Part I [Definitions](index=3&type=section&id=Definitions) This chapter defines key terms and abbreviations used in the report, ensuring a clear understanding of professional terminology such as articles of association, A-shares, H-shares, assets under management, futures exchanges, subsidiaries, and regulatory bodies [Corporate Information](index=8&type=section&id=Corporate%20Information) This chapter details Soho Holly Futures Co., Ltd.'s basic information, including company name, legal representative, registered capital, business qualifications, addresses, board and supervisory committee members, committee compositions, contact details, auditors, legal advisors, principal banks, and A-share and H-share listing summaries - The company's Chinese name was changed from "Holly Futures Co., Ltd." to "Soho Holly Futures Co., Ltd." on May 12, 2025[143](index=143&type=chunk) Company Basic Information | Indicator | Content | | :--- | :--- | | **Company Name** | Soho Holly Futures Co., Ltd. | | **Legal Representative** | Mr. Chu Kairong | | **Registered Capital** | RMB 1,007.777778 million | | **Domestic Business Qualifications** | Commodity futures brokerage, financial futures brokerage, futures investment consulting, asset management, fund sales, stock option trading participant, interbank bond trading | | **A-share Listing Information** | Shenzhen Stock Exchange, Stock Code: 001236 | | **H-share Listing Information** | Hong Kong Stock Exchange, Stock Code: 03678 | [Financial Summary](index=12&type=section&id=Financial%20Summary) This chapter summarizes the company's key financial data and risk control indicators for the first half of 2025, noting significant declines in operating revenue and net profit, a shift to net cash outflow from operating activities, yet compliance with all regulatory risk control metrics Key Accounting Data and Financial Indicators for Jan-Jun 2025 (RMB 10,000) | Indicator | Jan-Jun 2025 | Jan-Jun 2024 | Change Amount | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 32,253.32 | 102,847.27 | -70,593.95 | -68.64% | | Total Profit | -567.04 | 1,661.67 | -2,228.71 | -134.12% | | Net Profit - Attributable to Company Shareholders | -360.56 | 1,280.07 | -1,640.63 | -128.17% | | Net Cash Inflow from Operating Activities | -86,988.78 | 232,779.48 | -319,768.25 | -137.37% | | Basic Earnings Per Share (RMB/share) | -0.0036 | 0.0127 | - | - | | Weighted Average Return on Net Assets (%) | -0.1923% | 0.6903% | - | - | Scale Indicators as of June 30, 2025 (RMB 10,000) | Indicator | As of June 30, 2025 | As of Dec 31, 2024 | Change Amount | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Assets | 1,076,117.58 | 1,169,936.96 | -93,819.39 | -8.02% | | Total Liabilities | 889,764.61 | 982,259.10 | -92,494.49 | -9.42% | | Equity Attributable to Company Shareholders | 186,352.97 | 187,677.87 | -1,324.90 | -0.71% | | Asset-Liability Ratio (%) | 32.45% | 34.39% | - | - | Risk Control Indicators (RMB million) | Indicator | As of June 30, 2025 | As of Dec 31, 2024 | Warning Standard | Regulatory Standard | | :--- | :--- | :--- | :--- | :--- | | Net Capital | 753.46 | 914.53 | 36.00 | 30.00 | | Net Capital / Sum of Risk Capital Reserves (%) | 304.42% | 253.13% | 120.00% | 100.00% | | Net Capital / Net Assets (%) | 40.23% | 48.28% | 24.00% | 20.00% | | Current Assets / Current Liabilities (%) | 486.16% | 449.49% | 120.00% | 100.00% | | Total Liabilities / Net Assets (%) | 11.94% | 13.35% | 120.00% | 150.00% | - The company's net capital was **RMB 753 million** as of June 30, 2025, a decrease of **RMB 161 million** from the end of 2024, but all risk control indicators met regulatory requirements[36](index=36&type=chunk) Part II [Operating Performance](index=16&type=section&id=Part%20II%20Operating%20Performance) This section provides a comprehensive analysis of the company's operating performance, including management discussion, business analysis, future plans, financial resources, and risk management [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) This chapter deeply analyzes the company's operating performance for the first half of 2025, covering overall results, core business performance, industry changes, future strategies, and various risks, as the company actively addresses challenges in a complex market to achieve high-quality development [I. Overall Operating Performance](index=16&type=section&id=I.