholder Mr. Li Ming Chun, with approximately HK$97,582 thousand drawn as of June 30, 2025, which is unsecured, bears interest at 3% per annum, and is repayable within two years - The company entered into a loan agreement with shareholder Mr. Li Ming Chun, with a total of approximately **HK$97,582 thousand** drawn as of June 30, 2025[101](index=101&type=chunk) - The loan is unsecured, bears interest at **3%** per annum, and is repayable within two years[101](index=101&type=chunk) [20. Bank Borrowings](index=39&type=section&id=20.%20Bank%20Borrowings) As of June 30, 2025, total bank borrowings were HK$215,395 thousand, a significant increase from December 31, 2024, secured by loans and interest receivables, bearing floating interest rates, and complying with financial covenants Bank Borrowings (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Non-current bank borrowings | 215,000 | 112,000 | | Current bank borrowings | 395 | 422 | | **Total** | **215,395** | **112,422** | - Bank borrowings are secured by the Group's total balance of **HK$310,297 thousand** in loans and interest receivables[102](index=102&type=chunk) - Bank borrowings are denominated in HKD, bear floating interest rates, with a weighted average effective interest rate of **6.5%** per annum (December 31, 2024: **8.3%** per annum)[102](index=102&type=chunk) - The Group has complied with the financial covenants of its bank borrowing facilities[103](index=103&type=chunk) [21. Related Party Disclosures](index=40&type=section&id=21.%20Related%20Party%20Disclosures) The Group has transactions with related parties, including lease liabilities, IT service income, and lease payments, with amounts payable to a related company being unsecured, interest-free, and repayable on demand Balances with Related Parties (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Lease liabilities | 5,182 | 6,102 | Transactions with Related Parties (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Information technology service income | 3,085 | 1,727 | | Lease payments | 1,147 | 72 | - Amounts payable to a related company are unsecured, interest-free, and repayable on demand[106](index=106&type=chunk) - Compensation to key management personnel amounted to **HK$3,769 thousand** for the six months ended June 30, 2025[105](index=105&type=chunk) [22. Operating Lease Commitments - The Group as Lessor](index=41&type=section&id=22.%20Operating%20Lease%20Commitments%20-%20The%20Group%20as%20Lessor) The Group leases out certain properties held for sale under short-term operating leases to maintain flexibility in the number of residential units available for sale, with all properties having tenants committed for one year - The Group leases out certain properties held for sale under operating leases to maintain flexibility in the number of residential units available for sale[107](index=107&type=chunk) - As of June 30, 2025, all properties had tenants committed for one year[108](index=108&type=chunk) Total Future Minimum Lease Payments Receivable (As of June 30, 2025) | Term | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Less than one year | 2 | 22 | [23. Dividends](index=41&type=section&id=23.%20Dividends) No dividends were declared for the six months ended June 30, 2025 - No dividends were declared for the six months ended June 30, 2025[110](index=110&type=chunk) [24. Subsequent Events](index=41&type=section&id=24.%20Subsequent%20Events) On July 7, 2025, X8 Finance Limited, an indirect wholly-owned subsidiary, entered into two loan agreements totaling HK$92,000,000, secured by Hong Kong residential properties at an annual interest rate of 19%, repayable within 12 months - On July 7, 2025, X8 Finance Limited (an indirect wholly-owned subsidiary of the company) entered into two loan agreements with a total principal amount of **HK$92,000,000**[111](index=111&type=chunk) - These loans are secured by residential properties located in Hong Kong, bear an annual interest rate of **19%** (plus **3%** in case of default), and are repayable upon the expiry of the **12-month** term[111](index=111&type=chunk)

中期報告 目錄 JIAXING GAS GROUP CO., LTD.* 嘉興市燃氣集團股份有限公司 （於中華人民共和國註冊成立的股份有限公司） 股份代號 : 9908 2 公司資料 3 釋義 6 管理層討論與分析 12 企業管治及其他資料 22 獨立審閱報告 23 中期簡明綜合損益及其他全面收益表 25 中期簡明綜合財務狀況表 27 中期簡明綜合權益變動表 29 中期簡明綜合現金流量表 31 中期簡明綜合財務資料附註 公司資料 董事會 執行董事 孫連清先生 （主席兼首席執行官） 徐松強先生 非執行董事 郁建明先生 鄭歡利先生 傅松權先生 阮澤雲女士 獨立非執行董事 于友達先生 鄭學啟先生 周鑫發先生 監事 劉雯女士 （主席） 牟妮妮女士 何海燕女士 審核委員會 鄭學啟先生 （主席） 于友達先生 周鑫發先生 提名委員會 孫連清先生 （主席） 于友達先生 周鑫發先生 薪酬委員會 于友達先生 （主席） 郁建明先生 鄭學啟先生 聯席公司秘書 王水明女士 盤嘉盈女士(ACS, ACG) 授權代表 孫連清先生 盤嘉盈女士 註冊辦事處及中國總辦事處 中國 浙江省 嘉興市 經濟技術開發區 華隆廣場 3幢5層 嘉興市燃氣集團 ...

Contents 目錄 2 Corporate Information 公司資料 6 Unaudited Consolidated Statement of Profit or Loss 未經審核綜合損益表 7 Unaudited Consolidated Statement of Other Comprehensive Income 未經審核綜合其他全面收入表 8 Unaudited Consolidated Statement of Financial Position 未經審核綜合財務狀況表 10 Unaudited Condensed Consolidated Cash Flow Statement 未經審核簡明綜合現金流量報表 11 Unaudited Consolidated Statement of Changes in Equity 未經審核綜合權益變動報表 12 Notes to the Unaudited Interim Financial Report 未經審核中期財務報告附註 31 Independent Review Report 獨立審閱報告 33 Management Discu ...

[Corporate Information](index=3&type=section&id=Corporate%20Information) This section details the company's governance structure, key personnel, and essential contact information [Board of Directors and Committee Composition](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) The company's board comprises executive directors Zhou Fuyu (Chairman & CEO), Lü Hanbin, Wang Yali, and independent non-executive directors Chen Jincheng, Lu Weidong, Chen Chen, with committee memberships and chairmanships adjusted during the period - Chairman and CEO of the Board: **Mr. Zhou Fuyu**[6](index=6&type=chunk) - Chairman of the Audit Committee: **Mr. Chen Chen**[6](index=6&type=chunk) - Chairman of the Nomination Committee: **Mr. Chen Chen** (re-designated from June 24, 2025), with Mr. Zhou Fuyu no longer serving as chairman[6](index=6&type=chunk)[7](index=7&type=chunk) - Chairman of the Remuneration Committee: **Mr. Chen Chen**[7](index=7&type=chunk) - Chairman of the Strategy and Development Committee: **Mr. Zhou Fuyu**[8](index=8&type=chunk) [Key Personnel and Contact Information](index=4&type=section&id=Key%20Personnel%20and%20Contact%20Information) During the reporting period, Ms. Tam Pak Yu was appointed as company secretary and authorized representative, replacing Mr. Cheung Kai Cheong, with Ernst & Young serving as auditor - Company Secretary: **Ms. Tam Pak Yu** (appointed from August 28, 2025), with Mr. Cheung Kai Cheong resigning[8](index=8&type=chunk)[9](index=9&type=chunk) - Authorized Representatives: **Mr. Zhou Fuyu** and **Ms. Tam Pak Yu** (appointed from August 28, 2025)[8](index=8&type=chunk)[9](index=9&type=chunk) - Auditor: **Ernst & Young**[9](index=9&type=chunk) - Stock Code: **1458**[9](index=9&type=chunk) [Business Overview and Outlook](index=6&type=section&id=Business%20Overview%20and%20Outlook) This section provides an overview of the company's operational performance, strategic initiatives, and future prospects [Overall Business and Financial Performance](index=6&type=section&id=Overall%20Business%20and%20Financial%20Performance) As of June 30, 2025, Zhou Hei Ya operated 2,864 stores across 292 cities in 28 provinces, with a year-on-year decrease in total stores but Central China remaining the primary revenue contributor Store Count and Regional Distribution (As of June 30, 2025) | Region | 2025 Store Count () | 2025 Share (%) | 2024 Store Count () | 2024 Share (%) | | :--- | :--- | :--- | :--- | :--- | | Central China | 1,293 | 45.1 | 1,566 | 45.3 | | Southern China | 503 | 17.6 | 572 | 16.6 | | Eastern China | 383 | 13.4 | 524 | 15.2 | | Northern China | 393 | 13.7 | 443 | 12.8 | | Western China | 292 | 10.2 | 351 | 10.1 | | **Total** | **2,864** | **100.0** | **3,456** | **100.0** | Revenue Contribution by Geographical Location (For the Six Months Ended June 30) | Region | 2025 Revenue (RMB thousands) | 2025 Share (%) | 2024 Revenue (RMB thousands) | 2024 Share (%) | | :--- | :--- | :--- | :--- | :--- | | Central China | 538,003 | 55.0 | 547,675 | 53.5 | | Southern China | 168,119 | 17.2 | 173,117 | 16.9 | | Eastern China | 104,427 | 10.7 | 117,507 | 11.5 | | Northern China | 97,329 | 9.9 | 104,577 | 10.2 | | Western China | 71,136 | 7.2 | 81,457 | 7.9 | | **Total** | **979,014** | **100.0** | **1,024,333** | **100.0** | [Business Review and Outlook](index=8&type=section&id=Business%20Review%20and%20Outlook) In H1 2025, with moderate domestic consumption recovery, the braised food industry faced intensified competition and channel diversification challenges, prompting the company to focus on operational quality and performance growth through store efficiency, channel expansion, brand building, and supply chain optimization - Domestic consumption moderately recovered, but the braised food industry faced challenges including new channel diversion, intensified competition, product homogenization, and insufficient consumer value perception[18](index=18&type=chunk)[20](index=20&type=chunk) - The company's core objective is to enhance operational quality and restore performance growth, achieving positive progress in store operational efficiency, channel expansion, brand building, and supply chain optimization during the first half of the year[18](index=18&type=chunk)[20](index=20&type=chunk) [Store Strategy and Efficiency Enhancement](index=8&type=section&id=Store%20Strategy%20and%20Efficiency) The company prioritizes enhancing store operational quality by empowering frontline staff, strengthening member and private domain operations, integrating online-offline traffic, expanding late-night hours, and optimizing cost efficiency through precise site selection and flexible scheduling - Systematically empowered frontline staff through the "Four Seasons Battle Song" program, strengthening standardized execution, supervisory assessments, and skills training to enhance service quality[19](index=19&type=chunk)[21](index=21&type=chunk) - Strengthened member and private domain operational management, building a deep "staff-private domain" linkage mechanism to convert online traffic through precise marketing[19](index=19&type=chunk)[21](index=21&type=chunk) - Deepened cooperation in food delivery, with **delivery terminal sales of approximately RMB 380 million** in the first half; public domain in-store (Douyin + Meituan) terminal sales exceeded **RMB 80 million**[19](index=19&type=chunk)[21](index=21&type=chunk) - Expanded late-night snack hours, exploring full-time service to effectively extend business hours and capture incremental sales[19](index=19&type=chunk)[21](index=21&type=chunk) - Achieved cost reduction and efficiency improvement by strictly controlling key indicators like rent-to-sales ratio and per capita efficiency through precise site selection models, flexible leasing solutions, and dynamic scheduling mechanisms[19](index=19&type=chunk)[21](index=21&type=chunk) - As of June 30, 2025, the Group's store count was **2,864**[19](index=19&type=chunk)[21](index=21&type=chunk) [Channel Expansion and Overseas Market Layout](index=9&type=section&id=Channel%20Expansion%20and%20Overseas%20Market) The company actively expanded distribution channels, collaborating with Sam's Club for customized products and forming strategic partnerships with Yonghui and Pang Dong Lai, while successfully entering Malaysian and Singaporean markets and establishing a joint venture for compound seasonings - Collaborated with Sam's Club to customize and develop Zhou Hei Ya classic braised seasoning packs and flavored duck meat sauce[22](index=22&type=chunk)[25](index=25&type=chunk) - Established strategic partnerships with Yonghui, Pang Dong Lai, and others, expanding consumption scenarios by offering vacuum-packed and bulk products, dedicated counter displays, and joint marketing[22](index=22&type=chunk)[25](index=25&type=chunk) - Successfully entered overseas markets such as Malaysia and Singapore in the first half, with plans to continue expanding into Southeast Asia and other countries and regions in the future[23](index=23&type=chunk)[25](index=25&type=chunk) - Established a joint venture with Sichuan Shentang Industrial Group to jointly develop the "Gaga Xiang" series of compound seasonings and convenient instant food products[23](index=23&type=chunk)[25](index=25&type=chunk) [Product Innovation and Brand Building](index=9&type=section&id=Product%20Innovation%20and%20Brand%20Building) The company maintains high-quality standards, optimizing classic products and launching new categories like braised duck with sauce and braised squid, while developing new traffic-driving items and incubating the "Yaya Coconut" brand for a "braised food + beverage" experience, attracting Gen Z consumers and increasing member sales to over 60% - Adhered to "Zhou Hei Ya standards" for high quality, optimizing and iterating classic products, and launching new categories such as braised duck with sauce and braised squid[24](index=24&type=chunk)[26](index=26&type=chunk) - Developed new traffic-driving products such as braised duck wing roots with sauce and regional limited Sichuan spicy duck necks[24](index=24&type=chunk)[26](index=26&type=chunk) - Incubated the "Yaya Coconut" brand, launching fresh coconut water to create a one-stop "braised food + beverage" experience[24](index=24&type=chunk)[26](index=26&type=chunk) - Deeply engaged Gen Z consumers through precise marketing activities like Cherry Blossom Outing Season, Graduation Season, and student-exclusive benefits, strengthening brand penetration and resonance[27](index=27&type=chunk)[29](index=29&type=chunk) - As of June 30, 2025, **2.45 million new registered members** were added, with member sales accounting for **over 60%** of total sales[27](index=27&type=chunk)[29](index=29&type=chunk) [Supply Chain Optimization](index=10&type=section&id=Supply%20Chain%20Optimization) The company focused on cost reduction, efficiency, agile response, and quality improvement, driving refined supply chain operations to steadily increase gross profit margin to 58.6% through market analysis, supplier optimization, automation, cross-departmental collaboration, and a comprehensive quality assurance system - Gross profit margin steadily increased to **58.6%**[28](index=28&type=chunk)[29](index=29&type=chunk) - Effectively reduced per-ton costs through in-depth market analysis, supplier structure optimization, precise grasp of procurement windows to secure cost advantages, and continuous promotion of full-chain automation upgrades[28](index=28&type=chunk)[29](index=29&type=chunk) - Agilely ensured new product launches and channel expansion needs through efficient cross-departmental collaboration[28](index=28&type=chunk)[29](index=29&type=chunk) - Significantly improved product quality satisfaction by establishing an omni-channel consumer feedback and improvement mechanism, strengthening the quality assurance system, traceability, and standardized management[28](index=28&type=chunk)[29](index=29&type=chunk) [Organizational Capability Building](index=11&type=section&id=Organizational%20Capability) The company made significant progress in organizational vitality, capability, and efficiency through systematic organizational development, completing agile performance reforms, creating dynamic empowerment mechanisms, restructuring management, proactively planning talent reserves, and optimizing regional layouts, functional integration, process optimization, and flexible employment to substantially boost human efficiency - Completed the agile performance system reform for all employees, ensuring **100% alignment** of performance indicators with strategic goals[30](index=30&type=chunk)[32](index=32&type=chunk) - Innovatively created the "Four Seasons Battle Song" dynamic empowerment mechanism, significantly activating the combat effectiveness of frontline teams[30](index=30&type=chunk)[32](index=32&type=chunk) - Restructured the core management team to strengthen strategic synergy and decision-making efficiency; introduced high-potential experts from multiple fields to rapidly build new business teams and structures[30](index=30&type=chunk)[32](index=32&type=chunk) - Significantly improved human efficiency by optimizing regional layouts and implementing measures such as functional integration, process optimization, and flexible employment[30](index=30&type=chunk)[32](index=32&type=chunk) [Outlook for H2 2025](index=11&type=section&id=Outlook%20for%20H2%202025) For H2 2025, the company plans to enhance refined operations for store efficiency, accelerate product innovation and channel expansion, actively pursue overseas expansion for new growth, and refresh its brand to attract new customers, while continuously improving management efficiency and profitability for long-term high-quality development - Strengthen refined operations to enhance store efficiency and solidify the store base[31](index=31&type=chunk)[33](index=33&type=chunk) - Accelerate product innovation and distribution channel expansion, actively promote overseas expansion, and build new business growth curves[31](index=31&type=chunk)[33](index=33&type=chunk) - Accelerate brand rejuvenation to attract new customer segments[31](index=31&type=chunk)[33](index=33&type=chunk) - Continuously improve management efficiency, reduce costs, enhance profitability, and achieve long-term high-quality development[31](index=31&type=chunk)[33](index=33&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed review of the company's financial performance, liquidity, capital resources, and key operational metrics [Financial Performance Summary](index=12&type=section&id=Financial%20Performance%20Summary) For the six months ended June 30, 2025, total revenue decreased by 2.9% to RMB 1,222.6 million, yet gross profit and profit for the period significantly increased, improving both gross and net profit margins, with basic and diluted EPS rising 400% to RMB 0.05 Key Financial Indicators for H1 2025 | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,222,561 | 1,259,511 | (2.9) | | Cost of sales | (505,976) | (561,854) | (9.9) | | Gross profit | 716,585 | 697,657 | 2.7 | | Other income and gains, net | 26,505 | 23,595 | 12.3 | | Finance costs | (5,264) | (5,966) | (11.8) | | Selling and distribution expenses | (471,771) | (504,977) | (6.6) | | Administrative expenses | (115,928) | (119,872) | (3.3) | | Share of profits and losses of associates | (3,986) | (33,668) | (88.2) | | Profit before tax | 146,141 | 56,769 | 157.4 | | Income tax expense | (38,201) | (23,856) | 60.1 | | Profit for the period | 107,940 | 32,913 | 228.0 | | Basic and diluted earnings per share (RMB) | 0.05 | 0.01 | 400.0 | | Net profit margin | 8.8% | 2.6% | - | | Gross profit margin | 58.6% | 55.4% | - | [Revenue Analysis](index=13&type=section&id=Revenue%20Analysis) For the six months ended June 30, 2025, total revenue decreased by 2.9% to RMB 1,222.6 million, primarily due to the optimization and closure of inefficient stores, though improved single-store operational efficiency mitigated the overall decline - Total revenue decreased by **2.9%** year-on-year to **RMB 1,222.6 million**[36](index=36&type=chunk)[41](index=41&type=chunk) - Primary reason: optimization and closure of inefficient retail stores[36](index=36&type=chunk)[41](index=41&type=chunk) - Effectively increased average single-store sales through enhanced operational efficiency, mitigating the overall revenue decline[36](index=36&type=chunk)[41](index=41&type=chunk) [Cost of Sales and Gross Profit](index=13&type=section&id=Cost%20of%20Sales%20and%20Gross%20Profit) Cost of sales decreased by 9.9% year-on-year to RMB 506.0 million, driven by lower raw material prices, optimized product mix, and improved supply chain efficiency, leading to a 2.7% increase in gross profit to RMB 716.6 million and a gross profit margin improvement from 55.4% to 58.6% - Cost of sales decreased by **9.9%** year-on-year to **RMB 506.0 million**[37](index=37&type=chunk)[42](index=42&type=chunk) - Primary reasons: declining raw material prices, optimized product structure, and improved supply chain efficiency[37](index=37&type=chunk)[42](index=42&type=chunk) - Gross profit increased by **2.7%** year-on-year to **RMB 716.6 million**[38](index=38&type=chunk)[43](index=43&type=chunk) - Gross profit margin increased from **55.4%** in H1 2024 to **58.6%** in H1 2025[38](index=38&type=chunk)[43](index=43&type=chunk) [Other Income and Expenses](index=13&type=section&id=Other%20Income%20and%20Expenses) Other income and gains, net, increased by 12.3% to RMB 26.5 million, mainly due to higher exchange gains, while finance costs decreased by 11.8% to RMB 5.3 million due to reduced lease liability interest from store closures; selling and distribution expenses and administrative expenses also decreased by 6.6% and 3.3% respectively, benefiting from store optimization and organizational adjustments - Other income and gains, net, increased by **12.3%** year-on-year to **RMB 26.5 million**, primarily due to increased exchange gains[39](index=39&type=chunk)[44](index=44&type=chunk) - Finance costs decreased by **11.8%** year-on-year to **RMB 5.3 million**, primarily due to optimized store structure and reduced interest expenses related to lease liabilities[40](index=40&type=chunk)[45](index=45&type=chunk) - Selling and distribution expenses decreased by **6.6%** year-on-year to **RMB 471.8 million**, primarily due to reduced rent and labor costs from closing inefficient stores[46](index=46&type=chunk)[52](index=52&type=chunk) - Administrative expenses decreased by **3.3%** year-on-year to **RMB 115.9 million**, primarily due to optimized organizational structure and improved per capita efficiency[47](index=47&type=chunk)[53](index=53&type=chunk) - Share of losses of associates was **RMB 4.0 million**, mainly related to fair value changes of target companies invested by investment partnerships[48](index=48&type=chunk)[54](index=54&type=chunk) [Profit and Comprehensive Income](index=14&type=section&id=Profit%20and%20Comprehensive%20Income) Profit before tax surged by 157.4% to RMB 146.1 million, while profit for the period increased by 228.0% to RMB 107.9 million, raising the net profit margin to 8.8%, and total comprehensive income for the period grew by 177.1% to RMB 104.3 million - Profit before tax increased by **157.4%** year-on-year to **RMB 146.1 million**[49](index=49&type=chunk)[55](index=55&type=chunk) - Income tax expense increased by **60.1%** year-on-year to **RMB 38.2 million**, primarily due to a significant increase in profit before tax[50](index=50&type=chunk)[56](index=56&type=chunk) - Profit for the period increased by **228.0%** year-on-year to **RMB 107.9 million**, with net profit margin improving from **2.6%** to **8.8%**[51](index=51&type=chunk)[57](index=57&type=chunk) - Exchange differences on translation of overseas operations turned from a gain to a **loss of RMB 3.6 million**[58](index=58&type=chunk)[64](index=64&type=chunk) - Total comprehensive income for the period increased by **177.1%** year-on-year to **RMB 104.3 million**[59](index=59&type=chunk)[65](index=65&type=chunk) [Liquidity and Capital Resources](index=15&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the Group's net assets decreased to RMB 3,466.8 million, with cash and bank balances at RMB 877.5 million, including RMB 500.0 million in time deposits; the company repurchased 91,127,500 shares for HKD 189,733,668.46, and the remaining IPO proceeds of RMB 176.5 million had their usage extended for three years, while the gearing ratio decreased from 21.0% to 19.9% - As of June 30, 2025, the Group's net assets were **RMB 3,466.8 million**, a decrease from **RMB 3,626.5 million** as of December 31, 2024[62](index=62&type=chunk)[67](index=67&type=chunk) - As of June 30, 2025, cash and bank balances were approximately **RMB 877.5 million**, comprising unrestricted cash and bank deposits of approximately **RMB 377.5 million** and time deposits of approximately **RMB 500.0 million**[68](index=68&type=chunk)[72](index=72&type=chunk) - The company repurchased **91,127,500 shares** in H1 2025, with a total consideration of **HKD 189,733,668.46**[61](index=61&type=chunk)[66](index=66&type=chunk) - The remaining