[Company Information](index=2&type=section&id=Company%20Information) This section details the company's registration, principal business locations, share listing, and board composition [Company Basic Information](index=3&type=section&id=Company%20Basic%20Information) This section outlines Changhong Jiahua Holdings Limited's registered office, principal place of business, share registrar, principal bankers, exchange, and contact details - The company is registered in Bermuda, with its principal place of business in Hong Kong, and its shares are listed on the Main Board of the Hong Kong Stock Exchange, stock code **3991**[3](index=3&type=chunk)[4](index=4&type=chunk) [Board of Directors and Committees](index=4&type=section&id=Board%20of%20Directors%20and%20Committees) This section lists the company's board members, including executive and independent non-executive directors, and the composition of the Audit, Remuneration, and Nomination Committees - Mr. Zhu Jianqiu serves as the **Chairman of the Board and President**[5](index=5&type=chunk) - Mr. Chan Ming Shun is the **Chairman of the Audit Committee** and **Chairman of the Remuneration Committee**, while Mr. Zhu Jianqiu is the **Chairman of the Nomination Committee**[5](index=5&type=chunk) [Chairman's Report](index=4&type=section&id=Chairman%27s%20Report) This report reviews the group's business performance amidst global economic challenges and outlines future strategic directions [Business Review](index=5&type=section&id=Business%20Review) Despite global economic slowdowns and increased geopolitical conflicts, the Group achieved stable growth in revenue and profit attributable to shareholders by focusing on smart distribution services and strategic collaborations - The global economic outlook for the first half of 2025 deteriorated, while China's economy maintained steady progress, with the Group facing challenges from an unfavorable operating environment and industry changes[8](index=8&type=chunk) - The Group steadfastly implemented its "Ecological Value Creation, High-Quality Growth Partner" strategy, building on smart distribution services and accelerating its shift towards an ecological mindset, leveraging digital intelligence technology to develop diverse capabilities and professional services[8](index=8&type=chunk) - The Group deepened collaboration with ecological partners, strategically expanding into cloud applications, metaverse, security, low-altitude economy, and digital marketing to cultivate new competitive advantages[8](index=8&type=chunk) 2025 First Half Key Financial Indicators Comparison | Indicator | 2025 First Half (million HKD) | 2024 First Half (million HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 21,168.69 | 19,286.17 | **+9.76%** | | Overall Gross Profit Margin | 3.07% | 3.34% | **-0.27 percentage points** | | Profit Attributable to Shareholders | 181.19 | 164.48 | **+10.16%** | | Basic Earnings Per Share | 7.05 HK cents | 6.40 HK cents | **+0.65 HK cents** | - The increase in **R&D expenses** was primarily due to an increase in R&D personnel; the rise in **distribution and selling expenses** was mainly due to increased operating costs for e-commerce business; and the decrease in **finance costs** was primarily due to lower bank loan interest rates[9](index=9&type=chunk) 2025 First Half Revenue and Profit by Business Segment | Business Segment | Revenue (million HKD) | Year-on-Year Change | Profit (million HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | | ICT Consumer Product Distribution | 8,471.25 | **-0.28%** | 129.55 | **+5.62%** | | ICT Enterprise Product Distribution | 8,378.27 | **+23.67%** | 221.86 | **-8.08%** | | Other Businesses | 4,319.18 | **+7.53%** | 45.10 | **+21.23%** | [Outlook](index=7&type=section&id=Outlook) For the second half of 2025, the Group anticipates continued global economic recovery challenges but expects China to increase policy support, focusing on technological innovation and digital intelligence to expand new ecosystems - Global economic recovery faces pressure in the second half of 2025, while China will strengthen fiscal and monetary policy coordination, expand domestic demand, and develop new quality productive forces[12](index=12&type=chunk) - The Group will uphold its core as a technology service enterprise, driven by innovation and digital intelligence technology, with smart distribution services as its foundation, to expand into new industry ecosystems such as cloud applications, metaverse, security, and low-altitude economy[12](index=12&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the group's financial performance, liquidity, and operational aspects for the reporting period [Financial Summary](index=8&type=section&id=Financial%20Summary) The Group maintained a sound financial and liquidity position in the first half of 2025, with both revenue and profit growing, despite a relatively high net gearing ratio 2025 First Half Financial and Liquidity Position | Indicator | Amount (million HKD) | | :--- | :--- | | Total Interest-Bearing Borrowings | 2,749.99 | | Cash and Bank Balances | 3,371.76 | | Net Current Assets | 2,976.75 | | Net Gearing Ratio | **3.59 times** | - For the six months ended June 30, 2025, **revenue was approximately 21,168.69 million HKD**, representing a **9.76% year-on-year increase**; **profit was approximately 181.19 million HKD**, a **10.16% year-on-year increase**[19](index=19&type=chunk) - Total comprehensive income was approximately **241.06 million HKD**, primarily due to **fluctuations in the RMB exchange rate**[19](index=19&type=chunk) [Asset Pledges](index=8&type=section&id=Asset%20Pledges) As of June 30, 2025, the Group had not mortgaged or pledged any of its fixed assets - During the reporting period, the Group had **no fixed asset pledges**[16](index=16&type=chunk) [Exchange Rate Fluctuation Risk and Related Hedging](index=8&type=section&id=Exchange%20Rate%20Fluctuation%20Risk%20and%20Related%20Hedging) The Group primarily transacts in RMB, HKD, and USD, facing minimal foreign exchange risk due to the RMB's small fluctuation range and the HKD's peg to the USD, thus no hedging is currently undertaken - The Group faces **extremely low foreign exchange risk**, with its primary currencies being RMB, HKD, and USD[17](index=17&type=chunk) - As of June 30, 2025, the Group had **not undertaken any foreign currency investment hedging**[18](index=18&type=chunk) [Treasury Policy](index=9&type=section&id=Treasury%20Policy) The Group's cash and bank deposits are denominated in RMB, HKD, and USD, and due to minimal foreign exchange risk, no derivative instruments are used for hedging - The Group's cash and bank deposits are denominated in RMB, HKD, and USD, and **no derivative instruments are used to hedge foreign currency risk**[21](index=21&type=chunk) [Transfer of Financial Assets](index=9&type=section&id=Transfer%20of%20Financial%20Assets) The Group transfers financial assets by endorsing bills receivable to settle trade payables and discounting bills receivable with banks to raise cash, believing significant risks have been transferred, thus related assets and liabilities are not recognized in the consolidated financial statements - The Group transfers financial assets by **endorsing and discounting bills receivable**, believing that **significant risks have been transferred** and the **risk of default is low**[22](index=22&type=chunk) Maximum Exposure to Risk from Unrecovered Endorsed and Discounted Bills Receivable with Recourse | Item | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Settlement of Trade and Other Payables | 74,177 | 132,139 | | Discounted Bills for Cash Generation | 2,003,174 | 1,803,800 | | **Total** | **2,077,351** | **1,935,939** | [Material Investments and Future Plans](index=10&type=section&id=Material%20Investments%20and%20Future%20Plans) During the reporting period, the Group did not undertake any material investments, acquisitions, or disposals, nor did it have any significant capital commitments or future investment plans - There were **no material investments, acquisitions, disposals, or future capital asset plans** during the reporting period[23](index=23&type=chunk)[24](index=24&type=chunk) [Events After Reporting Period](index=10&type=section&id=Events%20After%20Reporting%20Period) No events with a material impact on the Group occurred from the end of the reporting period up to the date of this report - **No material events occurred after the reporting period**[25](index=25&type=chunk) [Employment and Remuneration Policies](index=10&type=section&id=Employment%20and%20Remuneration%20Policies) As of June 30, 2025, the Group's total number of employees decreased, with remuneration policies based on performance, experience, and industry practice, alongside retirement benefits Employee Headcount Comparison | Date | Total Employees | | :--- | :--- | | June 30, 2025 | **1,359 employees** | | June 30, 2024 | **1,552 employees** | - The Group remunerates employees based on their **performance, experience, and industry practice**, providing Mandatory Provident Fund or social old-age insurance and housing provident fund for Hong Kong and PRC employees[26](index=26&type=chunk) [Dividends](index=10&type=section&id=Dividends) The Board does not recommend any dividend payment for the first half of 2025, but the 2024 final dividend was paid on June 20, 2025 - The Board does **not recommend the payment of any dividend** for the six months ended June 30, 2025[27](index=27&type=chunk) - A **final dividend of HKD 0.05 per share** for the year ended December 31, 2024, totaling approximately **128.53 million HKD**, was paid on June 20, 2025[27](index=27&type=chunk) [Other Information](index=10&type=section&id=Other%20Information) This section covers corporate governance, directors' and major shareholders' interests, and other statutory disclosures [Purchase, Sale and Redemption of the Company's Listed Securities](index=11&type=section&id=Purchase%2C%20Sale%20and%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor its subsidiaries engaged in the **purchase, sale, or redemption of listed securities**[29](index=29&type=chunk) [Compliance with Corporate Governance Code](index=11&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company has complied with all provisions of the Corporate Governance Code, with a deviation where the Chairman and Chief Executive roles are combined, but the Board believes sufficient balance of power exists - The Company complies with the Corporate Governance Code, but the roles of **Chairman and Chief Executive are combined by Mr. Zhu Jianqiu**, deviating from Code Provision C.2.1[30](index=30&type=chunk) - The Board believes that with **three independent non-executive directors** and all major decisions discussed by the Board and senior management, there is **sufficient balance of power and safeguards**[30](index=30&type=chunk) [Directors' Securities Transactions](index=11&type=section&id=Directors%27%20Securities%20Transactions) Upon enquiry, all Directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period - All Directors confirmed compliance with the **Model Code for Securities Transactions by Directors** as set out in Appendix C3 of the Listing Rules[31](index=31&type=chunk) [Audit Committee and Review of Interim Results](index=11&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Audit Committee has reviewed the Group's results for the six months ended June 30, 2025, but the financial information has not been reviewed or audited by the Company's auditors - The Audit Committee has **reviewed the financial information** in this interim results report[32](index=32&type=chunk) - The financial information in this report has **not been reviewed or audited by the Company's auditors**[32](index=32&type=chunk) [Remuneration Committee](index=12&type=section&id=Remuneration%20Committee) The Remuneration Committee is responsible for reviewing and recommending remuneration policies for Directors and senior management, with members including Mr. Chan Ming Shun (Chairman), Mr. Zhu Jianqiu, and Mr. Meng Qingbin - The Remuneration Committee is responsible for **reviewing remuneration policies for Directors and senior management**, with **Mr. Chan Ming Shun as Chairman**[33](index=33&type=chunk) [Nomination Committee](index=12&type=section&id=Nomination%20Committee) The Nomination Committee is responsible for formulating nomination policies and making recommendations to the Board on director nominations, appointments, and succession, with members including Mr. Zhu Jianqiu (Chairman), Mr. Chan Ming Shun, and Mr. Gao Xudong - The Nomination Committee is responsible for **formulating nomination policies** and making recommendations on **director nominations, appointments, and succession**, with **Mr. Zhu Jianqiu as Chairman**[34](index=34&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in the Company](index=12&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20the%20Company) This section discloses the interests of Directors and the Chief Executive in the Company's shares as of June 30, 2025 Directors' Interests in the Company's Ordinary Shares (as of June 30, 2025) | Director Name | Capacity | Number of Ordinary Shares Interested (L) | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Mr. Zhu Jianqiu | Beneficial Owner | **115,165,762** | **7.92%** | | Mr. Zhao Qilin | Beneficial Owner | **750,000** | **0.05%** | | Ms. Su Huiqing | Beneficial Owner | **34,589,636** | **2.38%** | [Directors' Rights to Subscribe for Shares or Debentures](index=13&type=section&id=Directors%27%20Rights%20to%20Subscribe%20for%20Shares%20or%20Debentures) During the reporting period, no Director or their associates were granted or exercised any rights to subscribe for shares or debentures of the Company - During the reporting period, **no Director or their associates were granted or exercised any rights to subscribe for the Company's shares or debentures**[37](index=37&type=chunk) [Major Shareholders' Interests in the Company](index=13&type=section&id=Major%20Shareholders%27%20Interests%20in%20the%20Company) This section discloses the interests of major shareholders in the Company's shares or related shares as of June 30, 2025 Major Shareholders' Long Positions in the Company's Shares (as of June 30, 2025) | Major Shareholder Name | Capacity | Share Class | Number of Shares Interested (L) | Approximate Percentage of Interest in Relevant Class | | :--- | :--- | :--- | :--- | :--- | | Sichuan Changhong Electric Co., Ltd. | Controlled Corporation Interest | Ordinary Shares | **874,650,000** | **60.13%** | | | | Preference Shares | **1,115,868,000** | **100.00%** | | Changhong (Hong Kong) Trading Co., Ltd. | Controlled Corporation Interest and Beneficial Owner | Ordinary Shares | **874,650,000** | **60.13%** | | | | Preference Shares | **1,115,868,000** | **100.00%** | | Anjian Holdings Limited | Beneficial Owner | Ordinary Shares | **858,650,000** | **59.03%** | | | | Preference Shares | **1,115,868,000** | **100.00%** | | Sichuan Chuan Investment Asset Management Co., Ltd. | Beneficial Owner | Ordinary Shares | **83,009,340** | **5.70%** | | Sichuan Energy Development Group Co., Ltd. | Controlled Corporation Interest | Ordinary Shares | **83,009,340** | **5.70%** | - Sichuan Changhong Holdings is the **single largest shareholder of Sichuan Changhong**, holding approximately **23.22% equity**, and has **actual control over Sichuan Changhong's board of directors**[40](index=40&type=chunk) - Sichuan Energy Development Group Co., Ltd. is deemed to have an interest in the shares held by Chuan Investment Asset Management through **equity transfer**[40](index=40&type=chunk) [Directors' and Controlling Shareholders' Interests in Competing Businesses](index=15&type=section&id=Directors%27%20and%20Controlling%20Shareholders%27%20Interests%20in%20Competing%20Businesses) Except for Sichuan Changhong primarily engaged in wholesale of consumer home electronics, no other Directors or controlling shareholders and their close associates had any business or interest competing with the Group during the reporting period - Sichuan Changhong primarily engages in the **wholesale business of "Changhong" brand consumer home electronic products**[41](index=41&type=chunk) - During the reporting period, **no other Directors or controlling shareholders and their close associates had any business or interest that competed with the Group's business**[41](index=41&type=chunk) [Changes in Directors' Information](index=15&type=section&id=Changes%20in%20Directors%27%20Information) During the reporting period, there were no changes in Directors' information required to be disclosed under Rule 13.51B(1) of the Listing Rules - **No changes in Directors' information** occurred during the reporting period[42](index=42&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the group's financial performance, including revenue, profit, and other comprehensive income for the period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the six months ended June 30, 2025) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Revenue | **21,168,691** | 19,286,174 | | Cost of Sales | (20,519,053) | (18,642,526) | | Gross Profit | **649,638** | 643,648 | | Other Income | 43,349 | 35,462 | | Research and Development Expenses | (17,602) | (12,226) | | Administrative Expenses | (89,527) | (85,480) | | Net Impairment Loss on Trade Receivables | (42,949) | (33,972) | | Net Exchange Loss | (11,098) | (14,300) | | Distribution and Selling Expenses | (210,179) | (208,466) | | Finance Costs | (104,942) | (145,580) | | Profit Before Tax | **216,690** | 179,086 | | Income Tax Expense | (35,498) | (14,602) | | Profit for the Period Attributable to Owners of the Company | **181,192** | 164,484 | | Total Comprehensive Income for the Period Attributable to Owners of the Company | **241,058** | 134,936 | | Basic and Diluted Earnings Per Share (HK cents) | **7.05** | 6.40 | [Condensed Consolidated Statement of Financial Position](index=16&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the group's assets, liabilities, and equity at the end of the reporting period Condensed Consolidated Statement of Financial Position (as of June 30, 2025) | Indicator | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 2,665 | 2,934 | | Investment Properties | 430 | 430 | | Intangible Assets | 22,748 | 25,601 | | Right-of-use Assets | 20,410 | 25,494 | | Deferred Income Tax Assets | 44,022 | 43,357 | | Financial Assets at Fair Value Through Profit or Loss | 33,745 | 34,989 | | **Total Non-current Assets** | **124,020** | **132,805** | | **Current Assets** | | | | Inventories | 3,913,815 | 5,582,487 | | Trade Receivables | 5,239,554 | 4,460,739 | | Bills Receivable at Fair Value Through Other Comprehensive Income | 283,889 | 174,219 | | Prepayments, Deposits and Other Receivables | 326,958 | 391,364 | | Amounts Due from Related Companies | 46,084 | 34,699 | | Refundable Prepayments | 875,440 | 1,128,433 | | Pledged Bank Deposits | 2,114,040 | 5,602,464 | | Cash and Cash Equivalents | 1,257,718 | 561,776 | | **Total Current Assets** | **14,057,498** | **17,936,181** | | **Current Liabilities** | | | | Trade and Bills Payables | 4,977,310 | 5,194,413 | | Bills Payable under Supply Chain Financing | 2,333,710 | 5,865,134 | | Other Payables | 553,949 | 474,401 | | Tax Payables | 10,317 | 17,510 | | Borrowings | 2,749,991 | 2,723,459 | | Amounts Due to Related Companies | 18,500 | 24,063 | | Contract Liabilities | 425,644 | 765,228 | | Lease Liabilities | 11,327 | 12,130 | | **Total Current Liabilities** | **11,080,748** | **15,076,338** | | **Net Current Assets** | **2,976,750** | **2,859,843** | | **Total Assets Less Current Liabilities** | **3,100,770** | **2,992,648** | | **Non-current Liabilities** | | | | Lease Liabilities | 9,083 | 13,493 | | **Net Assets** | **3,091,687** | **2,979,155** | | **Total Equity** | **3,091,687** | **2,979,155** | [Condensed Consolidated Statement of Changes in Equity](index=18&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement details the changes in the group's equity components over the reporting period Condensed Consolidated Statement of Changes in Equity (for the six months ended June 30, 2025) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Total Equity as at January 1 | **2,979,155** | 2,812,545 | | Dividend Distribution | (128,526) | (128,526) | | Decrease in Exchange Differences Arising from Translation | 59,866 | (29,548) | | Total Profit for the Period Attributable to Shareholders | **181,192** | 164,484 | | **Total Equity as at June 30** | **3,091,687** | **2,818,955** | [Condensed Consolidated Statement of Cash Flows](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statement of Cash Flows (for the six months ended June 30, 2025) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | **(1,187,739)** | (3,193,175) | | Net Cash From Investing Activities | **3,577,174** | 3,054,038 | | Net Cash (Used In) / From Financing Activities | **(1,693,493)** | 104,760 | | Net Increase / (Decrease) in Cash and Cash Equivalents | **695,942** | (34,377) | | Cash and Cash Equivalents at Beginning of Year | 561,776 | 1,087,803 | | **Cash and Cash Equivalents at End of Period** | **1,257,718** | **1,053,426** | [Notes to the Condensed Consolidated Interim Financial Statements](index=20&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) These notes provide additional information and explanations supporting the condensed consolidated interim financial statements [1. General Information](index=21&type=section&id=1.%20General%20Information) This section introduces the company's registered office, listing status, principal activities, functional and presentation currencies, and identifies the controlling shareholder group - The Company's **functional currency is RMB**, and the condensed consolidated financial statements are **presented in HKD**[50](index=50&type=chunk) - As of June 30, 2025, Sichuan Changhong Holdings, Sichuan Changhong, Changhong (Hong Kong) Trading Co., Ltd., and Anjian Holdings Limited constitute a **group of controlling shareholders**[51](index=51&type=chunk) [2. Basis of Preparation and Principal Accounting Policies](index=21&type=section&id=2.