%20Overall%20Operating%20Performance) In the first half of 2025, the company's operating revenue decreased by 68.64% year-on-year to RMB 323 million, with total profit and net profit turning to losses, and average daily client equity and trading volume also declining, reflecting the significant impact of macroeconomic and market volatility on the futures industry's performance Overall Operating Data for Jan-Jun 2025 | Indicator | Amount/Quantity | | :--- | :--- | | Operating Revenue | RMB 323 million | | Total Profit | RMB -5.6704 million | | Net Profit | RMB -3.6056 million | | Average Daily Client Equity | RMB 7.306 billion | | Trading Volume | 36.21 million lots | - Operating revenue decreased by **68.64%** year-on-year, total profit decreased by **134.12%** year-on-year, and net profit decreased by **128.17%** year-on-year[38](index=38&type=chunk) - Average daily client equity decreased by **18.71%** year-on-year, and trading volume decreased by **24.34%** year-on-year[38](index=38&type=chunk) [II. Analysis of Principal Business Operations](index=16&type=section&id=II.%20Analysis%20of%20Principal%20Business%20Operations) This section analyzes the macroeconomic environment, regulatory policy changes, and specific operating conditions of the company's principal businesses, noting that while global economic recovery is challenging and geopolitical conflicts intensify, deepening reforms and accelerated opening-up in China's futures market offer opportunities for transformation and business expansion, with some segments achieving growth despite pressure [(1) Industry Conditions During the Reporting Period](index=16&type=section&id=(1)%20Industry%20Conditions%20During%20the%20Reporting%20Period) In the first half of 2025, the global economy faced multiple uncertainties with volatile commodity prices, while China's futures market actively promoted high-level opening-up and deepened regulatory reforms, including revisions to derivatives and futures company supervision rules and research into RMB foreign exchange futures, creating a favorable environment for futures companies' transformation and business expansion, leading to active trading and significant year-on-year growth in cumulative trading volume and value - Global economic recovery is challenging, geopolitical conflicts are intensifying, and international commodity prices are highly volatile[39](index=39&type=chunk) - The China Securities Regulatory Commission's 2025 legislative plan includes the formulation of the "Measures for the Supervision and Administration of Derivatives Trading" and revisions to the "Measures for the Supervision and Administration of Futures Companies," which are expected to broaden the business scope of futures companies[39](index=39&type=chunk) - From January to June 2025, the national futures market's cumulative trading volume was approximately **4.08 billion lots**, a year-on-year increase of **17.8%**; cumulative trading value was approximately **RMB 339.7 trillion**, a year-on-year increase of **20.7%**[41](index=41&type=chunk) [(2) Principal Businesses Engaged in by the Company During the Reporting Period](index=17&type=section&id=(2)%20Principal%20Businesses%20Engaged%20in%20by%20the%20Company%20During%20the%20Reporting%20Period) The company's principal businesses include commodity futures brokerage, financial futures brokerage, futures investment consulting, asset management, fund sales, risk management, and financial asset investment, with wholly-owned subsidiaries Holly Capital and Holly International Finance also providing bulk commodity trading, risk management, and overseas securities and futures trading services - The company is a comprehensive or full member of six domestic futures exchanges and has obtained qualifications as a stock option trading participant[42](index=42&type=chunk) - Holly Capital primarily engages in basis trading, market-making, OTC derivatives, cooperative hedging, and warehouse receipt services as part of its risk management business[43](index=43&type=chunk) - Holly International Finance and its subsidiary, Holly International Asset Management, provide overseas securities and futures trading, asset management, and investment consulting services in Hong Kong[43](index=43&type=chunk) [(3) Operating Performance](index=19&type=section&id=(3)%20Operating%20Performance) The company's various businesses showed mixed performance during the reporting period: brokerage business stabilized under pressure, asset management scale and fee income significantly decreased but focused on stable strategies, fund sales product numbers increased, risk management's spot trade volume and OTC option notional principal grew substantially, international business achieved its interim targets, and financial investment business realized steady value