balance of net proceeds from the Initial Public Offering (IPO) was **RMB 176.5 million**, with the expected timeline for use in general working capital and acquisitions and strategic alliances extended to within three years from the date of this report[70](index=70&type=chunk)[74](index=74&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - As of June 30, 2025, total bank borrowings were **RMB 84.4 million**, all maturing within one year[80](index=80&type=chunk)[85](index=85&type=chunk) - The gearing ratio decreased from **21.0%** as of December 31, 2024, to **19.9%** as of June 30, 2025, primarily due to reduced inventory reserves and trade payables[81](index=81&type=chunk)[85](index=85&type=chunk) - As of June 30, 2025, the Group had no assets pledged[82](index=82&type=chunk)[86](index=86&type=chunk) [Cash Flows](index=19&type=section&id=Cash%20Flows) In H1 2025, net cash from operating activities increased to RMB 210.8 million due to higher profit before tax and reduced inventories and receivables; net cash used in investing activities was RMB 157.6 million, mainly from structured and time deposit changes; and net cash used in financing activities was RMB 419.0 million, primarily for dividend payments, share repurchases, and bank loan repayments - Net cash generated from operating activities was approximately **RMB 210.8 million**, an increase from **RMB 193.8 million** in the same period of 2024[87](index=87&type=chunk)[90](index=90&type=chunk) - Net cash used in investing activities was approximately **RMB 157.6 million**, compared to net cash generated of approximately **RMB 374.4 million** in the same period of 2024[88](index=88&type=chunk)[91](index=91&type=chunk) - Net cash used in financing activities was approximately **RMB 419.0 million**, an increase from **RMB 249.2 million** in the same period of 2024[89](index=89&type=chunk)[92](index=92&type=chunk) [Structured Deposits and Financial Assets Measured at FVTPL](index=20&type=section&id=Structured%20Deposits%20and%20Financial%20Assets%20Measured%20at%20FVTPL) As of June 30, 2025, the Group held approximately RMB 212.3 million in structured deposits and other financial assets measured at FVTPL, primarily low-risk, capital-protected short-term products aimed at enhancing cash management returns, with related interest income decreasing to RMB 3.2 million in H1 2025 from RMB 9.4 million in H1 2024 - As of June 30, 2025, the balance of structured deposits and other financial assets measured at fair value through profit or loss was approximately **RMB 212.3 million**[93](index=93&type=chunk)[96](index=96&type=chunk) - These investments are primarily capital-protected products, typically with fixed short-term maturities and relatively low risk[93](index=93&type=chunk)[96](index=96&type=chunk) - In H1 2025, interest income from structured deposits and other financial assets was **RMB 3.2 million**, a decrease from **RMB 9.4 million** in the same period of 2024[93](index=93&type=chunk)[96](index=96&type=chunk) [Capital Expenditure and Liabilities](index=21&type=section&id=Capital%20Expenditure%20and%20Liabilities) In H1 2025, capital expenditure totaled RMB 25.9 million, primarily for store renovations, factory equipment upgrades, and information system development, funded mainly by operating cash flow and IPO proceeds; as of June 30, 2025, the Group had no significant unrecorded contingent liabilities, guarantees, litigation, or major investment, acquisition, or disposal events - Capital expenditure in H1 2025 was **RMB 25.9 million**, primarily for store renovations, factory equipment upgrades, and information system construction[98](index=98&type=chunk)[104](index=104&type=chunk) - Funding sources primarily included cash generated from operating activities and net proceeds from the Initial Public Offering (IPO)[98](index=98&type=chunk)[104](index=104&type=chunk) - As of June 30, 2025, the Group had no unrecorded significant contingent liabilities, guarantees, or litigation[99](index=99&type=chunk)[105](index=105&type=chunk) - During and after the reporting period up to the date of this report, the Group did not undertake any significant investments, acquisitions, or disposals[100](index=100&type=chunk)[106](index=106&type=chunk) [Restricted Share Unit Scheme](index=21&type=section&id=Restricted%20Share%20Unit%20Scheme) The company adopted the Restricted Share Unit (RSU) Scheme on July 25, 2018, to incentivize and retain talent, with 261 selected individuals granted RSUs representing 32,181,675 shares, or 1.49% of issued shares, as of the report date (August 28, 2025) - The RSU Scheme was adopted on **July 25, 2018**, aiming to incentivize directors, senior management, and employees[102](index=102&type=chunk)[107](index=107&type=chunk) - As of August 28, 2025, **261 selected individuals** were granted RSUs representing **32,181,675 shares**, accounting for **1.49%** of the company's issued shares[103](index=103&type=chunk)[107](index=107&type=chunk) [Turnover Ratios and Employee Costs](index=22&type=section&id=Turnover%20Ratios%20and%20Employee%20Costs) Average inventory turnover days decreased from 88.4 to 81.8, mainly due to faster inventory disposal from inefficient store optimization; average trade receivables turnover days increased from 9.0 to 11.8 due to extended credit terms for e-commerce platforms; average trade payables turnover days decreased from 30.2 to 25.4; and as of June 30, 2025, the Group had 3,756 employees, with total labor costs of RMB 233.1 million, representing 19.1% of total revenue - Average inventory turnover days decreased from **88.4 days** in H1 2024 to **81.8 days** in H1 2025[109](index=109&type=chunk)[116](index=116&type=chunk) - Average trade receivables turnover days increased from **9.0 days** in H1 2024 to **11.8 days** in H1 2025, primarily due to extended credit terms granted to e-commerce platforms[110](index=110&type=chunk)[116](index=116&type=chunk) - Average trade payables turnover days decreased from **30.2 days** in H1 2024 to **25.4 days** in H1 2025[111](index=111&type=chunk)[116](index=116&type=chunk) - As of June 30, 2025, the Group had **3,756 employees**, with **57.1%** in store operations and sales, and **29.5%** in processing factory production[112](index=112&type=chunk)[117](index=117&type=chunk) - Total labor costs in H1 2025 were **RMB 233.1 million**, representing **19.1%** of total revenue for the same period[114](index=114&type=chunk)[118](index=118&type=chunk) [Top Suppliers and Customers](index=23&type=section&id=Top%20Suppliers%20and%20Customers) In H1 2025, purchases from the largest duck supplier accounted for 13.4% of total procurement costs, with the top five collectively representing 27.3%; revenue from the top five customers was less than 30% of total revenue due to the nature of the business - Purchases from the largest duck supplier accounted for approximately **13.4%** of total procurement costs[119](index=119&type=chunk)[123](index=123&type=chunk) - Purchases from the top five duck suppliers collectively accounted for approximately **27.3%** of total procurement costs[119](index=119&type=chunk)[123](index=123&type=chunk) - Revenue from the top five customers accounted for **less than 30%** of total revenue[120](index=120&type=chunk)[123](index=123&type=chunk) [Reserves and Subsequent Events](index=23&type=section&id=Reserves%20and%20Subsequent%20Events) As of June 30, 2025, the company's distributable reserves to shareholders were approximately RMB 784.9 million, with no significant events occurring from the reporting period end until the report date (August 28, 2025) - As of June 30, 2025, distributable reserves to shareholders were approximately **RMB 784.9 million**[121](index=121&type=chunk)[124](index=124&type=chunk) - No significant events occurred from the end of the reporting period until August 28, 2025[122](index=122&type=chunk)[125](index=125&type=chunk) [Other Information](index=24&type=section&id=Other%20Information) This section covers details regarding directors' and substantial shareholders' interests, share repurchases, RSU scheme specifics, and corporate governance practices [Directors' and Chief Executive's Interests](index=24&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests) As of June 30, 2025, Mr. Zhou Fuyu held 62.90% of the company's shares through spousal interests, while Mr. Lü Hanbin and Ms. Wang Yali, along with their spouses, held smaller stakes primarily through the Restricted Share Unit Scheme, with all disclosed interests being long positions Directors' and Chief Executive's Interests in Shares (As of June 30, 2025) | Name | Capacity/Nature of Interest | Number of Relevant Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Zhou Fuyu | Interest of spouse | 1,358,470,940 | 62.90% | | Mr. Lü Hanbin | Beneficial owner | 1,250,000 | 0.06% | | Ms. Wang Yali | Beneficial owner | 492,545 | 0.02% | | Ms. Wang Yali | Interest of spouse | 116,880 | 0.01% | | **Ms. Wang Yali Total** | | **609,425** | **0.03%** | [Substantial Shareholders' Interests](index=26&type=section&id=Substantial%20Shareholders%27%20Interests) As of June 30, 2025, Ms. Tang Jianfang (Mr. Zhou Fuyu's spouse) was the company's substantial shareholder, holding a total of 62.90% of shares through controlled corporations, family trust settlors, and beneficial ownership, with Cantrust (Far East) Limited and ZHY X Holdings Co., Limited also holding significant stakes as trustees or controlled corporations Substantial Shareholders' Interests in Shares (As of June 30, 2025) | Shareholder Name | Nature of Interest | Number of Shares or Securities Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Ms. Tang Jianfang | Interest in controlled corporation | 122,527,140 (L) | 5.67% | | Ms. Tang Jianfang | Settlor of family trust | 1,230,372,300 (L) | 56.97% | | Ms. Tang Jianfang | Beneficial owner | 5,571,500 (L) | 0.26% | | **Ms. Tang Jianfang Total** | | **1,358,470,940 (L)** | **62.90%** | | Cantrust (Far East) Limited | Trustee | 1,230,372,300 (L) | 56.97% | | ZHY X Holdings Co., Limited | Interest in controlled corporation | 1,230,372,300 (L) | 56.97% | | Healthy Origin Holdings Limited | Beneficial owner | 1,197,892,000 (L) | 55.47% | | ZHY Holdings IV Company Limited | Beneficial owner | 122,527,140 (L) | 5.67% | [Purchase, Sale and Redemption of Listed Securities](index=28&type=section&id=Purchase%2C%20Sale%20and%20Redemption%20of%20Listed%20Securities) In H1 2025, the company repurchased 91,127,500 shares on the Hong Kong Stock Exchange for a total consideration of HKD 189,733,668.46; these repurchased shares were not held as treasury shares, with some cancelled on January 27 and April 9, 2025, and total issued shares standing at 2,159,709,500 as of June 30, 2025 Details of Share Repurchases in H1 2025 | Month of Repurchase | Number of Shares Repurchased | Highest Price Paid Per Share (HKD) | Lowest Price Paid Per Share (HKD) | Total Consideration (HKD) | | :--- | :--- | :--- | :--- | :--- | | January 2025 | 20,157,500 | 1.72 | 1.49 | 32,350,298.29 | | February 2025 | 25,597,500 | 1.92 | 1.66 | 45,940,422.89 | | March 2025 | 1,903,000 | 1.82 | 1.73 | 3,353,903.05 | | April 2025 | 7,711,000 | 2.53 | 1.93 | 17,462,193.77 | | May 2025 | 15,965,500 | 2.69 | 2.47 | 41,277,584.28 | | June 2025 | 19,793,000 | 2.62 | 2.37 | 49,349,266.18 | | **Total** | **91,127,500** | | | **189,733,668.46** | - Some repurchased shares were cancelled on **January 27, 2025**, and **April 9, 2025**[150](index=150&type=chunk)[152](index=152&type=chunk) - As of June 30, 2025, the total number of issued shares was **2,159,709,500**[150](index=150&type=chunk)[152](index=152&type=chunk) [Details of Restricted Share Units Granted Under the RSU Scheme](index=29&type=section&id=Details%20of%20RSUs%20Granted%20Under%20the%20RSU%20Scheme) The company completed six rounds of RSU grants, with the latest (sixth) on March 28, 2025, granting 11,057,500 RSUs to 234 selected individuals at HKD 0.35 per share; some earlier RSUs lapsed due to unmet performance conditions, and as of the report date, trustees held 92,259,825 shares for future RSU grants, representing 4.27% of total issued shares - The company has completed six rounds of RSU grants, with the latest (sixth round) on **March 28, 2025**, granting **11,057,500 RSUs** to **234 selected individuals** at a purchase price of **HKD 0.35** per share[159](index=159&type=chunk)[162](index=162&type=chunk)[311](index=311&type=chunk)[313](index=313&type=chunk) - Some early RSU grants (e.g., fourth and fifth rounds) lapsed due to unmet performance conditions[157](index=157&type=chunk)[158](index=158&type=chunk)[162](index=162&type=chunk) - As of the report date (**August 28, 2025**), the trustee held **92,259,825 shares** for future RSU grants, representing **4.27%** of the total issued shares[164](index=164&type=chunk)[165](index=165&type=chunk) - RSU vesting periods are typically **12 to 48 months** from the grant date, vesting in **four tranches of 25% each**, subject to individual and company performance assessments[170](index=170&type=chunk)[173](index=173&type=chunk)[313](index=313&type=chunk) [Corporate Governance and Compliance](index=34&type=section&id=Corporate%20Governance%20and%20Compliance) In H1 2025, the company largely complied with the Corporate Governance Code, with a deviation where Mr. Zhou Fuyu served as both Chairman and CEO, which the Board deemed beneficial for efficient decision-making during strategic transformation; the Audit Committee reviewed interim results, and the Board resolved not to declare an interim dividend, while director changes included Ms. Wang Yali's appointment to the Nomination Committee and Mr. Chen Chen's re-designation as its Chairman - The company complied with the Corporate Governance Code in H1 2025, but Mr. Zhou Fuyu's dual role as Chairman and CEO deviated from Code Provision C.2.1[177](index=177&type=chunk)[178](index=178&type=chunk)[181](index=181&type=chunk) - The Board believes the dual role facilitates efficient advancement of key strategies and optimizes operational efficiency during the strategic transformation period[178](index=178&type=chunk)[181](index=181&type=chunk) - The Audit Committee reviewed and discussed the interim results and report for the six months ended June 30, 2025[186](index=186&type=chunk)[191](index=191&type=chunk) - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025[187](index=187&type=chunk)[192](index=192&type=chunk) - Changes in directors' information: Ms. Wang Yali was appointed as a member of the Nomination Committee, Mr. Chen Chen was re-designated as Chairman of the Nomination Committee, and Mr. Zhou Fuyu ceased to be Chairman of the Nomination Committee (effective from June 24, 2025)[188](index=188&type=chunk)[189](index=189&type=chunk)[193](index=193&type=chunk) [Financial Statements](index=35&type=section&id=Financial%20Statements) This section presents the interim condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=35&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the unaudited consolidated profit or loss and other comprehensive income for the six months ended June 30, 2025, detailing the company's revenue, costs, profit, and other comprehensive income during the period [Interim Condensed Consolidated Statement of Financial Position](index=36&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides the unaudited consolidated financial position as of June 30, 2025, and December 31, 2024, detailing the company's non-current assets, current assets, current liabilities, non-current liabilities, and equity composition [Interim Condensed Consolidated Statement of Changes in Equity](index=38&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement presents the unaudited consolidated changes in equity for the six months ended June 30, 2025, including opening balances, period movements, and closing balances for share capital, treasury shares, share premium, various reserves, and retained profits [Interim Condensed Consolidated Statement of Cash Flows](index=40&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement presents the unaudited consolidated cash flows for the six months ended June 30, 2025, detailing net cash generated from operating, investing, and financing activities and their impact on cash and cash equivalents [Notes to the Interim Condensed Consolidated Financial Statements](index=44&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides explanatory notes and additional details supporting the interim condensed consolidated financial statements [Corporate and Group Information](index=44&type=section&id=Corporate%20and%20Group%20Information) Zhou Hei Ya International Holdings Company Limited was incorporated in the Cayman Islands on May 13, 2015, and listed on the Main Board of the Hong Kong Stock Exchange on November 11, 2016, primarily engaging in the production, marketing, and retail of braised duck leisure food products in mainland China, with Mr. Zhou Fuyu and Ms. Tang Jianfang as ultimate controlling shareholders - The company was incorporated in the Cayman Islands on **May 13, 2015**, and listed on the Main Board of the Hong Kong Stock Exchange on **November 11, 2016**[205](index=205&type=chunk)[208](index=208&type=chunk) - The Group primarily engages in the production, marketing, and retail of braised duck leisure food products in mainland China[206](index=206&type=chunk)[208](index=208&type=chunk) - The ultimate controlling shareholders are **Mr. Zhou Fuyu** and **Ms. Tang Jianfang**[207](index=207&type=chunk)[208](index=208&type=chunk) [Basis of Preparation and Changes to Accounting Policies](index=45&type=section&id=Basis%20of%20Preparation%20and%20Changes%20to%20Accounting%20Policies) The interim condensed consolidated financial information is prepared in accordance with HKAS 34 and consistent with accounting policies adopted for the annual consolidated financial statements for the year ended December 31, 2024, except for the initial adoption of HKFRS 21 "Lack of Exchangeability," which had no material impact on the current period's financial information - The interim condensed consolidated financial information is prepared in accordance with **Hong Kong Accounting Standard 34**[210](index=210&type=chunk)[213](index=213&type=chunk) - The revised **Hong Kong Financial Reporting Standard 21 "Lack of Exchangeability"** was adopted for the first time, but it had no impact on the interim condensed consolidated financial information[211](index=211&type=chunk)[212](index=212&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) [Operating Segment Information](index=46&type=section&id=Operating%20Segment%20Information) The Group's primary business is the production, marketing, and retail of braised duck leisure food products, constituting a single reportable segment; no geographical information is presented as all revenue and non-current assets originate from mainland China, and no single customer accounts for 10% or more of total revenue - The Group's primary business is the production, marketing, and retail of braised duck leisure food products, with only **one reportable segment**[216](index=216&type=chunk)[219](index=219&type=chunk) - All revenue and non-current assets are derived from mainland China, thus no geographical segment information is presented[217](index=217&type=chunk)[220](index=220&type=chunk) - No single customer's sales reached **10% or more** of total revenue, so no major customer information is presented[218](index=218&type=chunk)[221](index=221&type=chunk) [Revenue, Other Income and Gains, Net](index=47&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains%2C%20Net) In H1 2025, revenue from customer contracts totaled RMB 1,222.6 million, with modified atmosphere packaging products being the largest contributor; other income and gains, net, amounted to RMB 26.5 million, primarily comprising bank deposit interest, structured deposit interest, government grants, and exchange gains Revenue Disaggregation from Contracts with Customers (For the Six Months Ended June 30) | Type of Goods or Services | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Modified atmosphere packaging products | 1,027,536 | 1,072,578 | | Vacuum-packed products | 125,187 | 135,702 | | Retail store franchise fees | 12,914 | 17,099 | | Other products | 56,924 | 34,132 | | **Total** | **1,222,561** | **1,259,511** | Analysis of Other Income and Gains, Net (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest income from bank deposits | 15,697 | 18,387 | | Interest income from structured deposits | 1,703 | 9,070 | | Interest income from other financial assets measured at FVTPL | 1,536 | 316 | | Government grants | 6,798 | 12,375 | | Fair value loss on structured deposits measured at FVTPL | (526) | (4,492) | | Fair value loss on other financial assets measured at FVTPL | (5,000) | (10,000) | | Net loss on disposal of items of property, plant and equipment | (285) | (66) | | Gain on disposal of right-of-use assets | 3,764 | 910 | | Exchange difference gain/(loss) | 740 | (8,521) | | Others | 2,078 | 5,616 | | **Total** | **26,505** | **23,595** | [Profit Before Tax](index=51&type=section&id=Profit%20Before%20Tax) This section details various expenses and income affecting profit before tax, including cost of inventories sold, depreciation, amortization, employee benefit expenses, advertising and promotion, e-commerce and food delivery platform service fees, transportation, finance costs, and various interest income and fair value changes Expenses/Income Affecting Profit Before Tax (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of inventories sold | 338,422 | 383,587 | | Depreciation of property, plant and equipment | 58,686 | 58,104 | | Depreciation of right-of-use assets | 87,327 | 115,872 | | Amortisation of other intangible assets | 2,061 | 3,521 | | Total employee benefit expenses | 233,120 | 271,590 | | Advertising and promotion expenses | 25,379 | 17,548 | | E-commerce and food delivery platform related service and courier fees | 71,300 | 66,570 | | Transportation expenses | 37,824 | 23,780 | | Finance costs | 5,264 | 5,966 | | Share of profits and losses of associates | 3,986 | 33,668 | | Interest income from bank deposits | (15,697) | (18,387) | | Interest income from structured deposits | (1,703) | (9,070) | | Interest income from other financial assets measured at FVTPL | (1,536) | (316) | | Fair value loss on structured deposits measured at FVTPL | 526 | 4,492 | | Fair value loss on other financial assets measured at FVTPL | 5,000 | 10,000 | | Exchange difference loss/(gain) | (740) | 8,521 | | Government grants | (6,798) | (12,375) | [Income Tax](index=52&type=section&id=Income%20Tax) In H1 2025, total income tax expense increased to RMB 38.2 million from RMB 23.9 million in H1 2024; mainland China income tax is accrued at a statutory rate of 25%, and Hong Kong profits tax at 16.5%, with no assessable profits generated in Hong Kong during the period Components of Income Tax Expense (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current - China | 31,624 | 70,643 | | Deferred tax | 6,577 | (46,787) | | **Total tax expense for the period** | **38,201** | **23,856** | - Mainland China income tax is accrued at a statutory rate of **25%**[247](index=247&type=chunk)[249](index=249&type=chunk) - Hong Kong profits tax is accrued at **16.5%**, but no assessable profits were generated in Hong Kong during the period[248](index=248&type=chunk)[249](index=249&type=chunk) [Interim Dividends](index=53&type=section&id=Interim%20Dividends) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[250](index=250&type=chunk)[253](index=253&type=chunk) [Earnings Per Share](index=53&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic and diluted earnings per share were RMB 0.05, a significant increase from RMB 0.01 in H1 2024, calculated based on profit attributable to ordinary equity holders of the parent and the weighted average number of ordinary shares outstanding during the period Earnings Per Share Calculation (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousands/share) | 2024 (RMB thousands/share) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the parent for basic EPS calculation | 107,940 | 32,913 | | Weighted average number of ordinary shares in issue for basic EPS calculation | 2,054,500,587 | 2,248,691,112 | | Dilutive effect of restricted share unit scheme | 6,127,542 | 299,740 | | **Basic earnings per share (RMB)** | **0.05** | **0.01** | | **Diluted earnings per share (RMB)** | **0.05** | **0.01** | [Property, Plant and Equipment](index=55&type=section&id=Property%2C%20Plant%20and%20Equipment) In H1 2025, the Group acquired assets at a cost of RMB 14,509,000 and disposed of property, plant and equipment items with a net book value of RMB 5,681,000 - In H1 2025, the cost of acquired assets was **RMB 14,509,000** (H1 2024: **RMB 48,325,000**)[257](index=257&type=chunk)[259](index=259&type=chunk) - In H1 2025, items of property, plant and equipment with a net book value of **RMB 5,681,000** were disposed of (H1 2024: **RMB 8,238,000**)[257](index=257&type=chunk)[259](index=259&type=chunk) [Leases](index=55&type=section&id=Leases) As a lessee, the Group holds various property lease contracts with terms typically ranging from 15 months to 7 years; as of June 30, 2025, right-of-use assets had a carrying amount of RMB 295,315,000, and lease liabilities were RMB 189,490,000, with total lease-related amounts recognized in profit or loss during the period being RMB 143,522,000 Carrying Amount and Movements of Right-of-Use Assets (As of June 30, 2025) | Item | Leased land (RMB thousands) | Properties (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | Carrying amount at January 1, 2025 | 115,456 | 204,619 | 320,075 | | Additions | – | 57,215 | 57,215 | | Depreciation expense | (1,428) | (86,109) | (87,537) | | Lease term reassessment | – | (9,434) | (9,434) | | Lease modifications | – | 14,996 | 14,996 | | **Carrying amount at June 30, 2025** | **114,028** | **181,287** | **295,315** | Carrying Amount and Movements of Lease Liabilities (As of June 30, 2025) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Carrying amount at January 1 | 214,198 | 282,819 | | New leases | 57,215 | 87,254 | | Interest accretion | 4,935 | 5,656 | | Payments | (88,656) | (125,027) | | Lease modifications | 1,798 | 2,939 | | **Carrying amount at June 30** | **189,490** | **253,641** | | Current portion | 132,067 | 173,680 | | Non-current portion | 57,423 | 79,961 | - During the period, total lease-related amounts recognized in profit or loss were **RMB 143,522,000** (H1 2024: **RMB 175,860,000**)[271](index=271&type=chunk)[274](index=274&type=chunk) [Investment in Associates](index=58&type=section&id=Investment%20in%20Associates) As of June 30, 2025, the Group's investment in associates, measured at share of net assets, amounted to RMB 612,237,000, including key associates such as Shenzhen Tiantu Xingnan Investment Partnership, Shanghai Zhiyi Enterprise Development, Hainan Tiantu Xingzhou Venture Capital Partnership, Hubei Woju Food, ACCF Ginkgo Capital I L.P., and Sichuan Zhouheiya Food Technology - As of June 30, 2025, investment in associates, measured at share of net assets, was **RMB 612,237,000** (December 31, 2024: **RMB 627,848,000**)[272](index=272&type=chunk)[273](index=273&type=chunk) Details of Principal Associates | Name | Place of incorporation | Ownership interest | Percentage of voting rights | Share of profit | Principal activities | | :--- | :--- | :--- | :--- | :--- | :--- | | Shenzhen Tiantu Xingnan Investment Partnership | China | 24.99% | 40.00% | 24.99% | Investment fund | | Shanghai Zhiyi Enterprise Development Co., Ltd. | China | 49.90% | 49.90% | 49.90% | Investment holding | | Hainan Tiantu Xingzhou Venture Capital Partnership | China | 31.64% | 33.33% | 31.64% | Investment fund | | Hubei Woju Food Co., Ltd. | China | 20.00% | 20.00% | 20.00% | Warehousing and leasing | | ACCF Ginkgo Capital I L.P. | Cayman Islands | 39.47% | 33.33% | 39.47% | Investment fund | | Sichuan Zhouheiya Food Technology Co., Ltd. | China | 44.00% | 44.00% | 44.00% | Investment holding | [Inventories](index=60&type=section&id=Inventories) As of June 30, 2025, the Group's total inventories amounted to RMB 233,283,000, primarily consisting of raw materials Composition of Inventories (As of June 30, 2025) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Raw materials | 186,084 | 166,704 | | Work in progress | 6,449 | 5,894 | | Finished goods | 20,770 | 33,076 | | Packaging materials | 19,980 | 21,179 | | **Total** | **233,283** | **226,853** | [Trade Receivables](index=60&type=section&id=Trade%20Receivables) As of June 30, 2025, net trade receivables were RMB 91,973,000, with most due within three months; total trade receivables were RMB 109,260,000, with an impairment allowance of RMB 17,287,000 Ageing Analysis of Trade Receivables (As of June 30, 2025) | Ageing | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 76,943 | 41,419 | | 3 to 12 months | 4,908 | 26,443 | | Over 1 year | 10,122 | 63 | | **Total** | **91,973** | **67,925** | - Total trade receivables were **RMB 109,260,000**, with an impairment allowance of **RMB 17,287,000**[280](index=280&type=chunk) [Prepayments, Other Receivables and Other Assets](index=61&type=section&id=Prepayments%2C%20Other%20Receivables%20and%20Other%20Assets) As of June 30, 2025, total prepayments, other receivables, and other assets amounted to RMB 162,825,000, primarily comprising prepaid property rentals, advances to suppliers, and deductible input VAT Composition of Prepayments, Other Receivables and Other Assets (As of June 30, 2025) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Prepaid property rentals | 23,431 | 26,469 | | Advances to suppliers | 68,762 | 31,720 | | Deductible input VAT | 58,844 | 57,282 | | Others | 11,788 | 14,530 | | **Total** | **162,825** | **130,001** | [Cash and Bank Balances](index=61&type=section&id=Cash%20and%20Bank%20Balances) As of June 30, 2025, total cash and bank balances were RMB 877,517,000, including RMB 500,000,000 in time deposits, with cash and cash equivalents amounting to RMB 437,517,000, and most balances denominated in RMB Composition of Cash and Bank Balances (As of June 30, 2025) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash and bank on hand and demand deposits | 377,517 | 483,257 | | Time deposits | 500,000 | 770,900 | | **Total** | **877,517** | **1,254,157** | | Less: Time deposits with original maturity over three months | (440,000) | (448,701) | | **Cash and cash equivalents** | **437,517** | **805,456** | - As of the end of the reporting period, cash and bank balances and time deposits denominated in RMB amounted to **RMB 774,750,000**[285](index=285&type=chunk)[286](index=286&type=chunk) [Trade Payables](index=62&type=section&id=Trade%20Payables) As of June 30, 2025, total unpaid trade payables were RMB 85,849,000, with most due within three months, and these trade payables are non-interest bearing Ageing Analysis of Trade Payables (As of June 30, 2025) | Ageing | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 83,464 | 52,628 | | 3 to 6 months | 1,078 | 2,021 | | 6 to 12 months | 4 | 1,234 | | Over 12 months | 1,303 | 1,177 | | **Total** | **85,849** | **57,060** | - Trade payables are non-interest bearing[294](index=294&type=chunk) [Share Capital](index=63&type=section&id=Share%20Capital) As of June 30, 2025, the company's authorized share capital was 50,000,000,000 shares with a par value of USD 0.000001 each; issued and fully paid share capital was 2,159,709,500 shares, amounting to RMB 14,000, with share repurchases, cancellations, and exercise of share awards occurring during the period Overview of Share Capital Movements (As of June 30, 2025) | Item | Number of issued shares | Share capital (RMB thousands) | Treasury shares (RMB thousands) | | :--- | :--- | :--- | :--- | | At January 1, 2025 (audited) | 2,267,985,500 | 15 | (458,592) | | Shares repurchased | – | – | (174,987) | | Shares cancelled | (108,276,000) | (1) | 167,246 | | Exercise of share-based awards | – | – | 11,267 | | **At June 30, 2025 (unaudited)** | **2,159,709,500** | **14** | **(455,066)** | [Restricted Share Units Scheme Details](index=64&type=section&id=Restricted%20Share%20Units%20Scheme%20Details) This section details the company's Restricted Share Unit Scheme, including historical grant quantities, grantees, purchase prices, and vesting conditions; as of June 30, 2025, the total shares involved represented 1.76% of the company's issued shares, and the Group recognized equity-settled share-based payment expenses of RMB 1,920,000 in H1 2025 - As of June 30, 2025, ordinary shares of the company held by the scheme trustee were **104,438,225 shares**[298](index=298&type=chunk)[302](index=302&type=chunk) - As of June 30, 2025, the total number of shares involved represented **1.76%** of the company's issued shares[312](index=312&type=chunk)[313](index=313&type=chunk) - In H1 2025, the Group recognized equity-settled share-based payment expenses of **RMB 1,920,000**[314](index=314&type=chunk)[316](index=316&type=chunk) - RSU vesting conditions typically involve **25% vesting annually over four years**, subject to individual grantee and company performance[313](index=313&type=chunk) [Commitments](index=68&type=section&id=Commitments) As of June 30, 2025, the Group's total contracted but unprovided capital commitments amounted to RMB 37,175,000, primarily for buildings, software, and plant and machinery; additionally, uncalled capital contributions to associates totaled RMB 429,437,000 Capital Commitments (As of June 30, 2025) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Software | 2,386 | 2,386 | | Buildings | 32,977 | 44,892 | | Plant and machinery | 1,812 | 2,966 | | **Total** | **37,175** | **50,244** | - Uncalled capital contributions to associates amounted to **RMB 429,437,000** (December 31, 2024: **RMB 416,962,000**)[320](index=320&type=chunk) [Related Party Transactions](index=69&type=section&id=Related%20Party%20Transactions) In H1 2025, the Group engaged in lease payment transactions with related parties, including rent paid to ultimate controlling shareholder Mr. Zhou Fuyu and Zhouheiya Food, a subsidiary controlled by the controlling shareholder; additionally, there was no interest income from related party Hubei Woju Food Co., Ltd Related Party Transactions (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Lease payments - Mr. Zhou Fuyu | 407 | 244 | | Lease payments - Zhouheiya Food | 2,144 | – | | **Total lease payments** | **2,552** | **244** | | Interest income - Hubei Woju | – | 180 | - Total remuneration for key management personnel was **RMB 4,776,000** (H1 2024: **RMB 5,345,000**)[332](index=332&type=chunk) [Financial Instruments by Category](index=71&type=section&id=Financial%20Instruments%20by%20Category) This section presents the carrying amounts of the Group's financial assets and liabilities as of June 30, 2025, and December 31, 2024, categorized by those mandatorily designated at fair value through profit or loss, measured at amortized cost, and equity investments at fair value through other comprehensive income Financial Assets by Category (As of June 30, 2025) | Item | Financial assets at FVTPL (RMB thousands) | Financial assets measured at amortized cost (RMB thousands) | Equity investments at FVOCI (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Trade receivables | – | 91,973 | – | 91,973 | | Financial assets included in prepayments, other receivables and other assets | – | 345,078 | – | 345,078 | | Lease deposits | – | 83,449 | – | 83,449 | | Structured deposits | 120,208 | – | – | 120,208 | | Other financial assets at FVTPL | 92,059 | – | – | 92,059 | | Cash and bank balances | – | 877,517 | – | 877,517 | | Equity investments designated at FVOCI | – | – | 2,500 | 2,500 | | **Total** | **212,267** | **1,398,017** | **2,500** | **1,612,784** | Financial Liabilities by Category (As of June 30, 2025) | Item | Financial liabilities at FVTPL (RMB thousands) | Financial liabilities measured at amortized cost (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | Trade payables | – | 85,849 | 85,849 | | Financial liabilities included in other payables and accrued expenses | – | 130,805 | 130,805 | | Interest-bearing bank borrowings | – | 84,395 | 84,395 | | Lease liabilities | – | 189,490 | 189,490 | | **Total** | **–** | **490,539** | **490,539** | [Fair Value and Fair Value Hierarchy of Financial Instruments](index=74&type=section&id=Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) This section provides the fair value and hierarchy of the Group's financial instruments; structured deposits and other financial assets measured at fair value through profit or loss are valued using Level 2 (significant observable inputs) and Level 3 (significant unobservable inputs), and management assesses that the carrying amounts of most financial instruments approximate their fair values due to their short-term maturities Assets Measured at Fair Value (As of June 30, 2025) | Item | Significant observable inputs (Level 2) (RMB thousands) | Significant unobservable inputs (Level 3) (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | Structured deposits measured at fair value | 120,208 | – | 120,208 | | Other financial assets at FVTPL | 10,059 | 82,000 | 92,059 | | Equity investments designated at FVOCI | – | 2,500 | 2,500 | - Management has assessed that the fair values of financial instruments such as cash and bank balances, trade receivables, lease deposits, interest-bearing bank borrowings, and trade payables approximate their carrying amounts, primarily due to their short-term maturities[344](index=344&type=chunk)[345](index=345&type=chunk) - The Group's investments in structured deposits and wealth management products are fair valued using discounted cash flow valuation models, with private equity funds also employing similar models[347](index=347&type=chunk)[348](index=348&type=chunk)[351](index=351&type=chunk)[352](index=352&type=chunk) [Events After the Reporting Period](index=77&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events occurred for the Group from June 30, 2025, until August 28, 2025 (the date of this report) - No significant events occurred for the Group from June 30, 2025, until August 28, 2025 (the date of this report)[359](index=359&type=chunk)[360](index=360&type=chunk)

[Company Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides fundamental company information, including governance structure, key personnel, and essential contact and listing details - The company's board of directors includes executive directors Mr. Li Baoshan (Chairman), Mr. Liu Zhigang, Mr. Luo Wei; non-executive directors Mr. Miao Wenbin, Mr. Ma Fulin, Ms. Xu Lijie; and independent non-executive directors Dr. Xie Xiaodong, Mr. Zhang Haogang, Dr. Zhu Qing[5](index=5&type=chunk) - The Audit Committee comprises Mr. Zhang Haogang (Chairman), Mr. Miao Wenbin, and Dr. Zhu Qing[5](index=5&type=chunk) - The company's registered office and headquarters are located at Room 202, 2nd Floor, No. 15 Shuangliang Road, Ligang Street, Jiangyin City, Jiangsu Province, China, with its principal place of business in Hong Kong at Unit B, 17th Floor, United Centre, Admiralty[5](index=5&type=chunk) - The company's stock code is **2481**, and its auditor is PricewaterhouseCoopers[7](index=7&type=chunk) [Financial Performance Summary](index=5&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E6%91%98%E8%A6%81) This section outlines key financial performance metrics for the six months ended June 30, 2025, including revenue, profit, and per-share earnings, with comparative data Financial Performance Summary for the Six Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (Approx. %) | | :--- | :--- | :--- | :--- | | Revenue | 759,571 | 833,999 | -8.9% | | Profit and Total Comprehensive Income Attributable to Owners of the Company | 111,741 | 112,287 | -0.5% | | Earnings Per Share (Basic and Diluted) Attributable to Owners of the Company | 0.37 | 0.37 | 0% | Financial Position Summary as of June 30, 2025 | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (Approx. %) | | :--- | :--- | :--- | :--- | | Total Assets | 5,519,318 | 5,966,668 | -7.5% | | Equity Attributable to Owners of the Company | 1,237,002 | 1,174,722 | +5.3% | | Total Liabilities | 3,991,268 | 4,537,820 | -12.0% | [Management Discussion and Analysis](index=6&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) This section provides comprehensive insights into the company's operational performance, financial health, industry dynamics, and strategic outlook for the reporting period [Industry Review](index=6&type=section&id=%E8%A1%8C%E6%A5%AD%E5%9B%9E%E9%A1%A7) This section reviews the growth of China's heating and energy management industries, emphasizing the impact of clean heating trends and supportive government policies - China's total heating service area grew from **8.8 billion square meters in 2018** to **11.5 billion square meters in 2023**, with a compound annual growth rate of **5.5%**, projected to reach **13.8 billion square meters by 2027**[11](index=11&type=chunk) - Government policies encourage clean heating, promoting industrial waste heat and geothermal energy to align with carbon peak and carbon neutrality goals[11](index=11&type=chunk) - China's heating facility engineering construction service market is projected to grow to **RMB 70.8 billion by 2027**, driven by upgrades to existing facilities, new energy-saving construction, and government policy support[12](index=12&type=chunk) - China's EMC (Energy Management Contract) industry is developing rapidly, with government incentives including tax breaks, interest subsidies, and financial rewards to encourage energy saving[13](index=13&type=chunk) [Business Review](index=6&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) This section details the company's business performance, including revenue breakdown by service type and notable awards received during the reporting period - The company is one of China's leading non-state-owned inter-provincial heating service providers, establishing a leading position in the "Three Norths" region heating service industry[14](index=14&type=chunk) - During the reporting period, total revenue was approximately **RMB 759.6 million**, a year-on-year decrease of **8.9%**; profit attributable to owners of the company was approximately **RMB 111.7 million**, a year-on-year decrease of **0.5%**[14](index=14&type=chunk) - Heating service revenue was approximately **RMB 723.2 million**, a year-on-year increase of **3.8%**, primarily due to an increase in heating area, with total actual heating service area increasing by **3.5%** to approximately **50.2 million square meters**[16](index=16&type=chunk) Revenue from Heating and Heat Transmission and Distribution Customers (by Customer Type) | Customer Type | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Residential | 342,745 | 59.8% | 331,490 | 60.1% | | Non-residential | 230,369 | 40.2% | 219,913 | 39.9% | | Total | 573,114 | 100.0% | 551,403 | 100.0% | - Revenue from heating-related engineering construction services was approximately **RMB 23.3 million**, a significant year-on-year decrease of **80.9%**, mainly due to fewer pipeline network construction and heat exchange station projects[22](index=22&type=chunk) - EMC service revenue was **RMB 1.5 million**, remaining flat compared to the same period[24](index=24&type=chunk) - Other business revenue was approximately **RMB 11.6 million**, a year-on-year decrease of **15.9%**, primarily due to a decline in heat transmission service revenue[25](index=25&type=chunk) - The company and its subsidiaries received multiple honors and awards during the reporting period, including "2024 Outstanding Overseas Listed Company" and "2024 Outstanding Contribution Enterprise to County Economic Development"[26](index=26&type=chunk) [Financial Review](index=9&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section analyzes key financial metrics, including revenue, costs, profits, and expenses, explaining the drivers behind changes in the company's financial performance Comparison of Consolidated Statement of Comprehensive Income for the Six Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 759,571 | 833,999 | | Cost of sales | (520,005) | (600,205) | | Gross profit | 239,566 | 233,794 | | Operating profit | 184,260 | 199,175 | | Profit before income tax | 175,915 | 190,581 | | Profit and total comprehensive income for the period | 148,664 | 154,654 | | Profit attributable to owners of the Company | 111,741 | 112,287 | - Total revenue decreased by **8.9%** year-on-year to **RMB 759.6 million**, primarily due to a decline in engineering construction service revenue[31](index=31&type=chunk) - Cost of sales decreased by **13.4%** year-on-year to **RMB 520.0 million**, mainly due to a reduction in engineering construction services[32](index=32&type=chunk) - Gross profit increased by **2.5%** year-on-year to **RMB 239.6 million**, with gross margin improving from **28.0% to 31.5%**, primarily benefiting from cost control measures and a reduction in the scale of engineering construction services operations[34](index=34&type=chunk)[35](index=35&type=chunk) - Administrative expenses increased by **3.1%** year-on-year to **RMB 72.4 million**, mainly due to increased employee benefit expenses[36](index=36&type=chunk) - Reversal of impairment losses on financial assets and contract assets was approximately **RMB 3.4 million**, a significant decrease from **RMB 19.4 million** in the same period last year, primarily due to fewer bad debt reversals[37](index=37&type=chunk) - Other income decreased by **4.3%** year-on-year to **RMB 17.6 million**, mainly due to reduced government grants[38](index=38&type=chunk) - Other losses, net, increased by **77.3%** year-on-year to **RMB 3.9 million**, primarily due to increased fair value losses on investment properties[40](index=40&type=chunk) - Finance income decreased by **25.7%** year-on-year to **RMB 7.5 million**, mainly due to lower bank deposit interest income; finance costs decreased by **21.0%** year-on-year to **RMB 18.4 million**, primarily due to reduced borrowings[41](index=41&type=chunk) - Profit for the period decreased by **3.9%** year-on-year to **RMB 148.7 million**, mainly due to a decrease in the reversal of impairment losses on financial assets and contract assets[43](index=43&type=chunk) - Profit attributable to owners of the company decreased by **0.5%** year-on-year to **RMB 111.7 million**, consistent with the trend of reduced profit for the period[44](index=44&type=chunk) [Liquidity and Financial Resources](index=12&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) This section details the company's liquidity, leverage, borrowing profile, foreign exchange risk, capital commitments, and asset pledges Cash and Cash Equivalents | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | 309,100 | 645,700 | | Restricted cash | 31,000 | 74,200 | - Current assets were approximately **RMB 1,074.2 million**, current liabilities were approximately **RMB 1,511.9 million**, resulting in a current ratio of approximately **0.7 times** (December 31, 2024: 0.8 times)[45](index=45&type=chunk) - The gearing ratio (total borrowings divided by total equity) was **0.5** as of June 30, 2025, consistent with December 31, 2024[46](index=46&type=chunk) - Total bank borrowings were approximately **RMB 695.9 million**, with approximately **RMB 338.6 million** repayable within one year; the weighted average effective interest rate was **4.23% per annum** (December 31, 2024: 4.43%)[48](index=48&type=chunk)[50](index=50&type=chunk) - Some bank borrowings are guaranteed by the company and secured by trade receivables or intangible assets[49](index=49&type=chunk) - Capital commitments were approximately **RMB 32.3 million**, primarily related to intangible assets for expanding existing and preparing new heating service projects[52](index=52&type=chunk) - There were no significant investments, acquisitions, or disposals; intangible assets (approximately **RMB 732.0 million**) and trade receivables (approximately **RMB 137.9 million**) were pledged as collateral for bank borrowings[53](index=53&type=chunk)[54](index=54&type=chunk) - The Group has no significant contingent liabilities[55](index=55&type=chunk) - The company's financial management policy is to invest surplus cash reserves in low-risk, short-term financial products to generate income, managed by professionals[56](index=56&type=chunk) [Employment, Remuneration