%20Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) This section clarifies the basis of preparation for the condensed consolidated financial statements, which comply with HKAS 34, and notes that while the statements were reviewed by the Audit Committee, they were not reviewed or audited by external auditors - The condensed consolidated financial statements are prepared in accordance with **Hong Kong Accounting Standard 34 "Interim Financial Reporting"**[52](index=52&type=chunk) - The condensed consolidated results for the six months ended June 30, 2025, have **not been reviewed or audited by the Company's external auditors**, but have been **reviewed by the Audit Committee**[53](index=53&type=chunk) - The accounting policies adopted by the Company are **consistent with those followed in the preparation of the 2024 financial statements**[53](index=53&type=chunk) [3. Revenue](index=22&type=section&id=3.%20Revenue) This section details the Group's principal business activities, including providing ICT solutions and services, and distributing ICT consumer products, enterprise products, smartphones, and own-brand products, with amounts provided by major revenue categories - The Group's principal activities include providing **professional and comprehensive Information and Communication Technology (ICT) solutions and services**, as well as **distributing ICT consumer products, ICT enterprise products, smartphones, and own-brand products**[54](index=54&type=chunk) Revenue by Major Category (for the six months ended June 30) | Revenue Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | ICT Consumer Products | **8,471,250** | 8,495,043 | | ICT Enterprise Products | **8,378,265** | 6,774,592 | | Others | **4,319,176** | 4,016,539 | | **Total Revenue** | **21,168,691** | **19,286,174** | [4. Segment Information](index=22&type=section&id=4.%20Segment%20Information) This section provides an analysis of the Group's revenue and results by reportable and operating segments, including ICT consumer products, ICT enterprise products, and other businesses, along with sales by geographical market - The Group has **three reportable and operating segments**: ICT Consumer Products, ICT Enterprise Products, and Others[57](index=57&type=chunk) 2025 First Half Revenue and Profit by Segment | Segment | External Sales (thousand HKD) | Segment Profit (thousand HKD) | | :--- | :--- | :--- | | ICT Consumer Products | **8,471,250** | **129,547** | | ICT Enterprise Products | **8,378,265** | **221,864** | | Others | **4,319,176** | **45,099** | | **Total** | **21,168,691** | **396,510** | 2025 First Half Sales by Geographical Market | Region | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Mainland China | **20,906,633** | 19,007,151 | | Other Regions | **262,058** | 279,023 | | **Total** | **21,168,691** | **19,286,174** | [5. Profit for the Period](index=25&type=section&id=5.%20Profit%20for%20the%20Period) This section details the major expenses deducted from operating profit for the six months ended June 30, 2025, and the corresponding period in 2024 Expenses Deducted from Operating Profit for the Period (for the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Cost of Inventories Sold | **20,519,053** | 18,642,526 | | Depreciation of Plant and Equipment | **553** | 923 | | Depreciation of Right-of-use Assets | **5,932** | 5,974 | | Salaries and Related Staff Costs | **149,465** | 151,923 | | Contributions to Retirement Benefit Schemes | **42,165** | 41,654 | | Net Exchange Loss | **11,098** | 14,300 | [6. Income Tax Expense](index=25&type=section&id=6.%20Income%20Tax%20Expense) This section explains the Group's income tax policies across different jurisdictions, including Bermuda's tax exemption, Hong Kong's two-tiered profits tax, and the standard and preferential tax rates for PRC subsidiaries - The Company is **exempt from income tax in Bermuda**[63](index=63&type=chunk) - Hong Kong profits tax operates under a **two-tiered system**, with the first **2 million HKD of assessable profits taxed at 8.25%** and profits above that at **16.5%**[63](index=63&type=chunk) - PRC subsidiaries are subject to a **standard corporate income tax rate of 25%**, but certain "encouraged enterprises" located in western regions may enjoy a **preferential tax rate of 15%**[63](index=63&type=chunk)[64](index=64&type=chunk) [7. Earnings Per Share](index=26&type=section&id=7.%20Earnings%20Per%20Share) This section provides basic and diluted earnings per share calculations for the six months ended June 30, 2025, and the corresponding period in 2024, noting that basic and diluted EPS are identical due to no potentially dilutive shares Earnings Per Share Calculation (for the six months ended June 30) | Item | 2025 (thousand HKD / thousand shares) | 2024 (thousand HKD / thousand shares) | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (thousand HKD) | **181,192** | 164,484 | | Weighted Average Number of Ordinary Shares and Convertible Preference Shares (thousand shares) | **2,570,520** | 2,570,520 | | **Basic and Diluted Earnings Per Share (HK cents)** | **7.05** | **6.40** | - As there were **no potentially dilutive shares** during the reporting period, diluted earnings per share are **identical to basic earnings per share**[65](index=65&type=chunk) [8. Trade Receivables](index=27&type=section&id=8.%20Trade%20Receivables) This section outlines the Group's credit policy and provides an aging analysis of trade receivables by invoice date as of the end of the reporting period - The Group's credit period with third-party trade customers ranges from **0 to 180 days**, with customer credit limits reviewed annually[66](index=66&type=chunk) Aging Analysis of Trade Receivables (as of June 30, 2025) | Aging | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within 30 days | **1,419,410** | 1,111,255 | | 31 to 60 days | **802,571** | 775,144 | | 61 to 90 days | **413,331** | 417,505 | | 91 to 180 days | **986,218** | 601,759 | | 181 to 365 days | **565,574** | 512,339 | | Over one year | **1,052,450** | 1,042,737 | | **Total** | **5,239,554** | **4,460,739** | [9. Trade Payables and Bills Payable / Bills Payable under Supply Chain Financing](index=28&type=section&id=9.%20Trade%20Payables%20and%20Bills%20Payable%20%2F%20Bills%20Payable%20under%20Supply%20Chain%20Financing) This section presents the total trade and bills payables as of the reporting period end, an aging analysis of trade payables by goods receipt date, and details the credit period for goods purchased Trade and Bills Payables (as of June 30, 2025) | Item | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Trade and Bills Payables | **4,977,310** | 5,194,413 | | Bills Payable under Supply Chain Financing | **2,333,710** | 5,865,134 | | **Total** | **7,311,020** | **11,059,547** | Aging Analysis of Trade Payables (as of June 30, 2025) | Aging | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within 30 days | **699,781** | 520,984 | | 31 to 60 days | **523,312** | 428,416 | | 61 to 90 days | **75,507** | 100,414 | | 91 to 180 days | **198,081** | 142,300 | | 181 to 365 days | **144,082** | 113,739 | | Over one year | **116,805** | 84,330 | | **Total** | **1,757,568** | **1,390,183** | - The credit period for goods purchased ranges from **30 to 120 days**, and the Group has established financial risk management policies to ensure all payables are settled within the credit period[67](index=67&type=chunk) [10. Borrowings](index=29&type=section&id=10.%20Borrowings) This section discloses the Group's total borrowings as of the reporting period end, primarily unsecured bank borrowings, and presents the effective interest rate range Borrowings Analysis (as of June 30, 2025) | Item | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Bank Borrowings, Unsecured | **2,749,991** | 2,723,459 | - For the six months ended June 30, 2025, the Group's borrowings had an **effective interest rate fixed between 0.9981% and 4.6727%**[68](index=68&type=chunk) [11. Dividends](index=29&type=section&id=11.%20Dividends) This section confirms the Board's recommendation not to declare a dividend for the first half of 2025 and lists the dividend amount recognized as a distribution during the period - The Board does **not recommend the payment of any dividend** for the six months ended June 30, 2025[70](index=70&type=chunk) Dividends Recognized as Distribution During the Period (for the six months ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | 2024 Final — HKD 0.05 per share | **128,526** | 128,526 |

[Supplementary Announcement Overview](index=1&type=section&id=Supplementary%20Announcement%20Overview) [Purpose and Scope of the Announcement](index=1&type=section&id=Purpose%20and%20Scope%20of%20the%20Announcement) This announcement serves as a supplementary disclosure to Wei Ye Holdings Limited's 2024 annual report, providing detailed additional information regarding the impairment loss on property, plant, and equipment of **RMB 110 million** for the year ended December 31, 2024 - This announcement is a supplementary disclosure to the 2024 annual report of Wei Ye Holdings Limited (Hong Kong Stock Code: 1570)[2](index=2&type=chunk) - The supplementary information primarily addresses the **RMB 110 million** impairment loss on property, plant and equipment disclosed in the 2024 annual report[2](index=2&type=chunk) [Impairment Loss on Property, Plant and Equipment](index=1&type=section&id=Impairment%20Loss%20on%20Property%2C%20Plant%20and%20Equipment) [Reasons and Background for Impairment](index=1&type=section&id=Reasons%20and%20Background%20for%20Impairment) Wei Ye Holdings' non-wholly owned subsidiary, Yizheng Honglin Real Estate Co., Ltd., developed a residential and commercial project in Yangzhou, where a portion of completed construction (no less than **10,000 square meters**) was classified as permanent freehold buildings due to lack of legal ownership and transfer restrictions. This property, a cash-generating unit, recorded no sales and incurred a net loss of approximately **RMB 10 million** in 2024, leading the company to cease further investment and recognize an impairment due to adverse challenges in the Yangzhou real estate market - A commercial property (no less than **10,000 square meters**) developed by the non-wholly owned subsidiary, Yizheng Honglin Real Estate Co., Ltd., in Yangzhou, with a carrying amount of approximately **RMB 110 million**, was classified as a permanent freehold building due to lack of legal ownership and transfer restrictions[3](index=3&type=chunk) - As a cash-generating unit, the property recorded **no sales** and incurred a net loss of approximately **RMB 10 million** for the year ended December 31, 2024[5](index=5&type=chunk) - The company believes the overall economic environment in the Yangzhou real estate development market faces adverse challenges, hindering business expansion and making it difficult to reverse the loss-making situation in the short term, thus deciding against further investment in Yizheng Honglin[5](index=5&type=chunk) [Impairment Amount](index=1&type=section&id=Impairment%20Amount) The company recognized an impairment loss on property, plant and equipment of **RMB 110 million** for the year ended December 31, 2024, primarily related to Yizheng Honglin's permanent freehold buildings 2024 Impairment Loss on Property, Plant and Equipment | Metric | Amount (RMB) | | :--- | :--- | | Impairment Loss on Property, Plant and Equipment | 110 million | [Impairment Assessment Methodology and Assumptions](index=2&type=section&id=Impairment%20Assessment%20Methodology%20and%20Assumptions) [Assessment Methodology](index=2&type=section&id=Assessment%20Methodology) The company engaged an independent professional valuer (Huicheng Appraisal Consulting Co., Ltd.) to conduct a valuation on December 31, 2024, using the income approach's discounted cash flow analysis to determine the value in use of the cash-generating unit, in compliance with Hong Kong Accounting Standard 36 - The company engaged an independent professional valuer (Huicheng Appraisal Consulting Co., Ltd.) with relevant qualifications and experience to conduct the valuation on **December 31, 2024**[5](index=5&type=chunk)[6](index=6&type=chunk) - The valuation method adopted the income approach, specifically discounted cash flow analysis, to determine the value in use of the cash-generating unit, in compliance with **Hong Kong Accounting Standard 36 – Impairment of Assets**[6](index=6&type=chunk)[7](index=7&type=chunk) [Key Valuation Assumptions and Input Data](index=3&type=section&id=Key%20Valuation%20Assumptions%20and%20Input%20Data) The valuation is based on management-approved financial budgets, with a three-year forecast period, zero revenue growth, and a gross profit margin referencing **20% above** the carrying cost of remaining commercial properties at the valuation date. Estimated net cash flow during the forecast period is approximately **RMB 601,000**, with a present value of **RMB 531,000**, and an applied discount rate of **9.49%** - The valuation is based on Yizheng Honglin's financial budgets approved by company management, with key assumptions including revenue growth rate, gross profit margin, forecast period, expected cash flows at the end of the forecast period, and discount rate[8](index=8&type=chunk) - The forecast period is set at **three years**, with **zero revenue growth** during this period, and a gross profit margin adopted at **above 20.0%** of the carrying cost of the remaining commercial properties at the valuation date[8](index=8&type=chunk)[9](index=9&type=chunk) Key Valuation Financial Data | Metric | Value | | :--- | :--- | | Net Cash Flow during Forecast Period | Approx. RMB 601,000 | | Present Value of Net Cash Flow during Forecast Period | RMB 531,000 | | Discount Rate | 9.49% | - Given the transfer restrictions, the property is not expected to generate proceeds from sale at the end of the forecast period[9](index=9&type=chunk) [Other Information](index=3&type=section&id=Other%20Information) [Unchanged Report Information](index=3&type=section&id=Unchanged%20Report%20Information) Except for the impairment-related information disclosed in this supplementary announcement, all other information contained in the 2024 annual report remains unchanged - Except for the impairment-related information disclosed in this supplementary announcement, all other information contained in the 2024 annual report remains unchanged[10](index=10&type=chunk) [Board of Directors](index=3&type=section&id=Board%20of%20Directors) As of the announcement date, Mr. Chen Zhiyong serves as the Executive Director of Wei Ye Holdings Limited, with Mr. Liu Ning, Mr. Dong Xincheng, and Ms. Chen Shimin as Independent Non-Executive Directors - As of the date of this announcement, the Executive Director is **Mr. Chen Zhiyong**[11](index=11&type=chunk) - The Independent Non-Executive Directors are **Mr. Liu Ning**, **Mr. Dong Xincheng**, and **Ms. Chen Shimin**[11](index=11&type=chunk)

[Clarification Announcement Overview](index=1&type=section&id=Clarification%20Announcement%20Overview) [Purpose and Background](index=1&type=section&id=Purpose%20and%20Background) This announcement clarifies specific financial data in the condensed and consolidated cash flow statements from Fengzhan Holdings Limited's 2025 interim results, 2024 interim report, and 2024 annual report - The clarification pertains to the 2025 interim results announcement, 2024 interim report, and 2024 annual report[2](index=2&type=chunk) - The primary clarification concerns the condensed consolidated cash flow statements and consolidated cash flow statements[3](index=3&type=chunk)[5](index=5&type=chunk) [Financial Data Restatement Details](index=1&type=section&id=Financial%20Data%20Restatement%20Details) [H1 2024 Interim Report Restatement](index=1&type=section&id=H1%202024%20Interim%20Report%20Restatement) For the condensed consolidated cash flow statement for the six months ended June 30, 2024, the company restated 'Advances to joint ventures' and 'Repayments to joint ventures' under financing activities to offset non-cash transactions related to subcontracting services H1 2024 Financing Activities Cash Flow Restatement (HKD Thousands) | Metric | Originally Disclosed | Adjusted for Non-Cash Transactions | Restated | | :--- | :--- | :--- | :--- | | Advances to joint ventures | 134,042 | (97,907) | 36,135 | | Repayments to joint ventures | (109,879) | 97,907 | (11,972) | - Restatement reason: to offset non-cash transactions related to subcontracting services[3](index=3&type=chunk) [2024 Annual Report Restatement](index=2&type=section&id=2024%20Annual%20Report%20Restatement) For the consolidated cash flow statement for the year ended December 31, 2024, the company restated 'Advances to joint ventures' and 'Repayments to joint ventures' under financing activities to offset non-cash transactions related to subcontracting services Full Year 2024 Financing Activities Cash Flow Restatement (HKD Thousands) | Metric | Originally Disclosed | Adjusted for Non-Cash Transactions | Restated | | :--- | :--- | :--- | :--- | | Advances to joint ventures | 510,252 | (406,995) | 103,257 | | Repayments to joint ventures | (500,434) | 406,995 | (93,439) | - Restatement reason: to offset non-cash transactions related to subcontracting services[5](index=5&type=chunk) [Conclusion and Board Information](index=2&type=section&id=Conclusion%20and%20Board%20Information) [Impact on Total Financials](index=2&type=section&id=Impact%20on%20Total%20Financials) Despite the restatements, the total net cash from financing activities for the six months ended June 30, 2024, and the year ended December 31, 2024, remains unaffected - All other information remains unchanged[6](index=6&type=chunk) - The clarifications do not impact the total net cash from financing activities for the six months ended June 30, 2024, and the year ended December 31, 2024[6](index=6&type=chunk) [Board of Directors Information](index=2&type=section&id=Board%20of%20Directors%20Information) At the time of the announcement, the Board of Directors comprises Executive Director Mr. Wu Jian Shao (Chairman and Chief Executive Officer) and three independent non-executive directors - Chairman and Chief Executive Officer of the Board: **Mr. Wu Jian Shao**[7](index=7&type=chunk) - Independent Non-Executive Directors: **Mr. Siu Wai Lam**, **Ms. Ng Chung Chi**, and **Mr. Wong Chun Wah**[7](index=7&type=chunk)

[Financial Highlights](index=3&type=section&id=Financial%20Highlights) Key Financial Metrics Changes for the Six Months Ended 30 June 2025 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | Remarks | | :--- | :--- | :--- | :--- | :--- | | Revenue | 260.5 | 742.8 | -64.9% | Primarily due to disposal of paper packaging business and decline in e-cigarette sales | | Gross Profit | 57.8 | 153.6 | -62.3% | | | Gross Margin | 22.2% | 20.7% | +1.5% | Primarily due to disposal of less profitable paper packaging business | | Loss/Profit Attributable to Owners of the Company | (16.8) | 14.8 | Shifted from profit to loss | | | Average Trade and Bills Receivables Turnover Days | 139 days | 74 days (End of 2024) | Increased by 65 days | | | Average Trade and Bills Payables Turnover Days | 104 days | 124 days (End of 2024) | Decreased by 20 days | | | Average Inventory Turnover Days | 79 days | 51 days (End of 2024) | Increased by 28 days | | | Interim Dividend | Not recommended for distribution | None | - | | [Company Information](index=4&type=section&id=Company%20Information) - The Board of Directors includes Executive Directors Mr. Yang Yong'an (Chairman) and Mr. Li Lin, Non-executive Director Mr. Yang Fan, and Independent Non-executive Directors Mr. Gong Jinjun, Mr. Wang Ping, and Ms. Guo Wei; Mr. Feng Bin resigned as a Non-executive Director on **20 June 2025**[6](index=6&type=chunk) - The Company's registered office is in the Cayman Islands, its China headquarters are in Shenzhen, Guangdong Province, and its principal place of business in Hong Kong is in Causeway Bay[6](index=6&type=chunk) - The Company has an Audit Committee, Remuneration Committee, and Nomination Committee, and has published its company website and primary banking relationship information[6](index=6&type=chunk) [Chairman's Statement](index=5&type=section&id=Chairman's%20Statement) The Chairman's Statement outlines the complex and challenging global operating environment in H1 2025, particularly the tightening regulations and market volatility in the e-cigarette industry. The Group adopted a prudent strategy, focusing on operational resilience, supply chain consolidation, and strategic cooperation, while increasing investment in proprietary brands to navigate challenges and achieve sustainable long-term development [Global Operating Environment and Industry Challenges](index=5&type=section&id=Global%20Operating%20Environment%20and%20Industry%20Challenges) In H1 2025, the global economic environment was complex, with inflationary pressures, geopolitical friction, and market volatility dampening industry activity and investment sentiment. The e-cigarette industry faced an increasingly fragmented and stringent regulatory network, leading to restricted market access and logistical disruptions, directly impacting the Group's operations - Global operating environment in H1 2025 was complex and challenging, marked by entrenched inflationary pressures, significant geopolitical friction, and notable market volatility[9](index=9&type=chunk) - The global e-cigarette industry faces an increasingly fragmented and stringent regulatory network, with strict compliance frameworks implemented across jurisdictions worldwide, directly impacting market access and causing logistical disruptions[9](index=9&type=chunk) [Group Strategic Response and Future Outlook](index=5&type=section&id=Group%20Strategic%20Response%20and%20Future%20Outlook) Facing external pressures, the Group's management actively monitored the regulatory environment, implementing targeted strategic measures to maintain operational integrity, consolidate the supply chain, and preserve core market relationships. Future development will be guided by prudent principles, strengthening financial resilience, optimizing operational efficiency, and increasing investment in proprietary brand development and production to adapt to global e-cigarette regulatory fluctuations and international trade disputes - The Group actively monitors the evolving regulatory environment, implementing strategic responses to maintain operational integrity, consolidate the supply chain, and preserve core market relationships[9](index=9&type=chunk) - The Group has expanded close cooperation with key local distributors in various countries and regions, and increased investment in proprietary brand development and production based on local consumer preferences and e-cigarette product