appreciation - Brokerage business achieved stable and improving operating performance through optimized management, precise marketing, and live trading competitions[45](index=45&type=chunk) Key Data for Asset Management Business | Indicator | As of June 30, 2025 | Change from end of 2024 | | :--- | :--- | :--- | | Assets Under Management (AUM) | RMB 3.102 billion | Down 80.75% | | Asset Management Business Fee Income | RMB 1.5273 million | Down 53.86% | - Fund sales added **281** new agency-sold fund products, bringing the total to over **2,600**, and actively expanded into private fund sales[48](index=48&type=chunk) Key Data for Risk Management Business | Indicator | H1 2025 | Year-on-year Growth | | :--- | :--- | :--- | | Spot Trade Volume | RMB 1.398 billion | 66.43% | | Lithium Carbonate Single Product Trade Volume | over RMB 730 million | - | | New OTC Options Notional Principal | RMB 18.662 billion | 3.1% | - International business achieved its "half time, half task" targets for key operating indicators, accelerating the transformation and upgrading of its futures and securities business[47](index=47&type=chunk) Financial Asset Investment Business Income | Indicator | Jan-Jun 2025 | | :--- | :--- | | Disposal and Dividend Income | RMB 7.8587 million | | Fair Value Change Income | RMB 25.2597 million | [III. Outlook and Future Plans](index=21&type=section&id=III.%20Outlook%20and%20Future%20Plans) The company looks ahead to the conclusion of the "14th Five-Year Plan" and the "15th Five-Year Plan," aiming to become a "leading domestic and internationally renowned comprehensive derivatives service provider" by systematically strengthening its core business, optimizing services, and refining technology, while deepening institutional reforms, focusing on business expansion, promoting refined management, enhancing service capabilities, and attracting talent to build a diversified business landscape - The company's strategic goal is to become a **"leading domestic and internationally renowned comprehensive derivatives service provider,"** with business development focused on **"strengthening the core business, optimizing services, and refining technology"**[51](index=51&type=chunk) - A diversified business structure will be built with **"futures brokerage as the foundation, risk management as the core, asset management and investment research as wings, and cross-border services as a bridge"**[51](index=51&type=chunk) [(1) Deepen Institutional Reforms, Solidify Development Foundation](index=21&type=section&id=(1)%20Deepen%20Institutional%20Reforms,%20Solidify%20Development%20Foundation) The company will implement three institutional reforms and salary reforms to create a "small back-office, strong mid-office, large front-office" intensive operating model, optimize talent inventory and job responsibilities, establish a flexible labor relations management system, deepen market-oriented salary reforms, improve performance appraisal and incentive mechanisms, and build a tiered and categorized training system to stimulate employee vitality and enhance team efficiency - Establish an intensive operating model of **"small back-office, strong mid-office, large front-office"** to enhance business responsiveness and collaboration efficiency[52](index=52&type=chunk) - Deepen market-oriented salary system reforms to establish a compensation distribution system linked to job value and performance contributions[52](index=52&type=chunk) [(2) Focus on Business Expansion, Build a Solid Growth Core](index=22&type=section&id=(2)%20Focus%20on%20Business%20Expansion,%20Build%20a%20Solid%20Growth%20Core) The company plans to optimize departments and branches in brokerage, expand internet finance, and strengthen client lifecycle management and industrial client development; for large asset management, it will exit channel businesses, introduce professional investment managers, build active management capabilities, and promote the establishment of a public fund management company; risk management will expand positive arbitrage, enhance services to the real economy, and strengthen OTC business teams; international business will vigorously develop overseas operations, strengthen overseas teams, and gradually expand branches in Singapore, the UK, and the US - Brokerage business will achieve closed-loop client management through internet finance, client profiling, investment consulting, and industrial client development[53](index=53&type=chunk) - Large asset management business will exit channel businesses, introduce professional investment managers, integrate