Policies and Training](index=15&type=section&id=%E5%83%B1%E5%82%AD%E3%80%81%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96%E5%8F%8A%E5%9F%B9%E8%A8%93) This section details the company's employee numbers, welfare expenses, remuneration policies, and training initiatives, highlighting its commitment to staff development - As of June 30, 2025, the Group had **830 employees**, with total employee benefit expenses of approximately **RMB 46.6 million**[58](index=58&type=chunk) - Remuneration packages include basic salary, performance-based pay, and allowances, determined by qualifications, expertise, and experience[58](index=58&type=chunk) - The company complies with China's social welfare regulations, providing employees with benefits such as pension, medical, unemployment, work injury, maternity insurance, and housing provident fund[58](index=58&type=chunk) - The company invests in continuous education and training programs for management and general staff, focusing on operations, technical knowledge, workplace safety, and environmental protection[58](index=58&type=chunk) [Quantitative and Qualitative Disclosures About Financial Risks](index=15&type=section&id=%E6%9C%89%E9%97%9C%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%9A%84%E9%87%8F%E5%8C%96%E5%8F%8A%E5%AE%9A%E6%80%A7%E6%8A%AB%E9%9C%B2) This section outlines the company's financial risk exposures and management strategies, with detailed disclosures referenced elsewhere - The Group's operations face market risk, credit risk, and liquidity risk, with risk management plans designed to mitigate financial market unpredictability and minimize negative impacts[59](index=59&type=chunk) - There have been no significant changes in risk factors and management policies since the year ended December 31, 2024; detailed information can be found in Note 5 of the interim report[59](index=59&type=chunk) [Outlook](index=15&type=section&id=%E5%89%8D%E6%99%AF) This section outlines the company's strategic plans for the second half of 2025, focusing on business expansion, operational efficiency, digital transformation, and carbon-neutral heating technology R&D - In the second half of 2025, the company will adopt a "scale + quality" dual-driven strategy, focusing on expanding new heating services (including steam heating) and steadily advancing project implementation in key provinces of North China[60](index=60&type=chunk) - Regionally, the focus will be on the Bohai Rim Economic Circle (Liaodong Peninsula, Shandong Peninsula, and Beijing-Tianjin-Hebei region), while also prioritizing Inner Mongolia and Shanxi as key development areas[60](index=60&type=chunk) - Operationally, the company will optimize diversified heat sources (including waste heat recovery), promote clean operations and intelligent dispatching, reduce pipeline energy loss, and enhance service quality and operational efficiency[60](index=60&type=chunk) - The company will continue to improve its digital heating service platform, establish an R&D team to enhance functional development, and achieve optimized management, intelligence, and safety[61](index=61&type=chunk) - Operating a heating technology center within the Carbon Neutral Central Research Institute, the company will actively research new energy heating service applications, formulate carbon-neutral heating technology development plans, and promote the adoption of new energy solutions[63](index=63&type=chunk) [Events After the Reporting Period](index=16&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) This section confirms no significant events impacting financial position or operations occurred between the reporting period end and the interim report publication date - The Board is not aware of any significant events after the reporting period and up to the date of this interim report that would have a material impact on the Group's financial position or operations[64](index=64&type=chunk) [Future Material Investments and Plans for Capital Assets](index=16&type=section&id=%E6%9C%AA%E4%BE%86%E7%9A%84%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E8%A8%88%E5%8A%83) This section confirms no future material investments or new capital asset plans as of the interim report date - As of the date of this interim report, the company has no plans for any future material investments or new capital assets[65](index=65&type=chunk) [Other Information](index=17&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section provides supplementary information on corporate governance, shareholding, securities trading, dividend policy, use of proceeds, and significant legal matters [Interests and Short Positions of Directors, Supervisors and Chief Executive in Shares, Underlying Shares and Debentures of the Company or Any Associated Corporation](index=17&type=section&id=%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%88%96%E5%85%B6%E4%BB%BB%E4%BD%95%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E7%9A%84%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E4%B8%AD%E6%93%81%E6%9C%89%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) This section discloses the interests and short positions of directors, supervisors, and the chief executive in the company's shares and debentures as of June 30, 2025 Shareholdings of Directors, Supervisors and Chief Executive | Name | Position | Class of Shares | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Li Baoshan | Executive Director | H Shares | Beneficial Owner | 6,000,000 | 1.99% | | Mr. Miao Wenbin | Non-executive Director | H Shares | Other Interest | 201,000,000 | 66.66% | | Mr. Ma Fulin | Non-executive Director | H Shares | Other Interest | 201,000,000 | 66.66% | | Mr. Ma Peilin | Supervisor | H Shares | Other Interest | 201,000,000 | 66.66% | | Mr. Chen Zhen | Supervisor | H Shares | Spouse's Interest | 201,000,000 | 66.66% | - Hongda Group Co., Ltd. holds **201,000,000 H shares**, wholly owned by Shuangliang Technology, which is held by individual shareholders including Mr. Miao Wenbin, Mr. Ma Fulin, and Mr. Ma Peilin, who are collectively deemed controlling shareholders with **66.66% equity interest**[68](index=68&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=18&type=section&id=%E8%91%A3%E4%BA%8B%E8%AA%8D%E8%B3%BC%E8%82%A1%E4%BB%BD%E6%88%96%E5%82%B5%E6%AC%8A%E8%AD%89%E7%9A%84%E6%AC%8A%E5%88%A9) This section confirms no directors, their spouses, or minor children were granted or exercised rights to acquire company shares or debentures during the reporting period - During the reporting period, no director or their respective spouse or children under the age of 18 were granted any rights to acquire benefits by subscribing for shares or debentures of the company, nor did they exercise such rights[70](index=70&type=chunk) [Interests and/or Short Positions of Substantial Shareholders in Shares and Underlying Shares](index=18&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E3%81%84%E6%88%96%E6%B7%A1%E5%80%89) This section discloses substantial shareholders' interests and short positions in the company's shares and underlying shares as of June 30, 2025 Shareholdings of Substantial Shareholders | Name/Entity | Class of Shares | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Hongda Group Co., Ltd. | H Shares | Beneficial Owner | 201,000,000 | 66.66% | | Shuangliang Technology | H Shares | Interest in Controlled Corporation | 201,000,000 | 66.66% | | Hong Kong Star One Investment Management Co., Ltd. | H Shares | Beneficial Owner | 15,660,000 | 5.19% | | Ms. Zhou Xiaoping | H Shares | Interest in Controlled Corporation | 15,660,000 | 5.19% | | Jianggang International Investment Co., Ltd. | H Shares | Beneficial Owner | 14,823,000 | 4.91% | | Jiangyin State-owned Capital Holding Group Financial Investment Co., Ltd. | H Shares | Interest in Controlled Corporation | 14,823,000 | 4.91% | | Jiangyin State-owned Capital Holding (Group) Co., Ltd. | H Shares | Interest in Controlled Corporation | 14,823,000 | 4.91% | - Hongda Group Co., Ltd., Shuangliang Technology, and individual shareholders (Mr. Miao Shuangda, Mr. Miao Wenbin, Mr. Jiang Rongfang, Mr. Ma Peilin, Mr. Ma Fulin, Mr. Miao Zhiqiang, Mr. Miao Heida, and Ms. Miao Shuya) are collectively deemed a group of controlling shareholders of the company, indirectly and jointly holding **201,000,000 H shares**[74](index=74&type=chunk)[79](index=79&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=20&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) This section confirms no purchase, sale, or redemption of listed securities by the company or its subsidiaries, and no treasury shares held during the reporting period - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and no treasury shares were held as of June 30, 2025[77](index=77&type=chunk) [Interim Dividend](index=20&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E5%88%A9) This section confirms no interim dividends were declared or paid by the company during the reporting period - During the reporting period, the company did not declare or pay any interim dividends (same period: nil)[78](index=78&type=chunk) [Corporate Governance Practices](index=21&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) This section confirms the company's adherence to the Corporate Governance Code, with continuous review and enhancement of internal controls - The company has adopted the Corporate Governance Code as its own corporate governance code and complied with all its principles and code provisions during the reporting period[80](index=80&type=chunk)[81](index=81&type=chunk) - The company continuously reviews and strengthens internal controls and procedures to adapt to regulatory changes and best practice developments[80](index=80&type=chunk) [Compliance with the Model Code for Securities Transactions](index=21&type=section&id=%E9%81%B5%E5%AE%88%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E4%B9%8B%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) This section confirms compliance with a securities transaction code for directors and supervisors, no less stringent than the Model Code - The company has adopted a code of conduct for securities transactions by directors and supervisors, with terms no less stringent than the Model Code, and all directors and supervisors have confirmed compliance with it[82](index=82&type=chunk) [Directors' Responsibilities for Financial Statements](index=21&type=section&id=%E8%91%A3%E4%BA%8B%E5%B0%B1%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E6%89%80%E6%89%BF%E6%93%94%E7%9A%84%E8%B2%AC%E4%BB%BB) This section clarifies directors' responsibilities for preparing and timely publishing the Group's financial statements in compliance with regulations and accounting standards - The directors confirm their responsibility for preparing the Group's financial statements and accounts, ensuring compliance with relevant regulations and applicable accounting standards, and timely publication by the company[83](index=83&type=chunk) [Changes in Information of Directors, Supervisors and Senior Management](index=21&type=section&id=%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E5%8F%8A%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E4%BA%BA%E5%93%A1%E8%B3%87%E6%96%99%E4%B9%8B%E8%AE%8A%E6%9B%B4) This section discloses changes in directors, supervisors, and senior management information, primarily Nomination Committee member adjustments, during the reporting period - Mr. Li Baoshan ceased to be the Chairman and a member of the Nomination Committee; Dr. Zhu Qing was appointed as the Chairman, and Ms. Xu Lijie was appointed as a member of the Nomination Committee, effective August 22, 2025[87](index=87&type=chunk) [Audit Committee and Review of Interim Financial Information](index=21&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E5%8F%8A%E5%AF%A9%E9%96%B1%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) This section details the Audit Committee's composition and review of interim financial information, confirming compliance with accounting standards and adequate disclosure - The Audit Committee comprises two independent non-executive directors (Mr. Zhang Haogang, Dr. Zhu Qing) and one non-executive director (Mr. Miao Wenbin)[85](index=85&type=chunk) - The Audit Committee has reviewed the Group's unaudited interim results for the reporting period, deeming them prepared in accordance with applicable accounting standards and relevant requirements, with adequate disclosure[85](index=85&type=chunk) [Change in Use of Proceeds from Listing](index=22&type=section&id=%E8%AE%8A%E6%9B%B4%E4%B8%8A%E5%B8%82%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) This section discloses the reallocation of unused listing proceeds from the "Xinmi Heating Project" to the "Baotou Project Construction," detailing the rationale and anticipated benefits - The company decided to reallocate the unused portion of net proceeds originally designated for the "Xinmi Heating Preparation and Expansion Project" to the "Baotou Project Construction"[88](index=88&type=chunk) Comparison of Changes in Use of Proceeds from Listing | Use of Proceeds | Planned Allocation Before Revision (RMB millions) | Planned Allocation After Revision (RMB millions) | Amount Utilized as of June 30, 2025 (RMB millions) | Unutilized Amount After Reallocation (RMB millions) | | :--- | :--- | :--- | :--- | :--- | | Lanzhou Peak Shaving Boiler Construction | 85.3 | 85.3 | 42.3 | 43.0 | | Xinmi Heating Preparation and Expansion Project | 68.2 | 18.7 | 18.7 | — | | Baotou Project Construction | — | 49.5 | — | 49.5 | | Working Capital and Other General Corporate Purposes | 17.1 | 17.1 | 17.1 | — | | Total | 170.6 | 170.6 | 78.1 | 92.5 | - The primary reasons for the change are that the Baotou project is approaching a significant payment milestone, and the Xinmi project's secondary transmission and distribution pipeline network is largely complete with contingency funds available[91](index=91&type=chunk)[93](index=93&type=chunk) - The Board believes this change will enable the company to more effectively deploy financial resources, aligning with the Group's overall business strategy and the best interests of shareholders[94](index=94&type=chunk) [Material Litigation](index=24&type=section&id=%E9%87%8D%E5%A4%A7%E8%A8%B4%E8%A8%9F) This section confirms no material litigation, arbitration, or administrative proceedings significantly impacting the company's financial position or operating results as of June 30, 2025 - As of June 30, 2025, the company was not involved in any material litigation, arbitration, or administrative proceedings that would have a significant adverse impact on its financial position or operating results[95](index=95&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=25&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E8%A1%A8) This table presents the unaudited consolidated statement of comprehensive income for the six months ended June 30, 2025, detailing revenue, costs, profits, and tax expenses with comparative figures Interim Condensed Consolidated Statement of Comprehensive Income (For the Six Months Ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 759,571 | 833,999 | | Cost of sales | (520,005) | (600,205) | | Gross profit | 239,566 | 233,794 | | Administrative expenses | (72,427) | (70,229) | | Reversal of impairment losses on financial assets and contract assets | 3,441 | 19,411 | | Other income | 17,568 | 18,446 | | Other losses — net | (3,888) | (2,247) | | Operating profit | 184,260 | 199,175 | | Finance income | 7,481 | 10,077 | | Finance costs | (18,432) | (23,250) | | Finance costs — net | (10,951) | (13,173) | | Share of profit of associates accounted for using the equity method | 2,606 | 4,579 | | Profit before income tax | 175,915 | 190,581 | | Income tax expense | (27,251) | (35,927) | | Profit and total comprehensive income for the period | 148,664 | 154,654 | | Profit attributable to owners of the Company | 111,741 | 112,287 | | Non-controlling interests | 36,922 | 42,367 | | Basic and diluted earnings per share (RMB) | 0.37 | 0.37 | [Interim Condensed Consolidated Statement of Financial Position](index=26&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This table presents the unaudited consolidated statement of financial position as of June 30, 2025, detailing assets, equity, and liabilities with comparative audited data Interim Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **ASSETS** | | | | Non-current assets | 4,445,093 | 4,496,680 | | Current assets | 1,074,225 | 1,469,988 | | **TOTAL ASSETS** | **5,519,318** | **5,966,668** | | **EQUITY** | | | | Equity attributable to owners of the Company | 1,237,002 | 1,174,722 | | Non-controlling interests | 291,048 | 254,126 | | **TOTAL EQUITY** | **1,528,049** | **1,428,848** | | **LIABILITIES** | | | | Non-current liabilities | 2,479,404 | 2,624,658 | | Current liabilities | 1,511,864 | 1,913,162 | | **TOTAL LIABILITIES** | **3,991,268** | **4,537,820** | | **TOTAL EQUITY AND LIABILITIES** | **5,519,318** | **5,966,668** | [Interim Condensed Consolidated Statement of Changes in Equity](index=28&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) This table presents the unaudited consolidated statement of changes in equity for the six months ended June 30, 2025, detailing movements in share capital, reserves, retained earnings, and non-controlling interests Interim Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended June 30) | Metric | Share capital (RMB thousands) | Other reserves (RMB thousands) | Retained earnings (RMB thousands) | Total (RMB thousands) | Non-controlling interests (RMB thousands) | Total equity (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Balance at January 1, 2025** | 301,600 | 391,499 | 481,623 | 1,174,722 | 254,126 | 1,428,848 | | Profit for the period | — | — | 111,741 | 111,741 | 36,922 | 148,663 | | Total comprehensive income | — | — | 111,741 | 111,741 | 36,922 | 148,663 | | Dividends | — | — | (49,462) | (49,462) | — | (49,462) | | **Balance at June 30, 2025** | 301,600 | 391,499 | 543,902 | 1,237,001 | 291,048 | 1,528,049 | | **Balance at January 1, 2024** | 301,600 | 354,800 | 399,408 | 1,055,808 | 243,197 | 1,299,005 | | Profit for the period | — | — | 112,287 | 112,287 | 42,367 | 154,654 | | Total comprehensive income | — | — | 112,287 | 112,287 | 42,367 | 154,654 | | Dividends | — | — | (45,240) | (45,240) | (71,500) | (116,740) | | **Balance at June 30, 2024** | 301,600 | 354,800 | 466,455 | 1,122,855 | 223,228 | 1,346,083 | [Interim Condensed Consolidated Statement of Cash Flows](index=29&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) This table presents the unaudited consolidated statement of cash flows for the six months ended June 30, 2025, detailing cash flows from operating, investing, and financing activities, and ending cash balances Interim Condensed Consolidated Statement of Cash Flows (For the Six Months Ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash (used in) / generated from operating activities | (138,796) | (154,772) | | Net cash used in investing activities | (95,651) | (134,209) | | Net cash used in financing activities | (102,142) | (78,177) | | Net decrease in cash and cash equivalents | (336,590) | (367,158) | | Cash and cash equivalents at beginning of period | 645,680 | 713,175 | | Cash and cash equivalents at end of period | 309,090 | 346,017 | [Notes to the Interim Financial Information](index=30&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) This section provides detailed notes to the interim condensed consolidated financial information, covering accounting policies, estimates, risk management, and specific financial statement line items [1 General Information](index=30&type=section&id=1%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) This section provides general information about Huiju Technology Co., Ltd., including its establishment, business, listing, controlling shareholder, and financial reporting details - Huiju Technology Co., Ltd. was established in China on **September 3, 2010**, primarily engaged in heating and related services[108](index=108&type=chunk) - The company's H shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on **July 10, 2023**[108](index=108&type=chunk) - The company is controlled by Hongda Group Co., Ltd., which is held by individual shareholders including Mr. Miao Shuangda[108](index=108&type=chunk) - The interim financial information is presented in **RMB** and was approved for issue by the Board of Directors on **August 22, 2025**, and is unaudited[108](index=108&type=chunk)[109](index=109&type=chunk) [2 Basis of Presentation](index=30&type=section&id=2%20%E5%91%88%E5%88%97%E5%9F%BA%E6%BA%96) This section explains the interim financial information's preparation under IAS 34 and the rationale for the going concern basis despite net current liabilities - The interim financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the annual financial statements for the year ended December 31, 2024[110](index=110&type=chunk) - As of June 30, 2025, the Group had net current liabilities of **RMB 437,639,000**, but considering the nature of contract liabilities (not involving future cash outflows) and available unused bank facilities, management believes the Group will have sufficient financial resources to support operations, thus preparing on a going concern basis[110](index=110&type=chunk)[111](index=111&type=chunk) - As of June 30, 2025, the Group had unused bank facilities of **RMB 502 million**, available for drawdown over various future periods[111](index=111&type=chunk) [3 Principal Accounting Policies](index=31&type=section&id=3%20%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) This section confirms consistent accounting policies with the prior year and details the impact assessment of newly adopted revised standards - The accounting policies adopted are consistent with those described in the annual financial statements for the year ended December 31, 2024[112](index=112&type=chunk) New and Revised Standards Effective on or After January 1, 2024 | Standard | Description | Effective Date | | :--- | :--- | :--- | | IFRS 16 (Amendments) | Lease Liability in a Sale and Leaseback | January 1, 2024 | | IAS 1 (Amendments) | Classification of Liabilities as Current or Non-current | January 1, 2024 | | IAS 1 (Amendments) | Non-current Liabilities with Covenants | January 1, 2024 | | IAS 7 and IFRS 7 (Amendments) | Supplier Finance Arrangements | January 1, 2024 | - The adoption of these revised standards has not had any significant impact on the Group's results and financial position[114](index=114&type=chunk) - New standards and amendments to existing standards issued but not yet effective include IFRS 9 and 7 (Amendments), IFRS 19, IFRS 18, etc., which management expects will not have a significant impact upon adoption[119](index=119&type=chunk) [4 Critical Accounting Estimates and Judgments](index=32&type=section&id=4%20%E9%97%9C%E9%8D%B5%E6%9C%83%E8%A8%88%E4%BC%B0%E8%A8%88%E5%8F%8A%E5%88%A4%E6%96%B7) This section explains that critical accounting estimates and judgments for interim financial information are consistent with those applied in the annual financial statements - The preparation of interim financial information requires management to make judgments, estimates, and assumptions, and actual results may differ from these estimates[120](index=120&type=chunk) - The significant judgments made by management and the key sources of estimation uncertainty in preparing this interim financial information are the same as those applied in the annual financial statements for the year ended December 31, 2024[120](index=120&type=chunk) [5 Financial Risk Management](index=32&type=section&id=5%20%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) This section outlines the company's financial risk exposures (market, credit, liquidity) and management policies, including liquidity maturity analysis and fair value estimates - The Group's operations face market risk, credit risk, and liquidity risk, with risk management plans focused on mitigating financial market unpredictability[121](index=121&type=chunk) - There have been no significant changes in risk factors and management policies since the year ended December 31, 2024[122](index=122&type=chunk) - Management monitors rolling forecasts of liquidity reserves