regulations[10](index=10&type=chunk) - Looking ahead, the Group will adopt a more conservative approach to capital allocation and risk management, focusing on strengthening financial resilience, optimizing operational efficiency, and only pursuing strategic initiatives that offer clear and reliable returns to achieve sustainable, long-term stable development[12](index=12&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section details the macroeconomic headwinds and e-cigarette industry challenges faced by the Group in H1 2025, reviewing its business performance and financial position. The Group responded to market changes by adjusting sales strategies, strengthening operational management, optimizing product portfolios, and expanding distribution networks, but performance was still significantly affected, resulting in a shift from profit to loss. Future focus will remain on compliance, innovation, and global market expansion [Market Review](index=7&type=section&id=Market%20Review) In H1 2025, global economic growth was weak, with global GDP growth projected to slow due to geopolitical tensions, restrictive financial conditions, and a fragmented trade environment. China's economy showed moderate resilience but consumer confidence was low, and the real estate sector continued to drag down investment. The global e-cigarette industry faced increased regulatory scrutiny in North American and European markets, and maturing tax frameworks and comprehensive legislation in the Asia-Pacific region, leading to increased compliance costs and market access challenges - Global economic growth was weak in H1 2025, with the IMF projecting global GDP growth to slow from **3.3%** in 2024 to approximately **3.0%** in 2025[15](index=15&type=chunk) - China's economy grew by **5.3%** in H1 2025, but depressed consumer confidence and the real estate sector continued to drag down investment sentiment, with deflationary trends highlighting domestic demand weaknesses[15](index=15&type=chunk) - The global e-cigarette industry faces increased regulatory scrutiny in North American and European markets, and maturing tax frameworks and comprehensive legislation in the Asia-Pacific region (e.g., Malaysia, Philippines, Indonesia), leading to increased compliance costs and market access challenges[16](index=16&type=chunk) [Business Review](index=7&type=section&id=Business%20Review) In H1 2025, the Group's performance was significantly impacted by macroeconomic and industry headwinds, leading to restricted demand for non-essential goods. The Group executed a dual-pronged strategy, strengthening operational resilience, strictly managing efficiency and inventory, and pursuing strategic market diversification. Concurrently, it focused on commercial risks, collaborating with local distributors to ensure products met consumer preferences and regulatory environments. The Group continued to drive innovation, optimize production line efficiency, increase investment in core technology R&D, and implement stringent cost control measures [Sales and Distribution](index=8&type=section&id=Sales%20and%20Distribution) During the review period, the Group's revenue contracted due to macroeconomic uncertainties and tightening e-cigarette regulations. The Group managed operational headwinds by strategically optimizing its inventory portfolio, adjusting production volumes, and re-aligning labor cost allocation, while committing to strategic investments in global market development and brand positioning to solidify future market leadership - Group revenue contraction is a direct result of macroeconomic uncertainties and increasingly stringent and divergent regulatory frameworks for e-cigarette products in major international markets[20](index=20&type=chunk) - The Group strategically optimized its inventory portfolio to align with evolving demand patterns and optimized production volumes, and re-aligned labor cost allocation[20](index=20&type=chunk) - The Group is committed to strategic and forward-looking investments in global market development and brand positioning, maintaining a strong presence in key markets across Europe, the Americas, and Asia through establishing strategic relationships with key local distributors in target markets[20](index=20&type=chunk) [Product Research, Development and Design](index=8&type=section&id=Product%20Research%2C%20Development%20and%20Design) The Group continuously drives innovation, leveraging advanced production lines and facilities to produce mid-to-high-end products to maintain market leadership. During the reporting period, the Group reviewed its product development technologies, fully considering automation production requirements during the design phase to enhance product manufacturability and the feasibility of automation implementation - The Group leverages its technological expertise and development achievements, including advanced production lines and state-of-the-art manufacturing facilities, aiming to maximize production capacity for mid-to-high-end products[21](index=21&type=chunk) - During the reporting period, the Group reviewed its product development technologies, fully considering product manufacturability and automation integration requirements during the product design phase to enhance manufacturability and feasibility of automation implementation[21](index=21&type=chunk) [Technology Development and Quality Control](index=9&type=section&id=Technology%20Development%20and%20Quality%20Control) The Group adheres to the philosophy of "management innovation and system leadership," continuously increasing investment in core technology R&D and improving management levels. Proprietary brand e-cigarettes gained rapid customer recognition and achieved satisfactory sales growth during the reporting period due to high safety and better user experience. Concurrently, the Group actively implements environmental protection measures, controlling raw materials and manufacturing processes to provide high-quality, safe, and environmentally friendly products - The Group advocates the philosophy of "management innovation and system leadership," continuously increasing investment in core technology R&D and constantly improving management levels[23](index=23&type=chunk) - Proprietary brand e-cigarettes quickly gained recognition from multiple customers due to high safety and better user experience, and achieved satisfactory sales growth during the reporting period[23](index=23&type=chunk) - The Group actively implements environmental protection measures, including strict environmental indicators, controlling raw material and auxiliary material input and manufacturing processes, to provide high-quality, safe, and environmentally friendly products[23](index=23&type=chunk) [Cost Control](index=9&type=section&id=Cost%20Control) The Group is committed to integrating core businesses and controlling costs by optimizing processes and materials, improving productivity, introducing new suppliers, and conducting competitive negotiations to reduce raw material costs. Additionally, measures such as rolling inventory preparation and consolidating production orders for increased batch production have strengthened control over production processes, effectively enhancing production efficiency - The Group adopts strategies such as optimizing processes and materials, improving productivity, introducing new suppliers, and conducting competitive negotiations to reduce raw material costs[24](index=24&type=chunk) - The Group strengthens control over production processes and drives improvements in production efficiency through measures such as rolling inventory preparation, consolidating production orders for increased batch production, reducing production costs, and preventing inefficiencies caused by secondary loading due to insufficient delivery quantities[24](index=24&type=chunk) [Financial Review](index=9&type=section&id=Financial%20Review) This section provides a detailed review of the Group's financial performance in H1 20

[Company Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Board of Directors and Supervisors](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%A3%E4%BA%8B%E6%9C%83%E6%88%90%E5%93%A1) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with established audit, nomination, and remuneration committees, and lists its Supervisory Board members - Board members include Mr. Gao Feng (Chairman), Mr. Yuan Yuan, Mr. Zhang Jia'an, Mr. Yao Jun, Ms. Shen Zhigen, Ms. Ni Jingjing, Mr. Wang Fei (Executive Directors); Ms. Wei Yan (Non-executive Director); Mr. Lin Jiade, Mr. Zheng Manjun, Mr. Zheng Yu, Mr. Zhu Bo (Independent Non-executive Directors)[6](index=6&type=chunk) - Supervisory Board members include Ms. Zhan Mingyu, Mr. Xia Zhonglin, and Ms. Zhu Aizhen[6](index=6&type=chunk) - The Audit Committee is chaired by Mr. Lin Jiade, the Nomination Committee by Mr. Zheng Manjun, and the Remuneration Committee by Mr. Zheng Yu[6](index=6&type=chunk) [Company Secretary, Auditor, and Legal Advisors](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E7%A7%98%E6%9B%B8%E3%80%81%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%8F%8A%E6%B3%95%E5%BE%8B%E9%A1%A7%E5%95%8F) The company has appointed joint company secretaries, KPMG as auditor, and engaged Glory Capital Limited as compliance advisor, with DeHeng Law Offices (Hong Kong) LLP and Beijing Deheheng Law Firm as legal advisors - Joint Company Secretaries are Ms. Xu Chunling and Mr. Xu Hongqun[7](index=7&type=chunk) - The auditor is KPMG[7](index=7&type=chunk) - The compliance advisor is Glory Capital Limited, Hong Kong legal advisor is DeHeng Law Offices (Hong Kong) LLP, and PRC legal advisor is Beijing Deheheng Law Firm[8](index=8&type=chunk) [Registered Office and Principal Places of Business](index=4&type=section&id=%E8%A8%BB%E5%86%8A%E8%BE%A6%E4%BA%8B%E8%99%95%E5%8F%8A%E4%B8%BB%E8%A6%81%E7%87%9F%E6%A5%AD%E5%9C%B0%E9%BB%9E) The company's registered office and principal place of business in China are located in Shaobo Town Industrial Concentration Zone Logistics Park, Jiangdu District, Yangzhou City, Jiangsu Province, with its principal place of business in Hong Kong at 28/F, Hennessey Building, 5 Queen's Road Central - Registered office and principal place of business in China: Logistics Park, Shaobo Town Industrial Concentration Zone, Jiangdu District, Yangzhou City, Jiangsu Province, PRC[8](index=8&type=chunk) - Principal place of business in Hong Kong: 28/F, Hennessey Building, 5 Queen's Road Central, Hong Kong[8](index=8&type=chunk) [H Share Registrar and Principal Bankers](index=4&type=section&id=H%E8%82%A1%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98%E8%99%95%E5%8F%8A%E4%B8%BB%E8%A6%81%E5%BE%80%E4%BE%86%E9%8A%80%E8%A1%8C) The H share registrar is Hong Kong Registrars Limited, and principal bankers include Agricultural Bank of China, Bank of China, China Construction Bank, Agricultural Development Bank of China, and Jiangsu Jiangdu Rural Commercial Bank - H Share Registrar: Hong Kong Registrars Limited[8](index=8&type=chunk) - Principal bankers: Agricultural Bank of China Yangzhou Jiangdu Sub-branch, Bank of China Jiangdu Sub-branch, China Construction Bank Corporation Jiangdu Sub-branch, Agricultural Development Bank of China Yangzhou Jiangdu District Sub-branch, and Jiangsu Jiangdu Rural Commercial Bank Co., Ltd[8](index=8&type=chunk)[10](index=10&type=chunk) [Company Website and Listing Information](index=5&type=section&id=%E5%85%AC%E5%8F%B8%E7%B6%B2%E7%AB%99%E5%8F%8A%E4%B8%8A%E5%B8%82%E4%BF%A1%E6%81%AF) The company's website is www.hxsupermarket.cn, with stock code 2625 and listing date of March 31, 2025 - Company website: www.hxsupermarket.cn[10](index=10&type=chunk) - Stock code: **2625**[10](index=10&type=chunk) - Listing date: March 31, 2025[10](index=10&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Business Review and Outlook](index=6&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E5%8F%8A%E5%B1%95%E6%9C%9B) The company, a grain and oil wholesaler, operates "Hongxinlong" brand supermarkets and convenience stores in central Jiangsu, with a central kitchen for meal supply, actively expanding omni-channel retail, smart unmanned stores, and logistics, while planning to increase market share, warehousing, and meal processing capacity, and enhancing its ERP system - The company's main businesses include grain and oil wholesale, operating "Hongxinlong" brand supermarkets and convenience stores, mall sales (fashion, cosmetics, home appliances, etc.), leasing, and central kitchen meal supply[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk) - In the first half of 2025, the company's total revenue was **RMB 771.3 million**, a year-on-year increase of **16.2%**, primarily from retail, wholesale, and meal supply[16](index=16&type=chunk) - Future strategies include expanding market share and retail store count, establishing new distribution centers to increase warehousing capacity, building new central kitchens to expand meal processing capacity, and enhancing ERP and infrastructure systems to improve operational efficiency[18](index=18&type=chunk) [Market and Industry Overview](index=7&type=section&id=%E5%B8%82%E5%9C%BA%E5%8F%8A%E8%A1%8C%E4%B8%9A%E6%A6%82%E8%A7%88) China's retail sector accelerated its shift to omni-channel in 2023 amid economic recovery, with online retail growing, while chain supermarkets declined but small-to-medium formats showed resilience, and convenience stores saw strong growth, facing opportunities in a large consumer base and technology integration, but challenges from e-commerce and operating costs - China's economy recovered in 2023, with **GDP growth of 5.2%** and an increase in per capita disposable income, supporting consumer spending[17](index=17&type=chunk) - Retail formats accelerated their transformation to omni-channel strategies, with online retail accounting for **32.7%** in 2023[17](index=17&type=chunk) China Retail Market Compound Annual Growth Rate (CAGR) | Market Type | 2017-2023 CAGR | 2024-2027 Estimated CAGR | | :------- | :--------------- | :------------------- | | China Chain Supermarkets | -1.28% | 1.43% | | Jiangsu Province Small-to-Medium Chain Supermarkets | 15.7% | 8.7% | | Yangzhou City Small-to-Medium Supermarkets | 14.6% | 4.7% | | National Convenience Stores | 14.3% | 9.0% | | Yangzhou Convenience Stores | 14.3% | 8.0% | - Key opportunities include China's vast consumer base, urbanization, increasing demand for quality and fresh goods, and technological integration (omni-channel)[20](index=20&type=chunk) - Major challenges include intense market competition (especially e-commerce), shifting consumer preferences, and managing operating costs such as labor and rent[20](index=20&type=chunk) [Financial Review](index=8&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) For the six months ended June 30, 2025, total revenue increased by 16.2% to RMB 771.3 million, driven by wholesale and retail bulk sales, but gross profit decreased by 6.7% to RMB 138.9 million, with gross margin falling to 18.0% due to rising grain and oil costs, declining high-end liquor sales, and increased promotions, resulting in a 26.6% decrease in profit for the period to RMB 13.5 million, mainly due to increased listing expenses Key Financial Indicators for H1 2025 | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Revenue | 771,288 | 663,625 | +16.2% | | Cost of Sales | (632,409) | (514,765) | +22.9% | | Gross Profit | 138,879 | 148,860 | -6.7% | | Gross Margin | 18.0% | 22.4% | -4.4 percentage points | | Profit for the Period | 13,516 | 18,421 | -26.6% | [Revenue](index=8&type=section&id=%E6%94%B6%E5%85%A5) Total revenue increased by 16.2% year-on-year to RMB 771.3 million, with wholesale revenue up 24.1% to RMB 441.1 million due to market expansion, retail bulk sales surging 104.0% to RMB 33.9 million from group purchasing, and meal supply revenue soaring 409.8% to RMB 13.9 million as schools resumed catering bids, while operating lease rental income decreased by 12.9% to RMB 7.0 million Revenue Composition and Changes | Revenue Source | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :------- | :----------------------- | :----------------------- | :------- | | Total Revenue | 771.3 | 663.6 | +16.2% | | Wholesale Revenue | 441.1 | 355.5 | +24.1% | | Retail General Sales Revenue | 261.6 | 262.0 | Stable | | Retail Bulk Sales Revenue | 33.9 | 16.6 | +104.0% | | Meal Supply and Sales Revenue | 13.9 | 2.7 | +409.8% | | Operating Lease Rental Income | 7.0 | 8.0 | -12.9% | - Wholesale revenue growth was primarily due to the introduction of various brands and specifications of grain and oil, and the gradual expansion into the northern Jiangsu grain and oil wholesale market[21](index=21&type=chunk) - The increase in retail bulk sales revenue was mainly due to active expansion of group purchasing business with local enterprises and government agencies[21](index=21&type=chunk) - The increase in meal supply revenue was mainly due to some schools resuming catering tender processes in the second half of 2024[23](index=23&type=chunk) [Cost of Sales](index=9&type=section&id=%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, cost of sales increased by 22.9% year-on-year to RMB 632.4 million, primarily due to higher wholesale and bulk sales costs in the retail business Cost of Sales | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Cost of Sales | 632.4 | 514.8 | +22.9% | - The increase in cost of sales was primarily attributable to higher wholesale and bulk sales costs in the retail business[24](index=24&type=chunk) [Gross Profit and Gross Margin](index=9&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit decreased by 6.7% year-on-year to RMB 138.9 million, with gross margin falling by 4.4 percentage points to 18.0%, mainly due to slight increases in grain and oil costs, lower gross margins for new grain and oil categories, decreased sales of high-end liquor (affected by alcohol ban), and increased promotional activities Gross Profit and Gross Margin | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Gross Profit | 138.9 | 148.9 | -6.7% | | Gross Margin | 18.0% | 22.4% | -4.4 percentage points | - The decrease in gross margin was mainly due to a slight increase in grain and oil costs and lower gross margins for new grain and oil categories; a decline in high-end liquor sales volume due to the alcohol ban issued by the PRC central government; and a decrease in retail business gross margin due to holiday promotions and post-listing "promotion frenzy"[25](index=25&type=chunk) [Other Income and Net Gains](index=9&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Other income increased to RMB 3.4 million, primarily due to higher service income and government grants, while net other gains decreased to RMB 0.4 million, mainly from lower net exchange gains Other Income and Net Gains | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Other Income | 3.4 | 2.5 | +36.0% | | Net Other Gains | 0.4 | 1.0 | -60.0% | - The increase in other income was mainly due to higher service income from processing meals for two catering operators in Yangzhou and increased government grants[26](index=26&type=chunk) - The decrease in net other gains was mainly due to lower net exchange gains[27](index=27&type=chunk) [Selling and Distribution Costs](index=10&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E6%88%90%E6%9C%AC) Selling and distribution costs decreased by 5.5% year-on-year to RMB 75.1 million, primarily due to reduced staff costs Selling and Distribution Costs | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Selling and Distribution Costs | 75.1 | 79.5 | -5.5% | - The decrease in selling and distribution costs was mainly due to reduced staff costs[28](index=28&type=chunk) [Administrative and Other Operating Expenses](index=10&type=section&id=%E8%A1%8C%E6%94%BF%E5%8F%8A%E5%85%B6%E4%BB%96%E9%81%8B%E7%87%9F%E9%96%8B%E6%94%AF) Administrative and other operating expenses increased by 7.1% year-on-year to RMB 32.7 million, primarily due to higher listing expenses, partially offset by reduced staff costs Administrative and Other Operating Expenses | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Administrative and Other Operating Expenses | 32.7 | 30.5 | +7.1% | - The increase in administrative and other operating expenses was mainly due to higher listing expenses, partially offset by reduced staff costs[29](index=29&type=chunk) [Impairment Loss on Trade and Other Receivables](index=10&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E6%B8%9B%E5%80%BC%E虧%E6%90%8D) Impairment loss on financial assets decreased by RMB 1.5 million year-on-year to RMB 2.9 million, primarily due to a reduction in trade receivables Impairment Loss on Financial Assets | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Impairment Loss | 2.9 | 4.3 | -1.5 | - The decrease in impairment loss was mainly due to a reduction in trade receivables compared to the same period last year[30](index=30&type=chunk) [Net Finance Costs](index=10&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC%E6%B7%A8%E9%A1%8D) Net finance costs decreased by RMB 2.2 million year-on-year to RMB 9.2 million, primarily due to increased interest income from bank deposits and reduced interest expenses on lease liabilities Net Finance Costs | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Net Finance Costs | 9.2 | 11.4 | -2.2 | - The decrease in net finance costs was mainly due to increased interest income from bank deposits and reduced interest expenses on lease liabilities[31](index=31&type=chunk) [Income Tax](index=10&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) Income tax expense increased year-on-year to RMB 9.3 million, primarily due to higher non-deductible listing expenses Income Tax Expense | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Income Tax Expense | 9.3 | 8.3 | +1.0 | - The increase in income tax expense was mainly due to higher non-deductible listing expenses[32](index=32&type=chunk) [Profit for the Period](index=10&type=section&id=%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9) Profit for the period decreased by 26.6% year-on-year to RMB 13.5 million, primarily due to increased listing expenses Profit for the Period | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :----------------------- | :----------------------- | :------- | | Profit for the Period | 13.5 | 18.4 | -26.6% | - The decrease in profit for the period was mainly due to increased listing expenses[33](index=33&type=chunk) [Non-IFRS Measures](index=11&type=section&id=%E9%9D%9E%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E8%A8%88%E9%87%8F) To