teams to enhance active management capabilities, and apply for the establishment of a public fund management company[53](index=53&type=chunk) - Risk management business will expand positive arbitrage scale, enhance its ability to serve the real economy, and strengthen OTC business teams and trading strategy optimization[54](index=54&type=chunk) - International business will strengthen overseas team building, expand branches in Singapore, the UK, the US, and other regions, and acquire more licenses and clearing seats[54](index=54&type=chunk) [(3) Promote Refined Management, Enhance Operational Efficiency](index=23&type=section&id=(3)%20Promote%20Refined%20Management,%20Enhance%20Operational%20Efficiency) The company will build a modern corporate governance system by deepening business supervision, strengthening technological empowerment, and solidifying work style, including continuous revenue summit meetings for target and process management, phased advancement of comprehensive digitalization, intelligence, and AI development, building client profiling and full lifecycle management systems, and establishing a management system driven by "style leadership, goal orientation, performance incentives, institutional execution" - Deepen business supervision, driving key business and revenue management through a dual approach of **"target management + process management"**[56](index=56&type=chunk) - Strengthen technological empowerment, building client profiling, full lifecycle management systems, and real-time KPI dashboards in three phases (comprehensive digitalization, intelligence, AI-driven)[56](index=56&type=chunk) [(4) Enhance Service Capabilities, Build Competitive Advantages](index=23&type=section&id=(4)%20Enhance%20Service%20Capabilities,%20Build%20Competitive%20Advantages) The company will comprehensively build a three-tiered investment research system of "macro strategy – industry research – market analysis," regularly publishing high-quality reports and hosting industrial client salons, while deepening group collaborative services to customize "hedging solutions + basis trading + warehouse receipt pledge" one-stop integrated service solutions for the controlling group, aiming to enhance client satisfaction, industrial client coverage, and brand recognition - Establish a three-tiered investment research framework of **"macro strategy – industry research – market analysis,"** regularly publishing reports and hosting industrial client salons[57](index=57&type=chunk) - Deepen group collaborative services, customizing **"hedging solutions + basis trading + warehouse receipt pledge"** one-stop integrated service solutions for the controlling group[57](index=57&type=chunk) [(5) Focus on Attracting and Cultivating Talent, Build Talent Support](index=24&type=section&id=(5)%20Focus%20on%20Attracting%20and%20Cultivating%20Talent,%20Build%20Talent%20Support) The company will align with strategic development goals, precisely focusing on talent needs in key areas such as financial asset investment, international business expansion, and digital transformation, attracting top talent through diverse channels like "headhunter precise recruitment + industry-specific invitations + university joint training," complemented by market-oriented incentive mechanisms and career development paths to ensure talent attraction, retention, and development - Precisely focus on talent needs in key areas such as financial asset investment, international business expansion, and digital transformation[58](index=58&type=chunk) - Attract top industry talent through diverse channels such as **"headhunter precise recruitment + industry-specific invitations + university joint training"**[58](index=58&type=chunk) [IV. Liquidity, Financial Resources, and Capital Structure](index=24&type=section&id=IV.%20Liquidity,%20Financial%20Resources,%20and%20Capital%20Structure) This section analyzes the company's profitability, asset structure, liquidity management, exchange rate risk, and cash flow, noting a decline in profitability, reduced total assets and liabilities, but stable asset structure, good liquidity, low exchange rate risk, and a shift to net cash outflow from operating activities during the reporting period [(1) Analysis of Profitability](index=24&type=section&id=(1)%20Analysis%20of%20Profitability) In the first half of 2025, the company's operating revenue was RMB 323 million, with risk management spot trade volume growing by 66.43% year-on-year; net profit attributable to company shareholders was RMB -3.6056 million, a 128.17% year-on-year decrease, with