and cash equivalents, expecting to fund future cash flow requirements through cash generated from operations and available bank facilities[123](index=123&type=chunk) Maturity Analysis of Financial Liabilities (June 30, 2025) | Category | On demand or within 1 year (RMB thousands) | 1 to 2 years (RMB thousands) | 2 to 5 years (RMB thousands) | Over 5 years (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Lease liabilities | 728 | 503 | 1,038 | 1,120 | 3,389 | | Borrowings | 406,497 | 114,171 | 189,390 | 47,110 | 757,168 | | Trade and other payables | 913,416 | 26,740 | 25,985 | — | 966,141 | | Total | 1,320,641 | 141,414 | 216,413 | 48,230 | 1,726,698 | - For the six months ended June 30, 2025 and 2024, no financial assets were classified as Level 3 instruments[128](index=128&type=chunk) [6 Seasonal or Cyclical Operations](index=34&type=section&id=6%20%E5%AD%A3%E7%AF%80%E6%80%A7%E6%88%96%E9%80%B1%E6%9C%9F%E6%80%A7%E7%B6%93%E7%87%9F) This section explains the seasonal nature of heating services, with revenue and operating profit concentrated in the first and fourth fiscal quarters - The company's heating service period typically runs from October to April of the following year, with revenue and operating profit relatively evenly distributed across the first and fourth fiscal quarters[129](index=129&type=chunk) - For the year ended December 31, 2024, **45%** of the cumulative heating and heat transmission and distribution revenue in the first half related to the 2023-2024 heating service period, while the remaining **55%** accumulated in the second half related to the 2024-2025 heating service period[129](index=129&type=chunk) [7 Revenue and Segment Information](index=35&type=section&id=7%20%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) This section details revenue by service type and recognition timing, noting the company operates as a single segment with all revenue and non-current assets from China Revenue from Contracts with Customers (For the Six Months Ended June 30) | Service/Product Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Heating and heat transmission and distribution | 665,502 | 643,893 | | Engineering construction services | 23,321 | 122,202 | | Connection fees | 57,666 | 52,591 | | Heat transmission services | 1,589 | 2,128 | | Sale of goods | 694 | 1,986 | | Energy management services | 1,488 | 1,488 | | Design services | 4,892 | 2,974 | | Others | 4,419 | 6,737 | | **Total** | **759,571** | **833,999** | - Revenue recognition timing: **RMB 8,663 thousand** recognized at a point in time (2024: RMB 8,891 thousand), and **RMB 750,908 thousand** recognized over time (2024: RMB 825,108 thousand)[130](index=130&type=chunk) - The Group is primarily engaged in heating and related services in China, with the chief operating decision-maker reviewing this business as a single operating segment[131](index=131&type=chunk) - All of the Group's revenue and non-current assets originate from China[132](index=132&type=chunk)[133](index=133&type=chunk) - Contract liabilities primarily arise from heating-related customer prepayments and connection fees, typically received before contract performance[134](index=134&type=chunk) [8 Expenses by Nature](index=36&type=section&id=8%20%E6%8C%89%E6%80%A7%E8%B3%AA%E5%8A%83%E5%88%86%E7%9A%84%E9%96%8B%E6%94%AF) This section details expenses by nature, including heat purchase, construction, amortization, and employee benefits, with comparative figures Expenses by Nature (For the Six Months Ended June 30) | Expense Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Heat purchase costs | 230,049 | 225,422 | | Construction costs | 23,005 | 110,209 | | Amortisation of intangible assets | 112,144 | 108,147 | | Materials consumed | 63,594 | 65,472 | | Utility costs | 54,375 | 56,810 | | Employee benefit expenses | 46,560 | 45,843 | | Depreciation of property, plant and equipment | 14,934 | 9,209 | | Maintenance expenses | 5,197 | 5,932 | | Entertainment expenses | 5,742 | 5,622 | | Travel expenses | 3,646 | 4,485 | | Consultancy and professional service fees | 4,011 | 2,006 | | **Total** | **592,432** | **670,434** | [9 Other Income](index=36&type=section&id=9%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) This section details other income, primarily government grants and rental income, and clarifies the nature of the grants Other Income (For the Six Months Ended June 30) | Income Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Government grants | 9,953 | 10,496 | | Rental income | 7,615 | 7,950 | | **Total** | **17,568** | **18,446** | - Government grants are primarily related to heating operations, used to subsidize the acquisition or construction of heating facilities or to compensate for project losses, and are non-recurring in nature[138](index=138&type=chunk) [10 Other Losses — Net](index=37&type=section&id=10%20%E5%85%B6%E4%BB%96%E虧%E6%90%8D%20%E2%80%94%20%E6%B7%A8%E9%A1%8D) This section details other losses, net, primarily fair value losses on investment properties and foreign exchange losses, with comparative figures Other Losses — Net (For the Six Months Ended June 30) | Loss Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair value losses on investment properties | (4,830) | (5,325) | | Gain on settlement of trade receivables | — | 2,043 | | Foreign exchange (losses) / gains | (363) | 1,097 | | Loss on derecognition of a subsidiary | — | (181) | | (Loss) / gain on disposal of property, plant and equipment | (9) | 2 | | Others | 1,315 | 117 | | **Total** | **(3,888)** | **(2,247)** | [11 Finance Income and Costs](index=37&type=section&id=11%20%E8%B2%A1%E5%8B%99%E6%94%B6%E5%85%A5%E5%8F%8A%E6%88%90%E6%9C%AC) This section details the components of finance income and costs, including interest income and expense, and presents the net finance costs Finance Income (For the Six Months Ended June 30) | Income Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest income from bank deposits | 2,812 | 3,972 | | Interest income from financing arrangements | — | 1,070 | | Interest income from finance leases to related parties | 521 | 541 | | Interest income on lease receivables | 4,148 | 4,494 | | **Total** | **7,481** | **10,077** | Finance Costs (For the Six Months Ended June 30) | Cost Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest expense on borrowings | (15,405) | (18,454) | | Interest expense on lease liabilities | (78) | (580) | | Interest expense on instalment payments for acquisition of intangible assets | (1,907) | (2,866) | | Interest expense on government loans | — | (464) | | Major overhaul provision | (943) | (886) | | Interest expense on sale and leaseback | (100) | — | | **Total** | **(18,432)** | **(23,250)** | | **Finance costs — net** | **(10,951)** | **(13,173)** | [12 Income Tax Expense](index=38&type=section&id=12%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) This section details income tax expense, including current and deferred tax, and explains the recognition basis and estimated average annual tax rate Income Tax Expense (For the Six Months Ended June 30) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax — China corporate income tax | 32,343 | 39,257 | | Deferred income tax | (5,092) | (3,330) | | **Total** | **27,251** | **35,927** | - Income tax expense is recognized based on management's estimated weighted average annual effective income tax rate for the entire fiscal year, with an estimated average annual tax rate of **15%** for the year ended June 30, 2025 (2024: 19%)[143](index=143&type=chunk) [13 Earnings Per Share](index=38&type=section&id=13%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) This section provides the calculation for basic and diluted earnings per share, noting they are identical due to no potential dilutive ordinary shares Basic Earnings Per Share (For the Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB thousands) | 111,741 | 112,287 | | Weighted average number of ordinary shares in issue (thousands) | 301,600 | 301,600 | | Basic earnings per share (RMB per share) | 0.37 | 0.37 | - There were no potential dilutive ordinary shares outstanding as of June 30, 2025 and 2024, thus diluted earnings per share are the same as basic earnings per share[145](index=145&type=chunk) [14 Dividends](index=38&type=section&id=14%20%E8%82%A1%E5%88%A9) This section confirms no interim dividends were declared or paid by the company during the reporting period - For the six months ended June 30, 2025, the company did not declare or pay any interim dividends (for the six months ended June 30, 2024: nil)[146](index=146&type=chunk) [15 Investments Accounted for Using the Equity Method](index=39&type=section&id=15%20%E4%BD%BF%E7%94%A8%E6%AC%8A%E7%9B%8A%E6%B3%95%E5%85%A5%E8%B3%B9%E7%9A%84%E6%8A%95%E8%B3%87) This section details changes in the carrying amount of equity method investments, including opening balance, additions, and share of net profit Changes in Carrying Amount of Investments Accounted for Using the Equity Method (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Opening balance | 126,232 | 110,132 | | Additions | 8,000 | — | | Share of net profit | 2,606 | 4,579 | | **Closing balance** | **136,838** | **114,711** | [16 Property, Plant and Equipment](index=39&type=section&id=16%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) This section details changes in property, plant, and equipment carrying amounts, including additions, disposals, and depreciation, and addresses buildings without ownership certificates Changes in Net Carrying Amount of Property, Plant and Equipment (For the Six Months Ended June 30, 2025) | Item | Buildings (RMB thousands) | Machinery and equipment (RMB thousands) | Motor vehicles (RMB thousands) | Office and electronic equipment (RMB thousands) | Leasehold improvements (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net carrying amount at January 1, 2025 | 119,303 | 59,908 | 5,299 | 4,322 | 729 | 189,561 | | Additions | 2,556 | 1,772 | 2,832 | 658 | 3,992 | 11,809 | | Disposals | — | (731) | (75) | (101) | — | (907) | | Depreciation | (3,534) | (9,333) | (999) | (896) | (1,077) | (15,839) | | **Net carrying amount at June 30, 2025** | **118,325** | **51,615** | **7,058** | **3,983** | **3,644** | **184,624** | - As of June 30, 2025, the carrying amount of buildings for which property ownership certificates have not yet been obtained or transfer procedures not completed was **RMB 24,273,000**[148](index=148&type=chunk) - The directors believe the Group has the legal and effective right to occupy and use these buildings, will obtain relevant ownership certificates in due course, and will not face significant penalties for their temporary use in business operations[149](index=149&type=chunk) [17 Investment Properties](index=40&type=section&id=17%20%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD) This section details changes in investment property carrying amounts, including additions and fair value adjustments, and reports related rental income and fair value losses Changes in Carrying Amount of Investment Properties (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Opening balance | 373,179 | 344,197 | | Additions | — | 41,274 | | Net fair value adjustment losses | (4,830) | (5,325) | | **Closing balance** | **368,349** | **380,146** | Amounts Recognized in Profit or Loss from Investment Properties (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Rental income from operating leases | 7,615 | 7,950 | | Fair value losses | (4,830) | (5,325) | [18 Intangible Assets](index=41&type=section&id=18%20%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2) This section details changes in intangible asset carrying amounts, including goodwill and operating concessions, impairment test results, amortization, and collateral status Changes in Net Carrying Amount of Intangible Assets (For the Six Months Ended June 30, 2025) | Item | Goodwill (RMB thousands) | Operating concessions (RMB thousands) | Software (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | Net carrying amount at January 1, 2025 | 9,047 | 3,580,205 | 11,003 | 3,600,255 | | Additions | — | 60,462 | — | 60,462 | | Amortisation | — | (111,558) | (41) | (111,599) | | **Net carrying amount at June 30, 2025** | **9,047** | **3,529,109** | **10,962** | **3,549,118** | - There were no indications of impairment for goodwill related to Taiyuan Renewable Energy during the reporting period, thus no impairment provision was required[154](index=154&type=chunk) - Impairment test results for intangible assets related to Shuozhou Renewable Energy indicated no further impairment charges were required, but management believes any reasonably possible change in key assumptions would lead to further impairment recognition[155](index=155&type=chunk) - Amortization expenses for intangible assets were primarily recognized in cost of sales (**RMB 111,584 thousand**) and administrative expenses (**RMB 560 thousand**)[156](index=156&type=chunk) - As of June 30, 2025, intangible assets with a carrying amount of approximately **RMB 732,049,000** were pledged as collateral for bank borrowings[156](index=156&type=chunk) [19 Trade Receivables](index=42&type=section&id=19%20%E8%B2%A9%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) This section details trade receivables, including related party and third-party amounts, lease receivables, impairment provisions, aging analysis, and collateral Trade Receivables (As of June 30, 2025) | Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Included in current assets** | | | | Trade receivables — related parties | 2,409 | 2,712 | | Trade receivables — third parties | 637,909 | 623,927 | | Lease receivables | 18,904 | 18,904 | | Less: Impairment provision for trade and lease receivables | (88,564) | (69,709) | | **Subtotal (Current)** | **570,658** | **575,834** | | **Included in non-current assets** | | | | Lease receivables | 80,701 | 93,576 | | Less: Impairment provision for lease receivables | — | (22,000) | | **Subtotal (Non-current)** | **80,701** | **71,576** | | **Total** | **651,359** | **647,410** | Aging Analysis of Trade Receivables (As of June 30, 2025) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 403,268 | 389,079 | | 1 to 2 years | 172,483 | 176,229 | | 2 to 3 years | 28,001 | 37,291 | | Over 3 years | 36,566 | 24,040 | | **Total** | **640,317** | **626,639** | - The Group generally does not offer credit terms to customers, and trade receivables are denominated in **RMB**[158](index=158&type=chunk)[160](index=160&type=chunk) - As of June 30, 2025, trade receivables with a carrying amount of approximately **RMB 137,900,000** were pledged as collateral for bank borrowings[160](index=160&type=chunk) [20 Cash and Cash Equivalents](index=43&type=section&id=20%20%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9) This section details cash and cash equivalents, including bank and hand cash, restricted cash, its purpose, and the denomination currency Cash and Cash Equivalents (As of June 30, 2025) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash at bank | 340,105 | 719,796 | | Cash on hand | 10 | 59 | | Less: Restricted cash | (31,025) | (74,175) | | **Cash and cash equivalents** | **309,090** | **645,680** | - Restricted cash is primarily used as margin for issuing bank acceptance bills (**RMB 21,025,000**) and as a deposit for leased heat pipeline storage services (**RMB 10,000,000**)[159](index=159&type=chunk) Denomination Currency of Cash and Cash Equivalents (As of June 30, 2025) | Currency | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | HKD | 6,303 | 67,292 | | USD | — | 18,578 | | RMB | 284,208 | 578,388 | | **Total** | **309,089** | **645,680** | [21 Share Capital](index=44&type=section&id=21%20%E8%82%A1%E6%9C%AC) This section details the company's share capital, including ordinary share count and total amount, confirming no changes during the reporting period Share Capital (As of June 30, 2025) | Item | Number of ordinary shares | Total (RMB thousands) | | :--- | :--- | :--- | | As of June 30, 2025 and December 31, 2024 | 301,600,000 | 301,600 | [22 Borrowings](index=45&type=section&id=22%20%E5%80%9F%E6%AC%BE) This section details the company's borrowings, including current and non-current bank loans, collateral, guarantees, weighted average interest rate, and currency denomination Borrowings (As of June 30, 2025) | Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Included in non-current liabilities:** | | | | Bank borrowings — secured and guaranteed | 417,545 | 535,587 | | Less: Current portion of non-current liabilities | (60,228) | (108,554) | | **Subtotal (Non-current)** | **357,317** | **427,033** | | **Included in current liabilities:** | | | | Bank borrowings — secured and guaranteed | 136,322 | 99,651 | | Bank borrowings — unsecured and guaranteed | 142,000 | 34,000 | | Bank borrowings — unsecured | — | 57,500 | | Current portion of non-current liabilities | 60,228 | 108,554 | | **Subtotal (Current)** | **338,550** | **299,705** | | **Total** | **695,867** | **726,738** | - Multiple bank borrowings are guaranteed by the company and secured by trade receivables or intangible assets[164](index=164&type=chunk) - As of June 30, 2025, the weighted average effective interest rate for borrowings was **4.23% per annum** (December 31, 2024: 4.43%), and all borrowings are denominated in **RMB**[164](index=164&type=chunk) [23 Trade and Other Payables](index=46&type=section&id=23%20%E8%B2%A9%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) This section details trade and other payables, including related party amounts and intangible asset acquisition payables, and provides an aging analysis for trade payables Trade and Other Payables (As of June 30, 2025) | Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Included in current liabilities** | | | | Trade payables — related parties | 2,498 | 1,551 | | Trade payables — third parties | 483,609 | 480,665 | | Bills payable | 41,033 | 64,368 | | Amounts due to related parties and advances from related parties | 7,326 | 9,610 | | Amounts payable for acquisition of intangible assets | 186,829 | 196,291 | | Accrued employee benefits | 15,326 | 33,288 | | Other taxes payable | 20,957 | 32,088 | | Dividends payable to non-controlling interests | 46,280 | 46,280 | | Instalment payments for acquisition of intangible assets | 37,356 | 38,318 | | Others | 15,391 | 42,702 | | **Subtotal (Current)** | **883,524** | **975,960** | | **Included in non-current liabilities** | | | | Other payables — third parties (instalment payments for acquisition of intangible assets) | 16,961 | 29,442 | | **Total** | **900,485** | **1,005,402** | Aging Analysis of Trade Payables (As of June 30, 2025) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 318,173 | 376,207 | | 1 to 2 years | 78,143 | 44,523 | | 2 to 3 years | 28,512 | 21,560 | | Over 3 years | 61,280 | 39,926 | | **Total** | **486,107** | **482,216** | - The Group's trade and other payables are denominated in **RMB**[167](index=167&type=chunk) [24 Provisions](index=47&type=section&id=24%20%E6%92%A5%E5%82%99) This section explains the recognition and measurement of service concession facility maintenance provisions for contractual obligations to maintain or restore operating facilities Provisions (As of June 30, 2025) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Service concession facility maintenance provision | 41,670 | 38,113 | - Provisions are recognized in accordance with service concession agreements to fulfill contractual obligations to maintain operating facilities at a specific service quality level and/or restore the plant to a designated state at the end of the service concession period[168](index=168&type=chunk) [25 Commitments](index=47&type=section&id=25%20%E6%89%BF%E6%93%94) This section lists the company's short-term lease commitments and contracted capital expenditures, primarily for intangible assets Short-term Lease Commitments (As of June 30, 2025) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Not later than 1 year | 401 | 74 | Capital Commitments (As of June 30, 2025) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Intangible assets | 32,346 | 29,192 | [26 Related Party Transactions](index=48&type=section&id=26%20%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) This section discloses details of the company's related party transactions and balances, including purchases, leases, and sales Transactions with Related Parties (For the Six Months Ended June 30) | Type of Transaction | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | **Entities controlled or significantly influenced by certain shareholders** | | | | Purchase of property, plant, equipment and services | 1,172 | 3,516 | | Lease arrangements | 6 | 9 | | **Associates** | | | | Sale of goods or services | 3,256 | 3,706 | | Purchase of property, plant, equipment and services | — | 1,007 | | Lease arrangements | 942 | 1,022 | Balances with Related Parties (As of June 30, 2025) | Type of Balance | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Entities controlled or significantly influenced by certain shareholders** | | | | Trade and other payables | 7,330 | 8,247 | | Prepayments and other receivables | 2,776 | — | | **Associates** | | | | Trade receivables | 2,409 | 2,712 | | Lease receivables | 20,870 | 20,423 | | Trade and other payables | 2,494 | 2,914 | [27 Contingencies](index=48&type=section&id=27%20%E6%88%96%E7%84%B6%E4%BA%8B%E9%A0%85) This section confirms the company had no significant contingent liabilities as of June 30, 2025 - As of June 30, 2025 and December 31, 2024, the Group had no significant contingent liabilities[172](index=172&type=chunk) [28 Events After the Reporting Period](index=48&type=section&id=28%20%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) This section confirms no significant subsequent events requiring adjustment or additional disclosure occurred after June 30, 2025, up to the interim financial information publication date - Except as disclosed elsewhere in the interim financial information, no significant events after June 30, 2025, and up to the date of issue of this interim financial information, have occurred that would require adjustment to or additional disclosure in these interim financial information[173](index=173&type=chunk) [Definitions](index=49&type=section&id=%E9%87%8B%E7%BE%A9) This section defines key terms and terminology used throughout the interim report to ensure clear understanding - This section contains definitions of key terms and terminology used in the interim report, such as "Audit Committee," "Baotou Project," "Corporate Governance Code," "China," "the Company," "EMC," "the Group," "H Shares," "RMB," "SFO," "Shuangliang Technology," etc[175](index=175&type=chunk)[177](index=177&type=chunk)

Guiding Tomorrow Sustainable 綠色健康 Wellness 引領未來 中期報告 2025 2025 年中期報告 | 公司資料 | 2 | | --- | --- | | 股東資料 | 3 | | 董事長報告書 | 4 | | 集團業務結構 | 8 | | 業務回顧、討論與分析 | 9 | | 財務回顧 | 22 | | 簡明綜合財務報表的審閱報告 | 30 | | 簡明綜合損益表 | 31 | | 簡明綜合損益及其他全面收益表 | 32 | | 簡明綜合財務狀況表 | 33 | | 簡明綜合權益變動表 | 35 | | 簡明綜合現金流量表 | 37 | | 簡明綜合財務報表附註 | 39 | | 其他資料 | 54 | | 詞彙 | 56 | 目錄 公司資料 董事 執行董事 冷偉青女士 （董事長） 張 芊先生 （行政總裁） 姚嘉勇先生 徐有利先生 （副行政總裁） 獨立非執行董事 梁伯韜先生 袁天凡先生 張 黔教授1 唐嘉盛先生1 董事會轄下委員會 執行委員會 冷偉青女士 （委員會主席） 張 芊先生 姚嘉勇先生 徐有利先生 審核委員會 梁伯韜先生 （委員會主席） 袁天凡先生 張 黔教授 ...

中國鑄晨 81 金 融 有限公司 CHINA CASTSON 81 FINANCE COMPANY LIMITED (Continued into Bermuda with limited liability) (於百慕達存續之有限公司) Stock Code 股份代號:810 INTERIM REPORT 2025 中期報告 CONTENTS 目錄 | 頁次 | | | --- | --- | | CHAIRMAN'S STATEMENT | 2 | | 主席報告 | | | MANAGEMENT DISCUSSION AND ANALYSIS | 7 | | 管理層討論與分析 | | | PARTICULARS OF MAJOR INVESTMENTS HELD BY THE GROUP | 11 | | 本集團持有之主要投資之詳情 | | | CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS | 20 | | 簡明綜合損益表 | | | CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND | 2 ...

中期報告 2025 INTERIM REPORT 2025 中期報告 目錄 | 公司資料 | 2 | | --- | --- | | 財務摘要 | 4 | | 主席報告 | 5 | | 管理層討論與分析 | 9 | | 補充資料 | 18 | | 中期簡明綜合財務資料之審閱報告 | 27 | | 簡明綜合損益及其他全面收益表 | 28 | | 簡明綜合財務狀況表 | 29 | | 簡明綜合權益變動表 | 31 | | 簡明綜合現金流量表 | 33 | 中期簡明綜合財務資料附註 35 公司資料 執行董事 張波先生 （主席、行政總裁、授權代表） 鄭淑良女士 （副主席） 張瑞蓮女士 （副總裁、財務總監） 王雨婷女士 （企業融資部主管） 非執行董事 楊叢森先生 張敬雷先生 涂一鍇先生 （張浩先生為其替任董事） 孫冬冬女士 獨立非執行董事 文献軍先生 韓本文先生 董新義先生 傅郁林女士 財務總監 張瑞蓮女士 公司秘書 張月霞女士 審核委員會 韓本文先生 （審核委員會主席） 文献軍先生 董新義先生 提名委員會 張波先生 （提名委員會主席） 韓本文先生 傅郁林女士 薪酬委員會 韓本文先生 （薪酬委員會主席） 張波先生 文献 ...