provide a more comprehensive view of operational performance, the company presents adjusted net profit and adjusted net profit margin (non-IFRS measures), which add back listing expenses, with adjusted net profit at RMB 26.1 million and adjusted net profit margin at 3.4% for the six months ended June 30, 2025 - Non-IFRS measures (adjusted net profit and adjusted net profit margin) aim to provide a more comprehensive view of operating performance, especially when comparing periods and evaluating the overall operating and financial performance[35](index=35&type=chunk)[36](index=36&type=chunk) - Listing expenses are added back as they are incurred solely due to the listing[36](index=36&type=chunk) Adjusted Net Profit and Net Profit Margin (Non-IFRS Measures) | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Profit for the Period | 13,516 | 18,421 | | Adjusted for: Listing Expenses | 12,552 | 7,040 | | Adjusted Net Profit for the Period | 26,068 | 25,461 | | Adjusted Net Profit Margin | 3.4% | 3.8% | [Financial Position](index=12&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81) As of June 30, 2025, shareholders' equity increased to RMB 662.5 million, driven by global offering and profit for the period, with a current ratio of approximately 1.41 indicating sound liquidity, a gearing ratio of approximately 86.0%, and a debt-to-asset ratio of approximately 59.7%, while capital expenditure for the period was RMB 71.3 million, mainly for property, plant, and equipment acquisition Key Financial Position Indicators | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :----------------------- | :----------------------- | | Shareholders' Equity | 662.5 | 540.9 | | Cash and Cash Equivalents | 167.9 | 216.9 | | Total Current Assets | 1,212.3 | 1,056.6 | | Total Current Liabilities | 861.9 | 774.6 | | Current Ratio | 1.41 | 1.36 | | Gearing Ratio | 86.0% | 86.6% | | Debt-to-Asset Ratio | 59.7% | - | - The increase in shareholders' equity was mainly due to the global offering and profit for the reporting period[38](index=38&type=chunk) - For the six months ended June 30, 2025, net cash used in operating activities was approximately **RMB 141.8 million** (H1 2024: RMB 45.4 million)[39](index=39&type=chunk) - Capital expenditure amounted to **RMB 71.3 million**, mainly comprising the acquisition of property, plant and equipment, financial assets measured at fair value through other comprehensive income, and interests in associates[43](index=43&type=chunk) - The Group pledged land use rights with a net book value of **RMB 27.6 million** and buildings with a net book value of **RMB 28.7 million** as collateral for bank loans and other borrowings totaling **RMB 376.8 million**[44](index=44&type=chunk) - As of June 30, 2025, the company had no contingent liabilities, and controlling shareholders had not pledged any shares[45](index=45&type=chunk)[46](index=46&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures](index=14&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD) During the reporting period, the Group invested RMB 25.0 million in Haike Hongxin Digital Technology (Jiangsu) Co., Ltd. (18% stake) and HKD 20.0 million (approximately RMB 18.3 million) in Han Hong Holdings Limited (40% stake), with Haike classified as a financial asset measured at fair value through other comprehensive income and Han Hong as an associate accounted for using the equity method - Investment of **RMB 25.0 million** in Haike Hongxin Digital Technology (Jiangsu) Co., Ltd., holding an **18%** equity interest, classified as a financial asset measured at fair value through other comprehensive income[48](index=48&type=chunk) - Investment of **HKD 20.0 million** (approximately **RMB 18.3 million**) in Han Hong Holdings Limited, holding a **40%** equity interest, classified as an associate and accounted for using the equity method[48](index=48&type=chunk) - Haike is primarily engaged in providing IT-related information services, while Han Hong is mainly engaged in providing business consulting services[48](index=48&type=chunk) [Future Plans for Material Investments and Capital Assets](index=14&type=section&id=%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%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) As of June 30, 2025, the company has no other material investment and capital asset plans beyond those disclosed in the "Future Plans and Use of Proceeds" section of the prospectus - As of June 30, 2025, the company had no plans for material investments and capital assets other than those disclosed in the "Future Plans and Use of Proceeds" section of the prospectus[50](index=50&type=chunk) [Risks of Foreign Currency Exchange Rate Fluctuations](index=14&type=section&id=%E5%A4%96%E5%B9%A3%E5%8C%AF%E7%8E%87%E6%B3%A2%E5%8B%95%E7%9A%84%E9%A2%A8%E9%9A%AA) The Group's assets, liabilities, and cash flows are primarily denominated in RMB, with some in HKD, and management believes RMB exchange rate fluctuations against foreign currencies have no material impact on its financial position or performance, with no hedging activities undertaken during the reporting period - The majority of the Group's assets, liabilities, and cash flows are denominated in RMB, with some assets denominated in HKD[51](index=51&type=chunk) - Management believes that changes in the RMB exchange rate against foreign currencies have no material impact on the Group's financial position and performance[51](index=51&type=chunk) - For the six months ended June 30, 2025, the Group did not undertake any hedging activities and has no intention to do so in the foreseeable future[51](index=51&type=chunk) [Material Investments and Significant Events During the Reporting Period](index=14&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%85%A7%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E9%87%8D%E5%A4%A7%E4%BA%8B%E4%BB%B6) As of June 30, 2025, the Group had not made any material investments (5% or more of total assets) - As of June 30, 2025, the Group had not made any material investments (including any investment value in investee companies accounting for 5% or more of the Group's total assets as of June 30, 2025)[52](index=52&type=chunk) [Events After the Reporting Period](index=15&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Except as disclosed in this report, no other material events affecting the Group occurred after the reporting period up to the latest practicable date - Except as disclosed in this report, no other material events affecting the Group occurred after June 30, 2025, and up to the latest practicable date[54](index=54&type=chunk) [Employees and Remuneration Policy](index=15&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the company had 1,412 employees, with total employee benefits amounting to RMB 43.7 million, a year-on-year decrease, providing social insurance and housing provident fund contributions, basic salaries, and discretionary bonuses, despite past non-compliance in underpaying contributions without administrative action or penalties Number of Employees and Total Employee Benefits | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :------------- | :------------- | | Total Employees | 1,412 people | - | | Total Employee Benefits | RMB 43.7 million | RMB 52.2 million | - Total employee benefits (including directors' emoluments) decreased year-on-year, mainly due to reduced staff costs[55](index=55&type=chunk) - The company contributes to five types of social insurance and housing provident fund for its employees in accordance with China's social insurance system[57](index=57&type=chunk) - The company had instances of non-compliance in failing to pay full social insurance and housing provident fund contributions for all employees, but has not been subject to administrative actions, fines, or penalties by government authorities[57](index=57&type=chunk) [Recruitment Policy and Training](index=16&type=section&id=%E6%8B%9B%E8%81%98%E6%94%BF%E7%AD%96%E5%8F%8A%E5%9F%B9%E8%A8%93) The company primarily recruits employees through the open market, providing mandatory new employee induction training and regular customized training for management and frontline staff to enhance retention and cultivate managerial talent, with no significant labor disputes during the reporting period - The company generally recruits employees from the open market by publishing recruitment advertisements and continuously assesses human resource needs[58](index=58&type=chunk) - Mandatory training for new employees (company introduction and work procedures) and store manager training are provided, along with regular and tailored training for management and frontline staff to cultivate candidates for promotion[59](index=59&type=chunk) - During the reporting period and up to the latest practicable date, the company experienced no strikes or significant labor disputes, nor did it encounter any material difficulties in recruiting or retaining qualified employees[59](index=59&type=chunk) [Corporate Governance and Other Information](index=17&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Corporate Governance](index=17&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company has adopted and complied with all principles and applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules since its listing date, committed to maintaining high standards of corporate governance - The company has adopted and complied with all principles and applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules since its listing date[61](index=61&type=chunk) - The Board will continue to review corporate governance policies and compliance to maintain high standards of corporate governance[61](index=61&type=chunk) [Material Legal Proceedings](index=17&type=section&id=%E9%87%8D%E5%A4%A7%E6%B3%95%E5%BE%8B%E8%A8%B4%E8%A8%9F) During the reporting period, no Group member companies were involved in any material litigation, arbitration, or claims, nor were there any pending or threatened material legal disputes to the directors' knowledge - During the reporting period, no member companies of the Group were involved in any material litigation, arbitration, or claims, and to the best knowledge of the directors, no member companies of the Group had any pending or threatened material litigation, arbitration, or claims[62](index=62&type=chunk) [Audit Committee](index=17&type=section&id=%E5%AF%A9%E8%A8%88%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising four independent non-executive directors and one non-executive director, has reviewed and confirmed the unaudited interim condensed consolidated results for the six months ended June 30, 2025, deeming them compliant with relevant accounting standards, rules, and regulations - The Audit Committee comprises Mr. Lin Jiade (Chairman), Mr. Zheng Manjun, Mr. Zheng Yu, Mr. Zhu Bo (Independent Non-executive Directors), and Ms. Wei Yan (Non-executive Director)[63](index=63&type=chunk) - The Audit Committee has reviewed the unaudited interim condensed consolidated results for the six months ended June 30, 2025, and confirmed compliance with applicable accounting principles, standards, and requirements, with adequate disclosures made[63](index=63&type=chunk) [Interim Dividend](index=18&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors recommends not to declare an interim dividend for the six months ended June 30, 2025 - The Board recommends not to declare an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[64](index=64&type=chunk) [Compliance with Laws and Regulations](index=18&type=section&id=%E9%81%B5%E5%AE%88%E6%B3%95%E5%BE%8B%E6%B3%95%E8%A6%8F) Except for the "non-compliance" matters disclosed in the prospectus, the Group has complied in all material respects with relevant laws and regulations significantly affecting it during the reporting period - Except for those disclosed in the "Business - Non-compliance" section of the prospectus, the Group has complied in all material respects with relevant laws and regulations that have a significant impact on the Group during the reporting period[65](index=65&type=chunk) [Central Kitchen Relocation Plan](index=18&type=section&id=%E4%B8%AD%E5%A4%AE%E5%BB%9A%E6%88%BF%E6%90%AC%E9%81%B7%E8%A8%88%E5%8A%83) The company initially planned to relocate its Muyuan Central Kitchen due to defective land and property, but after receiving official confirmation from Shaobo Town People's Government around June 2025 that the land met planning requirements and assistance would be provided for land use conversion, the company decided to temporarily suspend the relocation and instead pursue the legalization of property rights for the defective property and related land - The company originally planned to relocate the Muyuan Central Kitchen because it was located on defective land and property for which land use rights certificates and property ownership certificates could not be obtained[66](index=66&type=chunk) - Around June 2025, the company received an official confirmation letter from the Shaobo Town People's Government, stating that the defective land met the village and town land planning requirements and was primarily used for vegetable processing and central kitchen purposes[68](index=68&type=chunk) - The Shaobo Town People's Government will assist the company in completing the procedures for converting agricultural land use, expected to be finalized by the end of December 2026, and confirmed that the company has not been subject to any penalties for land, property, construction, fire safety, or other related matters[68](index=68&type=chunk)[69](index=69&type=chunk) - Given the confirmation letter and the path to legalizing property rights, the company has decided to temporarily suspend the central kitchen relocation plan and instead proceed with obtaining land use rights and property ownership for the defective property and related land[69](index=69&type=chunk) [Gongnong Road Defective Property](index=20&type=section&id=%E5%B7%A5%E8%BE%B2%E8%B7%AF%E7%91%B6%E7%96%B5%E7%89%A9%E6%A5%AD) The defective portion of Gongnong Road property, lacking property ownership certificates, was primarily used for storage, but its storage activities were relocated to other validly certified areas within the same building before the listing date, rendering this defective portion idle - The defective portion of Gongnong Road property, approximately **2,500 square meters** in area, lacked property ownership certificates due to temporary structures not obtaining necessary permits and acceptance procedures, and was primarily used for storage[70](index=70&type=chunk) - The relocation of storage functions from the defective portion of Gongnong Road property was completed before the listing date, and this area has become an idle property with no operational activities[70](index=70&type=chunk) [Continuing Disclosure Obligations under Listing Rules](index=20&type=section&id=%E4%B8%8A%E5%B8%82%E8%A6%8F%E5%89%87%E8%A6%8F%E5%AE%9A%E7%9A%84%E6%8C%81%E7%BA%8C%E6%8A%AB%E9%9C%B2%E8%B2%AC%E4%BB%BB) Except as disclosed in this report, the company has no other continuing disclosure obligations under Rules 13.20, 13.21, and 13.22 of the Listing Rules - Except as disclosed in this report, the company has no other disclosure obligations under Rules 13.20, 13.21, and 13.22 of the Listing Rules[71](index=71&type=chunk) [Purchase, Sale, or Redemption of the Company's 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%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) From the listing date to the date of this report, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and as of June 30, 2025, the company held no treasury shares - From the listing date to the date of this report, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[72](index=72&type=chunk) - As of June 30, 2025, the company held no treasury shares[72](index=72&type=chunk) [Standard Code for Securities Transactions by Directors and Supervisors](index=20&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company has adopted a standard code governing securities transactions by directors, supervisors, and relevant employees, and all directors and supervisors confirmed strict compliance, with no violations by relevant employees found during the reporting period - The company has adopted a standard code governing all dealings in the company's securities by directors, supervisors, and relevant employees[73](index=73&type=chunk) - All directors and supervisors have confirmed strict compliance with the required standards set out in the standard code from the listing date up to the latest practicable date[73](index=73&type=chunk) - During the period from the listing date to June 30, 2025, the company found no instances of non-compliance with the standard code by any relevant employees of the company[74](index=74&type=chunk) [Global Offering and Use of Proceeds](index=21&type=section&id=%E5%85%A8%E7%90%83%E7%99%BC%E5%94%AE%E5%8F%8A%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) The company's H shares were listed on the Main Board of the Stock Exchange on March 31, 2025, through a global offering of 53,562,000 H shares at HKD 2.50 per share, yielding net proceeds of approximately HKD 89.04 million (after adjusting for actual listing expenses), of which approximately HKD 21.7 million has been utilized, primarily for opening new retail stores, store renovations, and purchasing shelves - The company's H shares were listed on the Main Board of the Stock Exchange on March 31, 2025, through a global offering of **53,562,000 H shares** at an offer price of **HKD 2.50 per H share**[76](index=76&type=chunk) - The net proceeds from the global offering were approximately **HKD 92.55 million**, with actual listing expenses of approximately **RMB 41.4 million** (approximately **HKD 44.9 million**), resulting in actual net proceeds of approximately **HKD 89.04 million**[78](index=78&type=chunk) Details of Use of Net Proceeds from Global Offering (as of the date of this report) | Purpose | Estimated Allocation in Prospectus (approx. HKD million) | Revised Allocation (approx. HKD million) | Utilized (approx. HKD million) | Remaining Amount (approx. HKD million) | | :--- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Opening new retail stores | 32.5 | 27.5 | 20.7 | 6.8 | | Store renovations | 9.7 | 8.2 | 8.2 | – | | Purchasing shelves | 9.4 | 7.9 | 5.2 | 2.7 | | Purchasing refrigeration facilities, lighting, air conditioning, CCTV surveillance systems, and POS systems | 8.8 | 7.5 | 3.4 | 4.1 | | Installing fire safety systems | 4.6 | 3.9 | 3.9 | – | | Establishing new distribution centers | 43.3 | 36.7 | – | 36.7 | | Establishing new central kitchens | 28.1 | 23.9 | – | 23.9 | | Enhancing ERP and infrastructure systems | 1.2 | 1.0 | 1.0 | – | | **Total** | **137.6** | **116.6** | **42.4** | **74.2** | [Interests and Short Positions of Directors, Supervisors, and Chief Executive in Shares, Underlying Shares, and Debentures](index=23&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%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, several directors, supervisors, and the chief executive held interests in the company's shares, with Mr. Gao Feng, Mr. Yuan Yuan, and Mr. Zhang Jia'an, along with their concert parties, collectively holding approximately 31.11% of the equity Interests of Directors, Supervisors, and Chief Executive in the Company | Name | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding (%) | | :--- | :------- | :------- | :----------------- | | Mr. Gao Feng | Beneficial owner, interest in controlled corporation, interest of concert parties | 66,674,976 | 31.11 | | Mr. Yuan Yuan | Beneficial owner, interest of concert parties | 66,674,976 | 31.11 | | Mr. Zhang Jia'an | Beneficial owner, interest of concert parties | 66,674,976 | 31.11 | | Mr. Yao Jun | Beneficial owner | 500,000 | 0.23 | | Ms. Shen Zhigen | Beneficial owner | 600,000 | 0.28 | | Ms. Zhan Mingyu | Beneficial owner | 2,700,000 | 1.26 | | Mr. Xia Zhonglin | Beneficial owner | 550,000 | 0.26 | | Ms. Zhu Aizhen | Beneficial owner | 200,000 | 0.09 | - All disclosed interests are long positions[83](index=83&type=chunk) - The interests of Mr. Gao Feng, Mr. Yuan Yuan, and Mr. Zhang Jia'an include shares directly held by them and shares deemed to be owned due to their concert party relationship[83](index=83&type=chunk) [Interests and Short Positions of Substantial Shareholders and Other Persons in Shares, Underlying Shares, and Debentures](index=25&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E5%8F%8A%E5%85%B6%E4%BB%96%E4%BA%BA%E5%A3%AB%E5%90%84%E8%87%AA%E6%96%BC%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, substantial shareholders and their associates, excluding directors, supervisors, and the chief executive, held interests in the company's shares, with Mr. Gao Feng, Ruichuanda Investment, and his spouse Ms. Leng Yuemei, Mr. Yuan Yuan and his spouse Ms. Gu Xia, and Mr. Zhang Jia'an and his spouse Ms. Wang Xia, all deemed to hold approximately 31.11% equity; Qiequan Fund and its associates held approximately 10.07% equity; Jiangdu Fund and its associates held approximately 7.65% equity; and Mr. Xu Shihe and his spouse Ms. Yu Qin held approximately 5.07% equity Interests of Substantial Shareholders and Other Persons in the Company | Shareholder Name/Name | Nature of Interest | Number of Shares | Approximate Percentage of Interest in the Company (%) | | :--- | :------- | :------- | :----------------- | | Mr. Gao Feng | Beneficial owner, interest in controlled corporation, interest of concert parties | 66,674,976 | 31.11 | | Ruichuanda Investment | Beneficial owner, interest of concert parties | 66,674,976 | 31.11 | | Ms. Leng Yuemei | Spouse's interest | 66,674,976 | 31.11 | | Mr. Yuan Yuan | Beneficial owner, interest of concert parties | 66,674,976 | 31.11 | | Ms. Gu Xia | Spouse's interest | 66,674,976 | 31.11 | | Mr. Zhang Jia'an | Beneficial owner, interest of concert parties | 66,674,976 | 31.11 | | Ms. Wang Xia | Spouse's interest | 66,674,976 | 31.11 | | Qiequan Fund | Beneficial owner | 21,558,441 | 10.07 | | Xingongxiao Fund | Interest in controlled corporation | 21,558,441 | 10.07 | | Jiangdu Fund | Beneficial owner | 16,393,442 | 7.65 | | Mr. Xu Shihe | Beneficial owner | 10,870,051 | 5.07 | | Ms. Yu Qin | Spouse's interest | 10,870,051 | 5.07 | - All disclosed interests are long positions, and both unlisted domestic shares and H shares are ordinary shares in the company's share capital[86](index=86&type=chunk)[87](index=87&type=chunk) - Qiequan