[Company Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Company Basic Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) Persistence Resources Group Ltd, a Cayman Islands-registered company (stock code 2489), maintained stable board members, company secretary, authorized representatives, and committee members during the reporting period - Company's Chinese name: 集海資源集團有限公司, English name: Persistence Resources Group Ltd[5](index=5&type=chunk) - Executive Directors include Dr. Shao Xuxin (Chairman and CEO), Mr. Mackie James Thomas, and Mr. Lu Zhuoguang[5](index=5&type=chunk) - Mr. Chen Yifen chairs the Audit Committee and Risk Management Committee, Dr. Zeng Ming chairs the Remuneration Committee and Environmental, Social and Governance Committee, and Dr. Shao Xuxin chairs the Nomination Committee[5](index=5&type=chunk) [Professional Advisors and Offices](index=4&type=section&id=%E5%B0%88%E6%A5%AD%E9%A1%A7%E5%95%8F%E8%88%87%E辦%E4%BA%8B%E8%99%95) The company appointed EY as auditor, Ascent Partners as compliance advisor, and Li & Partners as Hong Kong legal counsel, with its registered office in Cayman Islands and principal place of business in Hong Kong - The auditor is Ernst & Young, the compliance advisor is Ascent Partners, and the Hong Kong legal counsel is Li & Partners[6](index=6&type=chunk) - The registered office is located in the Cayman Islands, and the principal place of business in Hong Kong is at 20/F, Infinitus Plaza, 199 Des Voeux Road Central[6](index=6&type=chunk) - Major bankers include Huaxia Bank Co., Ltd. Yantai Branch and Shanghai Pudong Development Bank Co., Ltd. Yantai Laishan Sub-branch[6](index=6&type=chunk) [Management Discussion and Analysis](index=5&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) [I. Interim Results](index=5&type=section&id=I.%20%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) For the six months ended June 30, 2025, the Group's total gold production slightly decreased, but revenue and net profit significantly increased due to higher average selling prices, leading to improved earnings per share and an interim dividend declaration 2025 H1 Interim Results Overview | Indicator | 2025 H1 (RMB thousand/kg/cents) | 2024 H1 (RMB thousand/kg/cents) | Year-on-year Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total Gold Production (after smelting) | 446.04 kg | Approx. 453.71 kg | Decrease of approx. 7.67 kg | -1.7% | | Revenue | 303,493 | 236,173 | Increase of 67,320 | +28.5% | | Net Profit | 85,501 | 78,867 | Increase of 6,634 | +8.4% | | Basic and Diluted Earnings Per Share | 3.14 cents | 2.86 cents | Increase of 0.28 cents | +9.6% | | Interim Dividend | HKD0.03 per share | - | - | - | - The decrease in gold production was primarily due to the Yantai safety audit and assistance program implemented by the Shandong Provincial Emergency Management Department and the Shandong Bureau of the National Mine Safety Administration, requiring enhanced slope management[9](index=9&type=chunk) - The increase in revenue was mainly attributable to an approximately **34.2% increase in average selling price**, partially offset by a **4.3% decrease in sales volume**[10](index=10&type=chunk) [II. Market Overview](index=6&type=section&id=II.%20%E5%B8%82%E5%A0%B4%E6%A6%82%E8%A6%BD) In H1 2025, global gold prices rebounded strongly amid geopolitical risks, driven by a weaker US dollar, anticipated US interest rate cuts, and robust central bank purchases, particularly from China - Gold demand in H1 2025 increased compared to 2024, mainly due to a weaker US dollar, anticipated US interest rate cuts, and economic and geopolitical uncertainties[14](index=14&type=chunk) - Global spot gold prices peaked at approximately **USD3,500/ounce in April**, with an average price of approximately **USD3,070/ounce for the first half**[14](index=14&type=chunk) - China's spot gold prices reached a high of approximately **RMB827/gram in Q2**, with an average price of approximately **RMB720/gram for the first half**[14](index=14&type=chunk) [III. Business Review](index=7&type=section&id=III.%20%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's gold production slightly decreased in H1 due to safety audits, partially offset by the acquisition of Yantai Mujin, yet revenue and net profit grew, with Yantai Mujin commencing preliminary exploration for its Chahe underground mine project 2025 H1 Business Key Data | Indicator | 2025 H1 | 2024 H1 | Year-on-year Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Gold Production (after smelting) | 446.04 kg (14,340.49 ounces) | Approx. 453.71 kg (14,587.02 ounces) | Decrease of 7.67 kg (246.53 ounces) | -1.7% | | Revenue | RMB303,493,000 | RMB236,173,000 | Increase of 67,320,000 | +28.5% | | Net Profit | RMB85,501,000 | RMB78,867,000 | Increase of 6,634,000 | +8.4% | | Basic and Diluted Earnings Per Share | RMB3.14 cents | RMB2.86 cents | Increase of 0.28 cents | - | - The decrease in gold production was primarily due to the safety bureau's implementation of the Yantai safety audit and assistance program, requiring enhanced slope management[17](index=17&type=chunk) - Yantai Mujin completed a 22-drill hole hidden disaster exploration plan for the Chahe underground mine project, with a total contract value of approximately **RMB3,550,000**[18](index=18&type=chunk) [IV. Financial Analysis](index=7&type=section&id=IV.%20%E8%B2%A1%E5%8B%99%E5%88%86%E6%9E%90) The Group's revenue and gross profit increased, but gross margin slightly declined, while administrative expenses and finance costs rose significantly due to acquisitions and R&D, and income tax expenses increased with profit, leading to a higher effective tax rate 2025 H1 Key Financial Indicators Change | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 303,493 | 236,173 | Increase of 67,320 | +28.5% | | Cost of Sales | 147,982 | 110,693 | Increase of 37,289 | +33.7% | | Gross Profit | 155,511 | 125,480 | Increase of 30,031 | +23.9% | | Gross Profit Margin | 51.2% | 53.1% | Decrease of 1.9 percentage points | - | | Other Income and Gains | 8,305 | 10,725 | Decrease of 2,420 | -22.6% | | Administrative Expenses | 31,514 | 19,445 | Increase of 12,069 | +62.1% | | Finance Costs | 3,027 | 1,397 | Increase of 1,630 | - | | Income Tax Expense | 43,141 | 35,910 | Increase of 7,231 | +20.1% | | Profit Attributable to Owners of the Parent | 62,762 | 57,284 | Increase of 5,478 | +9.6% | Liquidity and Capital Resources | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 655,053 | 639,599 | Increase of 15,454 | | Working Capital | 400,603 | 548,015 | Decrease of 147,412 | | Outstanding Bank Borrowings | 174,750 | None | Increase of 174,750 | | Total Debt-to-Equity Ratio | 14.9% | None | - | - The decrease in gross profit margin was mainly due to the **34.2% increase in average selling price** being offset by a **33.7% increase in cost of sales**[21](index=21&type=chunk) - The increase in administrative expenses was primarily due to supplementary payments for water and soil conservation compensation fees, increased legal and professional fees for the acquisition of Yantai Mujin, and higher research and development expenses[23](index=23&type=chunk) - The effective tax rate increased from approximately **31.3% in the same period of 2024 to approximately 33.5%**, mainly due to additional tax expenses arising from tax adjustments made before the annual tax settlement in April 2025[27](index=27&type=chunk) - The Group faces interest rate risk, credit risk, foreign currency risk, and liquidity risk, adopting a conservative risk management strategy without hedging interest rate and foreign exchange risks[34](index=34&type=chunk)[36](index=36&type=chunk)[39](index=39&type=chunk) - As of June 30, 2025, pledged deposits of **RMB35,047,000** were for environmental restoration guarantees, and mining rights and land title deeds of approximately **RMB113,479,000** were pledged as collateral for bank credit[41](index=41&type=chunk) [V. Business Outlook](index=12&type=section&id=V.%20%E6%A5%AD%E5%8B%99%E5%89%8D%E6%99%AF) In H2 2025, gold prices are expected to rise, driven by macroeconomic and geopolitical factors, with strong investment demand in China, while the Group has optimized mining infrastructure and will continue slope management, but anticipates a potential production decrease due to slow economic recovery - In H2 2025, the gold market will be influenced by US monetary policy, geopolitical risks in the Middle East and Eastern Europe, central bank demand, and the strength of the US dollar, with gold prices expected to rise[44](index=44&type=chunk) - The Group has completed mining infrastructure construction and will continue slope management for open-pit mines as recommended by the safety bureau[44](index=44&type=chunk) - Due to the slow economic recovery in China, the Group will adjust its production plan, expecting overall production volume to potentially decrease[44](index=44&type=chunk) - The Denggezhuang Mine owned by Yantai Mujin has suspended production, with an estimated suspension cost of approximately **RMB3,671,000**, but this has no significant impact on the Group's overall performance as the two major mines in Songjiagou have resumed normal operations[45](index=45&type=chunk) [VI. Use of Proceeds from Global Offering](index=13&type=section&id=VI.%20%E5%85%A8%E7%90%83%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) The company's global offering in December 2023 yielded net proceeds of approximately HK$218.3 million, with HK$201.2 million utilized by June 30, 2025, primarily for mining infrastructure, exploration, and asset acquisitions, and the remaining HK$17.1 million fully utilized post-reporting date - The net proceeds from the company's global offering were approximately **HK$218.3 million**[47](index=47&type=chunk) Use of Proceeds from Global Offering (as of June 30, 2025) | Business Objective | Percentage of Net Proceeds | Actual Available Amount (HKD million) | Amount Utilized (HKD million) | Unutilized Net Proceeds (HKD million) | Expected Timeline for Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | | Further construction of mining infrastructure | 20.4% | 44.5 | 44.5 | – | Before June 2025 | | Upgrading gold ore reserves through additional exploration activities | 2.0% | 4.4 | 4.4 | – | Before February 2025 | | Expanding business through selective acquisitions of gold mining assets | 67.6% | 147.6 | 130.5 | 17.1 | Before February 2025 (Note) | | Working capital | 10.0% | 21.8 | 21.8 | – | Before December 2025 | | **Total** | **100.0%** | **218.3** | **201.2** | **17.1** | - | - The unutilized net proceeds were primarily for the acquisition of a **52% equity interest in Yantai Mujin**, which was fully utilized in **July 2025** (instead of the originally anticipated February 2025)[49](index=49&type=chunk) [Corporate Governance and Other Information](index=14&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) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares or Debentures of the Company and its Associated Corporations](index=14&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%85%B6%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E7%9A%84%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E6%88%96%E5%82%B5%E5%88%B8%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, Non-executive Director Mr. Chen Libei held a 0.91% family interest in the company's shares, while Chairman and CEO Dr. Shao Xuxin and Executive Director Mr. Mackie James Thomas held share options in ultimate holding company Majestic Gold Corp Directors' Long Positions in Shares of the Company (as of June 30, 2025) | Director Name | Personal Interest (Beneficial Owner) | Family Interest (Spouse's Interest) | Total | Percentage of Issued Voting Shares | | :--- | :--- | :--- | :--- | :--- | | Mr. Chen Libei (Non-executive Director) | – | 18,180,000 | 18,180,000 | 0.91% | Directors' Long Positions in Shares and Underlying Shares Held through Equity Derivatives in Majestic Gold Corp. (as of June 30, 2025) | Director Name | Personal Interest | Family Interest | Sub-total | Number of Underlying Shares Held through Equity Derivatives | Total | Percentage of Issued Voting Shares | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Dr. Shao Xuxin (Chairman and CEO) | – | – | – | 4,000,000 | 4,000,000 | 0.38% | | Mr. Mackie James Thomas (Executive Director) | 720,000 | – | 720,000 | 3,700,000 | 4,420,000 | 0.42% | - Majestic Gold Corp. is the ultimate holding company of the Group, and its share options vested **100% immediately upon grant**, but are not transferable within four months from the grant date[53](index=53&type=chunk)[54](index=54&type=chunk) [Interests of Substantial Shareholders in the Company](index=16&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E6%AC%8A%E7%9B%8A) As of June 30, 2025, Majestic Gold Corp. was the largest shareholder, holding 70.50% of the company's shares, with Oriental Gold Industry (Hong Kong) Co., Ltd. holding 9.90% Interests of Substantial Shareholders in the Company (as of June 30, 2025) | Shareholder Name | Capacity | Number of Shares Held (Long Position) | Approximate Percentage of Issued Share Capital in the Company | | :--- | :--- | :--- | :--- | | Majestic Gold Corp. | Beneficial Owner | 1,410,000,000 | 70.50% | | Oriental Gold Industry (Hong Kong) Co., Ltd. | Beneficial Owner | 198,000,000 | 9.90% | - Oriental Gold Industry (Hong Kong) Co., Ltd. is a wholly-owned subsidiary of Shandong Zhaojin Group Zhaoyuan Gold Smelting Co., Ltd[56](index=56&type=chunk) [Dividend Policy](index=17&type=section&id=%E8%82%A1%E6%81%AF%E6%94%BF%E7%AD%96) The company revised its dividend policy to allow shareholders to share profits while retaining sufficient reserves for future development, with the board considering various factors for dividend distribution and intending to distribute interim cash dividends referencing 30% of the previous year's net profit attributable to equity holders - The company has adopted a revised dividend policy aimed at allowing shareholders to share in the company's profits while retaining sufficient reserves for future development[58](index=58&type=chunk) - The company intends to distribute interim cash dividends to shareholders during the year, with the percentage of cash dividends calculated with reference to **30% of the net profit attributable to equity holders for the previous year**[59](index=59&type=chunk) - Dividends will be declared and paid in Hong Kong dollars, expected to be declared semi-annually after the announcement of semi-annual results[59](index=59&type=chunk) [Changes in Information of Directors and Chief Executive](index=18&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E8%B3%87%E6%96%99%E8%AE%8A%E5%8B%95) During the reporting period, Mr. Chen Shaohui resigned as an executive director, and Mr. Lu Zhuoguang resigned as an executive director, company secretary, and authorized representative - Mr. Chen Shaohui resigned as an executive director of the company, effective February 4, 2025[63](index=63&type=chunk) - Mr. Lu Zhuoguang resigned as an executive director, company secretary, and authorized representative of the company, effective November 5, 2025[63](index=63&type=chunk) [Sufficiency of Public Float](index=19&type=section&id=%E8%B6%B3%E5%A4%A0%E5%85%AC%E7%9C%BE%E6%8C%81%E8%82%A1%E9%87%8F) The company maintained the prescribed public float under the Listing Rules throughout the reporting period and up to the date of this report - The company maintained the prescribed public float under the Listing Rules for the six months ended June 30, 2025, and up to the date of this report[65](index=65&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=19&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%B9%8B%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) 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 any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[66](index=66&type=chunk) [Convertible Securities, Share Options, Warrants or Similar Rights](index=19&type=section&id=%E5%8F%AF%E6%8F%9B%E8%82%A1%E8%AD%89%E5%88%B8%E3%80%81%E8%B3%BC%E8%82%A1%E6%AC%8A%E3%80%81%E8%AA%8D%E8%82%A1%E6%AC%8A%E8%AD%89%E6%88%96%E9%A1%9E%E4%BC%BC%E6%AC%8A%E5%88%A9) During the reporting period, the company did not issue any convertible securities, share options, warrants, or similar rights - During the reporting period, the company did not issue any convertible securities, share options, warrants, or similar rights[67](index=67&type=chunk) [Remuneration Policy and Number of Employees of the Group](index=19&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96%E5%8F%8A%E5%83%B1%E5%93%A1%E4%BA%BA%E6%95%B8) The company's remuneration policy links employee compensation to company performance and individual work, aiming to broaden salary advancement channels and motivate staff, with 485 employees as of June 30, 2025 - The company adopts a policy where employee remuneration is linked to the company's performance and individual work performance[68](index=68&type=chunk) - As of June 30, 2025, the company had a total of **485 employees**[69](index=69&type=chunk) [Overview of Material Investments, Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=19&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%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%E7%9A%84%E6%A6%82%E6%B3%81) The Group had no other significant investments, capital asset plans, or material acquisitions and disposals of subsidiaries, associates, or joint ventures during the reporting period - The Group had no other significant investments or capital asset plans, or any other material investments, acquisitions, and disposals during the reporting period[70](index=70&type=chunk) [Details of Material Events After the Reporting Period](index=20&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E9%96%93%E5%BE%8C%E4%B9%8B%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A0%85%E8%A9%B3%E6%83%85) No other material events occurred after the reporting period and up to the date of this report - No other material events occurred after the reporting period and up to the date of this report[71](index=71&type=chunk) [Compliance with Corporate Governance Code](index=20&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99) The company has complied with the Corporate Governance Code since its listing date, except for the combined roles of Chairman and CEO, which the board believes is in the Group's best interest, with clear division of responsibilities to ensure checks and balances - The company has complied with the code provisions of Appendix C1 to the Listing Rules since its listing date (December 22, 2023) and up to the date of this report[72](index=72&type=chunk) - The company has not separated the roles of Chairman and Chief Executive Officer, with Dr. Shao Xuxin holding both positions, which the Board believes is conducive to effective management and business development, ensuring consistent leadership[74](index=74&type=chunk) - The Chairman is responsible for overseeing the Board's functions and performance, the Chief Executive Officer is responsible for managing the Group's business, and independent non-executive directors constitute at least one-third of the Board members to ensure checks and balances[74](index=74&type=chunk) [Directors' Interests in Competing Business](index=21&type=section&id=%E8%91%A3%E4%BA%8B%E6%96%BC%E7%AB%B6%E7%88%AD%E6%A5%AD%E5%8B%99%E4%B9%8B%E6%AC%8A%E7%9B%8A) During the reporting period, none of the company's directors, controlling shareholders, or their close associates held interests in any business directly or indirectly competing or potentially competing with the Group's business - During the reporting period, none of the company's directors or controlling shareholders and their respective close associates had any interests in any business that competes or is likely to compete, directly or indirectly, with the Group's business[76](index=76&type=chunk) [Share Option Scheme](index=21&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The company adopted a share option scheme on November 30, 2023, to recognize and incentivize eligible participants, valid until November 30, 2033, with exercise prices not lower than the closing price or par value, and 200,000,000 shares available for grant as of June 30, 2025, with 21,000,000 options granted post-reporting period - The share option scheme was conditionally adopted on **November 30, 2023**, and is valid until **November 30, 2033**, aiming to recognize and incentivize eligible participants[77](index=77&type=chunk) - The exercise price per share for share options is determined by the Board, but shall not be less than the highest of the closing price of the shares as quoted on the Stock Exchange on the date of grant, the average closing price for the five business days immediately preceding the date of grant, or the nominal value of the shares[79](index=79&type=chunk)[81](index=81&type=chunk) - As of January 1, 2025, and June 30, 2025, the total number of shares available for grant under the share option scheme was **200,000,000 shares**, representing **10% of the issued shares**[79](index=79&type=chunk) - On July 11, 2025, the company granted