earnings per share at RMB -0.0036 and weighted average return on net assets decreasing by 127.86% year-on-year Key Profitability Data for H1 2025 | Indicator | Amount/Ratio | | :--- | :--- | | Operating Revenue | RMB 323 million | | Risk Management Business Spot Trade Volume | RMB 1.398 billion | | Net Profit Attributable to Company Shareholders | RMB -3.6056 million | | Earnings Per Share | RMB -0.0036 | | Weighted Average Return on Net Assets | -0.19% | - Risk management business spot trade volume increased by **66.43%** year-on-year[59](index=59&type=chunk) - Net profit attributable to company shareholders decreased by **128.17%** year-on-year, and weighted average return on net assets decreased by **127.86%** year-on-year[59](index=59&type=chunk) [(2) Asset Structure and Asset Quality](index=25&type=section&id=(2)%20Asset%20Structure%20and%20Asset%20Quality) As of June 30, 2025, the company's total assets were RMB 10.761 billion, a decrease of 8.02% from the end of 2024; total liabilities were RMB 8.898 billion, a decrease of 9.42%; and net assets attributable to company shareholders were RMB 1.864 billion, a decrease of 0.71%, with the asset structure remaining stable, current assets accounting for 96.11%, cash-like assets for 88.90%, an asset-liability ratio of 32.45%, and an operating leverage ratio of 1.48 times Key Balance Sheet Data as of June 30, 2025 | Indicator | Amount | | :--- | :--- | | Total Assets | RMB 10.761 billion | | Total Liabilities | RMB 8.898 billion | | Net Assets Attributable to Company Shareholders | RMB 1.864 billion | | Proportion of Current Assets | 96.11% | | Proportion of Cash-like Assets | 88.90% | | Asset-Liability Ratio | 32.45% | | Operating Leverage Ratio | 1.48 times | - Total assets decreased by **8.02%** from the end of 2024, total liabilities decreased by **9.42%**, and net assets attributable to company shareholders decreased by **0.71%**[60](index=60&type=chunk) - Total borrowings were **RMB 25.0156 million**, all repayable within one year[63](index=63&type=chunk) [(3) Liquidity Management Status](index=25&type=section&id=(3)%20Liquidity%20Management%20Status) The company highly values liquidity management, adhering to principles of comprehensiveness, prudence, and foresight to ensure a balance of fund safety, liquidity, and profitability, with all monthly liquidity regulatory indicators meeting China Securities Regulatory Commission requirements in the first half of 2025 - The company's liquidity management adheres to principles of comprehensiveness, prudence, and foresight, ensuring fund safety, liquidity, and profitability[66](index=66&type=chunk) - In the first half of 2025, all monthly liquidity regulatory indicators of the company met the requirements of the China Securities Regulatory Commission[67](index=67&type=chunk) [(4) Exchange Rate Risk](index=25&type=section&id=(4)%20Exchange%20Rate%20Risk) As the company's principal business is concentrated in mainland China and settled in RMB, with minimal USD business, the Group has no significant exchange rate risk apart from HKD bank deposits, and no financial instruments were used to hedge exchange rate risk during the reporting period - The Group's principal business is concentrated in mainland China and settled in RMB, resulting in low exchange rate risk[68](index=68&type=chunk) - No financial instruments were used to hedge exchange rate risk during the reporting period[69](index=69&type=chunk) [(5) Cash Flow Status](index=26&type=section&id=(5)%20Cash%20Flow%20Status) In the first half of 2025, the Group's net increase in cash and cash equivalents was RMB -950 million, a significant decrease from the same period in 2024, with net cash flow from operating activities turning negative, and cash outflows from investing and financing activities both decreasing Cash Flow Status for H1 2025 (RMB 100 million) | Cash Flow Type | H1 2025 | H1 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -8.70 | 23.28 | -31.98 | | Net Cash Flow from Investing Activities | -0.67 | -1.91 | 1.25 | | Net Cash Flow from Financing Activities | -0.14 | -1.18 | 1.05 | | Net Increase in Cash and Cash Equivalents | -9.50 | 20.19 | -29.69 | [V. Significant Financing of the Company](index=26&type=section&id=V.%20Significant%20Financing%20of%20the%20Company) During the reporting period, the company did not undertake any equity or debt financing - During the reporting period, the company did not undertake any equity financing[74](index=74&type=chunk) - During the reporting period, the company did not undertake any debt financing[75](index=75&type=chunk) [VI. Investment Status During the Reporting Period](index=27&type=section&id=VI.