[Company Information](index=3&type=section&id=Company%20Information) The company's board of directors comprises executive, non-executive, and independent non-executive directors, with key committee chairs and main operating locations in Nanjing, China, and Jordan, Hong Kong - The company's board of directors consists of Executive Directors Mr. Zhang Lake Mozi (Chairman) and Mr. Cheng Li, Non-executive Directors Mr. Zhang Haihua and Ms. Song Yuanyuan, and Independent Non-executive Directors Mr. Zhao Zhen, Ms. Huang Mengting, and Mr. Pan Wenni[6](index=6&type=chunk) - The Audit Committee Chairman is Mr. Pan Wenni, the Nomination Committee Chairman is Mr. Zhang Lake Mozi, and the Remuneration Committee Chairman is Ms. Huang Mengting[6](index=6&type=chunk) - The Company Headquarters and China's Main Operating Location are in Nanjing, Jiangsu Province, China, and Hong Kong's Main Operating Location is in Jordan, Kowloon, Hong Kong[6](index=6&type=chunk)[8](index=8&type=chunk) [Summary](index=5&type=section&id=Summary) The interim financial results for the six months ended June 30, 2025, show a significant decrease in revenue and a substantial increase in loss for the period Condensed Consolidated Interim Results Summary for the Six Months Ended June 30, 2025 | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 9,475 | 16,539 | | Gross Profit | 2,686 | 1,599 | | Loss for the Period | (21,925) | (10,262) | | Total Loss for the Period Attributable to Owners of the Company | (21,925) | (10,262) | - Revenue decreased by **43%** year-on-year, and loss for the period increased by **114%** year-on-year[10](index=10&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's business, future outlook, financial performance, and key operational aspects [Business Review](index=6&type=section&id=Business%20Review) Yu'erwang continues to serve young Chinese families through content, private domain, e-commerce, and O2O services, expanding community reach and collaborating with professional institutions - Yu'erwang integrates the entire family consumption service chain through its **four major matrices**: content matrix, private domain matrix, e-commerce matrix, and O2O service matrix[11](index=11&type=chunk) - The company deepens cooperation with professional institutions such as the China National Committee for the Wellbeing of the Youth's Child Development Research Center and the National Health Commission to jointly develop a **0-6 year-old** parent school curriculum system and content co-construction projects[12](index=12&type=chunk) - Yu'erwang's community matrix covers over **5.26 million** person-times, with a total of **27,300+** communities, including mom store owner groups, group leader distribution groups, maternal and infant communication groups, and local travel groups[12](index=12&type=chunk) [Future Outlook](index=7&type=section&id=Future%20Outlook) Yu'erwang aims for continuous innovation and ecosystem enhancement to provide personalized smart home solutions for young Chinese families and drive brand business growth - The company will continue to innovate and progress, constantly improving its ecosystem layout to provide personalized smart home solutions for young Chinese families[15](index=15&type=chunk) - Yu'erwang aims to facilitate sustained brand business growth, upholding the vision of "doing practical things for users and serving more families"[15](index=15&type=chunk) [Financial Review](index=7&type=section&id=Financial%20Review) The Group's revenue significantly decreased by **43%** to **RMB 9.5 million**, while gross profit increased by **68%** to **RMB 2.7 million**, and loss for the period expanded by **114%** to **RMB 21.9 million** [Revenue](index=7&type=section&id=Revenue) Revenue for the six months ended June 30, 2025, decreased by **43%** to **RMB 9.475 million**, primarily due to reduced e-commerce wholesale and a decline in advertising and promotion business Revenue Comparison | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 9,475 | 16,539 | -43% | - The decrease in revenue was mainly due to reduced e-commerce wholesale in the first half of the year and a decline in advertising and promotion business affected by economic conditions[16](index=16&type=chunk) [Cost of Sales](index=7&type=section&id=Cost%20of%20Sales) Cost of sales decreased by **55%** to **RMB 6.789 million** for the six months ended June 30, 2025, primarily due to a reduction in orders during the period Cost of Sales Comparison | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of Sales | 6,789 | 14,940 | -55% | - The decrease in cost of sales was mainly due to a reduction in orders during the period[17](index=17&type=chunk) [Gross Profit and Gross Profit Margin](index=7&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit increased by **68%** to **RMB 2.686 million**, and the gross profit margin rose by **18.6 percentage points** to **28.3%**, mainly because APP product maintenance expenses normalized in 2025 Gross Profit and Gross Profit Margin Comparison | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 2,686 | 1,599 | +68% | | Gross Profit Margin | 28.3% | 9.7% | +18.6pp | - The increase in gross profit and gross profit margin was mainly due to the company's APP product maintenance expenses being concentrated in **2024** and returning to normal in **2025**[18](index=18&type=chunk) [Other Income, Gains and Losses](index=7&type=section&id=Other%20Income%2C%20Gains%20and%20Losses) Other income, gains, and losses shifted from a gain of **RMB 6.326 million** in 2024 to a loss of **RMB 7.962 million** in 2025, primarily due to the disposal of two subsidiaries Other Income, Gains and Losses Comparison | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Other Income, Gains and Losses | (7,962) | 6,326 | -226% | - Other income, gains, and losses shifted from a gain to a loss, primarily due to the disposal of two subsidiaries[19](index=19&type=chunk) [Selling and Distribution Expenses](index=7&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by **59%** to **RMB 2.688 million** for the six months ended June 30, 2025, mainly due to unfavorable market conditions Selling and Distribution Expenses Comparison | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 2,688 | 6,507 | -59% | - The decrease in selling and distribution expenses was mainly due to unfavorable market conditions[20](index=20&type=chunk) [Administrative Expenses](index=8&type=section&id=Administrative%20Expenses) Administrative expenses increased by **8%** to **RMB 7.717 million** for the six months ended June 30, 2025, primarily due to higher intermediary fees Administrative Expenses Comparison | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 7,717 | 7,163 | +8% | - The increase in administrative expenses was mainly due to higher intermediary fees[21](index=21&type=chunk) [Research and Development Costs](index=8&type=section&id=Research%20and%20Development%20Costs) Research and development costs increased by **35%** to **RMB 2.774 million** for the six months ended June 30, 2025, mainly due to increased investment in technology development Research and Development Costs Comparison | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Research and Development Costs | 2,774 | 2,057 | +35% | - The increase in research and development costs was mainly due to increased investment in technology development[22](index=22&type=chunk) [Income Tax Expense](index=8&type=section&id=Income%20Tax%20Expense) Income tax expense for the six months ended June 30, 2025, was **RMB 446 thousand**, compared to zero in the prior period Income Tax Expense Comparison | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Income Tax Expense | 446 | 0 | [Loss for the Period](index=8&type=section&id=Loss%20for%20the%20Period) Loss for the period expanded by **114%** to **RMB 21.925 million** for the six months ended June 30, 2025 Loss for the Period Comparison | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the Period | (21,925) | (10,262) | +114% | [Gearing Ratio](index=8&type=section&id=Gearing%20Ratio) The gearing ratio increased by **25 percentage points** to **137%** as of June 30, 2025, indicating a rise in the debt level Gearing Ratio Comparison | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing Ratio | 137% | 112% | - The gearing ratio increased by **25 percentage points**, indicating an increase in the debt level[25](index=25&type=chunk) [Liquidity and Financial Resources](index=8&type=section&id=Liquidity%20and%20Financial%20Resources) Net current liabilities increased, while cash and cash equivalents and total borrowings also rose as of June 30, 2025 Liquidity and Financial Resources Comparison | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Current Liabilities | (27,035) | (20,412) | | Cash and Cash Equivalents | 4,203 | 2,758 | | Borrowings | 23,465 | 21,545 | - Net current liabilities increased, cash and cash equivalents increased, and total borrowings also rose[26](index=26&type=chunk) [Foreign Exchange Risk](index=8&type=section&id=Foreign%20Exchange%20Risk) The Group's transactions are primarily settled in RMB, with some cash and bank deposits denominated in HKD, and no significant operational impact from exchange rate fluctuations was experienced - The Group's transactions are primarily settled in RMB, with some cash and bank deposits settled in HKD[27](index=27&type=chunk) - During the period, no significant operational impact or liquidity difficulties due to exchange rate changes were experienced, nor were there any hedging transactions or forward contract arrangements[27](index=27&type=chunk) [Employees, Training and Remuneration Policies](index=9&type=section&id=Employees%2C%20Training%20and%20Remuneration%20Policies) The Group's remuneration policy considers director responsibilities and company performance, with salaries based on employee performance and tenure, and training provided for new hires and professional development - The Company's Remuneration Committee determines remuneration based on directors' responsibilities, workload, time commitment, and Group performance[28](index=28&type=chunk) - The Group provides training for new employees and arranges internal and external training, covering topics such as finance, accounting, risk management, and information technology[28](index=28&type=chunk) Employee Count and Cost Comparison | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Employees | 33 employees | 41 employees | | Total Staff Costs (RMB thousands) | 1,900 | 4,800 | [Significant Acquisitions and Disposals of Subsidiaries, Associates or Joint Ventures](index=9&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20or%20Joint%20Ventures) The company disposed of its equity interest in Xibai (Nanjing) Information Technology Co., Ltd., and consequently Nanjing Xinchuang Micro-Electro Mechanical Technology Co., Ltd., for **RMB 500,000** on April 1, 2025 - The Company's indirect wholly-owned subsidiary, Star Group Limited, disposed of its equity interest in Xibai (Nanjing) Information Technology Co., Ltd. on **April 1, 2025**, for a consideration of **RMB 500,000**[29](index=29&type=chunk) - Following the disposal of Nanjing Xibai, Nanjing Xinchuang Micro-Electro Mechanical Technology Co., Ltd. was also effectively disposed of[29](index=29&type=chunk) [Pledge of Assets](index=9&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had no pledged bank deposits - As of **June 30, 2025**, the Group had no pledged bank deposits (December 31, 2024: Nil)[30](index=30&type=chunk) [Contingent Liabilities](index=9&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of **June 30, 2025**, the Group had no significant contingent liabilities (December 31, 2024: Nil)[31](index=31&type=chunk) [Dividends](index=9&type=section&id=Dividends) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended **June 30, 2025** (for the six months ended June 30, 2024: Nil)[32](index=32&type=chunk) [Financial Assets](index=10&type=section&id=Financial%20Assets) As of June 30, 2025, the company held a **17.64%** stake in CCLOUD TECH LIMITED, with an investment of **HKD 50 million** and a fair value of **RMB 5.26 million**, representing **15.07%** of total assets Details of Significant Financial Asset Investments | Related Company Name | Shareholding Percentage | Investment Amount (HKD) | Fair Value (RMB) | Percentage of Total Assets | Principal Business | | :--- | :--- | :--- | :--- | :--- | :--- | | CCLOUD TECH LIMITED | 17.64% | 50,000,000.00 | 5,262,746 | 15.07% | R&D and operation combining blockchain technology with the real economy, providing cross-border consumption, education, new retail platforms, etc | - The Company continuously monitors and conducts third-party professional evaluations of its investments, believing that the Group's overall investments in the first half of **2025** align with strategic layout trends[34](index=34&type=chunk) [Loans to Other Entities](index=11&type=section&id=Loans%20to%20Other%20Entities) The Group provided a **36-month** loan with an annual interest rate of **6.0%** to Nanjing Qianyu Information Technology Co., Ltd., with a carrying value of **RMB 13.777 million**, representing **39.5%** of total assets Details of Loans to Other Entities | Related Company Name | Amount Borrowed (RMB) | Annual Interest Rate | Loan Term | Loan Guarantee | Carrying Value (RMB) | Percentage of Total Assets | Principal Business | Accumulated Interest Income (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Nanjing Qianyu Information Technology Co., Ltd. | 12,000,000.00 | 6% | 36月 | Guaranteed by an A-share listed company | 13,776,672 | 39.5% | Main parent-child consumption platform | 4,404,932 | - This loan agreement is in line with the Group's long-term interests[35](index=35&type=chunk) [Investment Objectives and Policies](index=12&type=section&id=Investment%20Objectives%20and%20Policies) The Group, as a vertical maternal and infant online platform, aims to expand family-related businesses into health, education, and entertainment, seeking long-term equity investments or loan financing in emerging industries - The Group aims to extend its maternal and infant platform business to multiple areas such as health, education, and entertainment, expanding user acquisition scope and extending user lifecycle[38](index=38&type=chunk) - The company intends to leverage external empowerment to expand into core areas such as new social retail, family healthcare, family education, and internet technology, by investing in related companies to reduce costs and quickly enter new industries[38](index=38&type=chunk) - The Company prefers long-term investments, typically investing in target entities for over **one year**, and investments in target entities generally do not exceed **20%** of the target entity's equity[39](index=39&type=chunk) [Corporate Governance and Other Information](index=13&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details directors' and major shareholders' interests, share option and award schemes, compliance with corporate governance codes, and risk factors [Directors' and Chief Executives' Interests and/or Short Positions in the Shares, Underlying Shares and Debentures of the Company or any Associated Corporation](index=13&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests%20and%2For%20Short%20Positions%20in%20the%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20any%20Associated%20Corporation) As of June 30, 2025, Executive Director Mr. Cheng Li held **6.94%** of the company's shares through Victory Glory Holdings Limited, and Non-executive Director Ms. Song Yuanyuan held **3.60%** through XI-F-AI PTE.LTD Directors' Long Positions in the Company's Shares | Director's Name | Nature of Interest | Number of Shares or Underlying Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Cheng Li | Interest in Controlled Corporation | 3,000,000 | 6.94% | | Ms. Song Yuanyuan | Interest in Controlled Corporation | 1,555,817 | 3.60% | Directors' Interests in Other Group Members (Long Positions) | Director's Name | Subsidiary Name | Nature of Interest | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Cheng Li | Nanjing Yilaoyixiao Information Technology Co., Ltd. | Interest in Controlled Corporation | 90% | | Ms. Song Yuanyuan | Nanjing Yilaoyixiao Information Technology Co., Ltd. | Interest in Controlled Corporation | 10% | [Substantial Shareholders' and Other Persons' Interests and/or Short Positions in the Shares and Underlying Shares of the Company](index=15&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%2For%20Short%20Positions%20in%20the%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, Maria Rachel Mai Decolongon Tatoy held **12.52%** of the company's shares, Victory Glory held **6.94%**, Tan Chiu Lan Francine held **9.71%**, Gan Kwang Lee (spouse's interest) held **9.71%**, and Lee Yong Soon held **7.17%** Substantial Shareholders' Long Positions in the Company's Shares | Name | Nature of Interest | Number of Shares or Underlying Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Maria Rachel Mai Decolongon Tatoy | Beneficial Owner and Interest in Controlled Corporation | 5,408,825 | 12.52% | | Victory Glory | Beneficial Owner | 3,000,000 | 6.94% | | Tan Chiu Lan Francine | Beneficial Owner | 4,194,751 | 9.71% | | Gan Kwang Lee | Spouse's Interest | 4,194,751 | 9.71% | | Lee Yong Soon | Beneficial Owner | 3,099,329 | 7.17% | [Share Option Scheme](index=16&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme on June 19, 2015, effective for **ten years**, with a maximum issuance of **2.5 million shares**, representing approximately **5.8%** of issued shares, and no options were granted or outstanding as of June 30, 2025 - The share option scheme was adopted on **June 19, 2015**, to provide incentives or rewards to eligible persons, valid for **ten years**[50](index=50&type=chunk) - The maximum number of shares that may be issued under the share option scheme is **2,500,000** (after share consolidation), representing approximately **5.8%** of the Company's issued shares[51](index=51&type=chunk) - As of **June 30, 2025**, no share options were granted, and therefore no outstanding share options existed[52](index=52&type=chunk) [Share Award Scheme](index=17&type=section&id=Share%20Award%20Scheme) The Board adopted a share award scheme on July 6, 2016, to recognize employee contributions, with a maximum of **10%** of issued share capital for awards and **1%** for any single employee, valid until July 5, 2026 - The share award scheme was adopted on **July 6, 2016**, to recognize and appreciate the contributions of eligible employees to the Group's growth and development[53](index=53&type=chunk) - The maximum number of awarded shares under the scheme shall not exceed **10%** of the Company's issued share capital from time to time, and the maximum number of shares granted to a single selected employee shall not exceed **1%**[54](index=54&type=chunk) - The scheme is valid and effective for **ten years** from the adoption date until **July 5, 2026**[55](index=55&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=17&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) As of June 30, 2025, no rights to acquire benefits through purchasing the company's shares or debentures were granted to any director, their spouse, or minor children - As of **June 30, 2025**, no rights to acquire benefits through purchasing the Company's shares or debentures were granted to any director or their respective spouse or children under **18 years** of age[56](index=56&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=17&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[57](index=57&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=17&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules and confirmed full compliance by all directors during the period - The Company has adopted the Model Code as set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance with the standards set out in the Model Code during the period[58](index=58&type=chunk) [Compliance with Eligibility Requirements and Laws and Regulations](index=18&type=section&id=Compliance%20with%20Eligibility%20Requirements%20and%20Laws%20and%20Regulations) The Group's main business, value-added telecommunications services, is subject to foreign investment restrictions in China, which the company addresses through structured contractual arrangements to control operations - The Group's principal business is value-added telecommunications services, and foreign investment is subject to significant restrictions under PRC laws and regulations[59](index=59&type=chunk) - The Company entered into a series of contractual arrangements ("Structured Contracts") with Nanjing Yilaoyixiao and their respective registered shareholders to control business operations[59](index=59&type=chunk) - The Directors confirmed that as of the date of this report, the Company has taken all reasonable actions to ensure compliance with PRC laws and the eligibility requirements for overseas investors to substantially invest in value-added telecommunications services in China as permitted by relevant authorities[59](index=59&type=chunk) [Competing Interests](index=18&type=section&id=Competing%20Interests) As of the report date, no director or their close associates held any significant interests in businesses that compete or may compete with the Group's business - As of the date of this report, no Director or their respective close associates had any material interest in any business that competes or may compete with the Group's business[61](index=61&type=chunk) [Audit Committee and Review of Financial Statements](index=18&type=section&id=Audit%20Committee%20and%20Review%20of%20Financial%20Statements) The company's Audit Committee, chaired by Mr. Pan Wenni, is responsible for reviewing financial reports, risk management, and internal control systems, and has reviewed the Group's unaudited interim results - The primary responsibilities of the Audit Committee are to review the Company's annual report and accounts and interim report, the Group's financial reporting, risk management, and internal control systems[62](index=62&type=chunk) - The Audit Committee comprises Mr. Pan Wenni (Chairman), Ms. Huang Mengting (Independent Non-executive Director), and Ms. Song Yuanyuan (Non-executive Director)[62](index=62&type=chunk) - The Audit Committee has reviewed the Group's unaudited interim results and interim report for the period[62](index=62&type=chunk) [Risks and Uncertainties](index=19&type=section&id=Risks%20and%20Uncertainties) The Group faces operational risks related to contractual arrangements with PRC entities, reliance on sales and promotion services, uncertainties in new business development, and potential impacts from expanding investment scale - The Group cannot guarantee that the contractual arrangements with its PRC contractual entities will be deemed by relevant governmental and judicial authorities to be in compliance with current or future PRC laws and regulations[63](index=63&type=chunk) - The Group's revenue is substantially dependent on the sales and promotion services provided, and new businesses may not be successfully and sustainably developed and introduced[63](index=63&type=chunk) - The Company's investment scale is expanding, and untimely and ineffective management may affect the realization of investment expectations; an investment team has been established and risk management and internal control measures implemented[65](index=65&type=chunk) [Corporate Governance Code](index=20&type=section&id=Corporate%20Governance%20Code) The company adopted the principles and code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules and confirmed full compliance during the period - The Company has adopted the Corporate Governance Code as set out in Appendix C1 of the Listing Rules and confirmed compliance with all code provisions during the period[66](index=66&type=chunk) [By Order of the Board](index=20&type=section&id=By%20Order%20of%20the%20Board) This interim report was issued by Mr. Cheng Li, Executive Director and Chief Executive Officer, on behalf of the Board on August 29, 2025, with the Board comprising two executive, two non-executive, and three independent non-executive directors - This report was issued by Mr. Cheng Li, Executive Director and Chief Executive Officer of China Parenting Network Holdings Limited, on **August 29, 2025**[67](index=67&type=chunk) - As of the date of this report, the Executive Directors are Mr. Zhang Lake Mozi and Mr. Cheng Li; the Non-executive Directors are Mr. Zhang Haihua and Ms. Song Yuanyuan; and the Independent Non-executive Directors are Mr. Zhao Zhen, Ms. Huang Mengting, and Mr. Pan Wenni[67](index=67&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the Group's financial performance, including revenue, gross profit, loss for the period, and total comprehensive expense, for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue from contracts with customers | 9,475 | 16,539 | | Cost of sales | (6,789) | (14,940) | | Gross profit | 2,686 | 1,599 | | Other income, gains and losses | (7,962) | 6,326 | | Selling and distribution expenses | (2,688) | (6,507) | | Administrative expenses | (7,717) | (7,163) | | Research and development costs | (2,774) | (2,057) | | Reversal of impairment loss on financial and contract assets (impairment loss), net | 218 | (1) | | Fair value changes of financial assets at fair value through profit or loss | (325) | 389 | | Finance costs | (2,917) | (2,848) | | Loss before tax | (21,479) | (10,262) | | Income tax expense | (446) | – | | Loss for the period attributable to owners of the Company | (21,925) | (10,262) | | Other comprehensive income (expense) for the period | 13,540 | (27,848) | | Total comprehensive expense for the period attributable to owners of the Company | (8,385) | (38,110) | | Loss per share attributable to owners of the Company (RMB cents) | (50.74) | (27.15) | [Condensed Consolidated Statement of Financial Position](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement outlines the Group's assets, liabilities, and equity as of June 30, 2025, and December 31, 2024, showing changes in financial position Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 31 | 164 | | Right-of-use assets | 840 | 756 | | Other receivables | 13,777 | 13,551 | | Other financial assets | – | 844 | | **Current assets** | | | | Inventories | 5 | 16 | | Trade receivables | 5,907 | 19,043 | | Contract assets | 4,138 | 41 | |