a total of **21,000,000 share options** to certain directors and employee participants[80](index=80&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers ("Model Code")](index=23&type=section&id=%E9%81%B5%E5%AE%88%E4%B8%8A%E5%B8%82%E7%99%BC%E8%A1%8C%E4%BA%BA%E8%91%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%88%99%EF%BC%88%E3%80%8C%E6%A8%99%E6%BA%96%E5%AE%88%E5%88%99%E3%80%8D%EF%BC%89) The company adopted the Model Code as the standard for directors' securities transactions, and all directors confirmed full compliance during the reporting period and up to the date of this report - The company has adopted the Model Code as set out in Appendix C3 to the Listing Rules as the standard for directors' securities transactions[83](index=83&type=chunk) - All directors confirmed that they have fully complied with the required standards of the Model Code during the reporting period and up to the date of this report[83](index=83&type=chunk) [Audit Committee](index=23&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The company's Audit Committee, comprising three independent non-executive directors chaired by Mr. Chen Yifen, reviewed the interim report and unaudited interim consolidated financial statements, deeming their preparation compliant with applicable accounting standards and requirements - The Audit Committee comprises three independent non-executive directors: Mr. Chen Yifen (Chairman), Dr. Malaihollo Jeffrey Francis A, and Dr. Zeng Ming[84](index=84&type=chunk) - The primary responsibilities of the Audit Committee are to review and monitor the Group's financial reporting process, internal control systems, risk management, and internal audit[84](index=84&type=chunk) - The Audit Committee has reviewed this report and the unaudited interim consolidated financial statements, deeming their preparation compliant with applicable accounting standards and requirements[84](index=84&type=chunk) [Investor Relations](index=24&type=section&id=%E6%8A%95%E8%B3%87%E8%80%85%E9%97%9C%E4%BF%82) The company prioritizes effective communication with shareholders through AGMs and EGMs to enhance understanding of its business, performance, and strategy, with the Board Chairman and committee chairmen meeting shareholders and the auditor's representative attending to answer questions - The company believes that effective communication with shareholders is crucial for enhancing investor relations and their understanding of the Group's business, performance, and strategy[86](index=86&type=chunk) - The company maintains continuous communication with shareholders through annual general meetings and extraordinary general meetings, where the Board Chairman and chairmen of various Board committees will meet with shareholders and respond to inquiries[86](index=86&type=chunk) - The company will also invite a representative of the auditor to attend the annual general meeting to answer shareholders' questions regarding the audit work[86](index=86&type=chunk) [Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=25&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%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) [Overview of Profit or Loss and Other Comprehensive Income](index=25&type=section&id=%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%E6%A6%82%E8%A6%BD) For the six months ended June 30, 2025, the Group's revenue was RMB303,493 thousand and net profit was RMB85,501 thousand, both increasing year-on-year, with basic and diluted earnings per share attributable to owners of the parent at RMB3.14 cents, while total other comprehensive income for the period was a loss due to exchange differences Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 303,493 | 236,173 | | Cost of Sales | (147,982) | (110,693) | | Gross Profit | 155,511 | 125,480 | | Profit Before Tax | 128,642 | 114,777 | | Profit for the Period | 85,501 | 78,867 | | Profit Attributable to Owners of the Parent | 62,762 | 57,284 | | Profit Attributable to Non-controlling Interests | 22,739 | 21,583 | | Other Comprehensive Income for the Period (net of tax) | (1,452) | 1,715 | | Total Comprehensive Income for the Period | 84,049 | 80,582 | | Basic and Diluted Earnings Per Share Attributable to Owners of the Parent | RMB3.14 cents | RMB2.86 cents | [Condensed Interim Consolidated Statement of Financial Position](index=27&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) [Overview of Assets, Liabilities and Equity](index=27&type=section&id=%E8%B3%87%E7%94%A2%E3%80%81%E8%B2%A0%E5%82%B5%E5%8F%8A%E6%AC%8A%E7%9B%8A%E6%A6%82%E8%A6%BD) As of June 30, 2025, the Group's total non-current assets significantly increased to RMB1,084,750 thousand, mainly due to increases in property, plant and equipment, intangible assets, and goodwill, while total current assets also grew, but a larger increase in total current liabilities led to a decrease in net current assets, with both net assets and total equity increasing Condensed Interim Consolidated Statement of Financial Position (as of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Non-current Assets | 1,084,750 | 567,571 | | Total Current Assets | 740,052 | 687,391 | | Total Current Liabilities | 339,449 | 139,376 | | Net Current Assets | 400,603 | 548,015 | | Total Assets Less Current Liabilities | 1,485,353 | 1,115,586 | | Total Non-current Liabilities | 311,329 | 62,127 | | Net Assets | 1,174,024 | 1,053,459 | | Total Equity | 1,174,024 | 1,053,459 | - The significant increase in non-current assets was mainly due to increases in property, plant and equipment (**+RMB154,376 thousand**), intangible assets (**+RMB269,023 thousand**), and newly recognized goodwill (**RMB36,160 thousand**)[93](index=93&type=chunk) - The total current liabilities significantly increased, primarily from trade payables, other payables and accrued expenses, and new interest-bearing bank borrowings[93](index=93&type=chunk) [Condensed Interim Consolidated Statement of Changes in Equity](index=29&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) [Overview of Changes in Equity](index=29&type=section&id=%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E6%A6%82%E8%A6%BD) For the six months ended June 30, 2025, the Group's total equity increased from RMB1,053,459 thousand at the beginning of the period to RMB1,174,024 thousand, primarily due to profit for the period, capital contributions from non-controlling shareholders, and an increase in non-controlling interests from subsidiary acquisition Condensed Interim Consolidated Statement of Changes in Equity (for the six months ended June 30) | Item | June 30, 2025 (RMB thousand) | January 1, 2025 (RMB thousand) | | :--- | :--- | :--- | | Total Equity Attributable to Owners of the Parent | 964,068 | 883,464 | | Non-controlling Interests | 209,956 | 169,995 | | Total Equity | 1,174,024 | 1,053,459 | - Profit for the period was **RMB85,501 thousand**, of which **RMB62,762 thousand** was attributable to owners of the parent and **RMB22,739 thousand** to non-controlling interests[96](index=96&type=chunk) - Non-controlling shareholders contributed **RMB19,294 thousand**, and non-controlling interests increased by **RMB42,222 thousand** due to the acquisition of a subsidiary[96](index=96&type=chunk) [Condensed Interim Consolidated Statement of Cash Flows](index=31&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) [Overview of Cash Flows](index=31&type=section&id=%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E6%A6%82%E8%A6%BD) For the six months ended June 30, 2025, the Group's net cash flow from operating activities decreased to RMB74,553 thousand, while net cash flow used in investing activities significantly increased due to purchases of property, plant and equipment and subsidiary acquisition costs, and net cash flow from financing activities turned positive due to new bank loans and non-controlling shareholder contributions, with cash and cash equivalents increasing to RMB655,053 thousand at period-end Condensed Interim Consolidated Statement of Cash Flows (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 74,553 | 108,058 | | Net Cash Flows Used in Investing Activities | (59,716) | (33,566) | | Net Cash Flows from/(Used in) Financing Activities | 2,069 | (1,729) | | Net Increase in Cash and Cash Equivalents | 16,906 | 72,763 | | Cash and Cash Equivalents at End of Period | 655,053 | 661,318 | - Net cash flows from operating activities decreased, primarily due to a decrease in other payables and accrued expenses[99](index=99&type=chunk) - Net cash flows used in investing activities increased, mainly due to the purchase of property, plant and equipment (**RMB51,708 thousand**) and net acquisition costs of a subsidiary (**RMB6,708 thousand**)[99](index=99&type=chunk) - Net cash flows from financing activities turned positive, primarily from new bank and other loans (**RMB114,800 thousand**) and capital contributions from non-controlling shareholders (**RMB19,294 thousand**), partially offset by repayment of bank loans and dividends paid to non-controlling interests[100](index=100&type=chunk) [Notes to the Condensed Interim Consolidated Financial Information](index=33&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) [1. Company and Group Information](index=33&type=section&id=1.%20%E5%85%AC%E5%8F%B8%E5%8F%8A%E9%9B%86%E5%9C%98%E8%B3%87%E6%96%99) Persistence Resources Group Ltd is an investment holding company whose subsidiaries primarily engage in gold mining, beneficiation, and sales of gold doré in China, with Majestic Gold Corp. as its ultimate holding company, and Yantai Mujin Mining Co., Ltd. added as a new subsidiary during the reporting period - The company is an investment holding company, and its subsidiaries are engaged in gold mining, beneficiation, and sales of gold doré in China[101](index=101&type=chunk) - The company's holding company is Majestic Gold Corp., incorporated in British Columbia, Canada[101](index=101&type=chunk) - The Group added Yantai Mujin Mining Co., Ltd. (Yantai Mujin) as an indirectly owned subsidiary, holding a **52% equity interest**, primarily engaged in gold mining, beneficiation, and sales[102](index=102&type=chunk) [2. Basis of Preparation](index=34&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed interim consolidated financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and presented in RMB, with all amounts rounded to the nearest thousand - The condensed interim consolidated financial information has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[104](index=104&type=chunk) - The interim financial information is presented in RMB, and all amounts have been rounded to the nearest thousand (RMB thousand)[104](index=104&type=chunk) [3. Changes in Accounting Policies and Disclosures](index=34&type=section&id=3.%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E5%8F%8A%E6%8A%AB%E9%9C%B2%E4%B9%8B%E8%AE%8A%E5%8B%95) The accounting policies adopted for the condensed interim consolidated financial information are consistent with those used for the annual consolidated financial statements, with the initial adoption of IAS 21 amendments "Lack of Exchangeability" having no significant impact as the Group's transaction currencies are all exchangeable - The accounting policies adopted in the preparation of the condensed interim consolidated financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024[105](index=105&type=chunk) - The initial adoption of the amendments to IAS 21 "Lack of Exchangeability" had no impact on the condensed interim consolidated financial information, as all currencies in which the Group transacts are exchangeable[106](index=106&type=chunk) [4. Operating Segment Information](index=35&type=section&id=4.%20%E7%B6%93%E7%87%9F%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group has one reportable operating segment: mining and beneficiation of gold, ultimately sold as gold doré, with all revenue derived from operations in mainland China and no non-current assets located outside mainland China - The Group has one reportable operating segment: mining and beneficiation of gold, which is ultimately sold in the form of gold doré[107](index=107&type=chunk) - The Group's revenue from external customers is solely derived from its operations in mainland China, and no non-current assets are located outside mainland China[108](index=108&type=chunk) Revenue from Major Customers (for the six months ended June 30) | Customer | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Customer A | 303,493 | 236,173 | [5. Revenue](index=35&type=section&id=5.%20%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, the Group's revenue was RMB303,493 thousand, entirely from contracts with customers for the sale of gold doré, recognized at a point in time Revenue Analysis (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue from Contracts with Customers | 303,493 | 236,173 | | Type of Goods or Services: Sale of Gold Doré | 303,493 | 236,173 | | Timing of Revenue Recognition: At a Point in Time | 303,493 | 236,173 | [6. Finance Costs](index=36&type=section&id=6.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, the Group's finance costs significantly increased to RMB3,027 thousand from RMB1,397 thousand in the prior period, primarily due to higher interest on bank borrowings and increased discount amounts for provisions and other long-term liabilities over time Finance Costs Analysis (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 1,342 | 314 | | Interest Expense on Lease Liabilities | 9 | – | | Increase in Discount Amount of Provisions and Other Long-term Liabilities Due to Passage of Time | 1,676 | 1,083 | | **Total** | **3,027** | **1,397** | [7. Profit Before Tax](index=37&type=section&id=7.%20%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) For the six months ended June 30, 2025, the Group's profit before tax was RMB128,642 thousand, after deducting items such as cost of inventories sold, depreciation of property, plant and equipment, and research and development costs Profit Before Tax Deducted/Credited Items (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of Inventories Sold | 147,982 | 110,693 | | Depreciation of Property, Plant and Equipment | 26,404 | 21,383 | | Depreciation of Right-of-use Assets | 4,995 | 5,160 | | Amortization of Intangible Assets | 3,477 | 3,652 | | Research and Development Costs | 6,763 | 4,169 | - Depreciation of property, plant and equipment, depreciation of right-of-use assets, and amortization of intangible assets are included in "Cost of sales" and "Administrative expenses" in the consolidated statement of profit or loss and other comprehensive income[113](index=113&type=chunk) [8. Income Tax Expense](index=37&type=section&id=8.%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, the Group's income tax expense increased to RMB43,141 thousand, with mainland China subsidiaries generally subject to a 25% corporate income tax rate, but the Group's effective tax rate was approximately 33.5%, higher than the statutory rate, mainly due to withholding tax, non-deductible expenses, and unrecognized deductible losses Income Tax Expense Analysis (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax: China Corporate Income Tax | 43,880 | 33,615 | | Deferred Tax | (739) | 2,295 | | **Total Tax Expense for the Period** | **43,141** | **35,910** | - The Group's subsidiaries operating in mainland China are generally subject to China Corporate Income Tax at a rate of **25%** during the period[115](index=115&type=chunk) - The Group's effective tax rate for the reporting period was approximately **33.5%** (2024: approximately **31.3%**), which is higher than the statutory tax rate of **25%**, mainly due to factors such as withholding tax, non-deductible expenses, and unrecognized deductible losses[116](index=116&type=chunk) [9. Dividends](index=39&type=section&id=9.%20%E8%82%A1%E6%81%AF) On August 29, 2025, the Board declared an interim dividend of HK3.00 cents per ordinary share, totaling approximately HK$60,000,000, which was not recognized as a liability at the end of the reporting period - On August 29, 2025, the Board declared an interim dividend of **HK3.00 cents per ordinary share** (2024: **HK2.95 cents per ordinary share**)[117](index=117&type=chunk) - The total interim dividend amounted to approximately **HK$60,000,000** (2024: **HK$59,000,000**)[117](index=117&type=chunk) - The interim dividend was not recognized as a liability at the end of the reporting period[118](index=118&type=chunk) [10. Earnings Per Share Attributable to Owners of the Parent](index=39&type=section&id=10.%20%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%99%AE%E9%80%9A%E8%82%A1%E6%AC%8A%E6%8C%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%B5%E7%9A%84%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) For the six months ended June 30, 2025, basic and diluted earnings per share attributable to owners of the parent was RMB3.14 cents, calculated based on a weighted average of 2,000,000,000 ordinary shares outstanding during the period Basic Earnings Per Share Calculation (for the six months ended June 30) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Parent for Basic EPS Calculation (RMB thousand) | 62,762 | 57,284 | | Weighted Average Number of Ordinary Shares Outstanding for Basic EPS Calculation | 2,000,000,000 | 2,000,000,000 | | Basic and Diluted Earnings Per Share | RMB3.14 cents | RMB2.86 cents | [11. Property, Plant and Equipment](index=40&type=section&id=11.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) For the six months ended June 30, 2025, the Group acquired property, plant and equipment with a total cost of RMB32,712 thousand, excluding those acquired through business combinations, and at period-end, certain assets with a net book value of RMB6,140 thousand, mostly from business combinations, had not yet obtained ownership certificates - For the six months ended June 30, 2025, the Group acquired property, plant and equipment assets with a total cost of **RMB32,712 thousand**[121](index=121&type=chunk) - Certain property, plant and equipment with a total net book value of **RMB6,140 thousand** had not yet obtained ownership certificates as of June 30, 2025, of which **RMB4,291 thousand** was acquired through business combinations[121](index=121&type=chunk) [12. Trade Payables](index=40&type=section&id=12.%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, the Group's total trade payables were RMB24,402 thousand, mostly due within one year, and are interest-free, generally settled within 30 to 90 days Trade Payables Aging Analysis (as of June 30, 2025) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 23,356 | 11,501 | | 1 to 2 years | 1,046 | – | | **Total** | **24,402** | **11,501** | - Trade payables are interest-free and generally settled within **30 to 90 days**[122](index=122&type=chunk) [13. Share Capital](index=41&type=section&id=13.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's issued and fully paid share capital comprised 2,000,000,000 ordinary shares with a par value of HK$0.01 each, totaling RMB18,172 thousand, consistent with December 31, 2024 Share Capital Information (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Issued and Fully Paid Ordinary Shares (2,000,000,000 shares, HK$0.01 par value each) | 18,172 | 18,172 | [14. Commitments](index=41&type=section&id=14.%20%E6%89%BF%E6%93%94) As of June 30, 2025, the Group's total capital commitments for contractual costs not provided for in the financial statements amounted to RMB5,040 thousand, primarily for mining infrastructure Contractual Commitments (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Contracted but not provided for: Mining Infrastructure | 5,040 | – | [15. Business Combination](index=42&type=section&id=15.%20%E6%A5%AD%E5%8B%99%E5%90%88%E4%BD%B5) The Group completed the acquisition of a 52% equity interest in Yantai Mujin on February 28, 2025, for a total consideration of RMB81,900 thousand, aiming to expand its gold doré mining, processing, and sales market share, resulting in goodwill of RMB36,160 thousand, and since acquisition, Yantai Mujin contributed RMB25,275 thousand in revenue but a consolidated loss of RMB5,161 thousand - The Group completed the acquisition of a **52% equity interest in Yantai Mujin** on **February 28, 2025**, for a total consideration of **RMB81,900 thousand**[125](index=125&type=chunk) - The acquisition resulted in goodwill of **RMB36,160 thousand**[126](index=126&type=chunk) - Since the acquisition, Yantai Mujin contributed **RMB25,275 thousand in revenue** to the Group and resulted in a consolidated loss of **RMB5,161 thousand**[130](index=130&type=chunk) - The initial accounting for this acquisition has been provisionally determined, and the final PPA report is not yet complete, so amounts may be adjusted subsequently[128](index=128&type=chunk) [16. Related Party Transactions](index=44&type=section&id=16.%20%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) As of June 30, 2025, Kong Fanzhong, Kong Fanbo, and Yantai Baiheng Gold Mine Co., Ltd. provided guarantees for the Group's bank borrowings of RMB127,800 thousand, with no other related party transactions or outstanding balances during the period, and total key management personnel compensation amounted to RMB3,979 thousand - Kong Fanzhong, Kong Fanbo, and Yantai Baiheng Gold Mine Co., Ltd. provided guarantees for the Group's bank borrowings of **RMB127,800 thousand** as of June 30, 2025[131](index=131&type=chunk) - For the six months ended June 30, 2024 and 2025, there were no transactions with related parties and no outstanding related party balances[132](index=132&type=chunk)[131](index=131&type=chunk) Key Management Personnel Compensation of the Group (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Short-term Employee Benefits | 3,771 | 3,292 | | Contributions to Pension Schemes | 208 | 110 | | **Total Compensation Paid to Key Management Personnel** | **3,979** | **3,402** | [17. Fair Value and Fair Value Hierarchy of Financial Instruments](index=45&type=section&id=17.%20%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E7%9A%84%E5%85%AC%E5%B9%B3%E5%80%BC%E5%8F%8A%E5%85%AC%E5%B9%B3%E5%80%BC%E7%AD%89%E7%B4%9A) Management assesses that the fair values of short-term financial instruments like cash and cash equivalents and trade payables approximate their carrying amounts, while fair values of other long-term assets and liabilities are calculated by discounting expected future cash flows, with the company's finance team responsible for policies and procedures for fair value measurement - Management has assessed that the fair values of cash and cash equivalents, restricted and pledged deposits, financial assets, trade payables, financial liabilities, and interest-bearing bank borrowings approximate their carrying amounts, primarily because these instruments mature in the short term[133](index=133&type=chunk) - The fair values of other long-term assets and other long-term liabilities are calculated by discounting expected future cash flows[133](index=133&type=chunk) - The Group's corporate finance team, led by the Chief Financial Officer, is responsible for determining the policies and procedures for fair value measurement of financial instruments[133](index=133&type=chunk) [18. Events After the Reporting Period](index=45&type=section&id=18.%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) No other significant subsequent events occurred after June 30, 2025, other than those disclosed in the Management Discussion and Analysis section of this report - No other significant subsequent events occurred after June 30, 2025, other than those disclosed in the Management Discussion and Analysis section of this report[134](index=134&type=chunk) [19. Approval of Condensed Interim Consolidated Financial Information](index=45&type=section&id=19.%20%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E7%9A%84%E6%89%B9%E5%87%86) The condensed interim consolidated financial information was approved and authorized for issue by the Board of Directors on August 29, 2025 - The financial statements were approved and authorized for issue by the Board of Directors on August 29, 2025[135](index=135&type=chunk)