Fund, Xingongxiao Fund, Jiangdu Fund, and others are linked to multiple state-owned or local government-related entities through complex equity structures[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) [Changes in Information of Directors, Supervisors, and Chief Executive of the Company](index=28&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%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%E8%B3%87%E6%96%99%E8%AE%8A%E5%8B%95) During the reporting period, there were no changes in the information of the company's directors, supervisors, and chief executive required to be disclosed under the Listing Rules - During the reporting period, there were no changes in the information of the company's directors, supervisors, and chief executive required to be disclosed under Rules 13.51B(1) and 13.51B(2) of the Listing Rules[92](index=92&type=chunk) [Changes in Constitutional Documents](index=28&type=section&id=%E7%AB%A0%E7%A8%8B%E6%96%87%E4%BB%B6%E8%AE%8A%E6%9B%B4) The company adopted its Articles of Association on March 12, 2025, effective from the listing date, with no changes during the reporting period - The company adopted its Articles of Association on March 12, 2025, which became effective from the listing date[93](index=93&type=chunk) - There were no changes to the Articles of Association during the reporting period[93](index=93&type=chunk) [Consolidated Statement of Comprehensive Income and Other Comprehensive Income](index=29&type=section&id=%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company reported revenue of RMB 771.3 million and a profit for the period of RMB 13.5 million, a 26.6% year-on-year decrease, with basic and diluted earnings per share at RMB 0.07 and total comprehensive income for the period at RMB 14.4 million Summary of Consolidated Statement of Comprehensive Income and Other Comprehensive Income | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Revenue | 771,288 | 663,625 | | Gross Profit | 138,879 | 148,860 | | Operating Profit | 32,049 | 38,085 | | Profit Before Tax | 22,844 | 26,709 | | Profit for the Period | 13,516 | 18,421 | | Profit Attributable to Equity Holders of the Company | 12,499 | 18,002 | | Basic and Diluted Earnings Per Share (RMB yuan) | 0.07 | 0.11 | | Total Comprehensive Income for the Period | 14,356 | 19,877 | [Consolidated Statement of Financial Position](index=31&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company's total assets less current liabilities amounted to RMB 781.6 million, with share capital increasing to RMB 214.2 million and total equity rising to RMB 662.5 million, while total current assets were RMB 1,212.3 million and total current liabilities were RMB 861.9 million Summary of Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Non-current Assets | 431,093 | 399,108 | | Current Assets | 1,212,323 | 1,056,580 | | Current Liabilities | 861,864 | 774,555 | | Net Current Assets | 350,459 | 282,025 | | Total Assets Less Current Liabilities | 781,552 | 681,133 | | Non-current Liabilities | 119,096 | 140,223 | | Net Assets | 662,456 | 540,910 | | Share Capital | 214,247 | 160,685 | | Total Equity | 662,456 | 540,910 | [Consolidated Statement of Changes in Equity](index=33&type=section&id=%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For the six months ended June 30, 2025, the company's total equity increased from approximately RMB 540.9 million as of January 1, 2025, to approximately RMB 662.5 million, primarily due to profit for the period and shares issued from the initial public offering Summary of Consolidated Statement of Changes in Equity | Indicator | Balance as of January 1, 2025 (RMB thousand) | Balance as of June 30, 2025 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Share Capital | 160,685 | 214,247 | | Capital Reserve | 147,996 | 201,624 | | Statutory Reserve | 28,891 | 28,891 | | Fair Value Reserve (Non-transferable) | 20,072 | 20,876 | | Retained Profits | 166,145 | 178,644 | | Total Equity Attributable to Equity Holders of the Company | 523,789 | 644,282 | | Non-controlling Interests | 17,121 | 18,174 | | Total Equity | 540,910 | 662,456 | - The increase in total equity was mainly due to profit for the period and shares issued upon completion of the initial public offering[103](index=103&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=35&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, net cash used in operating activities was RMB 141.8 million, net cash used in investing activities was RMB 69.4 million, and net cash from financing activities was RMB 162.6 million, primarily from bank loans and IPO proceeds, with cash and cash equivalents at period-end totaling RMB 167.9 million Summary of Condensed Consolidated Statement of Cash Flows | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Net cash used in operating activities | (141,783) | (45,425) | | Net cash used in investing activities | (69,372) | (25,810) | | Net cash from/(used in) financing activities | 162,590 | (33,479) | | Net decrease in cash and cash equivalents | (48,565) | (104,714) | | Cash and cash equivalents at end of period | 167,902 | 131,673 | - Net cash from financing activities primarily came from proceeds from bank loans and other borrowings (**RMB 363.1 million**) and proceeds from the issuance of ordinary shares in the initial public offering (**RMB 107.2 million**)[105](index=105&type=chunk) [Notes to the Unaudited Interim Financial Report](index=37&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E9%99%84%E8%A8%BB) [1 General Information](index=37&type=section&id=1%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) Jiangsu Hongxin Supermarket Chain Co., Ltd. was established in China on October 19, 2005, restructured into a joint stock company on September 30, 2007, and its H shares were listed on the Hong Kong Stock Exchange Main Board on March 31, 2025, with the Group primarily engaged in grain and oil wholesale and operating "Hongxinlong" brand supermarkets and convenience stores - The company was established in China as a limited liability company on October 19, 2005, and restructured into a joint stock company on September 30, 2007[107](index=107&type=chunk) - The company's shares were listed on the Main Board of the Hong Kong Stock Exchange on March 31, 2025[107](index=107&type=chunk) - The Group is primarily engaged in grain and oil wholesale business and operates "Hongxinlong" brand supermarkets and convenience stores in central Jiangsu[107](index=107&type=chunk) [2 Basis of Preparation](index=37&type=section&id=2%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) This interim financial report is prepared in accordance with the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34, adopting the same accounting policies as the 2024 annual financial statements, and is unaudited - This interim financial report has been prepared in accordance with the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34[108](index=108&type=chunk) - The interim financial report has been prepared in accordance with the same accounting policies adopted in the 2024 annual financial statements[108](index=108&type=chunk) - This interim financial report is unaudited[109](index=109&type=chunk) [3 Changes in Accounting Policies](index=38&type=section&id=3%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95) The Group has applied amendments to IAS 21, but these had no material impact on the interim report as no foreign currency non-exchangeable transactions were undertaken, and no other new standards or interpretations not yet effective were applied during this accounting period - The Group has applied the amendments to IAS 21, but these had no material impact on this interim report as no foreign currency transactions that are not exchangeable into another currency were undertaken[111](index=111&type=chunk) - The Group has not applied any new standards or interpretations that are not yet effective during this accounting period[112](index=112&type=chunk) [4 Revenue and Segment Reporting](index=39&type=section&id=4%20%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) The Group's revenue primarily derives from goods sales (retail and wholesale), commission income, and meal supply, and as the chief operating decision-maker assesses the Group's performance as an integrated business, only one operating segment is presented, with no segment or geographical information provided Details of Revenue from Contracts with Customers | Revenue Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :------- | :----------------------- | :----------------------- | | Subtotal for sales of goods | 736,669 | 634,177 | | Subtotal for commission income | 13,758 | 18,710 | | Supply and sales of meals | 13,877 | 2,722 | | Other sources of income (operating lease rental income) | 6,984 | 8,016 | | **Total Revenue** | **771,288** | **663,625** | - The Group's revenue from contracts with customers is recognized at a point in time for the six months ended June 30, 2025, and 2024[114](index=114&type=chunk) - The Group has only one operating segment, and as the majority of its revenue and almost all non-current operating assets are located in China, no segment or geographical information is presented[115](index=115&type=chunk) [5 Other Income and Net Other Gains](index=41&type=section&id=5%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Other income, totaling RMB 3.4 million, primarily includes service income, government grants, and dividend income, while net other gains amounted to RMB 0.4 million, mainly from realized net gains on structured deposits and wealth management products and net exchange gains Other Income | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Service income | 2,707 | 2,338 | | Government grants | 508 | 61 | | Dividend income | 165 | 79 | | **Total** | **3,380** | **2,478** | Net Other Gains | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Net realized gains on structured deposits and wealth management products | 34 | 152 | | Net exchange gains | 210 | 970 | | Net loss on disposal of property, plant and equipment | (2) | (51) | | Others | 174 | (36) | | **Total** | **416** | **1,035** | [6 Profit Before Tax](index=42&type=section&id=6%20%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) Profit before tax was RMB 22.8 million, with net finance costs of RMB 9.2 million primarily comprising interest expenses on bank loans and lease liabilities, and other major expenses including cost of inventories, depreciation, impairment losses, and listing expenses Net Finance Costs | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Interest income from bank deposits | (1,728) | (929) | | Interest expense on bank loans and other borrowings | 9,083 | 9,591 | | Interest expense on lease liabilities | 1,850 | 2,714 | | **Net Finance Costs** | **9,205** | **11,376** | Other Major Expenses | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Cost of inventories recognized as expense | 624,338 | 509,676 | | Depreciation expense (owned property, plant and equipment) | 26,552 | 21,575 | | Depreciation expense (right-of-use assets) | 15,266 | 13,961 | | Impairment loss on trade and other receivables | 2,873 | 4,335 | | Listing expenses | 12,552 | 7,040 | | Auditor's remuneration (other services) | 1,855 | 1,575 | [7 Income Tax](index=43&type=section&id=7%20%E6%89%80%E5%BE%97%E7%A8%85) Income tax expense in the consolidated statement of comprehensive income was RMB 9.3 million, primarily comprising current tax provision and deferred tax, with PRC income tax provisions determined by applicable corporate income tax rates and Hong Kong profits tax estimated at an annual effective rate of 16.5% Income Tax Expense | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Current tax – provision for the period | 10,662 | 10,450 | | Deferred tax – origination and reversal of temporary differences | (1,334) | (2,162) | | **Total** | **9,328** | **8,288** | - PRC income tax provision is made based on the applicable corporate income tax rates determined by relevant PRC income tax rules and regulations for subsidiaries located in China[120](index=120&type=chunk) - Hong Kong profits tax provision is calculated at an estimated annual effective tax rate of **16.5%** adopted for the six months ended June 30, 2025[120](index=120&type=chunk) [8 Earnings Per Share](index=43&type=section&id=8%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) For the six months ended June 30, 2025, basic earnings per share were RMB 0.07, based on profit attributable to ordinary equity holders of RMB 12.5 million and a weighted average of 187.5 million ordinary shares outstanding, with diluted earnings per share being the same as basic earnings per share due to no potential dilutive ordinary shares Earnings Per Share | Indicator | H1 2025 | H1 2024 | | :--- | :----------- | :----------- | | Basic and Diluted Earnings Per Share (RMB yuan) | 0.07 | 0.11 | | Profit Attributable to Ordinary Equity Holders (RMB thousand) | 12,499 | 18,002 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 187,466 | 160,685 | - The company had no potential dilutive ordinary shares outstanding for the six months ended June 30, 2025, and 2024, thus diluted earnings per share were the same as basic earnings per share[122](index=122&type=chunk) [9 Inventories](index=44&type=section&id=9%20%E5%AD%98%E8%B2%A8) For the six months ended June 30, 2025, the decrease in the amount of inventories recognized (reversal of write-downs to net realizable value) was RMB 1.59 million, a significant increase compared to the same period last year Decrease in Inventory Amount | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Decrease in inventory amount | 1,590 | 152 | [10 Trade and Bills Receivables](index=44&type=section&id=10%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A) As of June 30, 2025, total trade and bills receivables amounted to RMB 313.1 million, an increase from December 31, 2024, with all amounts expected to be recovered within one year, and the company endorsed bank acceptance bills to suppliers to settle payables, fully derecognizing them with limited perceived risk Trade and Bills Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Trade receivables | 213,841 | 173,007 | | Bills receivable | 99,286 | 17,000 | | **Total** | **313,127** | **190,007** | Aging Analysis of Trade Receivables (Net of Loss Allowance) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Within 3 months | 200,614 | 122,506 | | Over 3 months but within 6 months | 11,980 | 44,062 | | Over 6 months but within 9 months | 1,051 | 3,293 | | Over 9 months but within 12 months | 196 | 3,021 | | Over 12 months | – | 125 | - The Group endorsed certain bank acceptance bills to suppliers to settle equivalent trade and other payables on a full recourse basis and has fully derecognized them[126](index=126&type=chunk) - The Group considers the issuing banks of these bills to have good credit quality and that it is unlikely the issuing banks will fail to settle the bills at maturity, thus the risk is limited[126](index=126&type=chunk) [11 Prepayments, Deposits, and Other Receivables](index=45&type=section&id=11%20%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85%E3%80%81%E6%8C%89%E9%87%91%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, total prepayments, deposits, and other receivables amounted to RMB 408.2 million, an increase from December 31, 2024, with all amounts expected to be recovered or recognized as expenses within one year Prepayments, Deposits, and Other Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Prepayments | 378,670 | 295,909 | | Recoverable VAT | 1,666 | 488 | | Other deposits and receivables | 30,067 | 23,824 | | Less: Loss allowance | (2,168) | (2,168) | | **Total** | **408,235** | **318,053** | - All prepayments, deposits, and other receivables are expected to be recovered or recognized as expenses within one year[127](index=127&type=chunk) [12 Restricted Deposits and Cash and Cash Equivalents](index=46&type=section&id=12%20%E5%8F%97%E9%99%90%E5%88%B6%E5%AD%98%E6%AC%BE%E4%BB%A5%E5%8F%8A%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9) As of June 30, 2025, restricted deposits amounted to RMB 6.1 million, primarily pledged letters of credit, while total cash and cash equivalents were RMB 167.9 million, mainly bank deposits, with outward remittances from mainland China subject to foreign exchange controls Restricted Deposits | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Pledged letters of credit | 6,100 | 1,600 | Cash and Cash Equivalents | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Bank deposits | 167,054 | 215,959 | | Cash on hand | 848 | 899 | | **Total** | **167,902** | **216,858** | - Outward remittances of funds from mainland China are subject to foreign exchange control regulations and rules[129](index=129&type=chunk) [13 Bank Loans and Other Borrowings](index=47&type=section&id=13%20%E9%8A%80%E8%A1%8C%E8%B2%B8%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E5%80%9F%E6%AC%BE) As of June 30, 2025, total bank loans and other borrowings amounted to RMB 569.5 million, comprising RMB 528.0 million in short-term borrowings and RMB 41.5 million in long-term borrowings Bank Loans and Other Borrowings | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Short-term bank loans and other borrowings | 527,463 | 409,265 | | Accrued interest (current) | 496 | 423 | | Long-term bank loans and other borrowings | 41,523 | 58,775 | | Accrued interest (non-current) | 24 | 54 | | **Total** | **569,506** | **468,517** | Maturity Profile of Interest-bearing Bank Loans and Other Borrowings | Maturity | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Within 1 year or on demand | 527,959 | 409,688 | | After 1 year but within 2 years | 37,397 | 48,787 | | After 2 years but within 5 years | 4,150 | 10,042 | | **Total** | **569,506** | **468,517** | [14 Trade and Bills Payables](index=48&type=section&id=14%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A) As of June 30, 2025, total trade and bills payables amounted to RMB 83.1 million, a decrease from December 31, 2024, with all amounts expected to be settled or repaid on demand within one year Trade and Bills Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Trade payables | 83,039 | 110,285 | | Bills payable | 100 | – | | **Total** | **83,139** | **110,285** | Aging Analysis of Trade and Bills Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Within 3 months | 63,664 | 89,894 | | 3 to 12 months | 12,809 | 12,856 | | Over 12 months | 6,666 | 7,535 | | **Total** | **83,139** | **110,285** | [15 Other Payables and Accrued Expenses](index=49&type=section&id=15%20%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8) As of June 30, 2025, total other payables and accrued expenses amounted to RMB 99.2 million, an increase from December 31, 2024, primarily including staff-related costs, deposits received, and other taxes payable Other Payables and Accrued Expenses | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Staff-related costs payable | 5,982 | 15,878 | | Deposits received | 14,054 | 12,423 | | Other taxes payable | 22,542 | 12,169 | | Others | 56,599 | 48,054 | | **Total** | **99,177** | **88,524** | - All other payables and accrued expenses are expected to be settled or repaid on demand within one year[132](index=132&type=chunk) [16 Capital, Reserves, and Dividends](index=49&type=section&id=16%20%E8%B3%87%E6%9C%AC%E3%80%81%E5%84%B2%E5%82%99%E5%8F%8A%E8%82%A1%E6%81%AF) As of June 30, 2025, the company's share capital increased to RMB 214.2 million and capital reserve to RMB 201.6 million, primarily due to the issuance of H shares in the initial public offering, with no dividends paid or declared during the reporting period Changes in Share Capital and Capital Reserve | Item | Number of Ordinary Shares | Share Capital (RMB thousand) | Capital Reserve (RMB thousand) | Total (RMB thousand) | | :--- | :--------- | :---------------- | :---------------- | :---------------- | | As of December 31, 2024 | 160,684,910 | 160,685 | 147,996 | 308,681 | | Issuance of H shares through initial public offering | 53,562,000 | 53,562 | 53,628 | 107,190 | | As of June 30, 2025 | 214,246,910 | 214,247 | 201,624 | 415,871 | - On March 31, 2025, the company issued **53,562,000 new H shares** with a par value of **RMB 1.0 yuan** each at a price of **HKD 2.5 per share** through the Hong Kong Public Offering and International Placing[133](index=133&type=chunk) - The company neither paid nor declared any dividends for the six months ended June 30, 2025, and 2024[134](index=134&type=chunk) [17 Commitments](index=50&type=section&id=17%20%E6%89%BF%E6%93%94) As of June 30, 2025, authorized and contracted commitments not provided for in the interim financial report amounted to RMB 15.8 million, a significant increase from December 31, 2024 Unfulfilled Commitments | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Authorized and contracted | 15,786 | 1,453 | [18 Material Related Party Transactions](index=50&type=section&id=18%20%E9%87%8D%E5%A4%A7%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) As of June 30, 2025, certain bank loans and other borrowings granted to the Group (RMB 328.2 million) were guaranteed by controlling shareholder Mr. Gao Feng and his spouse Ms. Leng Yuemei, controlling shareholder Mr. Zhang Jia'an, and key management personnel Ms. Yin Qin Bank Loans and Other Borrowings Guaranteed by Related Parties | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :----------------------- | :----------------------- | | Guarantees for bank loans and other borrowings granted | 328,186 | 327,040 | - Certain financings granted to the Group were guaranteed by controlling shareholder Mr. Gao Feng and his spouse Ms. Leng Yuemei, controlling shareholder Mr. Zhang Jia'an, and key management personnel Ms. Yin Qin[136](index=136&type=chunk) [Definitions](index=50&type=section&id=%E9%87%8B%E7%BE%A9) This section provides definitions for key terms and terminology used in the interim report to ensure readers have a clear understanding of the report's content

| | | | | | Attributable to owners of the parent | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | 母公司擁有人應佔 | | | | | | | | Statutory | Safety | | | | | | Share | Share | surplus | production | Retained | Total | | | | capital | premium | reserve | reserve | profits | equity | | | | | | 法定盈餘 | 安全生產 | | | | | | 股本 | 股份溢價 | 儲備 | 儲備 | 保留溢利 | 總權益 | | | | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | | | | | | 人民幣千元 人民幣千元 人民幣千元 人民幣千元 人民幣千元 人民幣千元 | | | | | At 1 January 2025 (Audite ...