%20Investment%20Status%20During%20the%20Reporting%20Period) This section details the utilization of the company's H-share and A-share raised funds; H-share funds were used as planned for developing Hong Kong and global futures business, asset management, bulk commodity trading and risk management, futures brokerage, IT equipment purchases, and working capital, with some adjustments to usage, while A-share funds were fully used to supplement the company's capital and have been expended [(1) Use of Raised Funds](index=27&type=section&id=(1)%20Use%20of%20Raised%20Funds) The net proceeds from H-share offerings were approximately HKD 536 million, primarily used for developing Hong Kong and global futures business, asset management, bulk commodity trading and risk management, futures brokerage, IT equipment purchases, and supplementing working capital, with two changes in use during the period; A-share net proceeds of RMB 161 million were fully used to supplement the company's capital and have been expended - Net proceeds from H-share offerings were approximately **HKD 536 million**, primarily used for developing Hong Kong and global futures business, asset management business, bulk commodity trading and risk management business, etc[77](index=77&type=chunk) - The use of H-share proceeds was adjusted twice in **2019** and **2022** to optimize fund allocation[78](index=78&type=chunk) - Net proceeds from A-share offerings were **RMB 161 million**, fully used to supplement the company's capital, and as of June 30, 2025, all funds have been expended and the dedicated account closed[79](index=79&type=chunk) [(2) Use of Committed Projects for Raised Funds](index=28&type=section&id=(2)%20Use%20of%20Committed%20Projects%20for%20Raised%20Funds) As of June 30, 2025, most H-share proceeds have been fully utilized for committed projects, with only HKD 5.31 million remaining for "purchase of information technology equipment and software"; A-share proceeds were fully used to supplement capital and the dedicated account has been closed H-share Raised Funds Committed Project Utilization (As of June 30, 2025, HKD 10,000) | Committed Project Name | Amount Available at End of Reporting Period | Cumulative Amount Used | Remaining Amount | | :--- | :--- | :--- | :--- | | Development of Hong Kong and Global Futures Business | 21,500 | 21,500 | – | | Development of Asset Management Business | 13,404 | 13,404 | – | | Development of Bulk Commodity Trading and Risk Management Business | 9,784 | 9,784 | – | | Development and Strengthening of Existing Futures Brokerage Business | 52 | 52 | – | | Purchase of Information Technology Equipment and Software | 4,586 | 4,055 | 531 | | General Working Capital of the Group | 4,289 | 4,289 | – | | Total | 53,615 | 53,084 | 531 | - A-share proceeds were fully used to supplement capital, and all dedicated fundraising accounts have been closed[83](index=83&type=chunk) [(3) Investment Progress of Subsidiaries and Associates](index=29&type=section&id=(3)%20Investment%20Progress%20of%20Subsidiaries%20and%20Associates) During the reporting period, the company had no investment progress regarding subsidiaries and associates - During the reporting period, the company had no investment progress regarding subsidiaries and associates[84](index=84&type=chunk) [(4) Future Major Investments and Fixed Asset Plans](index=29&type=section&id=(4)%20Future%20Major%20Investments%20and%20Fixed%20Asset%20Plans) During the reporting period, the company had no future major investment or fixed asset plans - During the reporting period, the company had no future major investment or fixed asset plans[84](index=84&type=chunk) [VII. Share Schemes](index=29&type=section&id=VII.%20Share%20Schemes) Neither the company nor its subsidiaries have adopted any share schemes - Neither the company nor its subsidiaries have adopted any share schemes[85](index=85&type=chunk) [VIII. Significant Asset Acquisitions, Disposals, External Guarantees, Mortgages, Pledges, and Material Contingent Liabilities of the Group](index=29&type=section&id=VIII.