Financial Performance - The company recorded a revenue of approximately HKD 1,028,737,000 for the six months ended June 30, 2025, representing a 21% increase compared to HKD 849,951,000 for the same period in 2024[6]. - The company reported a profit attributable to owners of approximately HKD 342,643,000, a significant increase of 273% from HKD 91,956,000 in the previous year[7]. - Gross profit for the gold mining business was approximately HKD 530,135,000, with a gross margin of 51.5%, compared to a gross profit of HKD 218,605,000 and a margin of 33.9% in 2024, marking a 143% increase in gross profit[9]. - The net profit for the period was HKD 350,484,000, compared to HKD 90,700,000 in the same period last year, marking a 286% increase[51]. - Basic earnings per share rose to HKD 8.17, up from HKD 2.26, reflecting a 262% increase[51]. - Profit before tax reached HKD 431,381,000, a significant rise of 225% compared to HKD 132,811,000 in the previous year[50]. - The company reported a total comprehensive income of HKD 403,008,000 for the period, compared to HKD 79,133,000 in the previous year, reflecting a 409% increase[54]. Production and Sales - Gold production and sales volume increased, with the average selling price of gold rising from approximately RMB 499 per gram in 2024 to RMB 666 per gram in the current period[9]. - The total ore production for the six months ended June 30, 2025, was 253.73 thousand tons, with an average gold grade of 5.45 grams per ton[16]. - The company processed approximately 279.84 thousand tons of ore, resulting in a gold production of 1,325.20 kilograms[17]. - For the six months ended June 30, 2025, the gold mining business generated revenue of HKD 1,028,737,000, with a gross profit of HKD 530,135,000[76]. Expenses and Costs - Administrative and other expenses were approximately HKD 81,298,000, a 12% increase from HKD 72,610,000 in 2024, primarily due to the acquisition of Huasheng Construction Investment Co., Ltd. and increased employee costs[6]. - Financial costs increased by approximately 28% to HKD 19,844,000, mainly due to interest expenses related to the precious metals purchase agreement with Zijin Mining Group[6]. - Employee costs for the interim period amounted to approximately HKD 34,895,000, with stock-based payments of about HKD 2,344,000 due to stock options granted[36]. - The cost of inventory recognized as an expense was HKD 417,563,000, a decrease of 27% compared to HKD 573,294,000 for the same period in 2024[86]. Assets and Liabilities - As of June 30, 2025, the total assets and net assets of the group were approximately HKD 5,574,793,000 and HKD 3,210,874,000, respectively, compared to HKD 4,593,704,000 and HKD 2,618,967,000 as of December 31, 2024[21]. - The total bank borrowings amounted to approximately HKD 567,719,000 as of June 30, 2025, slightly increasing from HKD 530,596,000 as of December 31, 2024[22]. - The debt-to-equity ratio was approximately 18.6% as of June 30, 2025, compared to 21.4% as of December 31, 2024[22]. - The company has a net current liability of approximately HKD 288,083,000, but it continues to prepare financial statements on a going concern basis, indicating confidence in future cash flows and financing options[61]. Acquisitions and Investments - The company completed a vertical integration acquisition of Huasheng Construction Investment Co., Ltd. in January 2025, enhancing cost efficiency and safety management[42]. - The company acquired 100% equity of Huasheng Construction Investment Co., Ltd. for RMB 30,000,000 through the issuance of convertible bonds[35]. - A horizontal acquisition of Rongchang Investment Co., Ltd. was announced on March 7, 2025, expected to expand mineral reserves in Subi County[42]. - The acquisition of Huasheng Group was completed for a total consideration of RMB 30,000,000 (approximately HKD 33,000,000), with adjustments based on the future financial performance of Xi'an Hongshang over a five-year guarantee period[128]. Corporate Governance - The company emphasizes adherence to corporate governance best practices to enhance performance and protect shareholder interests[141]. - The company has complied with the corporate governance code as per the listing rules for the six months ending June 30, 2025, with specific deviations explained[142]. - The board of directors is responsible for setting business strategies and management objectives, while daily operations are delegated to management[145]. - The audit committee consists of three independent non-executive directors, ensuring the quality and integrity of internal controls and reviewing accounting principles[146]. Cash Flow and Financing - The net cash generated from operating activities for the six months ended June 30, 2025, was HKD 535,551,000, a significant increase from HKD 238,703,000 in the same period of 2024, representing a growth of approximately 124.5%[57]. - The net cash used in investing activities amounted to HKD 139,243,000, compared to HKD 21,788,000 in the previous year, indicating a substantial increase in investment expenditures[57]. - The net cash generated from financing activities was HKD 199,492,000, a turnaround from a cash outflow of HKD 179,657,000 in the prior year, reflecting improved financing conditions[57]. - The company plans to actively negotiate with financial institutions for refinancing to ensure sufficient working capital and financial requirements in the foreseeable future[61]. Shareholder Information - Major shareholders include Jiang Wei with 1,186,334,000 shares (26.98%), Lin Changdong with 600,000,000 shares (13.64%), and Lin Yuying with 330,000,000 shares (7.50%)[154]. - The company issued 327,420,000 new ordinary shares at a subscription price of HKD 0.69 per share, raising a net amount of HKD 225.5 million[29]. - The company did not declare any dividends for the six months ended June 30, 2025, consistent with the previous year[90]. - The weighted average number of shares issued during the six months ended June 30, 2025, was used to calculate the potential shares from all stock option plans, resulting in a dilution of 1.9%[161].

Financial Performance - The company's revenue for the six months ended June 30, 2025, was approximately HKD 129.3 million, a decrease of about HKD 388.6 million compared to HKD 517.9 million for the same period in 2024[6] - The loss attributable to the company's owners for the six months ended June 30, 2025, was approximately HKD 19.9 million, significantly reduced from HKD 218.5 million in the same period of 2024[6] - For the six months ended June 30, 2025, total revenue decreased to HKD 129,328,000 from HKD 517,921,000 in the same period of 2024, representing a decline of approximately 75%[84] - The company incurred a loss before tax of HKD 18,082,000, significantly improved from a loss of HKD 217,175,000 in the previous year[66] - The net loss for the period was HKD 18,058,000, compared to a net loss of HKD 217,045,000 in 2024, indicating a substantial reduction in losses[66] - The total comprehensive loss for the period was HKD 12,752,000, compared to HKD 225,922,000 in the same period last year[66] - Basic and diluted loss per share for the period was HKD 3.10, an improvement from HKD 34.07 in the previous year[66] Revenue Breakdown - The property development segment reported revenue of approximately HKD 87.4 million for the six months ended June 30, 2025, down from HKD 477.5 million for the same period in 2024[7] - The property investment segment generated revenue of approximately HKD 21.1 million for the six months ended June 30, 2025, a slight decrease from HKD 21.6 million in the same period of 2024[10] - Revenue from the urban workspace segment was approximately HKD 18.8 million for the six months ending June 30, 2025, showing stability compared to HKD 19.1 million for the same period in 2024[12] - The wine business reported revenue of approximately HKD 9.8 million for the six months ending June 30, 2025, an increase of about HKD 2.5 million compared to HKD 7.3 million in the same period of 2024[17] - The company generated approximately HKD 6.9 million in revenue from property management services for the six months ending June 30, 2025, slightly down from HKD 7.1 million in the same period of 2024[14] - Revenue from the cleaning and renovation segment remained stable at approximately HKD 3.0 million for the six months ending June 30, 2025, consistent with the previous year[16] Assets and Liabilities - The total book value of the investment property portfolio was approximately HKD 738.4 million as of June 30, 2025, unchanged from December 31, 2024[12] - Non-current assets totaled HKD 873,446,000 as of June 30, 2025, compared to HKD 857,758,000 as of December 31, 2024[69] - Current assets decreased to HKD 1,495,982,000 from HKD 1,618,958,000 at the end of 2024[69] - Current liabilities were HKD 1,439,877,000, down from HKD 1,523,246,000 at the end of the previous year[69] - Total assets decreased to HKD 2,369,428,000 from HKD 2,476,716,000 as of December 31, 2024[88] - Total liabilities decreased to HKD 1,580,711,000 from HKD 1,675,247,000 as of December 31, 2024[88] Cash Flow and Financing - The net cash generated from operating activities for the six months ended June 30, 2025, was HKD 69,355,000, a significant decrease compared to HKD 451,580,000 in the prior year[76] - The company raised HKD 71,624,000 through borrowings during the six months ended June 30, 2025, compared to HKD 16,528,000 in the same period of 2024[76] - The company maintained a bank balance and cash of approximately HKD 11.0 million as of June 30, 2025, a decrease from HKD 28.9 million as of December 31, 2024[22] - The company's total borrowings as of June 30, 2025, were approximately HKD 1,223.7 million, a slight decrease from HKD 1,238.7 million as of December 31, 2024[23] - The company's convertible bond liabilities amounted to approximately HKD 63.1 million, up from HKD 60.7 million as of December 31, 2024[23] Strategic Plans and Market Outlook - The company plans to shift its focus towards the serviced apartment segment, anticipating significant demand for student accommodations in Hong Kong in the coming years[10] - The company plans to establish and manage real estate funds to broaden financing sources and expand market share in property development[19] - The company remains optimistic about the property market despite challenges, anticipating a boost from recent government policy changes allowing investment in residential properties[37] - The rental market is expected to remain robust due to strong demand driven by talent programs and the "Study in Hong Kong" initiative[37] - The company aims to diversify its investment portfolio and reduce risks by exploring new markets and asset classes[37] Shareholder Information - The company holds a significant stake in its shares, with the largest shareholder owning approximately 200.58% of the company[41] - Star Properties Holdings (BVI) Limited holds 432,140,800 shares, representing approximately 67.36% of the company's equity[45] - Metropolitan Lifestyle (BVI) Limited owns 836,000,000 shares, which is approximately 130.32% of the company's equity, due to the issuance of convertible bonds[47] - As of June 30, 2025, the total issued shares of the company are 641,498,000[47] Risk Management - The risk control committee is established to manage potential risks and ensure compliance with regulations[36] - The board emphasizes the importance of monitoring risk management and internal control systems continuously[36] Corporate Governance - The company has established an audit committee to comply with the corporate governance code and has reviewed the financial reporting procedures[64] - The company has adopted a standard code for securities trading for its directors, ensuring compliance throughout the reporting period[55]

Financial Performance - The company's operating revenue for the first half of the year reached CNY 1,683,873,882.60, a 1.41% increase compared to CNY 1,660,506,740.32 in the same period last year[17]. - Total profit for the reporting period was CNY 496,328,137.26, reflecting a 26.92% increase from CNY 391,058,983.14 year-on-year[17]. - Net profit attributable to shareholders was CNY 377,232,320.56, up 24.49% from CNY 303,026,018.30 in the previous year[17]. - The company reported a net cash flow from operating activities of CNY 632,244,063.03, which is a 16.36% increase compared to CNY 543,371,427.14 in the same period last year[17]. - Basic earnings per share increased to CNY 0.27, a rise of 22.73% from CNY 0.22 in the previous year[18]. - The gross profit increased by 12.54% to RMB 834,018,884.22, with a gross margin of 49.53%, up from 44.63% in the previous year, attributed to cost reduction and efficiency improvements[56]. - The total comprehensive income for the first half of 2025 was RMB 1,098,785,023.10, a recovery from a loss of RMB 59,018,018.49 in the previous year[170]. Dividend Distribution - The company plans to distribute a cash dividend of RMB 0.1 per share to all shareholders based on the total share capital as of the dividend record date for the first half of 2025[3]. - The company has not proposed any capital reserve conversion into share capital or bonus shares in this profit distribution plan[3]. - The profit distribution plan has been approved by the board and will be submitted to the shareholders' meeting for approval, with the expected distribution date before November 18, 2025[94]. - The company plans to distribute a cash dividend of RMB 418 million in 2024, accounting for 71.45% of the net profit attributable to the parent company for that year[87]. Compliance and Governance - The financial report for the first half of 2025 has been prepared in accordance with Chinese accounting standards and is unaudited[5]. - The report complies with all relevant disclosure requirements set by the Shanghai Stock Exchange and Hong Kong Stock Exchange[5]. - The board of directors has ensured the authenticity, accuracy, and completeness of the half-year report, with no significant omissions or misleading statements[6]. - The company has maintained compliance with corporate governance codes and is currently seeking a suitable candidate to assume the role of chairman[99]. Risk Management - The company has outlined various risks in the report, which can be found in the management discussion and analysis section[4]. - The company emphasizes that forward-looking statements do not constitute a commitment to investors and advises caution regarding investment risks[4]. - The company faces industry policy risks, particularly regarding renewable energy pricing policies, which could adversely affect profitability and cash flow due to changes in subsidy structures[75]. - Public perception of waste incineration may pose risks, leading to increased project costs and extended construction timelines due to stricter environmental assessments[81]. Operational Efficiency - The company operates 37 projects in the waste-to-energy sector, with a waste processing capacity of 40,300 tons per day and an installed capacity of 857 MW[23]. - The company has expanded its operational efficiency by enhancing waste processing and sludge treatment, resulting in a stable increase in waste intake across various regions[34]. - The company is focusing on expanding its overseas waste incineration projects and enhancing its core business in waste-to-energy, aiming for high-quality growth[37]. - The company is committed to enhancing operational efficiency through technological research and facility upgrades to counteract rising environmental compliance costs[78]. Market Presence and Expansion - The company has expanded its market presence across economically developed regions, including the Yangtze River Delta and Pearl River Delta, as well as central and western regions of China[23]. - The company is actively participating in the green electricity market, which includes biomass power generation, providing additional revenue opportunities[28]. - The company is actively participating in the green certificate market, which is expected to provide additional revenue opportunities for waste-to-energy projects[36]. - The company has a broad market presence, covering over 20 provinces and municipalities, with a focus on economically developed regions, enhancing its operational resilience[40]. Financial Position - As of June 30, 2025, the company's total assets amounted to RMB 21.96 billion, with total equity attributable to shareholders of RMB 8.16 billion[31]. - The net assets attributable to shareholders at the end of the reporting period were CNY 8,159,621,690.99, a 1.33% increase from CNY 8,052,817,092.46 at the end of the previous year[17]. - The company's cash and cash equivalents at the end of the period amounted to CNY 916,843,296.52, a 5.65% increase from CNY 867,810,323.28 at the end of the previous year[50]. - The company's long-term borrowings rose by 2.48% to CNY 7,715,139,066.27, reflecting adjustments in the debt structure[51]. Employee and Management - The company has a total of 3,319 employees as of June 30, 2025[139]. - The company has undergone changes in its management team, with the appointment of a new general manager and adjustments in board membership[89]. - The company maintains a competitive compensation system linked to performance, with adjustments based on operational conditions and industry standards[139]. - The company emphasizes the importance of employee training and development as a key strategy for achieving operational goals and enhancing performance[140]. Investment and Financing - The company raised a total of RMB 236,000,000 through convertible bond issuance, with RMB 234,476,640 utilized as of the reporting period[114]. - The company has not made any significant equity investments during the reporting period, with the previous year's investment amounting to RMB 15,000,000[69]. - The company has not purchased, sold, or redeemed any listed securities during the reporting period[124]. - The company expects to meet its redemption obligations under the convertible bonds, indicating a stable financial outlook[157].