[Announcement Overview](index=1&type=section&id=Announcement_Overview) This announcement provides supplementary details on expected credit loss (ECL) impairment losses for the 2024 annual report [Purpose and Background of Announcement](index=1&type=section&id=Purpose_and_Background) This announcement provides supplementary information on expected credit loss (ECL) impairment losses disclosed in the 'Management Discussion and Analysis' section of China Netcom Group Corporation Limited's 2024 annual report - This is a supplementary announcement to the 2024 annual report of China Netcom Group Corporation Limited (Stock Code: 1920)[2](index=2&type=chunk)[3](index=3&type=chunk) - It primarily provides additional information regarding expected credit loss (ECL) impairment losses in the 'Management Discussion and Analysis' section of the 2024 annual report[3](index=3&type=chunk) [Expected Credit Loss (ECL) Impairment Details](index=1&type=section&id=ECL_Impairment_Details) This section details the specific impairment projects, amounts, and the methodology and assumptions used for calculating expected credit losses [Impairment Projects and Amounts](index=1&type=section&id=Impairment_Projects_and_Amounts) The company recognized impairment losses due to significant uncertainties in receivables of approximately HKD 15.7 million and HKD 3.6 million for two construction projects in Chai Wan and Kwun Tong, despite the client indicating payment processing | Project | Impairment Loss Amount (HKD) | | :--- | :--- | | Chai Wan Construction Project | Approx. 15.7 million | | Kwun Tong Construction Project | Approx. 3.6 million | - The company submitted payment applications for these projects in February 2022 and January 2024, but the client has not issued payment confirmation for a long time[4](index=4&type=chunk) - By December 2024, the client communicated that payment applications were still being processed and required more time, leading directors to first recognize significant collection uncertainty and the need for impairment[4](index=4&type=chunk) [Impairment Calculation Methodology and Assumptions](index=2&type=section&id=Impairment_Calculation_Methodology_and_Assumptions) Impairment is calculated based on an independent valuer's report issued in March 2025 under HKFRS 9, using a probability-weighted loss default model and key inputs such as receivables grouping, probability of default, recovery rates, and forward-looking adjustment factors [Receivables Grouping](index=2&type=section&id=Receivables_Grouping) All receivables and unbilled revenue are categorized into three groups (A, B, C) based on repayment status, days past due, and credit risk, with Group C considered in default - Receivables and unbilled revenue are categorized into three groups: * **Group A:** Timely repayment, lower credit risk * **Group B:** Delayed repayment or 60-90 days past due, with supporting repayment evidence, relatively higher credit risk requiring individual analysis * **Group C:** Long overdue (over 90 days), no supporting repayment evidence, considered in default[5](index=5&type=chunk)[7](index=7&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) [Key Input Data and Assumptions](index=3&type=section&id=Key_Input_Data_and_Assumptions) Key input data includes probability of default, recovery rates, and forward-looking adjustment factors, primarily referencing Moody's rating reports and IMF GDP data, adjusted for forward-looking considerations | Metric | Group A (Accounts Receivable/Retention Money/Unbilled Revenue) | Group C (All Accounts Receivable/Retention Money/Unbilled Revenue) | Source | | :--- | :--- | :--- | :--- | | **Probability of Default** | 0.0% to 9.7% (Accounts Receivable) <br> 0.0% to 3.1% (Retention Money) <br> 0.0% to 100% (Unbilled Revenue) | 100% | Moody's Ratings (February 28, 2025) | | **Recovery Rate** | 37.9% (Accounts Receivable) <br> 37.9% (Retention Money) <br> 0.0% to 37.9% (Unbilled Revenue) | 0% | Moody's Ratings (February 28, 2025) | - Forward-looking adjustment factors are estimated using regression analysis, linking probability of default to GDP, with historical GDP data sourced from the International Monetary Fund (IMF)[12](index=12&type=chunk) - Forward-looking adjustment factors are set separately for investment-grade and speculative-grade assets based on economic conditions (stable, improving, deteriorating)[12](index=12&type=chunk) [Significant Changes](index=3&type=section&id=Significant_Changes) There are no significant changes in input data or assumptions compared to previous years, only an update of market data from 2023 to 2024 - No significant changes in input data or assumptions occurred compared to previous years, only an update of market data from 2023 to 2024 market data[11](index=11&type=chunk) [Valuation Methodology](index=4&type=section&id=Valuation_Methodology) The valuation report adopts the general approach for expected credit losses as described in HKFRS 9, paragraph 5.5.17, utilizing a probability-weighted loss default model consistently applied in 2023 and 2024 - The valuation report employs the general approach for expected credit losses as per HKFRS 9, paragraph 5.5.17, specifically a probability-weighted loss default model[13](index=13&type=chunk) - The same valuation model was applied in both 2023 and 2024[13](index=13&type=chunk) [Company Subsequent Actions](index=4&type=section&id=Company_Subsequent_Actions) This section outlines the company's actions taken after recognizing the impairment, including cessation of business with the client and debt recovery efforts [Post-Impairment Actions](index=4&type=section&id=Post_Impairment_Actions) Following impairment recognition, the company ceased business with the client and is actively pursuing debt recovery through payment reminders, communication with relevant parties, and considering legal action - The company has ceased business dealings with the client[13](index=13&type=chunk) - The company continues to pursue outstanding debts, with measures including: * Continuously issuing payment reminders to the client * Proactively responding to quantity surveyors' inquiries * Actively communicating with developers and main contractors of the relevant construction projects to seek assistance in expediting payment of outstanding debts[13](index=13&type=chunk) - The company is considering seeking legal advice regarding potential legal actions against the client, but no concrete plans are in place due to potential additional legal costs and time implications[13](index=13&type=chunk) [Other Information](index=4&type=section&id=Other_Information) This section provides additional details, including the composition of the Board of Directors [Board of Directors Members](index=4&type=section&id=Board_of_Directors_Members) The announcement discloses the list of Board of Directors members as of September 12, 2025, including Executive Directors Zhou Zhenlin, Peng Yunying, Guo Xianjiao, and Independent Non-executive Directors Ding Xin, Zhang Lingke, and Professor Lin Chengguang - As of September 12, 2025, the Board of Directors members include: * **Executive Directors:** Mr. Zhou Zhenlin, Ms. Peng Yunying, Mr. Guo Xianjiao * **Independent Non-executive Directors:** Ms. Ding Xin, Ms. Zhang Lingke, Professor Lin Chengguang[14](index=14&type=chunk)

2025 INTERIM REPORT 中期報告 本中期報告以再造紙印制。 This interim report is printed on recycled paper. 封面: 鄭州正商樂活城事 Cover : Zhengzhou Zensun Lehuo City WEBSITE 網址 www.zensunenterprises.com STOCK CODE 股份代號 Stock Exchange 聯交所 : 185 Bloomberg 彭博資訊 : 185 HK Reuters 路透社 : 0185.HK TABLE OF CONTENTS 目錄 | 2 | Corporate Information | | --- | --- | | | 公司資料 | | 4 | Property Development in the PRC and Project Summary | | | 在中國之物業發展及項目概要 | | 19 | Management Discussion and Analysis | | | 管理層討論及分析 | | 30 | Other Information | | | 其他資料 ...

[Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides essential company details, including its board structure, committee compositions, registration information, and key operational locations [Board and Committee Composition](index=4&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E8%88%87%E5%A7%94%E5%93%A1%E6%9C%83%E6%A7%8B%E6%88%90) The company's board comprises executive, non-executive, and independent non-executive directors, supported by audit, remuneration, nomination, and risk management committees to ensure robust corporate governance - Board members include Executive Directors **Mr. Chew Hwa Seng** (Chairman) and **Mr. Liu Yingchun** (Chief Executive Officer), Non-Executive Director **Ms. Geng Yu**, and Independent Non-Executive Directors **Mr. Chan Yiu Heung**, **Mr. Cheng Man Piu**, and **Mr. Liu Kwai Lam**[7](index=7&type=chunk) Board Committee Chairmen and Members | Committee | Chairman | Members | | :--- | :--- | :--- | | Remuneration Committee | Mr. Liu Kwai Lam | Mr. Chew Hwa Seng, Mr. Chan Yiu Heung | | Nomination Committee | Mr. Cheng Man Piu | Mr. Liu Kwai Lam, Ms. Geng Yu (appointed on August 22, 2025) | | Risk Management Committee | Mr. Chan Yiu Heung | Mr. Liu Yingchun, Mr. Cheng Man Piu | | Audit Committee | Mr. Chan Yiu Heung | Mr. Liu Kwai Lam, Ms. Geng Yu | [Company Basic Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) The company is incorporated in Hong Kong with stock code 8067, primarily operating in Langfang, Hebei, China, and maintaining a registered office in Hong Kong - The company's stock code is **8067**, with a board lot size of **1,000 shares**[7](index=7&type=chunk) - The registered office is located at 31/F, 148 Electric Road, North Point, Hong Kong, while the China headquarters and principal place of business are at 3rd Floor, No. 67 Zhangheng Road, Oriental University City, Langfang Economic and Technological Development Zone, Hebei Province[8](index=8&type=chunk) - The independent auditor is **BDO Limited**, Hong Kong[7](index=7&type=chunk) [Chairman's Statement](index=6&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A) The Chairman's Statement provides an overview of the Group's performance, strategic initiatives, and future outlook, highlighting key achievements and challenges [FY2024/25 Performance Overview](index=6&type=section&id=2024%2F25%E8%B2%A1%E6%94%BF%E5%B9%B4%E5%BA%A6%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A7%88) Despite challenging education and real estate markets, the Group improved financial results in FY2024/25, with revenue increasing by 1.3% year-on-year and significant reductions in operating and annual losses Key Financial Indicators for FY2024/25 | Indicator | FY2024/25 (RMB million) | FY2023/24 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 56.70 | 55.97 | +1.3% | | Operating Loss | (30.35) | (67.12) | -54.8% | | Loss for the Year | (57.02) | (74.58) | -23.5% | - The operating loss primarily resulted from losses on disposal of investment properties, fair value losses on investment properties, and impairment losses on an associate and other receivables[9](index=9&type=chunk) [Asset Rationalization and Business Diversification](index=6&type=section&id=%E8%B3%87%E7%94%A2%E5%90%88%E7%90%86%E5%8C%96%E8%88%87%E6%A5%AD%E5%8B%99%E5%A4%9A%E5%85%83%E5%8C%96) The Group rationalized assets by divesting low-yield investment properties and expanded its revenue base and geographical market coverage through the acquisition of 4 Vallees to address challenges in the Chinese market - In FY2024/25, the Group completed the disposal of **three investment properties**, generating **RMB 132.00 million** in proceeds, which were used to strengthen working capital and reduce bank borrowings[10](index=10&type=chunk) - Since February 2024, the wholly-owned subsidiary **4 Vallees Pte Ltd** has not only expanded the revenue base and geographical market coverage but also contributed positively to the Group's bottom line[10](index=10&type=chunk) - Sustainable demand is anticipated for education facilities in Oriental University City, Malaysia, and Indonesia, while moderate growth in the Swiss hotel industry is expected to benefit the Group's hotel properties in Switzerland[10](index=10&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section reviews the Group's financial performance, liquidity, and business operations, outlining key changes and future strategies [Financial Review](index=8&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's revenue slightly increased in FY2024/25, with a significant narrowing of operating loss, though still impacted by fair value losses on investment properties and asset disposal losses, alongside various cost and tax changes Key Financial Data Changes for FY2024/25 | Indicator | FY2024/25 (RMB million) | FY2023/24 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 56.70 | 55.97 | +1.3% | | Employee Costs | 6.66 | 5.46 | +22.2% | | Property Tax and Land Use Tax | 8.97 | 10.50 | -14.6% | | Property Management Fees | 3.34 | 3.09 | +8.1% | | Repair and Maintenance Expenses | 1.90 | 1.33 | +43.1% | | Legal and Professional Fees | 3.70 | 5.84 | -36.6% | | Loss on Disposal of Investment Properties and Assets Held for Sale | 11.36 | 0 | New | | Net Other Income | 1.74 | 5.31 | -67.3% | | Other Expenses | 6.25 | 3.33 | +88.0% | | Share of Loss of an Associate | 2.15 | 3.13 | -31.3% | | Impairment Loss on an Associate | 3.18 | 0 | New | | Impairment Loss on Other Receivables | 2.05 | 0 | New | | Fair Value Loss on Investment Properties | 38.65 | 93.81 | -58.8% | | Operating Loss | 30.35 | 67.12 | -54.8% | | Bank Borrowing Interest Expense | 14.56 | 16.43 | -11.4% | | Current Tax Expense | 31.17 | 4.86 | +541.8% | | Deferred Tax Credit | 19.03 | 13.81 | +37.8% | | Loss for the Year | 57.02 | 74.58 | -23.5% | | EBITDA | 13.90 | 27.09 | -48.7% | [Liquidity and Financial Resources](index=11&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) The Group's net current liabilities increased, but the gearing ratio decreased, with directors confident in sufficient working capital for the next 12 months, despite a significant reduction in cash and cash equivalents and no current foreign exchange hedging Overview of Liquidity and Financial Resources | Indicator | June 30, 2025 (RMB million) | June 30, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Net Current Liabilities | 33.97 | 6.90 | Increase | | Total Assets | 1,593.21 | 1,800.79 | Decrease | | Total Liabilities | 472.73 | 655.29 | Decrease | | Total Equity | 1,120.48 | 1,145.51 | Decrease | | Gearing Ratio | 21.96% | 25.34% | Decrease | | Cash and Cash Equivalents | 1.39 | 69.66 | Significant Decrease | - The directors believe the Group will have **sufficient working capital** to meet its cash flow requirements for the next twelve months, and the consolidated financial statements are prepared on a going concern basis[32](index=32&type=chunk) - The Group currently does not engage in any foreign exchange hedging, as most transactions are denominated in RMB, limiting foreign currency risk[35](index=35&type=chunk) [Business Review and Outlook](index=12&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E5%8F%8A%E5%B1%95%E6%9C%9B) The Group primarily provides education facility leasing in China, Malaysia, and Indonesia, and operates hotel properties in Switzerland; despite market challenges, asset rationalization and long-term lease agreements are expected to improve future financial performance - The Group's principal businesses are owning and leasing education facilities to educational institutions in China, Malaysia, and Indonesia, and owning, leasing, and managing hotel properties in Switzerland[36](index=36&type=chunk) - Revenue for FY2024/25 increased by **1.3%** to **RMB 56.70 million**, EBITDA remained at **RMB 13.90 million**, and both operating loss and loss for the year decreased[37](index=37&type=chunk) - The Group rationalized assets by disposing of low-yield investment properties (**3 properties** totaling **RMB 132.00 million** in FY2024/25), using the proceeds to upgrade selected properties and reduce bank borrowings[38](index=38&type=chunk) - The Board anticipates that, with existing long-term lease agreements and the appreciation of investment properties, financial performance for the financial year ending June 30, 2026, will further improve[38](index=38&type=chunk) [Biographies of Directors and Senior Management](index=14&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E5%B1%A4%E5%B1%A5%E6%AD%B7) This section provides detailed biographies of the Group's directors and senior management, highlighting their professional experience and roles within the company [Directors](index=14&type=section&id=%E8%91%A3%E4%BA%8B) This section details the backgrounds, responsibilities, academic qualifications, and professional experience of the company's executive, non-executive, and independent non-executive directors, who possess extensive expertise in corporate strategy, operational management, financial auditing, and investment - **Mr. Chew Hwa Seng** is the founding director, Chairman, and Executive Director, responsible for overall strategic planning and management, and is also the founder, Chairman, and CEO of Raffles Education Corporation Limited[40](index=40&type=chunk) - **Mr. Liu Yingchun** is the Group's CEO and Executive Director, responsible for overall operational management, with experience in auditing and construction engineering consulting[42](index=42&type=chunk) - **Ms. Geng Yu** is a Non-Executive Director with extensive experience in corporate management, financial auditing, education investment, and management, currently serving as Vice President of Wanbo Institute of Technology, a subsidiary of Raffles Education Group[43](index=43&type=chunk) - Independent Non-Executive Directors **Mr. Chan Yiu Heung**, **Mr. Cheng Man Piu**, and **Mr. Liu Kwai Lam** possess deep backgrounds in banking, catering solutions, financial management, and industrial park operations, respectively[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) [Senior Management](index=17&type=section&id=%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E5%B1%A4) The Group's senior management includes CEO Mr. Liu Yingchun, CFO Mr. Li Jingyan, COO Mr. Chen Guang, and Deputy General Manager Mr. Zhang Jianguang, each responsible for key functions such as finance, operations, and human resources - **Mr. Li Jingyan** serves as the Chief Financial Officer, responsible for the Group's financial accounting, with **26 years** of experience in finance, accounting, business, and business development[47](index=47&type=chunk) - **Mr. Chen Guang** serves as the Chief Operating Officer, overseeing the Group's property management and operational matters, including asset acquisition, disposal, leasing, and maintenance[48](index=48&type=chunk) - **Mr. Zhang Jianguang** is the Deputy General Manager, responsible for managing human resources operations and staff management[48](index=48&type=chunk) [Directors' Report](index=18&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A) This report covers the company's business overview, financial performance, corporate governance, shareholder interests, and environmental policies [Business Review and Financial Performance](index=18&type=section&id=%E6%A5%AD%E5%8B%99%E6%A6%82%E6%B3%81%E8%88%87%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE) The company primarily engages in investment holding, with subsidiaries providing education facility leasing and hotel property management services; the Group's FY2024/25 results are in the consolidated financial statements, and the Board recommends no final dividend - The company's principal business is investment holding, while its subsidiaries primarily engage in education facility leasing in China, Malaysia, and Indonesia, and hotel property leasing and management in Switzerland[50](index=50&type=chunk) - The Board resolved not to recommend the payment of any final dividend for the financial year 2024/25[52](index=52&type=chunk) - To determine shareholders' entitlement to attend the 2025 Annual General Meeting, share transfer registration will be suspended from **October 21 to October 24, 2025**[53](index=53&type=chunk) - All investment properties of the Group were revalued as of June 30, 2025, resulting in a net decrease in fair value of **RMB 38.65 million**[55](index=55&type=chunk) [Corporate Governance and Shareholder Interests](index=19&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E8%88%87%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A) The report outlines the company's policies and status regarding share capital, reserves, key customers and suppliers, directors' emoluments, equity-linked agreements, and public float, emphasizing director independence, related party transaction review, and the controlling shareholder's non-compete undertaking - In FY2024/25, the Group made charitable donations of **RMB 500,000**[62](index=62&type=chunk) - The company did not redeem or trade any of its listed shares during FY2024/25[63](index=63&type=chunk) FY2024/25 Key Customer and Supplier Proportions | Category | Percentage of Total Revenue/Purchases (%) | | :--- | :--- | | Largest Customer | 32.2 | | Top Five Customers Combined | 80.0 | | Largest Supplier | 18.9 | | Top Five Suppliers Combined | 67.3 | - The company has complied with the GEM Listing Rules requirement to maintain a sufficient public float of its issued shares (at least **25%**)[70](index=70&type=chunk) - Independent non-executive directors have provided annual written confirmations of their independence, and the company considers all independent non-executive directors to be independent[72](index=72&type=chunk) - The Group's continuing connected transactions include property lease agreements in Malaysia, Indonesia, and Singapore, as well as management services provided by Raffles Group, all entered into on normal commercial terms[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - The independent non-executive directors have reviewed the continuing connected transactions and confirmed they were conducted in the ordinary course of business, on normal or better commercial terms, and in the overall interests of the company and its shareholders[86](index=86&type=chunk)[89](index=89&type=chunk) - The controlling shareholder, Raffles, has provided an annual written declaration of compliance with the non-compete undertaking in the non-compete deed, and the independent non-executive directors confirmed full compliance[90](index=90&type=chunk) [Directors' and Major Shareholders' Interests](index=28&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A) This section discloses the interests and short positions of directors and major shareholders in the company's and its associated corporations' shares and debentures, with Chairman Mr. Chew Hwa Seng holding 75% equity through Raffles Directors' Long Positions in Company Shares (June 30, 2025) | Director Name | Capacity/Nature of Interest | Number of Issued Shares Held | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Chew Hwa Seng | Interest in controlled corporation/Corporate interest | 135,000,000 | 75% | Major Shareholders' Long Positions in Company Shares (June 30, 2025) | Major Shareholder Name/Entity | Capacity/Nature of Interest | Number of Issued Shares Held | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Raffles | Beneficial owner/Personal interest | 135,000,000 | 75% | | Ms. Chung | Spouse's interest/Family interest | 135,000,000 | 75% | - **Mr. Chew Hwa Seng** and his wife, **Ms. Chung**, hold **75%** of the company's equity through Raffles[100](index=100&type=chunk)[102](index=102&type=chunk) [Environmental Policy and Employee & Customer Relations](index=31&type=section&id=%E7%92%B0%E5%A2%83%E6%94%BF%E7%AD%96%E8%88%87%E5%83%B1%E5%93%A1%E5%8F%8A%E5%AE%A2%E6%88%B6%E9%97%9C%E4%BF%82) The Group is committed to environmental protection, complying with regulations and promoting energy conservation. It also values