[Definitions](index=3&type=section&id=Definitions) This section provides definitions of key terms used throughout the report [Significant Risk Warning](index=3&type=section&id=Significant%20Risk%20Warning) The company has detailed major risks and mitigation measures in the report, with further information available in Chapter 3 on risk management - The Company has detailed major risks and mitigation measures in the report; please refer to Chapter 3 for risk management content[5](index=5&type=chunk) [Important Notice](index=4&type=section&id=Important%20Notice) This section highlights the report's accuracy, profit distribution plans, unaudited financial statements, and forward-looking statements - The Company's Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of this report, assuming individual and joint legal responsibility[7](index=7&type=chunk) - The Company's 2025 interim profit distribution plan has been approved by the 2024 Annual General Meeting, with cash dividends to be distributed between January and February 2026[7](index=7&type=chunk) - The financial report contained herein is unaudited but has been reviewed by Ernst & Young Hua Ming LLP (China Accounting Standards) and Ernst & Young (International Financial Reporting Standards)[7](index=7&type=chunk) - This report contains forward-looking statements regarding the Group's financial position, operating results, and business development, which are based on current plans, estimates, and forecasts, and do not constitute a substantive commitment by the Group; investors should not over-rely on them and should be aware of investment risks[7](index=7&type=chunk) [Chapter 1 Company Profile](index=4&type=section&id=Chapter%201%20Company%20Profile) This chapter provides an overview of the company's establishment, operational scope, strategic vision, and stock listing information [1.1 Company Overview](index=5&type=section&id=1.1%20Company%20Overview) China Merchants Bank, established in 1987 with headquarters in Shenzhen, offers wholesale and retail banking services across China and major global financial centers, aiming to be an "innovation-driven, model-leading, distinctive best value-creating bank" - The Company was established in 1987, headquartered in Shenzhen, China, with branches primarily in major Chinese cities and international financial centers such as Hong Kong, New York, London, Singapore, and Sydney[12](index=12&type=chunk) - The Company provides wholesale and retail banking products and services, including account and payment settlement services based on "All-in-One Card" debit cards and credit cards, tiered wealth management services like "Sunflower Wealth Management" and private banking, retail credit services, and online services such as the China Merchants Bank App, Life App, and "All-in-One Net" integrated online banking[13](index=13&type=chunk) - The Company's strategic vision is to become an "innovation-driven, model-leading, distinctive best value-creating bank," accelerating its transformation towards "internationalization, comprehensive operations, differentiation, and digitalization"[13](index=13&type=chunk) Stock Listing Information | Stock Type | Exchange | Stock Abbreviation | Stock Code | | :--- | :--- | :--- | :--- | | A-share | Shanghai Stock Exchange | China Merchants Bank | 600036 | | H-share | Hong Kong Stock Exchange | China Merchants Bank | 03968 | | Domestic Preferred Stock | Shanghai Stock Exchange | CMB Pref 1 | 360028 | [Chapter 2 Summary of Accounting Data and Financial Indicators](index=6&type=section&id=Chapter%202%20Summary%20of%20Accounting%20Data%20and%20Financial%20Indicators) This chapter presents a concise overview of the Group's key accounting data, financial performance, and financial ratios for the reporting period [2.1 Key Accounting Data and Financial Indicators of the Group](index=7&type=section&id=2.1%20Key%20Accounting%20Data%20and%20Financial%20Indicators%20of%20the%20Group) In H1 2025, the Group's net operating income decreased by 1.73% year-on-year, while net profit attributable to shareholders increased by 0.25%; total assets and customer deposits grew steadily, and the non-performing loan ratio decreased by 0.02 percentage points to 0.93% Key Accounting Data and Financial Indicators of the Group (H1 2025 vs H1 2024, RMB million) | Indicator | H1 2025 | H1 2024 | Year-on-year change (%) | | :--- | :--- | :--- | :--- | | Net operating income | 169,923 | 172,922 | -1.73 | | Profit before tax | 88,906 | 89,641 | -0.82 | | Net profit attributable to the Bank's shareholders | 74,930 | 74,743 | 0.25 | | Basic earnings per share attributable to the Bank's ordinary shareholders (RMB) | 2.89 | 2.89 | – | | Diluted earnings per share attributable to the Bank's ordinary shareholders (RMB) | 2.89 | 2.89 | – | Scale Indicators of the Group (June 30, 2025 vs December 31, 2024, RMB million) | Indicator | June 30, 2025 | December 31, 2024 | Change from end of previous year (%) | | :--- | :--- | :--- | :--- | | Total assets | 12,657,151 | 12,152,036 | 4.16 | | Of which: Total loans and advances | 7,116,616 | 6,888,315 | 3.31 | | Total liabilities | 11,360,291 | 10,918,561 | 4.05 | | Of which: Total customer deposits | 9,422,379 | 9,096,587 | 3.58 | | Equity attributable to the Bank's shareholders | 1,289,233 | 1,226,014 | 5.16 | | Net assets per ordinary share attributable to the Bank's ordinary shareholders (RMB) | 42.10 | 41.46 | 1.54 | [2.2 Financial Ratios of the Group](index=8&type=section&id=2.2%20Financial%20Ratios%20of%20the%20Group) In H1 2025, the Group's profitability ratios (ROAA, ROAE, net interest margin, net interest income ratio) declined, and the cost-to-income ratio increased; capital adequacy ratios (CET1, Tier 1, total) also decreased, but the non-performing loan ratio fell by 0.02 percentage points to 0.93%, maintaining stable asset quality Profitability Ratios of the Group (Annualized, %) | Indicator (%) | H1 2025 | H1 2024 | Year-on-year change | | :--- | :--- | :--- | :--- | | Return on average total assets attributable to the Bank's shareholders | 1.21 | 1.32 | Decreased by 0.11 percentage points | | Return on average net assets attributable to the Bank's ordinary shareholders | 13.85 | 15.44 | Decreased by 1.59 percentage points | | Net interest margin | 1.79 | 1.88 | Decreased by 0.09 percentage points | | Net interest income ratio | 1.88 | 2.00 | Decreased by 0.12 percentage points | | Cost-to-income ratio | 30.11 | 29.75 | Increased by 0.36 percentage points | Capital Adequacy Ratios of the Group (Advanced Approach, %) | Indicator (%) | June 30, 2025 | December 31, 2024 | Change from end of previous year | | :--- | :--- | :--- | :--- | | Common Equity Tier 1 capital adequacy ratio | 14.00 | 14.86 | Decreased by 0.86 percentage points | | Tier 1 capital adequacy ratio | 17.07 | 17.48 | Decreased by 0.41 percentage points | | Capital adequacy ratio | 18.56 | 19.05 | Decreased by 0.49 percentage points | Asset Quality Indicators of the Group | Indicator (%) | June 30, 2025 | December 31, 2024 | Change from end of previous year | | :--- | :--- | :--- | :--- | | Non-performing loan ratio | 0.93 | 0.95 | Decreased by 0.02 percentage points | | Provision coverage ratio | 410.93 | 411.98 | Decreased by 1.05 percentage points | | Loan loss provision ratio | 3.83 | 3.92 | Decreased by 0.09 percentage points | | Credit cost (annualized) | 0.67 | 0.77 | Decreased by 0.10 percentage points | [Chapter 3 Management Discussion and Analysis](index=9&type=section&id=Chapter%203%20Management%20Discussion%20and%20Analysis) This chapter provides a comprehensive analysis of the Group's operating performance, financial position, asset quality, capital adequacy, and strategic implementation [3.1 Overall Operating Performance Analysis](index=9&type=section&id=3.1%20Overall%20Operating%20Performance%20Analysis) In H1 2025, China's economy grew steadily, but the banking sector faced narrowing net interest margins and pressure on net operating income; the Group achieved balanced development, with net operating income decreasing by 1.73% year-on-year, net profit attributable to shareholders increasing by 0.25%, steady growth in assets and liabilities, and stable asset quality with the non-performing loan ratio falling to 0.93% - In H1 2025, the Chinese economy faced complex situations and multiple challenges, achieving steady growth; under the influence of LPR reductions and insufficient effective credit demand, banks' net interest margins further narrowed, and net operating income pressure remained significant[19](index=19&type=chunk) - During the reporting period, the Group achieved net operating income of **RMB 169.923 billion**, a year-on-year decrease of **1.73%**; net profit attributable to the Bank's shareholders was **RMB 74.930 billion**, a year-on-year increase of **0.25%**[20](index=20&type=chunk) - As of the end of the reporting period, the Group's total assets were **RMB 12,657.151 billion**, an increase of **4.16%** from the end of the previous year; total loans and advances were **RMB 7,116.616 billion**, an increase of **3.31%** from the end of the previous year[20](index=20&type=chunk) - As of the end of the reporting period, the Group's non-performing loan balance was **RMB 66.370 billion**, an increase of **RMB 0.760 billion** from the end of the previous year; the non-performing loan ratio was **0.93%**, a decrease of **0.02 percentage points** from the end of the previous year[21](index=21&type=chunk) [3.2 Income Statement Analysis](index=9&type=section&id=3.2%20Income%20Statement%20Analysis) In H1 2025, the Group's profit before tax decreased by 0.82% year-on-year, and net operating income decreased by 1.73%; net interest income grew by 1.57%, but net interest margin and net interest income ratio both declined, while non-interest net income decreased by 6.77% due to lower bank card and settlement fees despite growth in wealth management fees; operating expenses slightly increased by 0.07%, and credit impairment losses decreased by 8.56% Key Income Statement Items of the Group (RMB million) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net interest income | 106,085 | 104,449 | | Net fee and commission income | 37,602 | 38,328 | | Other net income | 24,564 | 28,595 | | Total operating income | 168,251 | 171,372 | | Operating expenses | (56,383) | (56,345) | | Credit impairment losses | (24,623) | (26,928) | | Profit before tax | 88,906 | 89,641 | | Net profit | 75,405 | 75,379 | | Net profit attributable to the Bank's shareholders | 74,930 | 74,743 | - During the reporting period, the Group achieved net operating income of **RMB 169.923 billion**, a year-on-year decrease of **1.73%**, with net interest income accounting for **62.43%** and non-interest net income accounting for **37.57%**, a year-on-year decrease of **2.03 percentage points**[24](index=24&type=chunk) - During the reporting period, the Group achieved interest income of **RMB 177.014 billion**, a year-on-year decrease of **5.84%**, primarily due to a decrease in the yield on interest-earning assets; interest income from loans and advances was **RMB 119.080 billion**, a year-on-year decrease of **9.93%**, mainly affected by the reduction in interest rates for existing mortgage loans and LPR[25](index=25&type=chunk)[26](index=26&type=chunk) - During the reporting period, the Group's net interest income was **RMB 106.085 billion**, a year-on-year increase of **1.57%**; the annualized average yield on interest-earning assets was **3.14%**, a year-on-year decrease of **46 basis points**; the annualized average cost of interest-bearing liabilities was **1.35%**, a year-on-year decrease of **37 basis points**; net interest margin was **1.79%**, a year-on-year decrease of **9 basis points**; net interest income ratio was **1.88%**, a year-on-year decrease of **12 basis points**[36](index=36&type=chunk)[37](index=37&type=chunk) - During the reporting period, the Group achieved non-interest net income of **RMB 63.838 billion**, a year-on-year decrease of **6.77%**; of which, net fee and commission income was **RMB 37.602 billion**, a year-on-year decrease of **1.89%**, with wealth management fee and commission income increasing by **11.89%** to **RMB 12.797 billion**; bank card fee income was **RMB 7.221 billion**, a year-on-year decrease of **16.37%**[41](index=41&type=chunk) - During the reporting period, the Group's operating expenses were **RMB 56.383 billion**, a year-on-year increase of **0.07%**; the cost-to-income ratio was **30.11%**, a year-on-year increase of **0.36 percentage points**[45](index=45&type=chunk) - During the reporting period, the Group's credit impairment losses were **RMB 24.623 billion**, a year-on-year decrease of **8.56%**, mainly due to the Group's continuous optimization of asset and customer structures, maintaining stable asset quality for loan and guarantee commitment businesses[48](index=48&type=chunk)[49](index=49&type=chunk) [3.3 Balance Sheet Analysis](index=15&type=section&id=3.3%20Balance%20Sheet%20Analysis) As of the end of the reporting period, the Group's total assets grew by 4.16% to RMB 12,657.151 billion, driven by increases in loans and advances and financial investments; total liabilities grew by 4.05% to RMB 11,360.291 billion, mainly due to steady growth in customer deposits, which increased by 3.58%, though the proportion of demand deposits decreased, indicating a trend towards time deposits; shareholders' equity increased by 5.16%, despite declines in investment revaluation reserves and foreign currency translation differences - As of the end of the reporting period, the Group's total assets were **RMB 12,657.151 billion**, an increase of **4.16%** from the end of the previous year, mainly due to the growth in the Group's loans and advances and financial investments[50](index=50&type=chunk) Composition of Total Assets (RMB million) | Indicator | June 30, 2025 | Percentage of total (%) | December 31, 2024 | Percentage of total (%) | | :--- | :--- | :--- | :--- | :--- | | Total loans and advances | 7,116,616 | 56.23 | 6,888,315 | 56.68 | | Investment securities and other financial assets | 3,973,551 | 31.39 | 3,705,919 | 30.50 | | Cash, precious metals and deposits with central banks | 568,565 | 4.49 | 583,202 | 4.80 | | Interbank balances | 934,457 | 7.38 | 896,707 | 7.38 | | Total assets | 12,657,151 | 100.00 | 12,152,036 | 100.00 | - As of the end of the reporting period, the Group's total liabilities were **RMB 11,360.291 billion**, an increase of **4.05%** from the end of the previous year, mainly due to the steady growth in customer deposits[67](index=67&type=chunk) Composition of Total Liabilities (RMB million) | Indicator | June 30, 2025 | Percentage of total (%) | December 31, 2024 | Percentage of total (%) | | :--- | :--- | :--- | :--- | :--- | | Customer deposits | 9,422,379 | 82.94 | 9,096,587 | 83.31 | | Interbank balances | 1,118,033 | 9.84 | 1,017,506 | 9.32 | | Borrowings from central banks | 171,752 | 1.51 | 189,511 | 1.74 | | Debt securities issued | 162,020 | 1.43 | 221,583 | 2.03 | | Total liabilities | 11,360,291 | 100.00 | 10,918,561 | 100.00 | - As of the end of the reporting period, the Group's total customer deposits were **RMB 9,422.379 billion**, an increase of **3.58%** from the end of the previous year; during the reporting period, the average daily balance of demand deposits as a percentage of the average daily balance of customer deposits was **49.72%**, a decrease of **0.62 percentage points** from the full previous year, indicating a market-wide trend towards time deposits[70](index=70&type=chunk)[71](index=71&type=chunk) - As of the end of the reporting period, the Group's equity attributable to the Bank's shareholders was **RMB 1,289.233 billion**, an increase of **5.16%** from the end of the previous year; of which, investment revaluation reserves decreased by **11.75%**, and foreign currency translation differences decreased by **36.98%**[72](index=72&type=chunk) [3.4 Loan Quality Analysis](index=19&type=section&id=3.4%20Loan%20Quality%20Analysis) As of the end of the reporting period, the Group's non-performing loan balance was RMB 66.370 billion, with a non-performing loan ratio of 0.93%, a decrease of 0.02 percentage points from the end of the previous year; corporate loan NPL ratio decreased, while retail loan NPL ratio increased; the real estate NPL ratio was 4.74%, a decrease of 0.20 percentage points; total overdue loans increased, but the ratio of NPLs to loans overdue for over 90 days was 1.28; loan loss provisions increased, while provision coverage and loan loss provision ratios slightly decreased - As of the end of the reporting period, the Group's non-performing loan balance was **RMB 66.370 billion**, an increase of **RMB 0.760 billion** from the end of the previous year; the non-performing loan ratio was **0.93%**, a decrease of **0.02 percentage points** from the end of the previous year[75](index=75&type=chunk) Five-Category Loan Classification (RMB million) | Category | Amount as of June 30, 2025 | Percentage of total (%) | Amount as of December 31, 2024 | Percentage of total (%) | | :--- | :--- | :--- | :--- | :--- | | Normal loans | 6,948,779 | 97.64 | 6,733,625 | 97.76 | | Special mention loans | 101,467 | 1.43 | 89,080 | 1.29 | | Non-performing loans | 66,370 | 0.93 | 65,610 | 0.95 | | Total loans and advances | 7,116,616 | 100.00 | 6,888,315 | 100.00 | - Corporate loan balance was **RMB 3,089.691 billion**, an increase of **7.89%** from the end of the previous year, with an NPL ratio of **0.93%**, a decrease of **0.13 percentage points** from the end of the previous year; retail loan balance was **RMB 3,678.188 billion**, an increase of **0.92%** from the end of the previous year, with an NPL ratio of **1.03%**, an increase of **0.07 percentage points** from the end of the previous year[79](index=79&type=chunk) - Loans to the real estate industry amounted to **RMB 311.554 billion**, with an NPL ratio of **4.74%**, a decrease of **0.20 percentage points** from the end of the previous year[80](index=80&type=chunk) - As of the end of the reporting period, the Group's overdue loans totaled **RMB 97.084 billion**, an increase of **RMB 5.209 billion** from the end of the previous year, with an overdue loan ratio of **1.36%**, an increase of **0.03 percentage points** from the end of the previous year; the ratio of the Company's non-performing loans to loans overdue for more than 60 days was **1.12**[90](index=90&type=chunk) - As of the end of the reporting period, the Group's loan loss provision balance was **RMB 272.733 billion**, an increase of **RMB 2.432 billion** from the end of the previous year; the provision coverage ratio was **410.93%**, a decrease of **1.05 percentage points** from the end of the previous year; the loan loss provision ratio was **3.83%**, a decrease of **0.09 percentage points** from the end of the previous year[94](index=94&type=chunk) [3.5 Capital Adequacy Analysis](index=25&type=section&id=3.5%20Capital%20Adequacy%20Analysis) As of the end of the reporting period, the Group's and the Company's Common Equity Tier 1, Tier 1, and total capital adequacy ratios under the advanced approach all decreased, primarily due to cash dividends, but still met regulatory requirements; the leverage ratio slightly increased, and credit, market, and operational risk-weighted assets were disclosed - According to the various capital requirements of financial regulatory authorities, and the additional capital and leverage ratio requirements of the "Additional Regulatory Provisions for Systemically Important Banks (Trial)", the Group's and the Company's capital adequacy ratio, Tier 1 capital adequacy ratio, and Common Equity Tier 1 capital adequacy ratio should not be lower than **11.25%**, **9.25%**, and **8.25%** respectively, and the leverage ratio should not be lower than **4.375%**; during the reporting period, the Group and the Company consistently met all capital and leverage ratio regulatory requirements[95](index=95&type=chunk) Capital Adequacy Ratios of the Group under Advanced Approach (RMB million) | Indicator | June 30, 2025 | December 31, 2024 | Change from end of previous year (%) | | :--- | :--- | :--- | :--- | | Common Equity Tier 1 capital adequacy ratio | 14.00% | 14.86% | Decreased by 0.86 percentage points | | Tier 1 capital adequacy ratio | 17.07% | 17.48% | Decreased by 0.41 percentage points | | Capital adequacy ratio | 18.56% | 19.05% | Decreased by 0.49 percentage points | | Leverage ratio | 8.48% | 8.46% | Increased by 0.02 percentage points | - As of the end of the reporting period, the Group's Common Equity Tier 1 capital adequacy ratio, Tier 1 capital adequacy ratio, and capital adequacy ratio under the advanced approach were **14.00%**, **17.07%**, and **18.56%** respectively, decreasing by **0.86**, **0.41**, and **0.49 percentage points** from the end of the previous year; the decrease in all capital adequacy ratios was mainly due to the impact of cash dividends[99](index=99&type=chunk) - As of the end of the reporting period, the Group's market risk-weighted assets were **RMB 380.712 billion**, with a market risk capital requirement of **RMB 30.457 billion**; the Group's operational risk-weighted assets were **RMB 715.762 billion**, with an operational risk capital requirement of **RMB 57.261 billion**[110](index=110&type=chunk)[111](index=111&type=chunk) [3.6 Segment Operating Results](index=30&type=section&id=3.6%20Segment%20Operating%20Results) In H1 2025, retail finance business profit before tax increased by 1.64% year-on-year, accounting for 58.53% of the Group's total, and net operating income increased by 0.25%, accounting for 56.60%; wholesale finance business saw growth in both profit before tax and net operating income Summary of Operating Results by Business Segment of the Group (RMB million) | Item | H1 2025 Segment Profit Before Tax | H1 2025 Net Operating Income | H1 2024 Segment Profit Before Tax | H1 2024 Net Operating Income | | :--- | :--- | :--- | :--- | :--- | | Retail Finance Business | 52,036 | 96,179 | 51,198 | 95,939 | | Wholesale Finance Business | 37,057 | 70,301 | 36,433 | 72,022 | | Other Businesses | (187) | 3,443 | 2,010 | 4,961 | | Total | 88,906 | 169,923 | 89,641 | 172,922 | - During the reporting period, the Group's retail finance business achieved profit before tax of **RMB 52.036 billion**, a year-on-year increase of **1.64%**, accounting for **58.53%** of the Group's profit before tax, an increase of **1.42 percentage points** year-on-year; net operating income was **RMB 96.179 billion**, a year-on-year increase of **0.25%**, accounting for **56.60%** of the Group's net operating income, an increase of **1.12 percentage points** year-on-year[113](index=113&type=chunk) [3.7 Other Financial Information Disclosed According to Regulatory Requirements](index=29&type=section&id=3.7%20Other%20Financial%20Information%20Disclosed%20According%20to%20Regulatory%20Requirements) The Group's off-balance sheet items primarily include derivative financial instruments, commitments, and contingent liabilities, with credit commitments being the largest component at RMB 3,258.649 billion; as of the end of the reporting period, the Group had no overdue outstanding debts - The Group's off-balance sheet items include derivative financial instruments, commitments, and contingent liabilities; as of the end of the reporting period, the Group's credit commitment balance was **RMB 3,258.649 billion**[114](index=114&type=chunk) - As of the end of the reporting period, the Group had no overdue outstanding debts[115](index=115&type=chunk) [3.8 Implementation of Development Strategy](index=31&type=section&id=3.8%20Implementation%20of%20Development%20Strategy) The Company advanced its value banking strategy, accelerating "internationalization, comprehensive operations, differentiation, and digitalization" transformation; it achieved steady growth in customer numbers and AUM, maintained high ROAA and ROAE, accelerated international development with overseas institutions' net operating income growing by 23.72%, deepened comprehensive operations with subsidiaries' asset management and leasing businesses ranking high, demonstrated strong differentiated competitive advantages in retail and corporate finance, accelerated digitalization with IT investment at 2.93% of net operating income and AI applications across business areas, and continuously optimized its management and risk compliance systems - During the reporting period, the Company deeply promoted its value banking strategy, adhering to high-quality development and multi-objective balance, accelerating the "internationalization, comprehensive operations, differentiation, and digitalization" transformation, and maintaining steady and improving operating performance[116](index=116&type=chunk) - As of the end of the reporting period, the total number of retail customers was **216 million**, an increase of **2.86%** from the end of the previous year, and the total number of corporate customers was **3.3679 million**, an increase of **6.36%** from the end of the previous year; the annualized ROAA and ROAE for the reporting period were **1.21%** and **13.85%** respectively, maintaining a relatively high level globally[117](index=117&type=chunk) - Total assets of overseas institutions at the end of the reporting period increased by **6.56%** from the end of the previous year, and net operating income for the reporting period increased by **23.72%** year-on-year[118](index=118&type=chunk) - As of the end of the reporting period, CMB Wealth Management's wealth management product balance was **RMB 2.46 trillion**, maintaining a leading position among bank wealth management companies; CMB Financial Leasing's leasing business placement amount for the reporting period was **RMB 55.427 billion**, maintaining a leading position in the financial leasing industry; China Merchants Fund's non-money market public fund management scale was **RMB 522.889 billion**, maintaining a leading position in the industry[120](index=120&type=chunk) - As of the end of the reporting period, the Company's Assets Under Management (AUM) for retail customers totaled **RMB 16.03 trillion**, an increase of **7.39%** from the end of the previous year; retail wealth management fee and commission income for the reporting period increased by **6.00%** year-on-year[121](index=121&type=chunk) - As of the end of the reporting period, corporate loan balance was **RMB 2,798.720 billion**, an increase of **8.04%** from the end of the previous year; the Company's technology enterprise loan balance was **RMB 696.205 billion**, an increase of **17.91%** from the end of the previous year; public green loan balance was **RMB 414.714 billion**, an increase of **12.90%** from the beginning of the year[122](index=122&type=chunk) - During the reporting period, the Company's information technology investment was **RMB 4.444 billion**, reaching **2.93%** of the Company's net operating income; as of the end of the reporting period, the Group had **10,782 R&D personnel**, accounting for **9.13%** of the Group's total employees[125](index=125&type=chunk) - As of the end of the reporting period, the Company's non-performing loan ratio was **0.92%**, a decrease of **0.01 percentage points** from the end of the previous year[135](index=135&type=chunk) [3.9 Key Issues in Operations](index=35&type=section&id=3.9%20Key%20Issues%20in%20Operations) The Group's net interest income ratio remained under pressure due to declining asset yields and a trend towards time deposits; non-interest net income decreased year-on-year, but wealth management income grew; real estate risk control strengthened, with related business balances and NPL ratios declining; customer deposits grew steadily, but the time deposit trend continued; corporate loans grew significantly, while retail loan growth faced pressure; NPL formation rate decreased, and disposal efforts intensified; asset quality in key areas remained stable overall, but NPL ratios for consumer credit and small and micro loans increased; capital adequacy ratios remained high, with continuous optimization of capital allocation strategies - During the reporting period, the Group's and the Company's net interest income ratios were **1.88%** and **1.94%** respectively, a year-on-year decrease of **12** and **13 basis points**, mainly due to declining asset yields and a trend towards time deposits on the liability side[137](index=137&type=chunk) - During the reporting period, the Group achieved non-interest net income of **RMB 63.838 billion**, a year-on-year decrease of **6.77%**; the Group's wealth management income was **RMB 20.857 billion**, a year-on-year increase of **5.45%**[140](index=140&type=chunk) - As of the end of the reporting period, the Group's real estate-related credit and contingent credit, proprietary bond investments, proprietary non-standard investments, and other businesses bearing credit risk totaled **RMB 360.962 billion**, a decrease of **3.51%** from the end of the previous year; the Company's real estate non-performing loan ratio was **4.56%**, a decrease of **0.18 percentage points** from the end of the previous year[144](index=144&type=chunk) - As of the end of the reporting period, the Company's customer deposit balance was **RMB 9,063.432 billion**, an increase of **3.25%** from the end of the previous year; the average daily balance of demand deposits as a percentage of the average daily balance of customer deposits was **50.26%**, a decrease of **0.77 percentage points** from the full previous year, indicating a market-wide trend towards time deposits[146](index=146&type=chunk) - As of the end of the reporting period, the Company's corporate loans were **RMB 2,798.720 billion**, an increase of **8.04%** from the end of the previous year; retail loans were **RMB 3,611.408 billion**, an increase of **0.94%** from the end of the previous year[149](index=149&type=chunk) - During the reporting period, the Company generated new non-performing loans of **RMB 32.721 billion**, a year-on-year increase of **RMB 0.749 billion**; the annualized non-performing loan formation rate was **0.98%**, a year-on-year decrease of **0.04 percentage points**; a total of **RMB 31.846 billion** in non-performing loans were disposed of during the reporting period[151](index=151&type=chunk) - As of the end of the reporting period, the Company's non-performing loan ratio for consumer credit businesses was **1.64%**, an increase of **0.10 percentage points** from the end of the previous year; the non-performing loan ratio for retail small and micro loans was **0.96%**, an increase of **0.17 percentage points** from the end of the previous year[156](index=156&type=chunk)[157](index=157&type=chunk) - As of the end of the reporting period, the Company's risk-weighted assets to total assets ratio under the advanced approach was **56.52%**; the Company's Risk-Adjusted Return on Capital (RAROC, pre-tax) under the advanced approach for the reporting period was **23.53%**[158](index=158&type=chunk) [3.10 Business Operations](index=39&type=section&id=3.10%20Business%20Operations) The Company's retail finance business profit before tax increased by 0.02% year-on-year, while net operating income decreased by 0.71%, but AUM and private banking client numbers grew; credit card transaction volume and non-interest income declined, yet asset quality remained stable; wholesale finance business profit before tax decreased by 5.73% and net operating income by 5.87%, but corporate client financing and technology enterprise loan balances grew significantly; total asset management scale slightly decreased, though CMB International's asset management grew; custody asset balance increased by 5.60%; financial market transaction volume surged; distribution channels saw enhanced online and offline services, and overseas branches operated steadily; most major subsidiaries were profitable, except for CMB Europe Key Financial Data of the Company's Retail Finance Business (RMB million) | Indicator | H1 2025 | H1 2024 | Year-on-year growth (%) | | :--- | :--- | :--- | :--- | | Profit before tax | 49,977 | 49,967 | 0.02 | | Net operating income | 93,256 | 93,920 | -0.71 | | Retail net interest income | 69,130 | 68,909 | 0.32 | | Retail non-interest net income | 24,126 | 25,011 | -3.56 | | Retail wealth management fee and commission income | 11,272 | 10,634 | 6.00 | | Retail bank card fee income | 7,159 | 8,569 | -16.48 | - As of the end of the reporting period, the Company's Assets Under Management (AUM) for retail customers totaled **RMB 16,029.395 billion**, an increase of **7.39%** from the end of the previous year; private banking customers numbered **182,740**, an increase of **8.07%** from the end of the previous year[160](index=160&type=chunk)[164](index=164&type=chunk) - During the reporting period, the Company's credit card transaction volume was **RMB 2,020.960 billion**, a year-on-year decrease of **8.54%**; credit card interest income was **RMB 30.612 billion**, a year-on-year decrease of **4.96%**; credit card non-interest income was **RMB 10.471 billion**, a year-on-year decrease of **16.23%**; the credit card non-performing loan ratio was **1.75%**, flat compared to the end of the previous year[166](index=166&type=chunk) Key Financial Data of the Company's Wholesale Finance Business (RMB million) | Indicator | H1 2025 | H1 2024 | Year-on-year growth (%) | | :--- | :--- | :--- | :--- | | Profit before tax | 33,135 | 35,145 | -5.73 | | Net operating income | 60,872 | 64,668 | -5.87 | | Wholesale finance business net interest income | 38,110 | 37,030 | 2.92 | | Wholesale finance business non-interest net income | 22,762 | 27,638 | -17.65 | - As of the end of the reporting period, the Company's total financing for corporate customers (FPA) was **RMB 6,454.492 billion**, an increase of **RMB 395.469 billion** from the beginning of the year; technology enterprise loan balance was **RMB 696.205 billion**, an increase of **17.91%** from the end of the previous year[172](index=172&type=chunk)[182](index=182&type=chunk) - As of the end of the reporting period, the total asset management scale of the Company's subsidiaries CMB Wealth Management, China Merchants Fund, China