公司資料 董事會成員 公司秘書 温劍瑩 註冊地址 香港 夏慤道16號 遠東金融中心 46樓 主要往來銀行 中國光大銀行股份有限公司 中國建設銀行股份有限公司 中國農業銀行股份有限公司 中國工商銀行（亞洲）有限公司 平安銀行股份有限公司 中國銀行（香港）有限公司 上海浦東發展銀行股份有限公司香港分行 股票登記及過戶處 卓佳證券登記有限公司 香港夏慤道16號 遠東金融中心17樓 核數師 畢馬威會計師事務所 執業會計師 根據會計及財務匯報局條例註冊的 公眾利益實體核數師 網址 www.everbright.com 投資者關係聯絡 ir@everbright.com 股份代號 165 1 于法昌（主席）# 林 春（總裁） 潘劍云 安雪松 尹岩武 秦洪元# 林志軍* 羅卓堅* 黃俊碩* 楊許丹青* # 非執行董事 * 獨立非執行董事 中國光大控股有限公司 2025中期報告 中期業績 中國光大控股有限公司（「本公司」或「光大控股」）董事會（「董事會」或「董事」）宣佈本公司 及其附屬公司（統稱「本集團」）截至二零二五年六月三十日止六個月未經審核的業績。此中 期財務報表是未經審核的，但畢馬威會計師事務所（本公司核數師）已按照 ...

中期報告 2025 Interim Report 2025 香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM已定位為相比起在聯交所上市的其他公司可能帶有較高投資風險的中小型公司提供一個上市的市場。有意投資 者應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投資決定。 簡明綜合全面收益表 截至2025年6月30日止六個月 未經審核中期業績 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣的證券承受較大的市場波動風險，同時 無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所對本報告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表 示概不就因本報告全部或任何部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 本報告乃根據聯交所GEM證券上市規則（「GEM上市規則」）的規定而提供有關福田股份有限公司（「本公司」，連同其 附屬公司，統稱「本集團」）的資料，本公司董事（「董事」）願就此共同及個別承擔全部責任。董事在作出一切合理查詢 後確認，就彼等所深知及確信，本報告所載資料在所有重大方面均屬準確及完整，並無誤導或欺詐成分；及 ...

Management Discussion and Analysis [Business Review](index=3&type=section&id=BUSINESS%20REVIEW) The company achieved strategic growth in its core advertising business in Mainland China, while non-core businesses stagnated and an associate investment was sold to boost working capital - Hong Kong's economy is gradually recovering, but global uncertainties, interest rate volatility, and geopolitical tensions lead to moderate growth, with shifting consumption patterns suppressing consumer sectors like retail and F&B[5](index=5&type=chunk) - The company expanded advertising services to Mainland China starting in 2024, utilizing local channels like Douyin to offer integrated advertising solutions and partnering with Kingkey Group for mall promotion activities[6](index=6&type=chunk)[9](index=9&type=chunk) 2025 H1 vs 2024 H1 Advertising Business Revenue | Market | 2025 H1 Revenue (HKD) | 2024 H1 Revenue (HKD) | Change | | :--- | :--- | :--- | :--- | | Mainland China | Approximately 12.6 million | - | First contribution | | Hong Kong | Approximately 9.2 million | Approximately 13.8 million | Decreased | - The decline in Hong Kong market revenue was primarily due to market uncertainties and management's strategic reallocation of resources towards Mainland China market growth[7](index=7&type=chunk)[9](index=9&type=chunk) - Other business segments, including healthcare products, e-commerce, and IP development and design services, were largely stagnant in the first half of 2025, recording zero revenue, mainly due to historical issues stemming from the departure of a former executive director[11](index=11&type=chunk)[14](index=14&type=chunk) - The company successfully disposed of an investment in an associate in May 2025, with proceeds enhancing working capital and providing financial flexibility for ongoing operations and growth initiatives[11](index=11&type=chunk)[14](index=14&type=chunk) [Prospects](index=4&type=section&id=PROSPECT) The company maintains cautious optimism for the second half of 2025 and beyond, continuing to expand its Mainland China advertising market presence and exploring value-added services in Hong Kong to sustain revenue - The company will continue to expand its Mainland China advertising market, benefiting from national policies like the "14th Five-Year Plan" and digital economy development plans, anticipating sustained growth in the digital advertising industry[16](index=16&type=chunk)[19](index=19&type=chunk) - The company's advertising capabilities on Douyin and its partnership with Kingkey Group for events in high-traffic shopping malls position it to capitalize on rising consumption and experiential marketing trends in Mainland China[16](index=16&type=chunk)[19](index=19&type=chunk) - The company plans to launch workshops in China in July 2025, aiming to improve cost-effectiveness and quality control through vertical integration of event-related material production, while strengthening its project management team[17](index=17&type=chunk)[19](index=19&type=chunk) - The Hong Kong market remains challenging, and the company will leverage brands like Recruit Magazine and Like Magazine to explore value-added services, optimizing content and delivery platforms to adapt to market demands and maintain stable revenue[18](index=18&type=chunk)[20](index=20&type=chunk) - Non-core business segments remain inactive, but the company will selectively consider revitalization opportunities in line with strategic priorities and operational readiness[22](index=22&type=chunk)[27](index=27&type=chunk) [Financial Review](index=6&type=section&id=FINANCIAL%20REVIEW) In the first half of 2025, the Group's total revenue significantly increased by 57.6% to HKD 21.8 million, primarily driven by the expansion of its Mainland China advertising business, yet gross profit margin substantially declined due to competitive pricing strategies in the Chinese market, while administrative expenses decreased after excluding one-off items, but loss before income tax widened due to share of loss from an associate 2025 H1 vs 2024 H1 Revenue Comparison | Indicator | 2025 H1 (HKD) | 2024 H1 (HKD) | YoY Growth Rate | | :--- | :--- | :--- | :--- | | Total Revenue | Approximately 21.8 million | Approximately 13.8 million | Approximately 57.6% | | Advertising Services Revenue | Approximately 21.8 million | Approximately 13.8 million | Approximately 57.6% | | Healthcare Product Sales | Zero | Zero | - | | E-commerce | Zero | Zero | - | | IP Development and Design Services | Zero | Zero | - | - Revenue growth was primarily attributable to the Group's expansion of its advertising business into the Mainland China market[25](index=25&type=chunk)[28](index=28&type=chunk) - The healthcare products, e-commerce, and IP development and design services segments all recorded zero revenue in the first half of 2025, mainly due to documentation issues and business strategy adjustments following the departure of a former executive director[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) 2025 H1 vs 2024 H1 Gross Profit and Gross Profit Margin Comparison | Indicator | 2025 H1 (HKD) | 2024 H1 (HKD) | Change | | :--- | :--- | :--- | :--- | | Gross Profit | Approximately 6.3 million | Approximately 10.9 million | Decreased by approximately 41.7% | | Gross Profit Margin | Approximately 29.1% | Approximately 78.7% | Decreased by approximately 49.6 percentage points | - The decrease in gross profit and gross profit margin was mainly due to the Group's adoption of a lower-margin competitive pricing strategy during the initial expansion into the Mainland China market, leading to a higher proportion of direct operating costs to revenue[38](index=38&type=chunk)[39](index=39&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) 2025 H1 vs 2024 H1 Other Financial Indicators Comparison | Indicator | 2025 H1 (HKD) | 2024 H1 (HKD) | Change | | :--- | :--- | :--- | :--- | | Other Income | Approximately 891,000 | Approximately 645,000 | Increased, mainly due to higher bank interest income | | Selling and Distribution Costs | Approximately 4.4 million | Approximately 5.1 million | Slightly decreased by approximately 12.7% | | Administrative Expenses (excluding one-off items) | Approximately 6.5 million | Approximately 8.8 million | Decreased by 25.7% | | Finance Costs | Approximately 61,000 | Approximately 57,000 | Increased, mainly due to higher lease liabilities | | Loss Before Income Tax | Approximately 10.8 million | Approximately 7.5 million | Loss increased by approximately 45.0% | - Administrative expenses included one-off non-recurring items such as legal fees, forensic investigation, and internal control review fees; excluding these items, actual administrative expenses decreased by **25.7%** year-on-year[46](index=46&type=chunk)[50](index=50&type=chunk) [Liquidity and Financial Resources](index=9&type=section&id=LIQUIDITY%20AND%20FINANCIAL%20RESOURCES) As of June 30, 2025, the Group's net current assets and cash and bank balances both increased, and the current ratio improved, though net assets decreased; the Group had no bank loans or other borrowings, maintaining a zero gearing ratio, and adopted centralized financing with conservative foreign exchange and interest rate risk monitoring strategies 2025 H1 vs 2024 H2 Liquidity Indicators Comparison | Indicator | June 30, 2025 (HKD) | December 31, 2024 (HKD) | Change | | :--- | :--- | :--- | :--- | | Net Current Assets | Approximately 34.3 million | Approximately 30.7 million | Increased | | Current Ratio | Approximately 3.8 | Approximately 3.5 | Improved | | Net Assets | Approximately 41.5 million | Approximately 52.3 million | Decreased | | Total Cash and Bank Balances | Approximately 41 million | Approximately 37 million | Increased | - As of June 30, 2025, and December 31, 2024, the Group had no bank loans or other borrowings, resulting in a **0%** gearing ratio[55](index=55&type=chunk)[60](index=60&type=chunk) - The Group adopts a centralized financing and treasury policy, monitoring foreign exchange and interest rate risks with a prudent approach, with most transactions conducted in HKD, making currency risk not significant[56](index=56&type=chunk)[57](index=57&type=chunk)[60](index=60&type=chunk) [Capital Structure](index=10&type=section&id=CAPITAL%20STRUCTURE) As of June 30, 2025, the total number of issued shares remained unchanged at 455,534,000 shares, with a par value of HKD 0.2 per share 2025 H1 vs 2024 H2 Issued Shares | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Number of Issued Shares | 455,534,000 shares | 455,534,000 shares | | Par Value per Share | HK$0.2 | HK$0.2 | [Capital Commitments and Contingent Liabilities](index=10&type=section&id=CAPITAL%20COMMITMENTS%20AND%20CONTINGENT%20LIABILITY) As of June 30, 2025, the Group had no capital commitments or significant contingent liabilities - As of June 30, 2025, the Group had no capital commitments (December 31, 2024: nil)[59](index=59&type=chunk)[62](index=62&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[59](index=59&type=chunk)[62](index=62&type=chunk) [Material Acquisition and Disposal of Subsidiaries](index

Corporate Information [Directors and Senior Management](index=3&type=section&id=Corporate%20Information_Directors%20and%20Officers) This section details the company's executive, non-executive, and independent non-executive directors, along with key corporate officers and legal advisors - Executive Directors include **Yum Chak Ming, Matthew** (Executive Chairman) and **Yum Christopher Carson**[4](index=4&type=chunk) - Independent Non-Executive Directors include **Luk Koon Hoo, Lee Danny Lap Tan**, and **Chuen Yan, Paul**[4](index=4&type=chunk) - The Company Secretary is **Shek Kwok Man**, and the legal counsel is **Fangda Partners**[4](index=4&type=chunk) [Key Banks and Auditors](index=3&type=section&id=Corporate%20Information_Key%20Stakeholders) This section provides information on the company's principal bankers, auditors, and share registrar - Principal bankers include **The Hongkong and Shanghai Banking Corporation Limited, Hang Seng Bank Limited, MUFG Bank, Ltd.**, and **Citibank**[5](index=5&type=chunk)[6](index=6&type=chunk) - The auditor is **KPMG**[6](index=6&type=chunk) - The share registrar is **Tricor Investor Services Limited**[6](index=6&type=chunk) Unaudited Financial Report [Consolidated Income Statement](index=3&type=section&id=Consolidated%20Income%20Statement) For H1 2025, revenue declined **14.6%**, operating loss expanded, and net loss increased to **HK$52.92 million**, with basic loss per share at **HK$0.054** Consolidated Income Statement Key Financial Data | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 935,402 | 1,095,702 | -14.6% | | Cost of sales | (830,352) | (942,638) | -11.9% | | Gross profit | 105,050 | 153,064 | -31.4% | | Operating loss | (48,878) | (8,500) | 475.0% | | Loss for the period | (52,920) | (7,622) | 594.3% | | Loss attributable to equity holders of the Company | (48,779) | (4,472) | 990.7% | | Basic loss per share (HK Cents) | (5.4) | (0.5) | 980.0% | [Consolidated Statement of Comprehensive Income](index=4&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For H1 2025, total comprehensive loss narrowed to **HK$41.192 million** from **HK$56.317 million** in the prior year, primarily due to positive exchange differences Consolidated Statement of Comprehensive Income Key Data | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (52,920) | (7,622) | 594.3% | | Other comprehensive income (net of tax) | 11,728 | (48,695) | 124.1% | | - Fair value change of equity investments | 1,609 | (695) | 331.5% | | - Exchange differences | 10,119 | (47,650) | 121.2% | | Total comprehensive income | (41,192) | (56,317) | -26.9% | | Total comprehensive income attributable to equity holders of the Company | (38,089) | (49,028) | -22.3% | [Consolidated Statement of Financial Position](index=5&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets less current liabilities were **HK$2.893 billion**, and net assets were **HK$2.835 billion**, both decreasing from year-end 2024, mainly due to reduced cash and cash equivalents Consolidated Statement of Financial Position Key Data | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 1,515,869 | 1,553,555 | -2.55% | | Current assets | 1,777,401 | 1,882,022 | -5.56% | | - Inventories | 373,871 | 342,431 | 9.18% | | - Trade and other receivables | 642,455 | 564,108 | 13.89% | | - Bank and cash balances | 431,466 | 717,286 | -39.86% | | Current liabilities | 400,099 | 408,048 | -1.95% | | Non-current liabilities | 57,632 | 68,917 | -16.37% | | Net assets | 2,835,539 | 2,958,612 | -4.16% | | Share capital | 1,652,854 | 1,652,854 | 0.00% | | Reserves | 1,069,423 | 1,189,393 | -10.09% | | Total equity | 2,835,539 | 2,958,612 | -4.16% | [Consolidated Statement of Changes in Equity](index=7&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, total equity was **HK$2.835 billion**, a decrease from **HK$2.958 billion** at the beginning of the year, mainly due to the loss for the period and approved dividend payments Consolidated Statement of Changes in Equity Key Data | Metric | January 1, 2025 (HK$ Thousand) | June 30, 2025 (HK$ Thousand) | Change (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Share capital | 1,652,854 | 1,652,854 | 0 | | Reserves | 1,189,393 | 1,069,423 | (119,970) | | Total equity attributable to equity holders of the Company | 2,842,247 | 2,722,277 | (119,970) | | Non-controlling interests | 116,365 | 113,262 | (3,103) | | Total equity | 2,958,612 | 2,835,539 | (123,073) | | Loss for the period | - | (52,920) | (52,920) | | Other comprehensive income (net of tax) | - | 11,728 | 11,728 | | Approved dividends | - | (81,708) | (81,708) | [Condensed Consolidated Statement of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For H1 2025, net cash and cash equivalents decreased by **HK$333.957 million**, primarily due to net cash outflows from operating, investing, and financing activities Condensed Consolidated Statement of Cash Flows Key Data | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Change (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Net cash outflow from operating activities | (109,157) | (142,038) | 32,881 | | Net cash outflow/(inflow) from investing activities | (116,455) | 58,416 | (174,871) | | Net cash outflow from financing activities | (108,345) | (126,403) | 18,058 | | Net decrease in cash and cash equivalents | (333,957) | (210,025) | (123,932) | | Cash and cash equivalents at end of period | 387,606 | 587,133 | (199,527) | [Notes to the Unaudited Interim Financial Report](index=10&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) This section provides detailed notes to the unaudited interim financial report, covering general information, accounting policies, segment information, specific financial item breakdowns and changes, restricted share award scheme, and fair value estimates [1. General Information](index=10&type=section&id=1.%20General%20Information) The company is a limited company registered in Hong Kong, primarily engaged in book and packaging printing, consumer product packaging, corrugated cartons, and paper trading businesses - The Company is incorporated in Hong Kong and listed on the Main Board of The Stock Exchange of Hong Kong Limited[20](index=20&type=chunk) - The Group's principal activities include book and packaging printing, consumer product packaging, corrugated cartons, and paper trading[23](index=23&type=chunk) [2. Basis of Preparation](index=11&type=section&id=2.%20Basis%20of%20Preparation) The interim financial report is unaudited, prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, using the historical cost convention with certain financial assets measured at fair value - This interim financial report is unaudited and prepared in accordance with HKAS 34 and the applicable disclosure requirements of Appendix D2 to the Listing Rules[22](index=22&type=chunk) - The financial statements are prepared under the historical cost convention, except for certain financial assets measured at fair value[22](index=22&type=chunk) [3. Accounting Policies](index=12&type=section&id=3.%20Accounting%20Policies) The interim financial report applies the same accounting policies as the 2024 annual financial statements, with no new standards or interpretations significantly impacting the Group's results or financial position - The interim financial report adopts the same accounting policies as those used in the 2024 annual financial statements, except for accounting policy changes expected to be reflected in the 2025 annual financial statements[25](index=25&type=chunk) - Several HKFRS amendments issued by the HKICPA had no significant impact on the Group's results and financial position for the current or prior periods[26](index=26&type=chunk) [4. Revenue and Segment Information](index=13&type=section&id=4.%20Revenue%20and%20Segment%20Information) The Group's business is divided into four segments: book and packaging printing, consumer product packaging, corrugated cartons, and paper trading, with revenue and results disclosed by business segment and customer geographical location - The Group is organized into four business segments: book and packaging printing, consumer product packaging, corrugated cartons, and paper trading[32](index=32&type=chunk) H1 2025 Revenue and Results by Business Segment (HK$ Thousand) | Segment | Sales to External Customers | Inter-segment Sales | Total | Segment Results | | :--- | :--- | :--- | :--- | :--- | | Book and Packaging Printing | 647,141 | 1,563 | 648,704 | (22,144) | | Consumer Product Packaging | 144,523 | 177 | 144,700 | (17,619) | | Corrugated Cartons | 91,818 | 23,597 | 115,415 | (6,053) | | Paper Trading | 51,920 | 138,882 | 190,802 | (3,949) | | Elimination | - | (164,219) | (164,219) | (611) | | **Total** | **935,402** | **-** | **935,402** | **(50,376)** | H1 2025 Revenue by Customer Geographical Location (HK$ Thousand) | Geographical Location | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Hong Kong | 119,900 | 147,385 | | Mainland China | 253,871 | 263,662 | | United States | 328,239 | 428,960 | | United Kingdom | 75,905 | 73,931 | | Other Countries | 157,487 | 181,764 | | **Total** | **935,402** | **1,095,702** | [5. Revenue, Other Income and Other Net Gains](index=17&type=section&id=5.