employee welfare and development, maintaining stable relationships with suppliers and customers to ensure smooth business operations - The Group is committed to environmental protection, complying with all relevant environmental regulations, and implementing measures such as minimal renovation, promoting eco-friendly strategies, educating students and staff on environmental knowledge, and waste sorting[106](index=106&type=chunk)[107](index=107&type=chunk) - In FY2024/25, the Group had **38 full-time employees**, primarily working at the Oriental University City campus, with remuneration determined by market levels[110](index=110&type=chunk) - The Group's suppliers primarily provide asset management and maintenance services, with service quality ensured through tender procedures and regular evaluations[111](index=111&type=chunk) - The Group's main customers are educational institutions, with revenue from the top five customers (excluding Raffles Group) totaling **RMB 43,158,000** in FY2024/25[112](index=112&type=chunk) [Use of Proceeds from Property Disposals and Post-Reporting Period Events](index=33&type=section&id=%E7%89%A9%E6%A5%AD%E5%87%BA%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94%E5%8F%8A%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E4%BB%B6) The Group has fully utilized net proceeds from property disposals for loan repayment and general working capital. Post-reporting period, the Group further sold investment properties and continues to receive payments from the termination of the Mongolia property purchase Use of Net Proceeds from Property Disposals (as of June 30, 2025) | Intended Use | Planned Use (RMB million) | Utilized (RMB million) | Unutilized (RMB million) | | :--- | :--- | :--- | :--- | | Loan Repayment | 62.00 | 62.00 | — | | General Working Capital | 29.39 | 29.39 | — | | **Total** | **91.39** | **91.39** | **—** | - Post-reporting period, the Group entered into an agreement on **July 4, 2025**, to dispose of a property at Oriental University City campus for **RMB 18.00 million**, expected to be completed by September 2025[116](index=116&type=chunk) - Pursuant to the deed of termination for the purchase of the Mongolia investment property, the vendor is required to pay the company approximately **RMB 33,690,000** in termination payments, with the first installment and part of the second installment already received[117](index=117&type=chunk) [Corporate Governance Report](index=36&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) This report details the company's corporate governance framework, including board functions, committee responsibilities, and policies on diversity, risk management, and shareholder communication [Corporate Culture and Board Functions](index=36&type=section&id=%E4%BC%81%E6%A5%AD%E6%96%87%E5%8C%96%E8%88%87%E8%91%A3%E4%BA%8B%E6%9C%83%E8%81%B7%E8%83%BD) The company is committed to safeguarding shareholder value through sound corporate governance, upholding a culture of integrity, inclusivity, and excellence. The Board is responsible for overall management, strategy, and oversight, ensuring separation of Chairman and CEO roles to maintain high governance standards - The company complies with the Corporate Governance Code in Appendix C1 of the GEM Listing Rules and is committed to providing quality properties, ancillary facilities, and services, fostering a corporate culture rooted in integrity, inclusivity, and excellence[122](index=122&type=chunk)[123](index=123&type=chunk) - Chairman **Mr. Chew Hwa Seng** is responsible for overseeing board functions and overall strategy, while CEO **Mr. Liu Yingchun** is responsible for daily operations and strategy execution, with their responsibilities separated[124](index=124&type=chunk) - The Board is responsible for the overall management, leadership, and monitoring of the company's affairs, delegating day-to-day management functions to the CEO and senior management[126](index=126&type=chunk) - The Board holds at least **four meetings** annually, with **four Board meetings** and **one Annual General Meeting** held in FY2024/25, and all directors maintained high attendance rates[133](index=133&type=chunk) [Board Diversity and Policies](index=40&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A4%9A%E5%85%83%E5%8C%96%E8%88%87%E6%94%BF%E7%AD%96) The company has established a board diversity policy emphasizing gender, experience, and knowledge, ensuring board independence. It also has anti-corruption and whistleblowing policies and provides continuous professional development for directors - The Board has adopted a board diversity policy, emphasizing skills, experience, knowledge, and independence, and complies with the GEM Listing Rules' requirements for gender diversity[134](index=134&type=chunk) - The company has established mechanisms to ensure strong board independence and regularly reviews its effectiveness[136](index=136&type=chunk)[137](index=137&type=chunk) - The company has a Group anti-corruption policy and a whistleblowing policy, encouraging employees to anonymously report suspected corruption incidents, and conducts regular anti-corruption training[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) - All newly appointed directors receive formal induction training, and the company arranges continuous professional development for all directors, with costs borne by the company[141](index=141&type=chunk) [Responsibilities of Board Committees](index=43&type=section&id=%E8%91%A3%E4%BA%8B%E5%A7%94%E5%93%A1%E6%9C%83%E8%81%B7%E8%B2%AC) The Board has four committees—Audit, Remuneration, Nomination, and Risk Management—each with clear terms of reference to assist in effectively fulfilling responsibilities across financial reporting, compensation policy, director nomination, and risk management - The Audit Committee is responsible for reviewing financial statements, internal control systems, and communicating with independent auditors, holding **four meetings** in FY2024/25[145](index=145&type=chunk)[146](index=146&type=chunk) - The Remuneration Committee is responsible for making recommendations on the remuneration policy and structure for directors and senior management, holding **one meeting** in FY2024/25[147](index=147&type=chunk) - The Nomination Committee is responsible for reviewing the board structure, identifying qualified candidates, and assessing the independence of independent non-executive directors, holding **one meeting** in FY2024/25[150](index=150&type=chunk) - The Risk Management Committee is responsible for establishing the risk management framework, systems, and policies, and providing support on the risk aspects of strategic transactions, holding **two meetings** in FY2024/25[154](index=154&type=chunk) [Nomination Policy and Risk Management](index=47&type=section&id=%E6%8F%90%E5%90%8D%E6%94%BF%E7%AD%96%E8%88%87%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The company's nomination policy aims to ensure a balanced board in terms of skills, experience, knowledge, and diverse perspectives. The Group has established risk management and internal control systems, engaging external consultants for review, to effectively manage risks and ensure timely disclosure of inside information - Selection criteria for the nomination policy include candidate diversity, qualifications, commitment, independence, character and integrity, and potential contributions[156](index=156&type=chunk) - The Board is fully responsible for establishing, maintaining, and reviewing the Group's internal control and risk management systems, and engages external professional internal control consultants to provide review services[163](index=163&type=chunk) - The Group is aware of its inside information disclosure obligations and has established procedures and internal control measures to ensure timely announcement of inside information once a decision is made[165](index=165&type=chunk)[169](index=169&type=chunk) [Independent Auditor, Company Secretary, and Dividend Policy](index=50&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E3%80%81%E5%85%AC%E5%8F%B8%E7%A7%98%E6%9B%B8%E8%88%87%E8%82%A1%E6%81%AF%E6%94%BF%E7%AD%96) This section discloses the independent auditor's remuneration, the company secretary's qualifications and duties, and the company's dividend policy, aiming to enhance transparency and facilitate informed shareholder investment FY2024/25 Independent Auditor's Remuneration | Service Type | Fees Paid/Payable (RMB thousand) | | :--- | :--- | | Assurance Services (financial statement audit, agreed-upon procedures for announcements, continuing connected transactions reporting) | 718 | | Audit of Group Subsidiary Financial Statements | 49 | | **Total** | **767** | - Company Secretary **Ms. Tung Wing Yee** possesses extensive experience in company secretarial, audit and assurance, financial management, and corporate finance, and meets the professional training requirements of the GEM Listing Rules[170](index=170&type=chunk) - The company has adopted a dividend policy, where dividend payments will depend on factors such as the company's operations, profitability, financial position, cash needs, and legal restrictions, with no predetermined distribution ratio[171](index=171&type=chunk) [Communication with Shareholders and Constitutional Documents](index=52&type=section&id=%E8%88%87%E8%82%A1%E6%9D%B1%E6%BA%9D%E9%80%9A%E5%8F%8A%E7%AB%A0%E7%A8%8B%E6%96%87%E4%BB%B6) The company communicates with shareholders through various channels, including general meetings, regular reports, and its website, with established procedures for shareholders to convene meetings and propose resolutions. The company's constitutional documents remain transparent and are planned for revision to comply with the latest regulations - The company primarily communicates with shareholders and potential investors through general meetings, interim and annual reports, announcements, press releases, and its company website[172](index=172&type=chunk) - Shareholders may request the Board to convene general meetings or propose resolutions in accordance with the Articles of Association and the Companies Ordinance[173](index=173&type=chunk)[175](index=175&type=chunk) - The company has adopted a shareholder communication policy to ensure shareholders receive equal and timely access to information and actively participate in company affairs[177](index=177&type=chunk) - The company proposes to amend its Articles of Association to comply with the latest requirements of the Listing Rules and the Companies Ordinance[181](index=181&type=chunk) [Environmental, Social and Governance Report](index=55&type=section&id=%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E5%8F%8A%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) This report details the Group's ESG performance, policies, and initiatives, focusing on environmental protection, social responsibility, and corporate governance practices [Company Profile and Report Scope](index=55&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E6%B3%81%E8%88%87%E5%A0%B1%E5%91%8A%E7%AF%84%E5%9C%8D) The Group publishes its FY2024/25 ESG report to disclose sustainable development performance, adhering to HKEX ESG guidelines, focusing on environmental and social measures for Chinese education facilities, and identifying key issues through materiality assessment - The Group primarily engages in providing education facility leasing services in China, Malaysia, and Indonesia, and owns, leases, and manages hotel properties in Switzerland[182](index=182&type=chunk) - The report is prepared in accordance with the "Environmental, Social and Governance Reporting Guide" in Appendix C2 of the Hong Kong Stock Exchange GEM Listing Rules, focusing on environmental and social policies and performance of Chinese education facilities[183](index=183&type=chunk)[190](index=190&type=chunk) - The Board is responsible for overseeing the Group's sustainable development strategy, policies, and annual reporting, integrating ESG-related risks and opportunities into its overall strategy[184](index=184&type=chunk) - The Group conducts an annual materiality assessment to identify **24 key ESG issues** covering environmental, social, and operational aspects that are crucial to its business and of most concern to stakeholders[185](index=185&type=chunk)[194](index=194&type=chunk) [Environmental Performance](index=60&type=section&id=%E7%92%B0%E5%A2%83%E5%B1%A4%E9%9D%A2%E8%A1%A8%E7%8F%BE) The Group is committed to environmental protection, implementing "Office Environmental Guidelines" and setting quantitative reduction targets for air and greenhouse gas emissions, and resource consumption. It actively manages environmental and natural resources and addresses climate change risks FY2024/25 Key Environmental Indicators | Environmental Indicator | Unit | FY2024/25 | FY2023/24 | | :--- | :--- | :--- | :--- | | Nitrogen Oxides (NOx) Emissions | kg | 17.88 | 16.41 | | Sulfur Oxides (SOx) Emissions | kg | 0.03 | 0.03 | | Particulate Matter (PM) Emissions | kg | 1.71 | 1.57 | | Total Greenhouse Gas Emissions | tonnes CO2e | 375.89 | 512.24 | | Greenhouse Gas Emission Intensity | kg CO2e/campus sqm | 0.97 | 1.22 | | Total Energy Consumption | kWh | 579,590.79 | 716,382.87 | | Total Energy Consumption Intensity | kWh/campus sqm | 1.49 | 1.71 | | Water Consumption | tonnes | 585 | 3,320 | | Water Consumption Intensity | tonnes/campus sqm | 0.002 | 0.01 | - The Group has set a quantitative target to reduce air emissions, greenhouse gas emissions, non-hazardous waste generation, energy consumption, and water consumption intensity by **3%** for the year ending June 30, 2029[205](index=205&type=chunk)[213](index=213&type=chunk) - The Group engages horticultural service providers who follow internal guidelines for campus landscaping services to improve the campus environment[215](index=215&type=chunk)[218](index=218&type=chunk) - The Group has established risk management systems and procedures to identify, monitor, and control climate change impacts, including strengthening building design to withstand extreme weather and developing contingency plans[217](index=217&type=chunk)[219](index=219&type=chunk) [Social Performance](index=66&type=section&id=%E7%A4%BE%E6%9C%83%E5%B1%A4%E9%9D%A2%E8%A1%A8%E7%8F%BE) The Group is committed to providing a fair and healthy work environment and development training for employees, strictly adhering to labor standards. It also prioritizes supply chain management, product responsibility, anti-corruption, and community investment for sustainable development FY2024/25 China Employee Composition | Category | Unit | FY2024/25 | FY2023/24 | | :--- | :--- | :--- | :--- | | Total Employees | persons | 36 | 39 | | Male | persons | 23 (64%) | 26 (67%) | | Female | persons | 13 (36%) | 13 (33%) | | 30-50 years old | persons | 22 (61%) | 21 (54%) | | Over 50 years old | persons | 14 (39%) | 18 (46%) | | Mainland China | persons | 36 (100%) | 39 (100%) | - The Group highly values employee welfare, providing a clean working environment, social insurance, and various paid leaves, while strictly complying with local employment laws and regulations[224](index=224&type=chunk) - The Group is committed to providing a safe and healthy working environment, establishing health and safety policies, and regularly participating in fire drills[225](index=225&type=chunk) - In FY2024/25, the percentage of trained employees was **100%**, with an average training duration of **12 hours per employee**, covering corporate culture, operational management, financial management, and other topics[228](index=228&type=chunk)[231](index=231&type=chunk) - The Group strictly complies with the "Provisions on the Prohibition of Child Labor" and other labor standard laws and regulations, and implements measures in recruitment to prevent the employment of child labor and forced labor[233](index=233&type=chunk)[234](index=234&type=chunk) - In supplier selection, the Group considers not only economic factors but also their ability to comply with laws and regulations, ensure worker health and safety, and reduce environmental impact[235](index=235&type=chunk) - The Group is committed to improving education facilities, protecting customer personal data privacy, and has a customer feedback handling mechanism. No service-related complaints were received in FY2024/25[237](index=237&type=chunk) - The Group has zero tolerance for corruption, bribery, extortion, money laundering, and other fraudulent activities, with established whistleblowing procedures and anti-corruption training provided[239](index=239&type=chunk) - The Group encourages employees to participate in community activities and made charitable donations of **RMB 500,000** in FY2024/25[240](index=240&type=chunk) [HKEX ESG Reporting Guide Index](index=74&type=section&id=%E9%A6%99%E6%B8%AF%E8%81%AF%E4%BA%A4%E6%89%80%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E5%8F%8A%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A%E6%8C%87%E5%BC%95%E7%B4%A2%E5%BC%95) This section provides a cross-reference index between this Environmental, Social and Governance Report and the HKEX ESG Reporting Guide, detailing each subject, disclosure requirement, and corresponding report section [Independent Auditor's Report](index=80&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A) This report presents the independent auditor's opinion on the Group's consolidated financial statements, key audit matters, and the responsibilities of both directors and auditors [Auditor's Opinion](index=80&type=section&id=%E6%A0%B8%E6%95%B8%E5%B8%AB%E6%84%8F%E8%A6%8B) The independent auditor believes the Group's consolidated financial statements fairly and truly reflect its financial position as of June 30, 2025, and its financial performance and cash flows for the year then ended, prepared in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance - The auditor believes the consolidated financial statements truly and fairly reflect the Group's financial position, performance, and cash flows in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants[247](index=247&type=chunk) - The auditor conducted the audit in accordance with Hong Kong Standards on Auditing and adhered to the "Code of Ethics for Professional Accountants," maintaining independence from the Group[248](index=248&type=chunk) [Key Audit Matter: Valuation of Investment Properties](index=80&type=section&id=%E9%97%9C%E9%8D%B5%E5%AF%A9%E6%A0%B8%E4%BA%8B%E9%A0%85%EF%BC%9A%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD%E4%BC%B0%E5%80%BC) The valuation of investment properties is a key audit matter due to its significant impact on the consolidated financial statements and the substantial judgment and estimation involved in the valuation process. The auditor assessed the qualifications of the valuer, the methodology, and the appropriateness of input data - Investment properties are stated at fair value of **RMB 1,486,379,000** as of June 30, 2025, based on independent valuations by professionally qualified valuers[250](index=250&type=chunk) - The valuation of investment properties uses the income capitalization approach and market comparison approach, requiring significant judgment and estimation, posing a risk of material changes in carrying amounts[250](index=250&type=chunk) - The auditor assessed the qualifications of the external valuers, the appropriateness of their methodologies and assumptions, and examined the accuracy and relevance of the input data[253](index=253&type=chunk) [Directors' and Auditor's Responsibilities](index=81&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E6%A0%B8%E6%95%B8%E5%B8%AB%E8%B2%AC%E4%BB%BB) Directors are responsible for preparing true and fair consolidated financial statements and maintaining internal controls, as well as assessing the Group's ability to continue as a going concern. The auditor's responsibility is to provide reasonable assurance that the financial statements are free from material misstatement and to communicate audit findings to the audit committee - Directors are responsible for preparing true and fair consolidated financial statements in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance, and for internal controls[255](index=255&type=chunk) - The auditor's objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error[257](index=257&type=chunk) - The auditor communicates with the audit committee regarding the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control[258](index=258&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=85&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This statement presents the Group's financial performance for the year, including revenue, expenses, profit or loss, and other comprehensive income components [FY2024/25 Consolidated Results](index=85&type=section&id=2024%2F25%E8%B2%A1%E6%94%BF%E5%B9%B4%E5%BA%A6%E7%B6%9C%E5%90%88%E6%A5%AD%E7%B8%BE) The Group recorded a loss for the year of **RMB 57,019 thousand** in FY2024/25, a narrower loss compared to the previous year. Revenue slightly increased, but fair value losses on investment properties and current tax expenses continued to negatively impact profitability Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 56,697 | 55,969 | | Operating Loss | (30,354) | (67,115) | | Loss Before Income Tax | (44,883) | (83,528) | | Loss for the Year | (57,019) | (74,576) | | Total Comprehensive Income for the Year | (25,032) | (87,939) | | Loss Attributable to Owners of the Company | (56,558) | (73,861) | | Basic Loss Per Share (RMB) | (0.31) | (0.41) | - Other comprehensive income for the year was **RMB 31,987 thousand**, primarily from exchange differences on translating foreign operations[262](index=262&type=chunk) [Consolidated Statement of Financial Position](index=87&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This statement provides a snapshot of the Group's assets, liabilities, and equity at a specific point in time, reflecting its financial health and structure [Consolidated Financial Position as of June 30, 2025](index=87&type=section&id=2025%E5%B9%B46%E6%9C%8830%E6%97%A5%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81) As of June 30, 2025, the Group's total assets were **RMB 1,593,209 thousand**, and net assets were **RMB 1,120,475 thousand**. Net current liabilities increased, but total liabilities decreased, reflecting adjustments in the asset structure Summary of Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Non-Current Assets | 1,519,059 | 1,597,179 | | Total Current Assets | 74,150 | 203,614 | | Total Current Liabilities | 108,121 | 210,510 | | Net Current Liabilities | (33,971) | (6,896) | | Total Non-Current Liabilities | 364,613 | 444,776 | | Net Assets | 1,120,475 | 1,145,507 | | Total Equity | 1,120,475 | 1,145,507 | - Investment properties remain the Group's largest asset class, accounting for the vast majority of non-current assets[264](index=264&type=chunk) - Assets classified as held for sale decreased from **RMB 110,000 thousand** to **RMB 19,690 thousand**[264](index=264&type=chunk) [Consolidated Statement of Changes in Equity](index=89&type=section&id=%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) This statement details the changes in the Group's equity components over the reporting period, including profit or loss, other comprehensive income, and transactions with owners [FY2024/25 Consolidated Changes in Equity](index=89&type=section&id=2024%2F25%E8%B2%A1%E6%94%BF%E5%B9%B4%E5%BA%A6%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95) For the year ended June 30, 2025, the Group's total equity decreased from **RMB 1,145,507 thousand** to **RMB 1,120,475 thousand**, primarily due to the loss for the year, partially offset by an increase in foreign exchange reserves Summary of Consolidated Statement of Changes in Equity | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Share Capital | 290,136 | 290,136 | | Other Reserves | (71,025) | (71,025) | | Statutory Surplus Reserve | 5,553 | 1,510 | | Retained Profits | 860,087 | 920,688 | | Exchange Reserve | 26,286 | (5,701) | | Equity Attributable to Owners of the Company | 1,111,037 | 1,135,608 | | Non-Controlling Interests | 9,438 | 9,899 | | **Total** | **1,120,475** | **1,145,507** | - The loss for the year of **RMB 56,558 thousand** negatively impacted equity attributable to owners of the company[266](index=266&type=chunk) - Exchange differences on translating foreign operations resulted in a positive impact of **RMB 30,010 thousand**, turning the exchange reserve from negative to positive[266](index=266&type=chunk) [Consolidated Statement of Cash Flows](index=90&type=section&id=%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) This statement reports the Group's cash inflows and outflows from operating, investing, and financing activities, providing insights into its liquidity and solvency [FY2024/25 Consolidated Cash Flows](index=90&type=section&id=2024%2F25%E8%B2%A1%E6%94%BF%E5%B9%B4%E5%BA%A6%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F) The Group's cash and cash equivalents decreased by **RMB 68,437 thousand** in FY2024/25, mainly due to net cash outflows from operating and financing activities, despite net cash inflows from investing activities Summary of Consolidated Statement of Cash Flows | Activity Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash (Used in)/Generated from Operating Activities | (9,648) | 16,347 | | Net Cash Generated from Investing Activities | 23,227 | 40,875 | | Net Cash Used in Financing Activities | (82,016) | (50,833) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (68,437) | 6,389 | | Cash and Cash Equivalents at Year End | 1,388 | 69,664 | - Cash flow from operating activities shifted from a net inflow in the previous year to a net outflow, primarily due to increased income tax paid[267](index=267&type=chunk) - Net cash generated from investing activities mainly resulted from refunds of prepayments, refunds from property acquisitions, and proceeds from property disposals[267](index=267&type=chunk) - Net cash used in financing activities was primarily due to repayment of bank borrowings and repayment to Raffles Group[268](index=268&type=chunk) [Notes to the Consolidated Financial Statements](index=92&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) These notes provide detailed explanations and breakdowns of the figures presented in the consolidated financial statements, including accounting policies, significant judgments, and financial risk management [General Information and Accounting Standards](index=92&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99%E8%88%87%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87) The Group primarily provides education facility leasing in China, Malaysia, and Indonesia, and operates hotel properties in Switzerland. Financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, with new amendments adopted having no significant impact on current financial position - The Group's principal businesses are education facility leasing services in China, Malaysia, and Indonesia, and hotel property leasing and management in Switzerland[269](index=269&type=chunk) - The company's ultimate parent company is **Raffles Education Corporation Limited**, incorporated in Singapore[269](index=269&type=chunk) - The consolidated financial statements are prepared in accordance with all applicable Hong Kong Financial Reporting Standards and the disclosure requirements of the Hong Kong Companies Ordinance[274](index=274&type=chunk) - The adopted amendments to Hong Kong Financial Reporting Standards had no significant impact on the Group's results or financial position for the current or prior periods[270](index=270&type=chunk) [Basis of Preparation and Going Concern](index=94&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E8%88%87%E6%8C%81%E7%BA%8C%E7%B6%93%E7%87%9F) Despite facing challenges such as annual loss, net current liabilities, and reduced cash, the Board has taken measures to improve liquidity and believes the Group has the ability to continue as a going concern, thus financial statements are prepared on a going concern basis - The Group recorded a loss of **RMB 57,019 thousand** in FY2024/25, with current liabilities exceeding current assets by approximately **RMB 33,971 thousand**, and cash and cash equivalents of approximately **RMB 1,388 thousand**[275](index=275&type=chunk) - To improve liquidity, management is negotiating with banks to extend current bank loans, expects full receipt of proceeds from assets held for sale and property acquisition refunds, and is considering disposing of investment properties to provide funding[276](index=276&type=chunk) - The directors believe the Group will have **sufficient working capital** to meet its cash flow requirements for the next 12 months, hence the consolidated financial statements are prepared on a going concern basis[276](index=276&type=chunk) [Significant Accounting Judgments and Estimates](index=109&type=section&id=%E9%87%8D%E8%A6%81%E6%9C%83%E8%A8%88%E5%88%A4%E6%96%B7%E5%8F%8A%E4%BC%B0%E8%A8%88) The Group's financial statement preparation involves significant accounting judgments and estimates, primarily concerning impairment of financial assets, valuation of investment properties, determination of income tax, and assessment of the going concern assumption, which materially impact the carrying amounts of assets and liabilities - Impairment provisions for financial assets are based on assumptions regarding probability of default and loss given default, considering historical credit loss experience, market conditions, and forward-looking factors[327](index=327&type=chunk) - The fair value of investment properties is determined by independent valuers using the income capitalization approach and market comparison approach, involving significant judgment on market rents, capitalization rates, and comparable transaction prices[329](index=329&type=chunk)[330](index=330&type=chunk)[331](index=331&type=chunk) - The determination of income tax provisions requires significant judgment, particularly for deferred tax on fair value changes of investment properties, where the Group assumes its business model is to consume economic benefits over time rather than through sale[332](index=332&type=chunk) - The directors' assessment of the going concern assumption involves judgment about future events or conditions, and relevant mitigating measures have been considered[333](index=333&type=chunk) [Segment Reporting and Revenue](index=111&type=section&id=%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A%E5%8F%8A%E6%94%B6%E7%9B%8A) The Group is divided into two reportable segments: education facility leasing services and hotel property leasing and management. Total revenue for FY2024/25 was **RMB 56,697 thousand**, with China contributing the most, and the top five customers accounting for 80% of total revenue - The Group has two reportable segments: education facility leasing services in China, Malaysia, and Indonesia, and hotel property leasing and management in Switzerland[334](index=334&type=chunk) FY2024/25 Revenue by Category | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Education Facility Leasing | 47,710 | 49,293 | | Ancillary Facility Commercial Leasing | 2,938 | 2,779 | | Hotel Properties (Fixed Lease Payments) | 3,888 | 2,940 | | Hotel Properties (Variable Lease Payments) | 2,161 | 957 | | **Total Revenue** | **56,697** | **55,969** | FY2024/25 Revenue by Country | Country | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | China | 44,905 | 46,519 | | Non-China (Malaysia, Indonesia, and Switzerland) | 11,792 | 9,450 | | **Total Revenue** | **56,697** | **55,969** | Non-Current Assets by Asset Location as of June 30, 2025 | Region | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | China | 1,063,908 | 1,158,000 | | Switzerland | 313,836 | 273,487 | | Southeast Asia (Malaysia and Indonesia) | 121,746 | 115,534 | | Other | 8,809 | 40,590 | | **Total** | **1,508,299** | **1,587,611** | FY2024/25 Major Customer Revenue Contribution | Customer | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Customer A | 18,284 | 17,521 | | Customer B | 11,824 | 10,631 | | Raffles Group | 5,792 | Not applicable (not >10%) | [Employee Costs and Directors' Emoluments](index=117&type=section&id=%E5%83%B1%E5%93%A1%E6%88%90%E6%9C%AC%E8%88%87%E8%91%A3%E4%BA%8B%E9%85%AC%E9%87%91) Total employee costs for FY2024/25 amounted to **RMB 6,664 thousand**, an increase from the previous year. Directors' emoluments totaled **RMB 842 thousand**, with Executive Director Mr. Liu Yingchun receiving salaries and other benefits, and independent non-executive directors receiving fees FY2024/25 Employee Costs | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Wages and Salaries | 5,310 | 4,280 | | Other Allowances and Benefits | 596 | 433 | | Contributions to Defined Contribution Retirement Plans | 758 | 742 | | **Total** | **6,664** | **5,455** | FY2024/25 Directors' Emoluments | Director Category | Fees (RMB thousand) | Salaries and Other Benefits (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | | Executive Director (Liu Yingchun) | – | 290 | 290 | | Independent Non-Executive Director (Cheng Man Piu) | 184 | – | 184 | | Independent Non-Executive Director (Chan Yiu Heung) | 184 | – | 184 | | Independent Non-Executive Director (Liu Kwai Lam) | 184 | – | 184 | | **Total** | **552** | **290** | **842** | - Among the Group's five highest-paid individuals, one was a director, and the total emoluments for the other **four non-director individuals** amounted to **RMB 1,735 thousand**[347](index=347&type=chunk)[349](index=349&type=chunk) [Income Tax and Loss Per Share](index=120&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E8%88%87%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) Income tax expense for FY2024/25 was **RMB 12,136 thousand**, primarily influenced by China's corporate income tax and land appreciation tax. Basic loss per share attributable to owners of the company was **RMB 0.31** FY2024/25 Income Tax Expense | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax | 31,167 | 4,856 | | Deferred Tax | (19,031) | (13,808) | | **Income Tax Expense/(Credit)** | **12,136** | **(8,952)** | - Chinese subsidiaries are subject to a corporate income tax rate of **25%** and are liable for land appreciation tax[351](index=351&type=chunk)[352](index=352&type=chunk) - The loss attributable to owners of the company was **RMB 56,558 thousand**, with a basic loss per share of **RMB 0.31**[359](index=359&type=chunk) - No Hong Kong profits tax provision was made for the current or prior years due to the absence of assessable profits in Hong Kong[354](index=354&type=chunk) [Property, Plant and Equipment and Investment Properties](index=124&type=section&id=%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99%E8%88%87%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD) The Group's net book value of property, plant and equipment was **RMB 12,776 thousand**, and the fair value of investment properties was **RMB 1,486,379 thousand**. Investment properties are valued using the income capitalization and market comparison approaches, with some assets classified as held for sale Net Book Value of Property, Plant and Equipment | Category | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Buildings | 12,300 | 3,796 | | Furniture, Fixtures and Equipment | 449 | 563 | | Machinery | 27 | 29 | | **Total** | **12,776** | **4,388** | Changes in Fair Value of Investment Properties | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Fair Value at Beginning of Year | 1,533,592 | 1,458,878 | | Additions | 3,078 | 8,342 | | Disposals | (22,060) | – | | Transfer to Property, Plant and Equipment | (12,300) | – | | Reclassification to Assets Held for Sale | (19,690) | (110,000) | | Exchange Adjustments | 42,404 | (14,753) | | Fair Value Changes | (38,645) | (93,813) | | **Fair Value at End of Year** | **1,486,379** | **1,533,592** | - Investment properties are valued using the income capitalization approach and market comparison approach, with key unobservable inputs including unit monthly rent and capitalization rate[364](index=364&type=chunk)[366](index=366&type=chunk) - As of June 30, 2025, investment properties with a carrying amount of **RMB 1,249,969 thousand** were pledged to secure bank financing[368](index=368&type=chunk) - Properties classified as held for sale have a carrying amount of **RMB 19,690 thousand** and are expected to be disposed of in the first quarter of FY2026[370](index=370&type=chunk) [Investment in an Associate](index=130&type=section&id=%E6%96%BC%E4%B8%80%E9%96%93%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E7%9A%84%E6%8A%95%E8%B3%87) The Group's investment in associate Axiom Properties Limited had a net book value of **RMB 8,809 thousand**. An impairment loss of **RMB 3,178 thousand** was recognized this year as its fair value less costs to sell was below its carrying amount Investment in Associate Axiom | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Share of Net Assets Excluding Goodwill | 9,335 | 9,508 | | Goodwill | 2,652 | 2,652 | | Accumulated Impairment Loss | (3,178) | – | | **Net Carrying Amount** | **8,809** | **12,160** | - The Group's ownership interest in Axiom is **19.01%**, but it is accounted for as an associate due to the right to appoint representatives[371](index=371&type=chunk) - An impairment loss of **RMB 3,178 thousand** was recognized in FY2024/25 because Axiom's fair value less costs to sell was below its carrying amount[371](index=371&type=chunk) [Trade and Other Receivables and Payables](index=135&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E8%88%87%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) The Group's total trade and other receivables amounted to **RMB 54,865 thousand**, including **RMB 20,008 thousand** for receivables from property acquisition refunds. Total trade and other payables and accrued expenses were **RMB 62,669 thousand**, with **RMB 40,692 thousand** payable to Raffles Group Trade and Other Receivables | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables (net of provision) | 23,355 | 17,687 | | Other Receivables and Prepayments | 16,167 | 10,629 | | Receivables from Property Acquisition Refunds | 20,008 | – | | Other Recoverable Taxes | 3,326 | 3,166 | | Less: Impairment Provision | (7,991) | (5,937) | | **Net Amount** | **54,865** | **25,545** | - Receivables from property acquisition refunds of approximately **RMB 33,690 thousand** are to be collected in **four installments**, with **RMB 8,422 thousand** received as of the reporting date[377](index=377&type=chunk) Trade and Other Payables and Accrued Expenses | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 2,226 | 3,064 | | Other Payables and Accrued Expenses | 14,751 | 15,968 | | Deposits Received | 5,000 | 110,000 | | Amounts Due to Raffles Group | 40,692 | 52,574 | | **Total** | **62,669** | **181,606** | - Amounts due to Raffles Group are unsecured, interest-free, non-trade in nature, and not repayable before July 1, 2026[379](index=379&type=chunk) [Bank Borrowings and Deferred Tax Liabilities](index=138&type=section&id=%E9%8A%80%E8%A1%8C%E5%80%9F%E6%AC%BE%E8%88%87%E9%81%9E%E5%BB%B6%E7%A8%85%E9%A0%85%E8%B2%A0%E5%82%B5) The Group's total bank borrowings amounted to **RMB 246,003 thousand**, with **RMB 77,632 thousand** due within one year. Deferred tax liabilities, primarily from the revaluation of investment properties, totaled **RMB 155,550 thousand** Bank Borrowings Maturity Analysis | Maturity Period | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Within One Year | 77,632 | 71,135 | | After One Year but Within Two Years | 23,109 | 73,923 | | After Two Years but Within Five Years | 60,529 | 53,453 | | After Five Years | 84,733 | 91,762 | | **Total** | **246,003** | **290,273** | - Bank borrowings bear interest at fixed and floating rates, ranging from **2.00% to 8.95% per annum**[383](index=383&type=chunk) - Bank facilities are secured by certain investment properties of the Group, corporate guarantees from the company, non-controlling shareholders of Chinese subsidiaries, and the ultimate parent company, and equity pledges of Chinese subsidiaries[383](index=383&type=chunk) Changes in Deferred Tax Liabilities | Item | Revaluation of Investment Properties (RMB thousand) | | :--- | :--- | | As of June 30, 2024 | 173,064 | | Charged to Profit or Loss | (19,031) | | Exchange Adjustments | 1,517 | | **As of June 30, 2025** | **155,550** | [Share Capital and Reserves](index=141&type=section&id=%E8%82%A1%E6%9C%AC%E8%88%87%E5%84%B2%E5%82%99) The company's issued share capital consists of 180,000,000 ordinary shares, totaling **RMB 290,136 thousand**. Group reserves include other reserves, statutory surplus reserve, retained profits, and foreign exchange reserve, with the latter turning positive due to exchange differences Issued Share Capital | Item | Number of Ordinary Shares | Share Capital (RMB thousand) | | :--- | :--- | :--- | | As of June 30, 2025 | 180,000,000 | 290,136,000 | - The statutory surplus reserve primarily arises from a **10%** transfer from post-tax profits of Chinese subsidiaries[387](index=387&type=chunk) - The exchange reserve reflects gains or losses arising from the retranslation of the net assets of foreign operations into the presentation currency[387](index=387&type=chunk) - The company's retained profits as of June 30, 2025, amounted to **RMB 38,395 thousand**[388](index=388&type=chunk) [Leases and Related Party Transactions](index=143&type=section&id=%E7%A7%9F%E8%B3%83%E8%88%87%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) As a lessor, the Group's investment properties are leased to tenants under operating leases for terms ranging from one to ten years. The Group engages in various transactions with related parties, primarily Raffles Group, including lease income, management service fees, and salary contributions Minimum Lease Receivables from Irrevocable Operating Leases (2025) | Period | RMB thousand | | :--- | :--- | | Not more than one year | 49,690 | | More than one year but not more than two years | 41,872 | | More than two years but not more than three years | 18,348 | | More than three years but not more than four years | 15,481 | | More than four years but not more than five years | 15,481 | | More than five years | 15,150 | | **Total** | **156,022** | FY2024/25 Transactions with Related Parties | Transaction Type | Related Party | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | :--- | | Lease Income | Raffles College of Higher Education Sdn. Bhd. | 3,297 | 3,058 | | Lease Income | PT. Raffles Institute of Higher Education | 2,445 | 2,495 | | Management Service Fees | Raffles K12 Sdn Bhd | 370 | – | | Short-Term Lease Fees | Raffles College of Higher Education Pte. Ltd. | 1,178 | – | | Salaries and Retirement Plan Contributions | Mr. Chew Han Wai, son of a director | 1,019 | – | [Financial Risk Management](index=148&type=section&id=%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group faces credit risk, liquidity risk, interest rate risk, and foreign currency risk. These risks are managed through monitoring customer credit, rolling cash flow forecasts, managing bank borrowing interest rates, and overseeing foreign exchange exposure, while maintaining a robust capital structure - Credit risk primarily arises from tenants defaulting on rent, with the top five customers accounting for **80.0%** of total revenue and **96.9%** of receivables[399](index=399&type=chunk) Trade Receivables Credit Risk Exposure as of June 30, 2025 | Overdue Status | Expected Loss Rate (%) | Gross Carrying Amount (RMB thousand) | Loss Provision (RMB thousand) | Net Amount (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Not overdue and not impaired | Not applicable | 16,549 | – | 16,549 | | Overdue 1 to 3 months | – | 2,271 | – | 2,271 | | Overdue 3 to 12 months | – | 4,157 | – | 4,157 | | Overdue over 12 months | 74 | 1,459 | 1,081 | 378 | | **Total** | | **24,436** | **1,081** | **23,355** | - Liquidity risk is managed by maintaining sufficient cash and cash equivalents, securing funding facilities, and monitoring rolling cash flow forecasts[413](index=413&type=chunk) - Interest rate risk primarily arises from bank deposits and bank borrowings, with floating-rate bank borrowings exposing the Group to fair value interest rate risk[417](index=417&type=chunk)[419](index=419&type=chunk) - Foreign currency risk is mainly caused by amounts due to Raffles Group denominated in currencies other than the functional currency, and the Group currently has no foreign currency hedging policy[420](index=420&type=chunk) - The Group's capital management objective is to safeguard continuous operations, provide returns to shareholders, and maintain an optimal capital structure[422](index=422&type=chunk) [Business Acquisitions in Prior Years](index=158&type=section&id=%E9%81%8E%E5%BE%80%E5%B9%B4%E5%BA%A6%E5%85%A7%E6%A5%AD%E5%8B%99%E6%94%B6%E8%B3%BC%E4%BA%8B%E9%A0%85) In prior years, the Group acquired a 75.39% equity interest in 4 Vallees to expand its revenue base and achieve geographical diversification. This acquisition resulted in a bargain purchase gain of **RMB 2,352 thousand** - The Group acquired a **75.39%** equity interest in **4 Vallees** for a final consideration of **RMB 93,337 thousand**, aiming to expand its revenue base and achieve geographical diversification[374](index=374&type=chunk)[427](index=427&type=chunk) - The acquisition resulted in a bargain purchase gain of **RMB 2,352 thousand**, primarily due to the fair value change of 4 Vallees' investment properties between the acquisition agreement date and the completion date[428](index=428&type=chunk)[429](index=429&type=chunk) - Since the acquisition date, **4 Vallees** contributed **RMB 3,897 thousand** in revenue to the Group and accounted for **RMB 5,321 thousand** of the Group's loss in the prior year[429](index=429&type=chunk) [Investment Properties (Details)](index=161&type=section&id=%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD%20(%E8%A9%B3%E6%83%85)) This section provides a detailed list of the Group's investment properties, including their locations, uses, approximate gross floor areas, and the Group's ownership interests [List of Investment Properties as of June 30, 2025](index=161&type=section&id=2025%E5%B9%B46%E6%9C%8830%E6%97%A5%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD%E5%88%97%E8%A1%A8) As of June 30, 2025, the Group's investment properties are primarily located in Langfang, China; Kuala Lumpur, Malaysia; Jakarta, Indonesia; and Switzerland, serving purposes such as teaching buildings, student and staff dormitories, retail, ancillary facilities, and hotels Overview of Investment Properties as of June 30, 2025 | Name and Location | Use | Approximate Gross Floor Area (sqm) | Group's Interest (%) | | :--- | :--- | :--- | :--- | | Multiple plots of land and buildings in Oriental University City, Langfang, Hebei Province, PRC | Teaching buildings, student and staff dormitories, retail, ancillary facilities | 2

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任 何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 Optima Automobile Group Holdings Limited 傲迪瑪汽車集團控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：8418） 茲提述傲迪瑪汽車集團控股有限公司（「本公司」，連同其附屬公司統稱「本集團」） 截至二零二四年十二月三十一日止年度之年報（「年報」）。除另有界定外，本公告 所用詞彙與年報所界定者具有相同涵義。 胡武安 香港，二零二五年九月十二日 本公司董事（「董事」）會（「董事會」）謹此根據GEM 上市規則之相關披露規定，就 本公司於二零一九年九月十八日採納之購股權計劃補充下列額外資料。 購股權計劃之目的 購股權計劃之目的是令本集團可以向選定參與者授予購股權，作為彼等為本集團 所作貢獻的鼓勵或獎勵。 除上文所披露者外，年報所載所有其他資料均維持不變且繼續有效。本公告乃年 報之補充，應與年報一併閱讀。 承董事會命 傲迪瑪汽車集團控股有限公司 主席兼執行董事 ...