%20Significant%20Asset%20Acquisitions,%20Disposals,%20External%20Guarantees,%20Mortgages,%20Pledges,%20and%20Material%20Contingent%20Liabilities%20of%20the%20Group) As of June 30, 2025, the Group had no significant asset acquisitions, disposals, or exchanges, nor any material external guarantees, mortgages, pledges, or other off-balance sheet items and contingent liabilities that would significantly affect its financial position and operating results - As of June 30, 2025, the company had no significant acquisitions or disposals related to subsidiaries, associates, or joint ventures[86](index=86&type=chunk) - During the reporting period, the Group had no significant asset acquisitions, disposals, exchanges, or business combinations, nor any material external guarantees, mortgages, pledges, or other off-balance sheet items and contingent liabilities that would significantly affect the Group's financial position and operating results[86](index=86&type=chunk) [IX. Employees, Remuneration Policy, and Training Status](index=30&type=section&id=IX.%20Employees,%20Remuneration%20Policy,%20and%20Training%20Status) As of the end of the reporting period, the Group had 589 employees; the company's remuneration comprises basic salary, allowances, performance bonuses, and benefits, providing social insurance, housing provident fund, enterprise annuity, and supplementary medical insurance, along with tiered and categorized training programs to enhance employee professional capabilities and vocational ethics - As of the end of the reporting period, the Group had a total of **589** employees[88](index=88&type=chunk) - Employee remuneration includes basic salary, allowances, performance bonuses, and benefits, with social insurance, housing provident fund, enterprise annuity, and supplementary medical insurance provided[88](index=88&type=chunk) - The company has formulated tiered and categorized training plans, encouraging employees to self-study and obtain professional qualifications to enhance their professional capabilities and vocational ethics[89](index=89&type=chunk) [X. Risk Management](index=30&type=section&id=X.%20Risk%20Management) The company's operations face various risks including policy, risk management and internal control, ethical, market, credit, information technology, and ESG risks; during the reporting period, the company actively implemented effective measures to address these risks, ensuring safe and efficient operations, with this section detailing specific risk manifestations and the company's response strategies - The company's operating activities face policy risk, risk management and internal control risk, ethical risk, market risk, credit risk, information technology risk, and ESG risk, among others[90](index=90&type=chunk) - In the first half of 2025, the company adopted effective measures to actively and proactively manage risks, ensuring the safe and efficient operation of its business activities[91](index=91&type=chunk) [(1) Policy Risk](index=31&type=section&id=(1)%20Policy%20Risk) The futures industry is in a developmental stage with an evolving regulatory environment, where strengthened supervision may lead to business restrictions, changes in operating models, or increased costs; furthermore, changes in exchange fee reduction policies could significantly impact the company's operating revenue and profitability - Stricter futures regulation by supervisory authorities may lead to business restrictions, changes in operating models, or increased costs for the company[93](index=93&type=chunk) - Significant changes in exchange fee reduction policies could have a substantial impact on the company's operating revenue and profitability[93](index=93&type=chunk) [(2) Risk Management and Internal Control Risk](index=31&type=section&id=(2)%20Risk%20Management%20and%20Internal%20Control%20Risk) The company's risk management and internal control systems rely on internally established controls, observations of past market behavior, and industry practices, which may not predict future risks or identify unforeseen ones; failure to timely adjust and improve risk management policies, or errors in execution, could significantly and adversely affect the company's business, financial condition, and operating performance - Risk management methods are based on past market behavior and industry practices, which may not predict future risk exposures or identify unexpected risks[94](index=94&type=chunk) - Failure to timely adjust and improve risk management policies or errors in execution could have a significant adverse impact on the company's business, financial condition, and operating performance[95](index=95&type=chunk) [(3) Ethical Risk](index=32&type=section&id=(3)%20Ethical%20Risk) Ethical risk primarily stems from employees' non-compliance with laws, regulations, or company policies, such as unauthorized client asset management or self-trading; the company mitigates and prevents such risks through technical blocking of trading ports, establishing accountability mechanisms, and