%20Revenue%2C%20Other%20Revenue%20and%20Other%20Net%20Gain) This section details the Group's revenue, other income, and other net gains, with sales of goods as the primary revenue source and other net gains mainly from net foreign exchange gains and fair value gains on structured bank deposits Revenue, Other Income and Other Net Gains Breakdown (HK$ Thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Revenue** | | | | Sales of goods | 935,402 | 1,095,702 | | **Other income** | | | | Interest income | 4,588 | 8,342 | | Dividend income | 402 | 346 | | Government grants | 6,757 | 6,640 | | Sales of scraps | 2,911 | 1,557 | | Miscellaneous income | 5,000 | 4,223 | | **Other net gains** | | | | Net foreign exchange gains/(losses) | 9,612 | (1,170) | | Fair value gains on structured bank deposits | 11,783 | 8,753 | | Net loss on disposal of property, plant and equipment | (5,447) | (921) | [6. Expenses by Nature](index=18&type=section&id=6.%20Expenses%20by%20Nature) This section analyzes various expenses within cost of sales, administrative, and selling expenses by nature, including depreciation, amortization of intangible assets, and employee benefit expenses Expenses by Nature (HK$ Thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Depreciation | 61,985 | 63,434 | | Amortization of intangible assets | 816 | 627 | | Employee benefit expenses (including directors' emoluments) | 279,431 | 295,739 | | Net reversal of write-down of inventories | (4,591) | (584) | | Net provision for loss on trade and other receivables | 566 | 256 | [7. Finance Costs](index=18&type=section&id=7.%20Finance%20Costs) For H1 2025, the company's finance costs were **HK$1.617 million**, a decrease from the prior year, primarily comprising interest on bank borrowings and lease liabilities Finance Costs Breakdown (HK$ Thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest on bank borrowings | 724 | 1,621 | | Interest on lease liabilities | 893 | 899 | | **Total** | **1,617** | **2,520** | [8. Income Tax](index=19&type=section&id=8.%20Income%20Tax) For H1 2025, the company's income tax expense was **HK$2.77 million**, compared to an income tax credit of **HK$3.26 million** in the prior year, mainly due to changes in deferred tax Income Tax Breakdown (HK$ Thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Current tax | 913 | 1,164 | | - Hong Kong Profits Tax | 172 | 904 | | - Mainland China Income Tax | (595) | (639) | | - Vietnam Income Tax | 1,336 | 899 | | Deferred tax | 1,857 | (4,424) | | **Total Income Tax** | **2,770** | **(3,260)** | - Hong Kong Profits Tax is calculated at **16.5%** of the estimated assessable profits[52](index=52&type=chunk) - Hung Hing Printing (China) Co., Ltd., as a High and New Technology Enterprise, is subject to a preferential PRC Enterprise Income Tax rate of **15%** for 2024 and 2025[52](index=52&type=chunk) - Vietnam Enterprise Income Tax is calculated at **17%** of estimated assessable profits, with certain Vietnamese subsidiaries enjoying a tax exemption for the first two years and a **50%** reduction for the subsequent four years[53](index=53&type=chunk) [9. Loss Per Share](index=20&type=section&id=9.%20Loss%20Per%20Share) For H1 2025, the company's basic loss per share was **HK$0.054**, a significant increase from **HK$0.005** in the prior year, primarily due to a substantial rise in loss attributable to equity holders Loss Per Share Calculation (HK$ Thousand/Thousand Shares) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss attributable to equity holders of the Company | (48,779) | (4,472) | | Weighted average number of ordinary shares in issue | 907,865 | 907,865 | | Weighted average number of own shares held under Restricted Share Award Scheme | (573) | (3,274) | | Weighted average number of ordinary shares for basic loss per share calculation | 907,292 | 904,591 | | **Basic loss per share (HK Cents)** | **(5.4)** | **(0.5)** | | **Diluted loss per share (HK Cents)** | **(5.4)** | **(0.5)** | - Diluted loss per share is the same as basic loss per share as the ordinary shares repurchased for the share award scheme have an anti-dilutive effect on loss per share[58](index=58&type=chunk) [10. Dividends](index=21&type=section&id=10.%20Dividend) For H1 2025, the company declared an interim dividend of **HK$0.03** per share, lower than **HK$0.04** per share in the prior year Interim Dividends (HK$ Thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interim dividend per ordinary share (HK Cents) | 3 | 4 | | **Total** | **27,236** | **36,315** | [11. Property, Plant and Equipment](index=21&type=section&id=11.%20Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, the net book value of the company's property, plant and equipment was **HK$1.370 billion**, a decrease from **HK$1.416 billion** at year-end 2024, mainly due to depreciation and disposals Property, Plant and Equipment Movement (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net book value at beginning of period | 1,415,823 | 1,482,133 | | Additions | 11,698 | 69,335 | | Transfer from prepayments for acquisition of non-current assets | 22,150 | 28,540 | | Disposals/write-offs | (21,391) | (15,348) | | Depreciation | (61,985) | (129,761) | | Exchange differences | 4,087 | (19,076) | | **Net book value at end of period** | **1,370,382** | **1,415,823** | [12. Trade and Other Receivables](index=22&type=section&id=12.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, the company's net trade receivables were **HK$513 million**, an increase from **HK$450 million** at year-end 2024, with the highest proportion in the 1-30 day aging category Trade and Other Receivables (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 533,865 | 474,546 | | Less: Loss allowance | (20,857) | (24,872) | | **Net trade receivables** | **513,008** | **449,674** | | Trade receivables from related parties | 313 | 9 | | Bills receivable | 6,781 | 974 | | Prepayments, deposits and other receivables | 122,353 | 113,451 | | **Total** | **642,455** | **564,108** | Trade Receivables Aging Analysis (HK$ Thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 1-30 days | 238,921 | 250,557 | | 31-60 days | 112,312 | 95,160 | | 61-90 days | 83,528 | 56,138 | | Over 90 days | 78,560 | 47,828 | | **Total** | **513,321** | **449,683** | - Trade receivables are generally due within **30 to 90 days** from the invoice date[66](index=66&type=chunk) [13. Cash and Cash Equivalents](index=23&type=section&id=13.%20Cash%20and%20Cash%20Equivalents) As of June 30, 2025, the company's bank and cash balances were **HK$431.466 million**, a significant decrease from **HK$717.286 million** at year-end 2024, after deducting time deposits with original maturities over three months Cash and Cash Equivalents (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bank and cash balances | 431,466 | 717,286 | | Less: Time deposits with original maturity over three months | (43,860) | - | | **Cash and cash equivalents in condensed consolidated statement of cash flows** | **387,606** | **717,286** | [14. Trade and Other Payables](index=23&type=section&id=14.%20Trade%20and%20Other%20Payables) As of June 30, 2025, the company's total trade and other payables were **HK$335.801 million**, an increase from **HK$323.573 million** at year-end 2024, with growth in both trade payables and bills payable Trade and Other Payables (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 142,616 | 130,262 | | Bills payable | 10,316 | 6,799 | | Current portion of deferred income | 4,798 | 5,956 | | Other payables and accrued liabilities | 173,171 | 175,138 | | Amounts due to related parties | 4,900 | 5,418 | | **Total** | **335,801** | **323,573** | Trade Payables Aging Analysis (HK$ Thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 1-30 days | 102,309 | 102,772 | | 31-60 days | 23,696 | 19,827 | | 61-90 days | 5,674 | 2,466 | | Over 90 days | 10,937 | 5,197 | | **Total** | **142,616** | **130,262** | [15. Bank Borrowings – Unsecured](index=24&type=section&id=15.%20Bank%20Borrowings%20%E2%80%93%20Unsecured) As of June 30, 2025, the company's unsecured bank borrowings were **HK$45.628 million**, a decrease from **HK$61.946 million** at year-end 2024, and are classified as current liabilities under accounting standards Bank Borrowings – Unsecured (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Term loan due 2026 | 45,628 | 61,946 | - The non-current portion of the term loan is classified as a current liability in accordance with HK Interpretation 5 issued by the HKICPA[76](index=76&type=chunk) - All bank loans are guaranteed by the Company[77](index=77&type=chunk) [16. Share Capital](index=25&type=section&id=16.%20Share%20Capital) As of June 30, 2025, the company's issued and fully paid share capital was **HK$1.653 billion**, including **289,618 shares** held in trust by the trustee under the Restricted Share Award Scheme Share Capital Breakdown (HK$ Thousand) | Item | June 30, 2025 (Number of Shares) | June 30, 2025 (Share Capital Amount) | December 31, 2024 (Number of Shares) | December 31, 2024 (Share Capital Amount) | | :--- | :--- | :--- | :--- | :--- | | Issued and fully paid ordinary shares | 907,864,974 | 1,652,854 | 907,864,974 | 1,652,854 | - As of June 30, 2025, the issued and fully paid shares of the Company included **289,618 shares** (December 31, 2024: **758,172 shares**) held in trust by the trustee under the Restricted Share Award Scheme[81](index=81&type=chunk) - During the period ended June 30, 2025, the trustee of the Restricted Share Award Scheme purchased **288,000 shares** of the Company on the Stock Exchange[81](index=81&type=chunk) [17. Material Related Party Transactions](index=25&type=section&id=17.%20Material%20Related%20Party%20Transactions) This section discloses material transactions between the Group and related parties during the reporting period, including sales of raw materials or finished goods to major shareholders and associates, and key management personnel compensation Sales of Raw Materials or Finished Goods to Related Parties (HK$ Thousand) | Related Party | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Major shareholders | 619 | 688 | | Associates | 687 | 707 | Key Management Personnel Compensation (HK$ Thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Short-term employee benefits | 12,464 | 12,417 | | Share-based payments | 125 | 557 | | Post-employment benefits | 239 | 441 | | **Total** | **12,828** | **13,415** | [18. Capital Commitments](index=26&type=section&id=18.%20Capital%20Commitments) As of the end of the reporting period, the Group had capital commitments of **HK$42.63 million** that were contracted but not provided for Capital Commitments (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted but not provided for | 42,630 | 46,682 | [19. Restricted Share Award Scheme](index=26&type=section&id=19.%20Restricted%20Share%20Award%20Scheme) The Restricted Share Award Scheme aims to attract, incentivize, and retain employees, with **289,446 shares** granted and **756,554 shares** vested in H1 2025 - The scheme was adopted on **December 21, 2009**, to attract, incentivize, and retain Group employees, and will expire on **June 30, 2027**[88](index=88&type=chunk)[89](index=89&type=chunk) - During the period ended June 30, 2025, a total of **756,554 shares** vested, with an average fair value of **HK$1,026,000**[90](index=90&type=chunk) Restricted Share Award Scheme Movement (Number of Shares) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Balance at beginning of period | 756,554 | 4,482,986 | | Granted | 289,446 | - | | Vested | (756,554) | (3,726,432) | | Balance at end of period | 289,446 | 756,554 | - As of June 30, 2025, the trustee held **289,618 shares** for the scheme, having purchased **288,000 shares** during the period for a total consideration of **HK$298,000**[95](index=95&type=chunk) [20. Fair Value Estimation](index=28&type=section&id=20.%20Fair%20Value%20Estimation) This section analyzes financial instruments measured at fair value, including structured bank deposits, unlisted and listed equity securities, categorized into three levels based on valuation methods Assets Measured at Fair Value (HK$ Thousand) | Item | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | **Financial Investments** | | | | | | - Structured bank deposits | - | 328,998 | - | 328,998 | | - Unlisted equity securities | - | - | 40,499 | 40,499 | | - Listed equity securities | 9,380 | - | - | 9,380 | | **Total** | **9,380** | **328,998** | **40,499** | **378,877** | - The fair value of structured bank deposits is determined by discounting expected future cash flows using market interest rates at the reporting date[100](index=100&type=chunk) - The fair value of unlisted equity instruments is determined using valuation techniques based on market conditions at the reporting date[100](index=100&type=chunk) Management Discussion and Analysis [Results and Dividends](index=30&type=section&id=Results%20and%20dividends) In H1 2025, the Group faced a challenging global economic environment, with declining demand due to trade protectionism and policy uncertainties, leading to a loss attributable to equity holders of approximately **HK$49 million** and a declared interim dividend of **HK$0.03** per share - The global printing and packaging industry, particularly export-oriented businesses, faced significant challenges and declining demand in H1 2025[104](index=104&type=chunk) - US tariffs and supply chain disruptions led to reduced business confidence, with consumers sensitive to rising import prices[105](index=105&type=chunk)[106](index=106&type=chunk) Loss Attributable to Equity Holders (HK$ Million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss attributable to equity holders | (49) | (4) | - The Group maintained a robust deposit and cash position of approximately **HK$760 million** and declared an interim dividend of **HK$0.03** per share (2024: **HK$0.04** per share)[108](index=108&type=chunk) [Lay Groundwork for Future Development](index=31&type=section&id=Lay%20groundwork%20for%20future%20development) The Group is actively preparing for future growth by constructing a second factory in Vietnam for geographical diversification, integrating Zhongshan operations for efficiency, transforming operations through system standardization and AI innovation, advancing EUDR compliance, and expanding diversified businesses like education and self-service printing - Construction of the second Vietnam factory (Thai Ha site) is progressing well, with the warehouse already operational and new businesses, including local customers, being expanded[111](index=111&type=chunk) - The Zhongshan base completed two business integrations: the merger of Zhongshan Hung Hing and Nanzeng teams for enhanced efficiency, and the relocation of Jun Hing's Shenzhen paper products warehouse to Zhongshan for synergy[112](index=112&type=chunk) - Business operations are being transformed through system standardization and AI-driven innovation, including the introduction of ERP5.0 and the formation of an AI team to streamline operations[113](index=113&type=chunk) - Significant progress has been made in EU Deforestation Regulation (EUDR) compliance, with full traceability of paper raw materials expected by July 2025 and compliance agreements signed with all core suppliers[114](index=114&type=chunk) - STEM PLUS is expanding its influence in education through relevant activities and plans to extend into Asian markets beyond Hong Kong[117](index=117&type=chunk)[151](index=151&type=chunk) - Active Minds Limited successfully transitioned from manual to RFID technology in logistics management, enhancing operational efficiency and inventory control[118](index=118&type=chunk) - Yum Me Print has established **50 self-service printing points** in Hong Kong and formed a strategic partnership with a shared power bank service provider in Mainland China[119](index=119&type=chunk)[120](index=120&type=chunk) [Business Performance](index=33&type=section&id=Business%20performance) The Group's business segments showed mixed performance in a challenging market: Book and Packaging Printing and Consumer Product Packaging saw revenue declines and losses, though the latter's loss narrowed; Corrugated Cartons revenue grew with reduced losses; and Paper Trading experienced a significant revenue drop - Book and Packaging Printing (BPP) revenue decreased by **15%** from **HK$761.7 million** in H1 2024 to **HK$647.1 million** in H1 2025, recording a **HK$22.1 million** loss (H1 2024: **HK$26.4 million** profit)[122](index=122&type=chunk) - Consumer Product Packaging (CPP) revenue decreased by **4.1%** to **HK$144.5 million** (H1 2024: **HK$150.7 million**), with losses narrowing from **HK$24.2 million** in H1 2024 to **HK$17.6 million** in H1 2025[124](index=124&type=chunk) - Corrugated Cartons (CB) revenue grew by **6.3%** to **HK$91.8 million**, and losses decreased to **HK$6 million** (H1 2024: **HK$8.4 million** loss)[125](index=125&type=chunk) - Paper Trading (PT) revenue significantly decreased by **46.4%** to **HK$51.9 million** (H1 2024: **HK$96.8 million**), primarily due to weak export demand[127](index=127&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The Group maintains a robust cash management strategy, with total cash (including structured deposits) of **HK$760 million** and net cash of **HK$715 million** as of June 30, 2025, while bank borrowings and finance costs decreased, and capital projects continue to support business development - As of June 30, 2025, the Group's total cash (including structured deposits) was approximately **HK$760 million**, with net cash (total cash less bank borrowings) at **HK$715 million**[128](index=128&type=chunk) - The USD/RMB structured deposit portfolio is used to hedge RMB exposure and fund Mainland China working capital needs at preferential exchange rates, with RMB-related structured bank deposits increasing to **HK$329 million** in H1 2025[129](index=129&type=chunk) - Approximately **71%** of total cash (including structured deposits) is held in RMB, with the remainder primarily in USD[130](index=130&type=chunk) - As of June 30, 2025, the Group's total bank borrowings were **HK$46 million**, with the gearing ratio decreasing to **1.6%** (2024: **3.1%**), and total interest costs decreasing by **55%** year-on-year to **HK$0.7 million**[132](index=132&type=chunk) - During the reporting period, the Group spent over **HK$41 million** on capital projects and committed an additional **HK$43 million** for expanding and upgrading existing capacity, including preparations for the new Vietnam factory[134](index=134&type=chunk) [Environmental Sustainability](index=35&type=section&id=Environmental%20Sustainability) The Group continues to strengthen environmental sustainability initiatives, expanding solar infrastructure, significantly reducing carbon emissions, electricity, and water consumption, and maintaining high production waste recycling rates and sustainable procurement practices - Solar projects have expanded to **six sites**, increasing total installed capacity to **9,806kWp** (H1 2024: **6,504kWp**), generating **4,473,720 units** of green electricity and offsetting approximately **1,771 tonnes** of carbon emissions[136](index=136&type=chunk) - Total electricity consumption decreased to **26.81 million units** (H1 2024: **28.25 million units**), and water consumption decreased to **177,859 cubic meters** (H1 2024: **307,352 cubic meters**)[137](index=137&type=chunk) - Production waste recycling rate remained high at **96%**, with over **95%** of paper being forest scheme certified