Merchants Cigna Asset Management, and CMB International was **RMB 4.45 trillion**, a decrease of **0.51%** from the end of the previous year; CMB International's asset management scale was **HKD 147.966 billion**, an increase of **13.53%** from the end of the previous year[198](index=198&type=chunk) - As of the end of the reporting period, the Company's custody asset balance was **RMB 24.14 trillion**, an increase of **5.60%** from the end of the previous year, with the total custody scale ranking among the top in the industry[203](index=203&type=chunk) - During the reporting period, RMB bond investment transaction volume was **RMB 4.58 trillion**, a year-on-year increase of **182.72%**; financial market wholesale customer business transaction volume was **USD 159.176 billion**, a year-on-year increase of **25.16%**[204](index=204&type=chunk) Operating Results of Major Overseas Branches (Net Operating Income) | Branch Name | Net Operating Income (during reporting period) | | :--- | :--- | | Hong Kong Branch | HKD 1.538 billion | | New York Branch | USD 48.9733 million | | Singapore Branch | USD 18.0577 million | | Luxembourg Branch | EUR 12.7146 million | | London Branch | USD 21.6047 million | | Sydney Branch | AUD 33.9476 million | Operating Results of Major Subsidiaries (Net Profit) | Subsidiary Name | Net Profit (during reporting period) | | :--- | :--- | | Wing Lung Bank | HKD 3.037 billion | | CMB Financial Leasing | RMB 2.839 billion | | CMB International | HKD 1.371 billion | | CMB Wealth Management | RMB 1.364 billion | | China Merchants Fund | RMB 0.789 billion | | China Merchants Cigna Asset Management | RMB 0.071 billion | | CMB Europe | EUR -1.025 million | | China Merchants Cigna (Joint Venture) | RMB 0.308 billion | | China Union Consumer Finance (Joint Venture) | RMB 1.504 billion | [3.11 Risk Management](index=52&type=section&id=3.11%20Risk%20Management) The Company upholds a prudent risk culture, strengthening comprehensive risk management to ensure overall stable asset quality; credit risk management involves optimizing credit policies, enhancing key area risk prevention, and intensifying NPL recovery and disposal efforts; large exposure and country risks are within regulatory limits; market risk, including interest rate and exchange rate risks in trading and banking books, is effectively monitored; operational risk management continuously improves, focusing on cybersecurity and data security; liquidity risk management is prudent, with all indicators meeting regulatory requirements; reputation and compliance risk management mechanisms are optimized, and anti-money laundering risk management effectiveness is enhanced - The Company closely focused on its value banking strategy, adhered to a prudent risk culture and risk appetite, continuously consolidated its fortress-style risk and compliance management system, and maintained the bottom line of preventing systemic risks[234](index=234&type=chunk) - In wholesale finance business credit risk management, the Group optimized credit and investment policies, continuously improved admission standards for corporate, interbank, and institutional clients, strengthened control over key risk areas, and promoted credit structure optimization; in retail finance business credit risk management, the Group primarily relies on credit assessment of applicants as the basis for granting personal credit, evaluating applicants' income, credit history, and loan repayment ability[236](index=236&type=chunk) - As of the end of the reporting period, except for regulatory exempted clients, the Company's non-interbank single clients, non-interbank group clients, interbank single clients, and interbank group clients that met large exposure standards all complied with regulatory requirements; at the end of the reporting period, the Company's country risk exposure was mainly concentrated in low-risk countries or regions, and country risk is not expected to have a significant adverse impact on the Company's business operations[239](index=239&type=chunk)[240](index=240&type=chunk) - The Company's trading book investment scope is primarily RMB bonds, and it generally adopted cautious trading strategies and prudent risk control measures, ensuring that all interest rate risk indicators for the trading book were within target ranges; as of the end of the reporting period, all on-balance sheet and off-balance sheet management measures were progressing as planned, interest rate risk levels were controlled within the annual interest rate risk management targets, and all indicators, including stress test results, remained within limits and warning values, with overall stable interest rate risk in the banking book[243](index=243&type=chunk)[245](index=245&type=chunk) - During the reporting period, the Company continuously improved its operational risk management system with the goal of preventing systemic operational risks and significant operational risk losses; first, by strengthening the operational risk event and loss management mechanism; second, by focusing on risk control in key business areas; third, by focusing on cybersecurity and data security; fourth, by further improving business continuity management; and fifth, by improving system management tools and functions to enhance digitalization capabilities[250](index=250&type=chunk) - As of the end of the reporting period, all of the Company's liquidity indicators met regulatory requirements, and it had sufficient funding sources to meet the needs of continuous healthy business development; the Company's liquidity indicators performed well, deposits maintained stable growth, liquidity reserves were ample, and overall liquidity was secure[252](index=252&type=chunk) - During the reporting period, the Company strictly implemented the requirements of the "Measures for the Management of Reputation Risk of Banking and Insurance Institutions (Trial)" and continuously optimized its reputation risk management mechanism; the Company established a complete and effective compliance risk management system through a management organizational structure consisting of the Board's Risk and Capital Management Committee, head office and branch risk and compliance management committees, compliance officers, and compliance supervisors, achieving effective control over compliance risk[254](index=254&type=chunk)[255](index=255&type=chunk) - During the reporting period, the Company actively fulfilled its anti-money laundering obligations and continuously improved the effectiveness of money laundering risk management; first, by strengthening training and promotion of the "Anti-Money Laundering Law"; second, by continuously strengthening money laundering risk management for customers and products; third, by improving suspicious transaction monitoring tools; and fourth, by continuing to increase technology investment in key anti-money laundering areas to promote the level of anti-money laundering digitalization[257](index=257&type=chunk) [3.12 Outlook and Countermeasures](index=55&type=section&id=3.12%20Outlook%20and%20Countermeasures) Looking ahead to H2, global economic growth is expected to be moderate with uncertainties, while the domestic economy is projected to continue its recovery; the Company will deepen its value banking strategy by strengthening foundations, accelerating "four transformations," adhering to risk and compliance bottom lines, and building a "strict management, integrity, and innovation" model to address low-interest rate challenges and achieve high-quality development - Domestically, achieving the full-year economic growth target of around **5%** in 2025 has solid support; first, consumption's contribution to economic growth is strengthening; second, real estate investment may continue to decline but with weakened drag; third, economic policies will be anchored to economic and social development tasks, continuously exerting effort and adding strength as appropriate[258](index=258&type=chunk) - The Company will strengthen its foundation, maintaining coordinated development in quality, efficiency, and scale; it will focus on its core, doing well in the three basic businesses of deposits, loans, and intermediary services, and consolidating the three fundamental aspects of customer base, asset quality, and market share[259](index=259&type=chunk) - Accelerate the "internationalization, comprehensive operations, differentiation, and digitalization" transformation, leading the construction of a digital China Merchants Bank with "AI First," striving to become a globally leading intelligent bank[260](index=260&type=chunk) - Adhere to the bottom line, persistently strengthening risk and compliance management; enhance risk prevention and resolution in key areas, strengthen proactive risk prevention in real estate, supply-demand mismatch in production capacity, and retail credit, and intensify efforts in non-performing asset recovery and disposal[261](index=261&type=chunk) - Continuously build a new model of high-quality development characterized by "strict management, integrity, and innovation"; strengthen asset-liability management, improving its refinement and foresight; strengthen full-cost management, improving its lean level; strengthen innovation-driven development, increasing innovation in products, services, management, technology, models, and institutional mechanisms[261](index=261&type=chunk) [Chapter 4 Environmental, Social, and Governance (ESG)](index=57&type=section&id=Chapter%204%20Environmental%2C%20Social%2C%20and%20Governance%20(ESG)) This chapter details the Company's commitment to ESG principles, its social responsibility initiatives, and efforts to create comprehensive value for stakeholders and promote sustainable development [4.1 Overview of Environmental, Social, and Governance](index=58&type=section&id=4.1%20Overview%20of%20Environmental%2C%20Social%2C%20and%20Governance) The Company actively practices ESG principles, fulfills social responsibilities, creates comprehensive value for customers, employees, shareholders, partners, and society, and promotes sustainable economic and social development - The Company actively practices ESG principles, earnestly fulfills its social responsibilities, continuously creates comprehensive value for customers, employees, shareholders, partners, and society, and contributes to sustainable economic and social development[262](index=262&type=chunk) [4.2 Environmental Information](index=58&type=section&id=4.2%20Environmental%20Information) The Company actively responds to national carbon peak and neutrality strategies, accelerates green finance development, and improves its green operations management system; the Board is responsible for environmental (climate) management and green finance strategy, integrating ESG factors into risk appetite and client admission standards; progress was made in green credit, deposits, bonds, and investments, while green operations deepened carbon reduction, promoted paperless offices, and strengthened energy, water, and waste management - During the reporting period, the Company actively responded to national carbon peak and carbon neutrality strategic goals, accelerated the development of green finance, improved its green operations management system, promoted green development transformation, and fostered harmonious coexistence between humanity and nature[263](index=263&type=chunk) - The Company's Board of Directors plays a strategic leading role in environmental (climate) management and green finance; the Green Finance Business Development Committee is responsible for coordinating and promoting the Bank's green finance work[264](index=264&type=chunk)[265](index=265&type=chunk) - ESG factors, including climate, are integrated into the risk appetite, explicitly requiring enhanced understanding of green development trends in key areas, increased support for green, low-carbon, and circular economies, improved ESG risk management, and strict control over clients and projects with significant ESG risks[267](index=267&type=chunk) - As of the end of the reporting period, the Company's green loan balance was **RMB 566.799 billion**, an increase of **12.55%** from the beginning of the year; cumulative green deposits handled amounted to **RMB 13.760 billion**, an increase of **13.14%** from the end of the previous year[270](index=270&type=chunk) - During the reporting period, the Company lead-underwrote debt financing instruments totaling **RMB 7.889 billion**; subsidiary CMB International assisted **18 enterprises** in issuing **20 green bonds**, with a financing scale of **USD 6.356 billion**, a year-on-year increase of **95.09%**[271](index=271&type=chunk) - During the reporting period, **548,600 paperless reimbursement documents** were processed, saving **2.1944 million sheets of paper**; electronic seals were used **71.7603 million times**, saving **113 million sheets of paper**[275](index=275&type=chunk) [4.3 Social Responsibility Information](index=61&type=section&id=4.3%20Social%20Responsibility%20Information) The Company actively serves the real economy by increasing loans to green economy, manufacturing, technological innovation, inclusive small and micro enterprises, and agricultural sectors; it supports education, housing, medical security, and migrant worker wage supervision for livelihood improvement; financial service accessibility is enhanced through optimized online/offline channels, elderly-friendly adaptations, and payment convenience; robust cybersecurity and data security management systems are in place, with no major incidents; customer privacy and consumer rights protection are strengthened; the Company actively participates in rural revitalization and philanthropy; human capital development adheres to a "talent-strong bank" strategy, building a professional talent system with equal employment and comprehensive compensation benefits - As of the end of the reporting period, the Company's manufacturing loan balance was **RMB 691.308 billion**, an increase of **7.77%** from the end of the previous year; technology enterprise loan balance was **RMB 696.205 billion**, an increase of **17.91%** from the end of the previous year; during the reporting period, the Company issued **RMB 315.980 billion** in loans to inclusive small and micro enterprises, with an outstanding balance of **RMB 913.347 billion** at the end of the period[278](index=278&type=chunk) - As of the end of the reporting period, the Company collaborated with **178 education authorities** at various levels nationwide, cumulatively safeguarding parents' course purchase funds for **137 million person-times**; cumulative activation of medical insurance electronic certificates (medical insurance codes) reached **33.2471 million**; cumulative safeguarding of migrant worker wage payments reached **RMB 318.330 billion**[282](index=282&type=chunk)[284](index=284&type=chunk) - As of the end of the reporting period, the China Merchants Bank App "Elderly Version" had **2.4149 million customers**; as one of the first domestic pilot banks, the Company launched the Cross-border Payment Connect product, opening a more efficient and convenient new channel for cross-border payment services for residents of mainland China and Hong Kong[286](index=286&type=chunk)[287](index=287&type=chunk) - The Company has established a comprehensive cybersecurity management framework covering four major areas: internet service security, intranet security, office security, and third-party security; during the reporting period, the Company experienced no major cybersecurity, information, or data security incidents[288](index=288&type=chunk)[289](index=289&type=chunk) - The Company strictly complies with national laws and regulations such as the "Personal Information Protection Law of the People's Republic of China" and continuously strengthens the protection of customer personal information; during the reporting period, the Company experienced no major customer privacy leakage incidents[291](index=291&type=chunk)[293](index=293&type=chunk) - In terms of consumer protection review, **97,700 products and services** were reviewed during the reporting period, achieving **100% coverage**; in financial education, financial education activities covered **287 million consumer person-times** during the reporting period[295](index=295&type=chunk) - During the reporting period, the Company directly invested **RMB 24.784 million** in rural revitalization assistance funds; total external donations amounted to **RMB 9.5303 million**, continuously participating in philanthropy[297](index=297&type=chunk)[298](index=298&type=chunk) - The Company consistently adheres to the "talent-strong bank" strategy, is committed to building the "best employee growth bank," and focuses on establishing a "professional, diversified, market-oriented, and international" talent system; as of June 30, 2025, the Group had a total of **118,068 employees**, with **10,782 R&D personnel**, accounting for **9.13%** of the Group's total employees[299](index=299&type=chunk)[330](index=330&type=chunk) [4.4 Governance Information](index=65&type=section&id=4.4%20Governance%20Information) The Company continuously improves its corporate governance mechanism, adhering to the President responsibility system under Board leadership and market-oriented professional principles; the Board and Supervisory Board actively fulfill their duties, reviewing numerous important proposals and promoting inclusive finance, green finance, data governance, and consumer rights protection; the Company highly values business ethics, preventing corruption and money laundering through training and audits - The Company continuously promotes the improvement of its corporate governance mechanism, adheres to the "two consistent" principles, constantly enhances its corporate governance level, and maintains a philosophy of steady development and prudent risk management; the key to the corporate governance mechanism is adherence to the President responsibility system under the leadership of the Board of Directors and adherence to market-oriented and professional principles[305](index=305&type=chunk) - During the reporting period, the Company's Board of Directors actively fulfilled its responsibilities in inclusive finance, green finance, data governance, human capital, consumer rights protection, social responsibility, and other areas, reviewing multiple related proposals; the Company's Supervisory Board researched and reviewed multiple proposals, supervising key matters such as inclusive finance, green finance, data governance, consumer rights protection, and social responsibility[306](index=306&type=chunk)[307](index=307&type=chunk) - The Company highly values the supervision, warning, education, and training of business ethics; it conducts anti-corruption system training and warning education, as well as other business ethics-related training activities for all employees, consciously resisting and strictly prohibiting participation in illegal activities such as money laundering, commercial bribery, corruption, insider trading, and market manipulation[309](index=309&type=chunk) - The Company annually formulates internal audit plans covering business ethics matters, conducts special audits on anti-money laundering and sanctions compliance management annually, conducts regular audits of overseas institutions and subsidiaries annually, and conducts regular audits of domestic branches annually[310](index=310&type=chunk) [Chapter 5 Corporate Governance](index=67&type=section&id=Chapter%205%20Corporate%20Governance) This chapter outlines the Company's corporate governance structure, including the functions and operations of the Shareholders' Meeting, Board of Directors, Supervisory Board, and their respective committees [5.1 Overview of Corporate Governance](index=68&type=section&id=5.1%20Overview%20of%20Corporate%20Governance) During the reporting period, the Company's Shareholders' Meeting, Board of Directors, Supervisory Board, and their respective special committees performed their duties efficiently, ensuring compliant and stable operations; one Shareholders' Meeting, ten Board meetings, twenty-two Board special committee meetings, and seven Supervisory Board meetings were held, with no significant discrepancies between actual corporate governance and legal requirements - During the reporting period, the Company's Shareholders' Meeting, Board of Directors, Supervisory Board, and their respective special committees performed their duties efficiently, fully ensuring the Company's compliant and stable operations and sustained healthy development[312](index=312&type=chunk) - During the reporting period, the Company held **1 Shareholders' Meeting**, **10 Board of Directors meetings**, **22 Board of Directors special committee meetings**, and **7 Supervisory Board meetings**[312](index=312&type=chunk) - Through diligent self-inspection, the Company found no significant discrepancies between its actual corporate governance situation during the reporting period and the requirements of laws, administrative regulations, and normative documents of the China Securities Regulatory Commission concerning corporate governance of listed companies[312](index=312&type=chunk) [5.2 Shareholders' Meeting Convening Status](index=68&type=section&id=5.2%20Shareholders'%20Meeting%20Convening%20Status) The 2024 Annual General Meeting, held on June 25, 2025, approved 13 proposals, including Board and Supervisory Board work reports, profit distribution plans, capital management plans, auditor appointments, and director elections, with meeting procedures complying with relevant regulations - The Company's 2024 Annual General Meeting, held on June 25, 2025, reviewed and approved **13 proposals**, including the 2024 Board of Directors' Work Report, 2024 Supervisory Board's Work Report, 2024 Annual Report (including audited financial report), 2024 Financial Final Account Report, 2024 Profit Distribution Plan (including declaration of final dividend), 2025 Interim Profit Distribution Plan, 2025-2029 Capital Management Plan, appointment of 2025 auditors, election of directors for the Thirteenth Board of Directors, discontinuation of the Supervisory Board, revision of the Articles of Association, and 2024 Related Party Transactions Report[313](index=313&type=chunk) - The notice, convening, holding, and voting procedures of the meeting all complied with the relevant provisions of the "Company Law of the People's Republic of China," "Articles of Association of China Merchants Bank Co., Ltd.," and the Hong Kong Listing Rules[313](index=313&type=chunk) [5.3 Directors, Supervisors, and Senior Management](index=68&type=section&id=5.3%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, there were changes in the Company's directors, supervisors, and senior management, including new appointments (Zhu Liwei, Huang Jian, Xu Mingjie, Lei Caihua) and departures (Zhang Jian, Chen Dong, Zhu Jiangtao as directors; Luo Sheng, Xu Zhengjun, Cai Jin as supervisors); all directors and supervisors complied with the standard code for securities transactions during the period List of Directors, Supervisors, and Senior Management and Shareholdings (Partial) | Name | Position | Shareholding at period-end (shares) | | :--- | :--- | :--- | | Miao Jianmin | Chairman | – | | Wang Liang | Executive Director, President and CEO | 300,000 | | Zhong Desheng | Executive Director, Chief Risk Officer | 177,300 | | Peng Jiawen | Vice President, Chief Financial Officer, Board Secretary | 221,900 | | Lei Caihua | Vice President | 264,400 | | Xu Mingjie | Vice President | 200,000 | - In January 2025, Mr. Zhu Liwei's directorship qualification was approved by the National Financial Regulatory Administration; in March 2025, Mr. Huang Jian's directorship qualification was approved by the National Financial Regulatory Administration; in May 2025, Mr. Lei Caihua's vice president qualification was approved by the National Financial Regulatory Administration; in June 2025, Mr. Xu Mingjie's vice president qualification was approved by the National Financial Regulatory Administration; in February 2025, Mr. Zhang Jian ceased to serve as a non-executive director of the Company due to work changes; in March 2025, Mr. Chen Dong ceased to serve as a non-executive director of the Company due to work changes; in May 2025, Mr. Zhu Jiangtao ceased to serve as an executive director of the Company due to work reasons; in March 2025, Mr. Luo Sheng ceased to serve as a shareholder supervisor of the Company due to personal work reasons; in June 2025, Mr. Xu Zhengjun ceased to serve as an external supervisor of the Company due to the expiration of his term, and Ms. Cai Jin ceased to serve as an employee supervisor of the Company due to age reasons[320](index=320&type=chunk)[321](index=321&type=chunk)[322](index=322&type=chunk) - The Company has adopted the standards set out in Appendix C3 of the Hong Kong Listing Rules' Standard Code as the code of conduct for its directors and supervisors in securities transactions; after inquiry, to the best of the Company's knowledge, all directors and supervisors of the Company have complied with the Standard Code and the guidelines set by the Company during the reporting period[326](index=326&type=chunk) Interests and Short Positions of Directors, Supervisors, and Chief Executive under Hong Kong Regulations (Partial) | Name | Position | Share Class | Long/Short Position | Number of Shares (shares) | | :--- | :--- | :--- | :--- | :--- | | Wang Liang | Executive Director, President and CEO | A-share | Long Position | 300,000 | | Zhong Desheng | Executive Director, Chief Risk Officer | A-share | Long Position | 177,300 | | Yang Sheng | Employee Supervisor | A-share | Long Position | 197,700 | | Yang Sheng | Employee Supervisor | A-share | Spouse's Interest | 143,300 | [5.4 Profit Distribution](index=72&type=section&id=5.4%20Profit%20Distribution) The 2024 profit distribution plan, approved by the Shareholders' Meeting, includes appropriations for statutory surplus reserve, general reserve, country risk reserve, and public fund custody business risk reserve, along with a cash dividend of RMB 2.000 per share (tax inclusive) to all shareholders; the 2025 interim profit distribution plan targets a cash dividend amount representing 35% of the half-year net profit attributable to ordinary shareholders - The Company's 2024 Annual General Meeting, held on June 25, 2025, reviewed and approved the Company's 2024 profit distribution plan, including the appropriation of **RMB 13.915 billion** for statutory surplus reserve, **RMB 13.323 billion** for general reserve, **RMB 0.022 billion** for country risk reserve, and **RMB 0.056 billion** for public fund custody business risk reserve[328](index=328&type=chunk) - Based on the total share capital of A-shares and H-shares on the equity registration date for profit distribution, a cash dividend of **RMB 2.000 per share** (tax inclusive) will be distributed to all registered shareholders[328](index=328&type=chunk) - The Company's 2025 interim profit distribution plan is as follows: the cash dividend amount will account for **35%** of the net profit attributable to the Bank's ordinary shareholders for the first half of 2025[329](index=329&type=chunk) [5.5 Employee Information](index=73&type=section&id=5.5%20Employee%20Information) As of June 30, 2025, the Group had 118,068 employees with a balanced gender ratio; the professional composition was primarily retail finance, and educational background mainly consisted of bachelor's degrees and master's degrees or above; R&D personnel numbered 10,782, accounting for 9.13% of the total workforce - As of June 30, 2025, the Group had a total of **118,068 employees** (including dispatched personnel); the gender composition of the Group's employees was: **50,575 males** and **67,493 females**, indicating a relatively balanced gender ratio[330](index=330&type=chunk) - The professional composition of the Group's employees was: **20,584 in corporate finance**, **52,813 in retail finance**, **6,990 in risk management**, **17,264 in operations and management**, **10,782 in R&D**, **1,091 in administrative support**, and **8,544 in general management**[330](index=330&type=chunk) - The educational background composition of the Group's employees was: **31,629 with master's degrees or above**, **75,464 with bachelor's degrees**, and **10,975 with junior college degrees or below**[330](index=330&type=chunk) - The Group's R&D personnel numbered **10,782**, accounting for **9.13%** of the Group's total employees[330](index=330&type=chunk) [5.6 Head Office and Branches](index=73&type=section&id=5.6%20Head%20Office%20and%20Branches) As of the end of the reporting period, the Company had 1,953 institutions across China and overseas, with total assets of RMB 11,799.728 billion; these institutions are primarily located in the Yangtze River Delta, Pearl River Delta and Western Taiwan Straits Economic Zone, and Bohai Rim regions Distribution and Asset Scale of Head Office and Branches (Partial, RMB million) | Regional Division | Number of Institutions | Asset Scale (RMB million) | | :--- | :--- | :--- | | Head Office | 3 | 5,931,820 | | Yangtze River Delta Region | 300 | 1,003,761 | | Bohai Rim Region | 384 | 917,885 | | Pearl River Delta and Western Taiwan Straits Economic Zone | 359 | 1,225,172 | | Northeast Region | 150 | 171,778 | | Central Region | 307 | 642,079 | | Western Region | 322 | 646,068 | | Overseas | 6 | 235,078 | | Total | 1,953 | 11,799,728 | [5.7 Compliance with Corporate Governance Code](index=74&type=section&id=5.7%20Compliance%20with%20Corporate%20Governance%20Code) During the reporting period, the Company complied with the principles and code provisions of the Corporate Governance Code in Appendix C1 of the Hong Kong Listing Rules, and also met most of the recommended best practices - During the reporting period, the Company complied with the principles and code provisions contained in the Corporate Governance Code in Appendix C1 of the Hong Kong Listing Rules, and also met most of the recommended best practices[334](index=334&type=chunk) [Chapter 6 Significant Matters](index=75&type=section&id=Chapter%206%20Significant%20Matters) This chapter addresses significant events and disclosures, including securities transactions, pena