or high recycled content paper[138](index=138&type=chunk)[139](index=139&type=chunk) [Our People](index=36&type=section&id=Our%20People) As of June 30, 2025, the Group's total workforce was **4,918**, a decrease from the prior year, but training investment continued, with an increase in average training hours per trainee Employee and Training Data | Metric | June 30, 2025 | H1 2024 | | :--- | :--- | :--- | | Total employees | 4,918 | 5,600 | | Total training hours | 84,873 | 94,252 | | Number of training participants | 34,131 | - | | Average training hours per trainee | 2.49 | 2.37 | - Training covers key areas such as environmental awareness, business ethics, functional specialized skills, and Diversity, Equity & Inclusion (DE&I)[142](index=142&type=chunk) [Outlook](index=36&type=section&id=Outlook) The Group is optimistic about H2 2025 and future development, continuing to drive strategic initiatives to enhance competitiveness, including business integration, full operation of the Vietnam factory, innovative eco-friendly printing technologies, and active expansion in Mainland China and Asian education markets - The Group remains optimistic about H2 2025 and future development, continuing to drive synergies for operational savings and resource optimization[144](index=144&type=chunk)[145](index=145&type=chunk) - Shenzhen corrugated carton business is integrating with Shunde/Foshan and Zhongshan factories, and the second Vietnam factory is expected to be fully operational by the end of September[145](index=145&type=chunk) - Through the Zhongshan R&D team, the Group secured new product packaging orders from several internationally renowned consumer brands, utilizing more eco-friendly and innovative printing technologies[146](index=146&type=chunk) - The Group holds a positive outlook on global trade and long-term economic growth, anticipating a gradual return of some major customers to China as trade tensions ease[150](index=150&type=chunk) - STEM PLUS plans to expand its business into Asian regions beyond Hong Kong, while Active Minds will prioritize developing its online digital marketplace[151](index=151&type=chunk)[152](index=152&type=chunk) Information Provided in Accordance with the Listing Rules [Interim Dividend](index=38&type=section&id=Interim%20Dividend) The Board has resolved to declare an interim dividend of **HK$0.03** per share, payable on October 17, 2025, to shareholders registered on September 25, 2025 - The Board has resolved to declare an interim dividend of **HK$0.03** per share (2024: **HK$0.04** per share)[156](index=156&type=chunk) - The interim dividend will be payable on **October 17, 2025**, to shareholders whose names appear on the register of members on **September 25, 2025**[156](index=156&type=chunk) [Closure of Register of Members](index=38&type=section&id=Closure%20of%20Register%20of%20Members) The company's register of members will be closed from September 22, 2025, to September 25, 2025, during which no transfers of shares will be registered - The register of members of the Company will be closed from **September 22, 2025**, to **September 25, 2025** (both dates inclusive)[157](index=157&type=chunk) - To qualify for the interim dividend, all transfer forms accompanied by the relevant share certificates must be lodged with the Company's share registrar no later than **4:30 p.m. on September 19, 2025**[157](index=157&type=chunk) [Purchase, Redemption or Sale of Listed Securities of the Company](index=38&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20Listed%20Securities%20of%20the%20Company) During the reporting period, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities, except for the trustee of the Restricted Share Award Scheme purchasing **288,000 shares** - The trustee of the Restricted Share Award Scheme purchased **288,000 shares** of the Company on the Stock Exchange for a total consideration of **HK$298,000** in accordance with the terms of the scheme[158](index=158&type=chunk) - Save as disclosed above, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during the reporting period[158](index=158&type=chunk) [Directors' Interests in Shares and Underlying Shares](index=39&type=section&id=Directors'%20Interests%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, the company's directors held long positions in the company's ordinary shares, with Executive Chairman **Yum Chak Ming, Matthew** holding **6.36%** of the shares Directors' Long Positions in Ordinary Shares of the Company | Director's Name | Directly Beneficially Owned (Number of Shares) | Share Award Scheme (Number of Shares) | Total (Number of Shares) | Percentage of Issued Share Capital (%) | | :--- | :--- | :--- | :--- | :--- | | Yum Chak Ming, Matthew | 57,465,254 | 289,446 | 57,754,700 | 6.36 | | Yum Christopher Carson | 9,398,874 | - | 9,398,874 | 1.04 | | Yum Nicholas Kevin | 1,318,891 | - | 1,318,891 | 0.15 | - Save as disclosed above, as of June 30, 2025, no Director had any interests or short positions in the shares or underlying shares of the Company or any of its associated corporations required to be recorded under Section 352 of the Securities and Futures Ordinance[163](index=163&type=chunk) [Restricted Share Award Scheme](index=40&type=section&id=Restricted%20Share%20Award%20Scheme) This section details the Restricted Share Award Scheme's purpose, duration, participant eligibility, maximum number of shares that can be granted, maximum entitlement per participant, vesting periods, and details of share awards granted and accepted - The scheme aims to recognize employee contributions, attract, incentivize, and retain employees, and will expire on **June 30, 2027**[164](index=164&type=chunk) - Participants in the scheme include any director, full-time or part-time employee, executive, or officer of the Company or any of its subsidiaries[165](index=165&type=chunk) - The maximum number of restricted shares that may be granted under the scheme shall not exceed **18,157,299 shares**, representing **2%** of the Company's total issued share capital[167](index=167&type=chunk) - Restricted share awards granted to any grantee will vest in **three equal tranches**, each representing **1/3** of the total, on the first, second, and third anniversaries following the expiration of the **30-day period** after the grant date[171](index=171&type=chunk) Details of Restricted Share Awards Granted During the Reporting Period | Grant Date | Vesting Period | Unvested Shares at Jan 1, 2025 (Number of Shares) | Shares Granted During Period (Number of Shares) | Fair Value at Grant Date (HK$) | Shares Vested During Period (Number of Shares) | Unvested Shares at June 30, 2025 (Number of Shares) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Yum Chak Ming, Matthew | | | | | | | | 1/4/2022 | 3 years | 756,554 | - | 1.29 | 756,554 | - | | 1/4/2025 | 3 years | - | 289,446 | 1.01 | - | 289,446 | | Five Highest Paid Individuals | | | | | | | | 1/4/2022 | 3 years | 756,554 | - | 1.29 | 756,554 | - | | 1/4/2025 | 3 years | - | 289,446 | 1.01 | - | 289,446 | [Changes in Directors' Information](index=43&type=section&id=Changes%20in%20Directors'%20Information) There have been changes in directors' information since the date of the 2024 Annual Report, including **Mr. Tan Chuen Yan, Paul** ceasing to be an independent non-executive director of Hualian International (Holdings) Company Limited on June 27, 2025 - **Mr. Tan Chuen Yan, Paul** ceased to be an independent non-executive director of Hualian International (Holdings) Company Limited (stock code: 969) with effect from **June 27, 2025**[179](index=179&type=chunk) - The updated biographical details of the Directors are available on the Company's website[179](index=179&type=chunk) [Substantial Shareholders' and Other Persons' Interests in Shares and Underlying Shares](index=43&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, the company's substantial shareholders include **C.H. Yam International Limited, C.H. Yam Holding Limited, Hung Tai Industrial Company Limited**, and **Rengo Co., Ltd.**, all holding **5%** or more of the company's issued shares Substantial Shareholders' Long Positions in Ordinary Shares of the Company | Shareholder Name | Nature of Interest | Number of Ordinary Shares Held | Percentage of Issued Share Capital (%) | | :--- | :--- | :--- | :--- | | C.H. Yam International Limited* | Directly beneficially owned and through controlled corporations | 290,834,379 | 32.03 | | C.H. Yam Holding Limited | Through controlled corporations | 199,263,190 | 21.95 | | Hung Tai Industrial Company Limited | Directly beneficially owned | 199,263,190 | 21.95 | | Rengo Co., Ltd. | Directly beneficially owned | 271,552,000 | 29.91 | - There is a duplication of interests of **199,263,190 shares** among **C.H. Yam International Limited, C.H. Yam Holding Limited**, and **Hung Tai Industrial Company Limited**[184](index=184&type=chunk) [CORPORATE GOVERNANCE](index=44&type=section&id=CORPORATE%20GOVERNANCE) The Board believes the company complied with the Corporate Governance Code during the reporting period, though the roles of Chairman and Chief Executive Officer are performed by the same individual, **Mr. Yum Chak Ming, Matthew**, an arrangement the Board considers to be in the company's best interests - The Company complied with the code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules during the reporting period[186](index=186&type=chunk) - The roles of Chairman and Chief Executive Officer are performed by the Executive Chairman, **Mr. Yum Chak Ming, Matthew**, an arrangement the Board considers appropriate and in the best interests of the Company[186](index=186&type=chunk) [Model Code for Securities Transactions](index=45&type=section&id=Model%20Code%20for%20Securities%20Transactions) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and specific inquiries confirmed that all directors complied with the code during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules as its own code of conduct regarding Directors' dealings in the Company's securities[188](index=188&type=chunk) - Specific inquiries made to the Company's Directors confirmed that they all complied with the required standards set out in the Model Code during the reporting period[188](index=188&type=chunk) [Audit Committee](index=45&type=section&id=Audit%20Committee) The company's Audit Committee has reviewed the interim results for the six months ended June 30, 2025, along with accounting principles and practices, and discussed audit, internal control, and financial reporting matters - The Audit Committee has reviewed the interim results, the accounting principles and practices adopted by the Group, and discussed audit, internal control, and financial reporting matters[189](index=189&type=chunk) - The Audit Committee comprises **three Independent Non-Executive Directors** and **one Non-Executive Director**[189](index=189&type=chunk)

| 公司資料 | 2 | | --- | --- | | 摘要 | 4 | | 管理層討論及分析 | 6 | | 企業管治 | 18 | | 其他資料 | 20 | | 中期財務報告審閱報告 | 56 | | 綜合損益表 | 57 | | 綜合全面收益表 | 58 | | 綜合財務狀況表 | 59 | | 綜合權益變動表 | 61 | | 簡明綜合現金流量表 | 63 | | 未經審計中期財務報告附註 | 65 | | 釋義 | 96 | 01 目錄 公司資料 董事會 執行董事 蔡宗建先生 （主席兼首席執行官） 許元先生 張竑先生 沈潔蕾女士 陳豐先生 非執行董事 池元先生 獨立非執行董事 甘偉民先生 李鳳女士 陳合火先生 （於二零二五年五月二十八日獲委任） 梁漢基博士 （於二零二五年五月二十八日辭任） 董事會委員會 審核委員會 甘偉民先生 （主席） 李鳳女士 陳合火先生 （於二零二五年五月二十八日獲委任） 梁漢基博士 （於二零二五年五月二十八日辭任） 提名委員會 陳合火先生 （主席） （於二零二五年五月二十八日獲委任） 蔡宗建先生 甘偉民先生 李鳳女士 梁漢基博士 （於二零二五年五月二十八日辭任） 薪酬委員 ...

[Corporate Information](index=2&type=section&id=Corporate%20Information) This section outlines the company's governance structure, including directors, committees, and key contact information [Directors and Committees](index=3&type=section&id=Directors%20and%20Committees) This section lists the company's executive and independent non-executive directors, along with the composition of its audit, remuneration, nomination, and strategy and development committees - Executive Directors include Mr. Gui Pinghu (Chairman), Ms. Zhang Yuan (CEO), and Ms. Zhu Feifei[2](index=2&type=chunk)[3](index=3&type=chunk) - Independent Non-Executive Directors include Mr. Yu Bo, Mr. Ye Bangyin, and Mr. Cheng Jianming[2](index=2&type=chunk)[3](index=3&type=chunk) - Mr. Ye Bangyin chairs the Audit Committee, Mr. Cheng Jianming chairs the Remuneration Committee, Mr. Yu Bo chairs the Nomination Committee, and Mr. Gui Pinghu chairs the Strategy and Development Committee[3](index=3&type=chunk)[4](index=4&type=chunk) [Company Contacts and Advisers](index=3&type=section&id=Company%20Contacts%20and%20Advisers) This section provides details on the company's joint company secretaries, registered office, Hong Kong principal place of business, authorized representatives, legal advisers, H-share registrar, principal bankers, and auditor - Joint Company Secretaries are Ms. Zhi Hui and Mr. You Zilin[3](index=3&type=chunk)[4](index=4&type=chunk) - The company's registered office and headquarters are in Nanjing, Jiangsu Province, China, with its principal place of business in Hong Kong at 40/F, Jardine House, 1 Connaught Place[3](index=3&type=chunk)[4](index=4&type=chunk) - The auditor is Ernst & Young, and the stock code is **3332**[7](index=7&type=chunk)[8](index=8&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) This section presents a concise overview of the company's key financial performance indicators for the first half of 2025 [2025 First Half Financial Highlights](index=5&type=section&id=2025%20First%20Half%20Financial%20Highlights) The company's financial performance declined in the first half of 2025, with year-on-year decreases in revenue, gross profit, and profit for the period, reduced basic earnings per share, and no interim dividend declared 2025 First Half Financial Highlights | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 332.4 | 370.2 | -10.2% | | Gross Profit | 243.4 | 268.7 | -9.4% | | Profit for the Period | 15.3 | 33.4 | -54.2% | | Basic Earnings Per Share | 1.62 cents | 3.53 cents | -54.0% | - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[10](index=10&type=chunk) [Product Information](index=6&type=section&id=Product%20Information) This section details the company's extensive 'Good Health' product line, encompassing a wide range of nutritional supplements and health foods [Good Health Series](index=6&type=section&id=Good%20Health%20Series) The company's primary product line, 'Good Health,' offers a diverse range of nutritional and health supplements, including oyster essence, propolis, high calcium, CoQ10, grapeseed, glucosamine, green-lipped mussel, milk thistle, fish oil, bilberry lutein, collagen, stomach powder, immune powder, cranberry evening primrose oil, nasal capsules, throat lozenges, lactoferrin milk powder, probiotics, calcium-iron-zinc nutritional packs, and various children's products - The 'Good Health' series features a rich product line, including adult health supplements such as oyster essence capsules, propolis capsules, high calcium liquid calcium and vitamin D, CoQ10 capsules, grapeseed 55,000 capsules, glucosamine capsules, green-lipped mussel 6000 capsules, milk thistle capsules, fish oil capsules, high-concentration fish oil capsules, bilberry lutein capsules, and collagen capsules[13](index=13&type=chunk)[14](index=14&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) - It also includes specialized functional products like stomach powder, Vilex Immune Powder, cranberry evening primrose oil capsules, Vilex Nasal Capsules, Vilex Throat Lozenges, lactoferrin milk powder, Little Monkey Lactoferrin Powder, Vilmin Compound Powder, and lactase milk powder[22](index=22&type=chunk)[24](index=24&type=chunk)[26](index=26&type=chunk) - Children's series products include calcium-iron-zinc nutritional packs, probiotic solid beverages, children's vision chewable tablets, children's immunity chewable tablets, children's growth chewable tablets, children's magnesium chewable tablets, children's algal oil DHA capsules, children's vision lutein chewable tablets, and gummy candy series[25](index=25&type=chunk)[26](index=26&type=chunk)[29](index=29&type=chunk)[31](index=31&type=chunk) [Management Discussion and Analysis](index=10&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review and analysis of the group's business operations, financial performance, and future outlook [Business Review](index=11&type=section&id=Business%20Review) In the first half of 2025, the group's performance declined due to global economic slowdown, trade policy uncertainties, and intensified industry competition, with revenue decreasing by 10.2% and profit by 54.2%, while the group focused on cross-border e-commerce for its 'Good Health' brand, enhancing promotion on platforms like Douyin and launching 11 new products - In the first half of 2025, the group's revenue was approximately **RMB 332.4 million**, a year-on-year decrease of **10.2%**[32](index=32&type=chunk)[35](index=35&type=chunk) - Profit for the period was approximately **RMB 15.3 million**, a year-on-year decrease of **54.2%**[32](index=32&type=chunk)[35](index=35&type=chunk) - The group focused on the 'Good Health' brand's cross-border e-commerce business, implementing a combined strategy of influencer marketing, external promotion, and live streaming on Douyin, alongside brand building and sales promotion through distributors, pharmacies, duty-free shops, and e-commerce platforms[33](index=33&type=chunk)[36](index=36&type=chunk) - For the six months ended June 30, 2025, the group launched **11 new products**, comprising **9** from the 'Good Health' series and **2** from the 'Living Nature' series[34](index=34&type=chunk)[36](index=36&type=chunk) [Financial Review](index=12&type=section&id=Financial%20Review) This section provides a detailed review of the group's financial performance for the first half of 2025, including specific data and reasons for changes in revenue, gross profit, other income and gains, selling and distribution expenses, administrative expenses, income tax expense, and profit for the period [Results Overview](index=12&type=section&id=Results%20Overview) In the first half of 2025, the group experienced significant declines in both revenue and profit, with a corresponding reduction in earnings per share 2025 First Half Performance Overview | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 332.4 | 370.2 | -10.2% | | Profit for the Period | 15.3 | 33.4 | -54.2% | | Earnings Per Share | 1.62 cents | 3.53 cents | -54.0% | [Revenue Analysis](index=12&type=section&id=Revenue%20Analysis) The decrease in revenue is primarily attributed to reduced income from infant and child products sold through mainland China distributor platforms - Revenue for the first half of 2025 was approximately **RMB 332.4 million**, a decrease of approximately **RMB 37.8 million** or **10.2%** compared to the first half of 2024[40](index=40&type=chunk)[44](index=44&type=chunk) - The decrease in revenue was primarily due to lower income generated from infant and child products sold through domestic distributor platforms for the six months ended June 30, 2025[40](index=40&type=chunk)[44](index=44&type=chunk) [Gross Profit Analysis](index=12&type=section&id=Gross%20Profit%20Analysis) Gross profit decreased by 9.4% year-on-year, but the gross profit margin remained stable at approximately 73.2% Gross Profit and Gross Profit Margin | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Gross Profit | 243.4 | 268.7 | -9.4% | | Gross Profit Margin | 73.2% | 72.6% | +0.6% | [Other Income and Gains](index=12&type=section&id=Other%20Income%20and%20Gains) Other income and gains, primarily comprising rental income, government grants, and bank interest income, saw a slight year-on-year increase, mainly driven by higher bank interest income Other Income and Gains | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Other Income and Gains | 3.8 | 3.5 | +8.6% | - The increase was primarily due to higher bank interest income[42](index=42&type=chunk)[46](index=46&type=chunk) [Operating Expenses](index=13&type=section&id=Operating%20Expenses) Selling and distribution expenses increased by 2.4% year-on-year, rising to 7.1% of sales revenue, mainly due to increased investment in cross-border e-commerce promotion and staff expansion, while administrative expenses decreased by 2.4% year-on-year, with its proportion to sales revenue remaining largely stable Operating Expenses | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 190.7 | 186.3 | +2.4% | | Selling and Distribution Expenses as % of Revenue | 57.4% | 50.3% | +7.1% | | Administrative Expenses | 36.5 | 37.4 | -2.4% | | Administrative Expenses as % of Revenue | 11.0% | 10.1% | +0.9% | - The increase in selling and distribution expenses was primarily due to the group's continued vigorous development of the 'Good Health' brand's cross-border e-commerce channel business in the Chinese market, increased investment in sales promotion resources, and an expanded headcount in the cross-border e-commerce department[47](index=47&type=chunk)[50](index=50&type=chunk) [Income Tax Expense](index=13&type=section&id=Income%20Tax%20Expense) Income tax expense significantly decreased year-on-year, primarily due to a decline in the pre-tax profit of the New Zealand subsidiary, Good Health Products Limited Income Tax Expense | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Income Tax Expense | 2.5 | 6.9 | -63.8% | - The decrease in income tax expense was primarily attributable to the lower pre-tax profit of Good Health Products Limited, one of the company's New Zealand subsidiaries, for the six months ended June 30, 2025, compared to the same period last year[49](index=49&type=chunk)[52](index=52&type=chunk) [Profit for the Period](index=14&type=section&id=Profit%20for%20the%20Period) The combined effect of decreased revenue and an increased proportion of selling and distribution expenses led to a 54.2% year-on-year decline in profit for the period in the first half of 2025, with the profit margin falling from 9.0% to 4.6% Profit for the Period and Profit Margin | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Profit for the Period | 15.3 | 33.4 | -54.2% | | Profit Margin | 4.6% | 9.0% | -4.4% | - The decline in profit was primarily due to the combined impact of reduced revenue and an increased proportion of selling and distribution expenses relative to sales revenue[54](index=54&type=chunk)[57](index=57&type=chunk) [Other Comprehensive Income](index=14&type=section&id=Other%20Comprehensive%20Income) In the first half of 2025, the group recorded exchange gains of approximately **RMB 13.7 million**, primarily due to a significant appreciation of the New Zealand Dollar against the Renminbi, contrasting with an exchange loss in the prior period Exchange Differences | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Exchange differences on translation of foreign operations | 13.7 (gain) | -2.5 (loss) | - The exchange gain was primarily due to a significant appreciation of the New Zealand Dollar against the Renminbi[55](index=55&type=chunk)[58](index=58&type=chunk) [Liquidity and Capital Resources](index=14&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the group's cash flows, inventories, trade receivables, trade payables, foreign exchange risk, borrowings and asset pledges, gearing ratio, and capital expenditure and commitments [Cash Flow](index=14&type=section&id=Cash%20Flow) As of June 30, 2025, the group's cash and cash equivalents increased by approximately **RMB 31.6 million** compared to the end of 2024, primarily driven by net cash inflows from operating activities, financing activities, and exchange rate effects Changes in Cash and Cash Equivalents | Item | Amount (RMB million) | | :--- | :--- | | Increase in cash and cash equivalents from beginning to end of period | 31.6 | | Net cash inflow from operating activities | 9.5 | | Net cash outflow from investing activities | -0.03 | | Net cash inflow from financing activities | 17.7 | | Cash inflow from exchange rate effects | 4.4 | [Working Capital](index=15&type=section&id=Working%20Capital) Inventories decreased by 5.5%, mainly due to increased raw material demand from e-commerce channel development and enhanced procurement management; trade receivables increased by 49.2%, primarily from growth in cross-border e-commerce platform sales; and trade payables increased by 39.8% to meet increased production capacity needs for core products driven by cross-border e-commerce sales growth Changes in Working Capital Metrics | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Inventories | 112.5 | 119.1 | -5.5% | | Trade Receivables | 62.5 | 41.9 | +49.2% | | Trade Payables | 17.9 | 12.8 | +39.8% | - The decrease in inventories was primarily due to the vigorous development of the 'Good Health' e-commerce channel, leading to increased raw material usage to meet second-half e-commerce sales demand, coupled with strengthened raw material procurement management[60](index=60&type=chunk)[63](index=63&type=chunk) - The increase in trade receivables was mainly due to growth in sales revenue from cross-border e-commerce channels, particularly the increase in receivables from e-commerce platforms[61](index=61&type=chunk)[64](index=64&type=chunk) - The growth in trade payables was primarily due to the continuous increase in cross-border e-commerce sales, leading to increased procurement of raw materials required for production to boost output of certain core products in response to market demand[62](index=62&type=chunk)[65](index=65&type=chunk) [Debt and Gearing](index=16&type=section&id=Debt%20and%20Gearing) As of June 30, 2025, the group incurred new borrowings of **RMB 20 million** at an annual interest rate of **2.6%**, pledging approximately **RMB 1.5 million** in property as collateral, with the gearing ratio increasing to **21.1%** Borrowings and Gearing Ratio | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Borrowings | 20.0 | 0 | | Annual Interest Rate on Borrowings | 2.6% | - | | Net Book Value of Pledged Property | 1.5 | 0 | | Gearing Ratio | 21.1% | 18.7% | - The group has not adopted any hedging or alternative policies to manage foreign exchange risk, considering its exposure manageable[67](index=67&type=chunk)[72](index=72&type=chunk) [Capital Expenditure and Commitments](index=16&type=section&id=Capital%20Expenditure%20and%20Commitments) Capital expenditure for the first half of 2025 significantly decreased to **RMB 0.3 million**, with no material capital commitments or contingent liabilities Capital Expenditure | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Additions to Property, Plant and Equipment | 0.3 | 5.8 | - As of June 30, 2025, the group had no material capital commitments or contingent liabilities[71](index=71&type=chunk)[76](index=76&type=chunk) [Outlook](index=17&type=section&id=Outlook) For the second half of 2025, the global economy is expected to continue its trend of slowing growth, increasing regional divergence, trade fragmentation, and policy uncertainty, while China's economy faces structural breakthroughs and domestic demand challenges, but supply-side reform 2.0, accelerated commercialization of tech manufacturing (e.g., AI terminals, drones), stable employment, expanded domestic demand, high-level opening-up, and green low-carbon development policies will inject new vitality into high-quality development - In the first half of 2025, the global economy exhibited a complex landscape of escalating risks and uneven recovery, with global economic growth slowing and major institutions generally lowering their full-year growth forecasts[77](index=77&type=chunk)[79](index=79&type=chunk) - China's economy achieved better-than-expected growth amidst internal and external pressures but still faces challenges such as unresolved deflationary pressure, increasing employment pressure, and insufficient consumer confidence[77](index=77&type=chunk)[79](index=79&type=chunk) - In the second half of 2025, China's economic development will confront challenges of structural breakthroughs and domestic demand strengthening, but policies such as supply-side reform 2.0, accelerated commercialization of technology manufacturing (e.g., AI terminals, drones), stable employment, expanded domestic demand, high-level opening-up, and green low-carbon development will inject new vitality[78](index=78&type=chunk)[80](index=80&type=chunk) - The group's key priorities for the second half include vigorously developing e-commerce platforms to expand sales, optimizing promotion strategies, and accelerating new product R&D; strengthening supply chain management, developing quality suppliers, enhancing production capacity, and shortening production and procurement cycles; and optimizing promotional expenses to improve overall profitability[82](index=82&type=chunk)[84](index=84&type=chunk) [Human Resources Management](index=18&type=section&id=Human%20Resources%20Management) The group considers high-quality employees a key asset for success, providing regular training and corporate culture education, along with competitive compensation and benefits; as of June 30, 2025, the group employed **481** staff, with total salaries and related costs amounting to approximately **RMB 51.5 million** - The group continuously enhances employees' knowledge and skills in nutritional supplements, maternal and infant nutrition, and cross-border e-commerce operations and promotion through comprehensive training and corporate culture education[82](index=82&type=chunk)[83](index=83&type=chunk) - As of June 30, 2025, the group employed **481** staff (**350** in China, **128** in New Zealand, and **3** in Australia)[82](index=82&type=chunk)[83](index=83&type=chunk) Salaries and Related Costs | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Total Salaries and Related Costs | 51.5 | 51.7 | [Other Information](index=18&type=section&id=Other%20Information) This section covers shareholding details, securities transactions, director and supervisor information, corporate governance, investments, and interim dividend policy [Shareholding Information](index=19&type=section&id=Shareholding%20Information) This section discloses the interests and short positions of directors, supervisors, senior management, and substantial shareholders in the company's shares and related shares [Directors', Supervisors' and Chief Executives' Interests](index=19&type=section&id=Directors%27%2C%20Supervisors%27%20and%20Chief%20Executives%27%20Interests) As of June 30, 2025, Executive Director Mr. Gui Pinghu held a **54.84%** H-share interest in the company, with his spouse Ms. Wu Yanmei holding **5.60%**, and other directors and supervisors also holding minor H-share interests Shareholding of Directors, Supervisors, and Senior Management (June 30, 2025) | Name | Capacity | Nature of Interest | Class of Shares | Number of Shares Held | Approximate % of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Gui Pinghu | Director | Beneficial Owner | H Shares | 518,937,108 | 54.84 | | Mr. Gui Pinghu | Director | Spouse's Interest | H Shares | 52,965,000 | 5.60 | | Ms. Zhang Yuan | Director | Beneficial Owner | H Shares | 6,817,550 | 0.72 | | Ms. Zhu Feifei | Director | Beneficial Owner | H Shares | 659,340 | 0.07 | | Ms. Yu Min | Supervisor | Beneficial Owner | H Shares | 409,340 | 0.04 | [Substantial Shareholders' Interests](index=21&type=section&id=Substantial%20Shareholders%27%20Interests) As of June 30, 2025, in addition to directors and supervisors, Ms. Wu Yanmei, Mr. Gui Ke, Derun Group (International) Holdings Limited, and its associates were substantial shareholders, holding **5%** or more of the company's shares Shareholding of Substantial Shareholders (June 30, 2025) | Name/Entity | Nature of Interest | Class of Shares | Number of Shares Held | Approximate % of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | | Ms. Wu Yanmei | Beneficial Owner | H Shares | 52,965,000 | 5.60 | | Ms. Wu Yanmei | Spouse's Interest | H Shares | 518,937,108 | 54.84 | | Mr. Gui Ke | Beneficial Owner | H Shares | 65,923,000 | 6.97 | | Ms. Li Shi | Spouse's Interest | H Shares | 65,923,000 | 6.97 | | Derun Group (International) Holdings Limited | Beneficial Owner | H Shares | 59,121,600 | 6.25 | | Derun Group Holdings Limited | Controlled Corporation Interest | H Shares | 59,121,600 | 6.25 | | Ms. Guan Liwen | Controlled Corporation Interest | H Shares | 59,121,600 | 6.25 | | Ms. Guan Liwen | Spouse's Interest | H Shares | 404,000 | 0.04 | | Mr. Peng Shaoyan | Controlled Corporation Interest | H Shares | 59,121,600 | 6.25 | | Mr. Peng Shaoyan | Beneficial Owner | H Shares | 404,000 | 0.04 | [Securities Transactions](index=23&type=section&id=Securities%20Transactions) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, redeemed, or sold any of the company's listed securities, nor did they hold any treasury shares - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[100](index=100&type=chunk)[105](index=105&type=chunk) - For the six months ended June 30, 2025, the group held no treasury shares[100](index=100&type=chunk)[105](index=105&type=chunk) [Directors and Supervisors Information](index=23&type=section&id=Directors%20and%20Supervisors%20Information) Executive Director Mr. Gui Pinghu was appointed as a director of Living Nature Natural Products Limited and Living Nature Limited on June 1, 2025, while Executive Director Ms. Zhang Yuan resigned from her directorships in both companies on the same date, with no other changes to director and supervisor information since the publication date of the 2024 annual report - Executive Director Mr. Gui Pinghu was appointed as a director of Living Nature Natural Products Limited and Living Nature Limited on **June 1, 2025**[101](index=101&type=chunk)[106](index=106&type=chunk) - Executive Director Ms. Zhang Yuan resigned as a director of Living Nature Natural Products Limited and Living Nature Limited on **June 1, 2025**[101](index=101&type=chunk)[106](index=106&type=chunk) - Save as disclosed, there have been no changes to the information on directors and supervisors since the publication date of the company's 2024 annual report[102](index=102&type=chunk)[106](index=106&type=chunk) [Corporate Governance](index=23&type=section&id=Corporate%20Governance) The company adopted the Model Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions, with all directors and supervisors confirming compliance during the reporting period, and the company's corporate governance practices align with the principles and code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules of the Stock Exchange as the code of conduct for directors' dealings in the company's securities[103](index=103&type=chunk)[107](index=107&type=chunk) - All directors and supervisors have confirmed their compliance with the Model Code for the six months ended June 30, 2025, and up to the date of this interim report[103](index=103&type=chunk)[107](index=107&type=chunk) - The directors believe that the company has complied with the code provisions set out in Part 2 of the Corporate Governance Code contained in Appendix C1 of the Listing Rules for the six months ended June 30, 2025, and up to the date of this interim report[104](index=104&type=chunk)[108](index=108&type=chunk) [Investments and Events](index=24&type=section&id=Investments%20and%20Events) For the six months ended June 30, 2025, the company made no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures, and no material events affecting the group occurred after the reporting period - For the six months ended June 30, 2025, there were no material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures[109](index=109&type=chunk)[113](index=113&type=chunk) - No material events affecting the group occurred after the six months ended June 30, 2025, and up to the date of this interim report[110](index=110&type=chunk)[114](index=114&type=chunk) [Interim Dividend](index=24&type=section&id=Interim%20Dividend) The Board resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[111](index=111&type=chunk)[115](index=115&type=chunk) [Audit Committee](index=24&type=section&id=Audit%20Committee) The company's Audit Committee reviewed the group's unaudited condensed consolidated interim results for the six months ended June 30, 2025, comprising three independent non-executive directors chaired by Mr. Ye Bangyin, with primary responsibilities including reviewing and monitoring financial reporting, internal controls, and risk management systems - The group's unaudited interim condensed consolidated financial results for the six months ended June 30, 2025, have been reviewed by the company's Audit Committee[112](index=112&type=chunk)[116](index=116&type=chunk) - The Audit Committee comprises three independent non-executive directors, Mr. Yu Bo, Mr. Ye Bangyin, and Mr. Cheng Jianming, with Mr. Ye Bangyin serving as Chairman[112](index=112&type=chunk)[116](index=116&type=chunk) - The primary responsibilities of the Audit Committee are to review and monitor the company's financial reporting, internal control, and risk management systems, and to assist the Board in fulfilling its audit responsibilities[112](index=112&type=chunk)[116](index=116&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=24&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the group's financial performance, including revenue, gross profit, and profit for the period, along with other comprehensive income [Consolidated Profit and Loss](index=24&type=section&id=Consolidated%20Profit%20and%20Loss) For the six months ended June 30, 2025, the group reported revenue of **RMB 332.4 million**, gross profit of **RMB 243.4 million**, profit for the period of **RMB 15.3 million**, and basic earnings per share of **1.62 cents**, with all metrics decreasing compared to the prior period Summary of Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 332,364 | 370,189 | | Cost of Sales | (88,975) | (101,503) | | Gross Profit | 243,389 | 268,686 | | Other Income and Gains | 3,819 | 3,492 | | Selling and Distribution Expenses | (190,710) | (186,263) | | Administrative Expenses | (36,462) | (37,420) | | Finance Costs | (1,672) | (1,723) | | Other Expenses | (561) | (6,439) | | Profit Before Tax | 17,803 | 40,333 | | Income Tax Expense | (2,481) | (6,924) | | Profit for the Period | 15,322 | 33,409 | | Exchange differences on translation of foreign operations | 13,689 | (2,523) | | Total Comprehensive Income for the Period | 29,011 | 30,886 | | Basic Earnings Per Share | 1.62 cents | 3.53 cents | [Interim Condensed Consolidated Statement of Financial Position](index=25&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the group's assets, liabilities, and equity as of the reporting date [Consolidated Financial Position](index=25&type=section&id=Consolidated%20Financial%20Position) As of June 30, 2025, the group's total assets were **RMB 549.3 million**, net current assets were **RMB 250.2 million**, and net assets were **RMB 423.1 million**, with both total assets and net assets increasing compared to December 31, 2024 Summary of Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 76,793 | 80,416 | | Investment Properties | 56,857 | 57,256 | | Right-of-use Assets | 37,426 | 37,117 | | Goodwill | 31,870 | 30,023 | | Other Intangible Assets | 130 | 912 | | Deferred Tax Assets | 12,518 | 12,288 | | Other Non-current Assets | 791 | 214 | | **Total Non-current Assets** | **216,385** | **218,226** | | **Current Assets** | | | | Inventories | 112,467 | 119,085 | | Trade Receivables | 62,482 | 41,902 | | Prepayments, Deposits and Other Receivables | 21,879 | 21,814 | | Cash and Cash Equivalents | 136,115 | 104,530 | | **Total Current Assets** | **332,943** | **287,331** | | **Total Assets** | **549,328** | **505,557** | | **Current Liabilities** | | | | Trade Payables | 17,868 | 12,750 | | Other Payables and Accruals | 36,213 | 44,145 | | Interest-bearing Loans and Borrowings | 20,000 | – | | Lease Liabilities | 4,759 | 4,286 | | Tax Payable | 3,908 | 7,958 | | **Total Current Liabilities** | **82,748** | **69,139** | | **Net Current Assets** | **250,195** | **218,192** | | **Total Assets Less Current Liabilities** | **466,580** | **436,418** | | **Non-current Liabilities** | | | | Lease Liabilities | 30,606 | 29,615 | | Deferred Tax Liabilities | 12,081 | 11,968 | | Provisions | 786 | 739 | | **Total Non-current Liabilities** | **43,473** | **42,322** | | **Net Assets** | **423,107** | **394,096** | | **Total Equity** | **423,107** | **394,096** | [Interim Condensed Consolidated Statement of Changes in Equity](index=26&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement details the changes in the group's equity attributable to owners of the parent during the reporting period [Consolidated Changes in Equity](index=26&type=section&id=Consolidated%20Changes%20in%20Equity) As of June 30, 2025, total equity attributable to owners of the parent was **RMB 423.1 million**, an increase of approximately **RMB 29 million** from the beginning of the year, primarily due to profit for the period and an increase in exchange fluctuation reserve Summary of Interim Condensed Consolidated Statement of Changes in Equity | Item | January 1, 2025 (Audited) (RMB thousand) | Profit for the Period (RMB thousand) | Exchange Differences (RMB thousand) | June 30, 2025 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Share Capital | 94,630 | – | – | 94,630 | | Capital Reserve | 544,223 | – | – | 544,223 | | Exchange Fluctuation Reserve | (23,201) | – | 13,689 | (9,512) | | Statutory Surplus Reserve | 55,902 | – | – | 55,902 | | Merger Reserve | (3,871) | – | – | (3,871) | | Other Reserves | (2,022) | – | – | (2,022) | | Asset Revaluation Reserve | 12,972 | – | – | 12,972 | | Accumulated Losses | (284,537) | 15,322 | – | (269,215) | | **Total Equity** | **394,096** | **15,322** | **13,689** | **423,107** | [Interim Condensed Consolidated Statement of Cash Flows](index=27&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement provides an overview of the group's cash inflows and outflows from operating, investing, and financing activities [Consolidated Cash Flows](index=27&type=section&id=Consolidated%20Cash%20Flows) For the six months ended June 30, 2025, the group generated net cash inflow of **RMB 9.5 million** from operating activities, net cash outflow of **RMB 0.03 million** from investing activities, net cash inflow of **RMB 17.7 million** from financing activities, with cash and cash equivalents totaling **RMB 136.1 million** at period-end Summary of Interim Condensed Consolidated Statement of Cash Flows | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 9,480 | (32,287) | | Net cash used in investing activities | (32) | (5,135) | | Net cash generated from/(used in) financing activities | 17,726 | (2,272) | | Net increase/(decrease) in cash and cash equivalents | 27,174 | (39,694) | | Cash and cash equivalents at beginning of period | 104,530 | 117,556 | | Effect of foreign exchange rate changes, net | 4,411 | (884) | | Cash and cash equivalents at end of period | 136,115 | 76,978 | [Notes to the Interim Condensed Consolidated Financial Statements](index=28&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes to the interim condensed consolidated financial statements, covering accounting policies, segment information, and specific financial line items [Corporate and Group Information](index=29&type=section&id=Corporate%20and%20Group%20Information) The company, a joint stock company incorporated in China, primarily manufactures and sells nutritional supplements and health foods in China, Australia, and New Zealand, with notes detailing key subsidiaries including their place of registration, date of establishment, registered capital, and principal activities - The company is a joint stock company incorporated in the People's Republic of China, primarily engaged in the manufacture and sale of nutritional supplements and health foods in China, Australia, and New Zealand[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) - Key subsidiaries include Nanjing ZhongSheng Bio-Technology Co., Ltd. (production, processing, and sale of health foods), New Good Health Nutrition (Nanjing) Co., Ltd. (retail of health foods and e-commerce operations), and Good Health Products Limited (New Zealand, production, processing, and sale of health foods)[128](index=128&type=chunk)[131](index=131&type=chunk) [Basis of Preparation and Changes to Accounting Policies](index=31&type=section&id=Basis%20of%20Preparation%20and%20Changes%20to%20Accounting%20Policies) The interim condensed consolidated financial statements are prepared in accordance with HKAS 34 and presented in RMB, with the first-time adoption of revised HKFRS accounting standards in this period having no material impact on financial information due to the convertibility of the group's transaction and functional currencies - The group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, have been prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting and are presented in Renminbi[132](index=132&type=chunk)[133](index=133&type=chunk)[136](index=136&type=chunk) - This period marks the first-time adoption of revised Hong Kong Financial Reporting Standards accounting standards, specifically the amendments to Hong Kong Accounting Standard 21 'Lack of Exchangeability'[134](index=134&type=chunk)[135](index=135&type=chunk)[137](index=137&type=chunk) - As the currencies used for the group's transactions and the functional currencies used by group entities for translating the group's presentation currency are convertible, these amendments have had no impact on the interim condensed consolidated financial information[135](index=135&type=chunk)[137](index=137&type=chunk) [Operating Segment Information](index=32&type=section&id=Operating%20Segment%20Information) The group operates a single reportable segment, manufacturing and selling nutritional supplements and health foods in China, Australia, and New Zealand, with revenue primarily from mainland China, followed by New Zealand and Australia, and non-current assets also predominantly located in these regions - The group operates a single business unit based on its products and has a single reportable segment, which is the manufacture and sale of nutritional supplements and packaged health foods in China, Australia, and New Zealand[138](index=138&type=chunk)[139](index=139&type=chunk) Revenue Analysis by Major Market | Region | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 273,002 | 304,902 | | New Zealand | 52,571 | 52,862 | | Australia | 437 | 3,463 | | Other Countries | 6,354 | 8,962 | | **Total** | **332,364** | **370,189** | Geographical Distribution of Non-current Assets (excluding goodwill and deferred tax assets) | Region | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 134,373 | 138,178 | | New Zealand | 37,445 | 37,564 | | Australia | 179 | 173 | | **Total** | **171,997** | **175,915** | - No revenue from transactions with a single external customer accounted for **10%** or more of the group's revenue[144](index=144&type=chunk)[146](index=146&type=chunk) [Revenue, Other Income and Gains](index=34&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains) Revenue primarily derives from goods sales, recognized at a specific point in time, while other income and gains mainly comprise bank interest income, government grants, reversal of impairment on trade receivables, net exchange differences, and rental income - Revenue refers to the net invoiced value of goods sold after deducting returns and trade discounts, and the value of services provided, all recognized at the point in time when goods or services are transferred[148](index=148&type=chunk)[150](index=150&type=chunk)[153](index=153&type=chunk) Analysis of Other Income and Gains | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank Interest Income | 798 | 572 | | Government Grants | 628 | 573 | | Reversal of Impairment on Trade Receivables | 163 | – | | Net Exchange Differences | 108 | – | | Rental Income | 1,899 | 2,089 | | Others | 223 | 258 | | **Total** | **3,819** | **3,492** | [Profit Before Tax](index=35&type=section&id=Profit%20Before%20Tax) Profit before tax is derived after deducting costs of inventories sold, staff costs, depreciation and amortization of various assets, lease payments, and R&D expenses, with a reversal of impairment on trade receivables and a net exchange gain recorded for the period Deductions from Profit Before Tax | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of Inventories Sold | 88,975 | 101,503 | | Staff Costs (excluding key management personnel remuneration) | 46,712 | 46,473 | | Depreciation of Right-of-use Assets | 1,486 | 1,554 | | Amortization of Intangible Assets | 811 | 1,003 | | Depreciation of Property, Plant and Equipment | 4,325 | 4,446 | | Lease Payments (not included in lease liabilities measurement) | 436 | 436 | | Trade Receivables (Reversal)/Impairment | (163) | 837 | | Net Exchange Differences | (108) | 4,737 | | Government Grants | (628) | (573) | | Research and Development Expenses | 440 | 416 | [Income Tax Expense](index=36&type=section&id=Income%20Tax%20Expense_Notes) Income tax expense for the first half of 2025 was **RMB 2.5 million**, a significant decrease from the prior period, with Chinese subsidiaries subject to a **25%** tax rate, New Zealand **28%**, and Australia **30%** Income Tax Expense | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Current — New Zealand | 2,318 | 8,218 | | Deferred | 163 | (1,294) | | **Total Tax Expense for the Period** | **2,481** | **6,924** | - Chinese subsidiaries are subject to an income tax rate of **25%**, New Zealand **28%**, and Australia **30%**[158](index=158&type=chunk)[160](index=160&type=chunk) [Dividend](index=36&type=section&id=Dividend_Notes) The Board resolved not to declare any interim dividend for the six months ended June 30, 2025, and no dividend has been proposed for the year ended December 31, 2024 - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[159](index=159&type=chunk)[161](index=161&type=chunk) - The Board has not proposed any dividend for the year ended December 31, 2024[159](index=159&type=chunk)[161](index=161&type=chunk) [Earnings Per Share](index=37&type=section&id=Earnings%20Per%20Share) Basic earnings per share are calculated based on the profit for the period attributable to ordinary equity holders of the parent and the weighted average number of ordinary shares outstanding, with no potential dilutive ordinary shares outstanding for the periods ended June 30, 2025, and 2024 - Basic earnings per share are calculated based on the profit for the period attributable to ordinary equity holders of the parent and the weighted average number of **946,298,370** ordinary shares outstanding during the period[162](index=162&type=chunk)[164](index=164&type=chunk) - For the periods ended June 30, 2025, and 2024, the group had no potential dilutive ordinary shares outstanding[163](index=163&type=chunk)[165](index=165&type=chunk) Basic Earnings Per Share Calculation | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the parent | 15,322 | 33,409 | | Weighted average number of ordinary shares outstanding | 946,298,370 | 946,298,370 | [Property, Plant and Equipment](index=38&type=section&id=Property%2C%20Plant%20and%20Equipment) Additions to property, plant, and equipment for the period amounted to **RMB 253 thousand**, a significant decrease from the prior period, with no impairment losses recognized for either period Additions to Property, Plant and Equipment | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Additions to Property, Plant and Equipment | 253 | 9,028 | - No impairment losses were recognized for property, plant, and equipment for the current or prior period[169](index=169&type=chunk) [Inventories](index=38&type=section&id=Inventories_Notes) As of June 30, 2025, the group's total inventories amounted to **RMB 112.5 million**, a **5.5%** decrease from the end of 2024, primarily driven by a reduction in raw materials Composition of Inventories | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Raw Materials | 7,032 | 18,332 | | Work-in-progress | 3,175 | 1,523 | | Finished Goods | 102,057 | 99,144 | | Purchased Goods | 203 | 86 | | **Total** | **112,467** | **119,085** | [Trade Receivables](index=38&type=section&id=Trade%20Receivables_Notes) As of June 30, 2025, the net book value of trade receivables was **RMB 62.5 million**, a **49.2%** increase from the end of 2024, with receivables within one month accounting for the largest proportion, and a reversal of impairment loss of **RMB 163 thousand** recorded for the period Net Book Value of Trade Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 65,990 | 45,429 | | Impairment | (3,508) | (3,527) | | **Net Book Value** | **62,482** | **41,902** | Ageing Analysis of Trade Receivables (by invoice date) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 month | 44,046 | 38,962 | | 1 to 3 months | 17,834 | 2,543 | | 3 months to 1 year | 429 | 303 | | Over 1 year | 173 | 94 | | **Total** | **62,482** | **41,902** | Movement in Provision for Impairment Loss on Trade Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Beginning of Year | 3,527 | 2,994 | | Accumulated Impairment Loss | (163) | 759 | | Exchange Adjustment | 144 | (226) | | **Total** | **3,508** | **3,527** | [Prepayments, Deposits and Other Receivables](index=40&type=section&id=Prepayments%2C%20Deposits%20and%20Other%20Receivables) As of June 30, 2025, total prepayments, deposits, and other receivables amounted to **RMB 21.9 million**, largely consistent with the end of 2024, with none of these assets being overdue or impaired Composition of Prepayments, Deposits and Other Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Prepayments | 16,716 | 17,195 | | Right of Return Assets | 440 | 36 | | Deposits and Other Receivables | 4,723 | 4,583 | | **Total** | **21,879** | **21,814** | - None of the aforementioned assets are overdue or impaired, and they involve receivables with no recent history of default[179](index=179&type=chunk) [Cash and Cash Equivalents](index=41&type=section&id=Cash%20and%20Cash%20Equivalents_Notes) As of June 30, 2025, total cash and cash equivalents amounted to **RMB 136.1 million**, primarily comprising cash and bank balances, representing an increase from the end of 2024 Composition of Cash and Cash Equivalents | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash and Bank Balances | 127,480 | 95,937 | | Time Deposits | 8,635 | 8,593 | | **Cash and Cash Equivalents** | **136,115** | **104,530** | [Trade Payables](index=41&type=section&id=Trade%20Payables_Notes) As of June 30, 2025, total trade payables amounted to **RMB 17.9 million**, a **39.8%** increase from the end of 2024, with trade payables being interest-free and typically settled within 30 to 90 days Ageing Analysis of Trade Payables (by invoice date) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 month | 14,912 | 11,310 | | 1 to 3 months | 1,836 | 124 | | 3 months to 1 year | 360 | 556 | | Over 1 year | 760 | 760 | | **Total** | **17,868** | **12,750** | - Trade payables are interest-free and generally settled within 30 to 90 days[184](index=184&type=chunk) [Other Payables and Accruals](index=42&type=section&id=Other%20Payables%20and%20Accruals) As of June 30, 2025, total other payables and accruals amounted to **RMB 36.2 million**, a decrease from the end of 2024, primarily due to reductions in accrued payroll and refund liabilities Composition of Other Payables and Accruals | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Accrued Payroll | 12,285 | 22,480 | | Contract Liabilities | 11,725 | 10,075 | | Other Payables | 9,045 | 5,030 | | Refund Liabilities | 1,922 | 3,170 | | Other Taxes Payable | 1,236 | 3,390 | | **Total** | **36,213** | **44,145** | - Other payables are non-interest bearing[187](index=187&type=chunk) [Share Capital](index=43&type=section&id=Share%20Capital) As of June 30, 2025, the company had **946,298,370** issued and fully paid ordinary shares, with total share capital of **RMB 94.6 million**, consistent with the end of 2024 Share Capital Information | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Number of Issued and Fully Paid Ordinary Shares | 946,298,370 | 946,298,370 | | Share Capital | 94,630 | 94,630 | [Related Party Disclosures](index=43&type=section&id=Related%20Party%20Disclosures) This section discloses the remuneration of the group's key management personnel, including basic salaries and bonuses, social insurance, and housing provident fund contributions Key Management Personnel Remuneration | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Basic Salaries and Bonuses | 4,749 | 5,184 | | Social Insurance and Housing Provident Fund | 84 | 85 | | **Total Remuneration Paid to Key Management Personnel** | **4,833** | **5,269** | [Financial Instruments by Category](index=44&type=section&id=Financial%20Instruments%20by%20Category) As of June 30, 2025, total financial assets measured at amortized cost amounted to **RMB 203.3 million**, and total financial liabilities were **RMB 26.9 million** Financial Assets Measured at Amortized Cost | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 62,482 | 41,902 | | Financial Assets included in Prepayments, Deposits and Other Receivables | 4,723 | 4,583 | | Cash and Cash Equivalents | 136,115 | 104,530 | | **Total** | **203,320** | **151,015** | Financial Liabilities Measured at Amortized Cost | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 17,868 | 12,750 | | Financial Liabilities included in Other Payables and Accruals | 9,045 | 5,030 | | **Total** | **26,913** | **17,780** | [Fair Value and Fair Value Hierarchy of Financial Instruments](index=45&type=section&id=Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) The carrying amounts of the group's financial instruments are reasonably approximate to their fair values, with no significant differences - The carrying amounts of the group's financial instruments are reasonably approximate to their fair values[195](index=195&type=chunk)[198](index=198&type=chunk) - Management assesses that the fair values of trade receivables, financial assets included in prepayments, deposits and other receivables, trade payables, and financial liabilities included in other payables and accruals do not differ significantly from their carrying amounts[196](index=196&type=chunk)[198](index=198&type=chunk) [Events After the Reporting Period](index=45&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events affecting the group occurred after June 30, 2025 - No significant events affecting the group occurred after June 30, 2025[197](index=197&type=chunk)[199](index=199&type=chunk)