enhancing employee training and education - Ethical risk primarily refers to employee misconduct such as unauthorized client asset management or self-trading[96](index=96&type=chunk) - The company prevents ethical risks by technically blocking trading ports, establishing accountability mechanisms, and strengthening employee training and education[96](index=96&type=chunk) [(4) Market Risk](index=32&type=section&id=(4)%20Market%20Risk) Market risk arises from fluctuations in macroeconomic changes, stock prices, interest rates, exchange rates, and commodities; the company's financial asset investments focus on low-volatility asset allocation and enhanced technological empowerment, while traditional brokerage faces intense competition and client default risk, which the company controls through close market monitoring, margin adjustments, forced liquidation, and enhanced client risk education, with foreign currency funds and assets also subject to exchange rate fluctuations - The company's financial asset investments focus on low-volatility asset allocation, strengthening technological empowerment, and optimizing risk classification and diversified asset allocation[97](index=97&type=chunk) - Traditional brokerage business faces intense competition and client default risk, which the company controls by adjusting margins, forced liquidation, and strengthening client risk education[99](index=99&type=chunk) [(5) Credit Risk](index=33&type=section&id=(5)%20Credit%20Risk) Credit risk primarily stems from defaults by financing clients, product or bond issuers, and counterparties, especially clients' inability to fulfill futures contract obligations; the company controls credit risk through strict account opening procedures, investor suitability management systems, client credit assessment, and enhanced investor education - Credit risk primarily arises from clients' inability or refusal to fulfill futures contract obligations[100](index=100&type=chunk) - The company controls credit risk through strict account opening procedures, investor suitability management, and risk education[100](index=100&type=chunk) [(6) Information Technology Risk](index=34&type=section&id=(6)%20Information%20Technology%20Risk) Information technology risk refers to business interruption or losses due to system malfunctions, data corruption, or leaks; the company continuously increases IT investment, improves risk management systems and processes, strengthens quality control, risk identification, and governance, and conducts regular emergency drills, with no major IT risk incidents occurring during the reporting period - Information technology risk refers to business losses caused by abnormal operation of information systems or data corruption and leakage[101](index=101&type=chunk) - The company continuously increases investment in information technology, improves risk management systems, strengthens quality control and emergency plans, and no major information technology risk incidents occurred during the reporting period[101](index=101&type=chunk) [(7) ESG (Environmental, Social, and Governance) Risk](index=34&type=section&id=(7)%20ESG%20(Environmental,%20Social,%20and%20Governance)%20Risk) ESG risks include compliance, environmental pollution, and data security risks; with stricter A+H share ESG disclosure rules, the company actively identifies and addresses ESG risks and opportunities, optimizing report disclosures, exploring green finance paths to support a green and low-carbon economy, and establishing a board-centric ESG governance structure to prevent data security risks through management measures and IT audits - A+H share ESG information disclosure rules are becoming stricter, and the company actively identifies and responds to ESG risks and opportunities, optimizing report disclosures[102](index=102&type=chunk) - The company explores the development of green finance, supports environmental protection industries, and provides risk management tools for a green and low-carbon economy[104](index=104&type=chunk) - An ESG governance structure with the board of directors at its core has been established to prevent data security risks through data security management, client privacy protection, and IT audits[105](index=105&type=chunk) [XI. Construction of the Company's Risk Management System](index=35&type=section&id=XI.%20Construction%20of%20the%20Company's%20Risk%20Management%20System) The company is committed to maximizing enterprise value through a comprehensive risk management system, having been continuously rated "Class A, Grade A" by the China Securities Regulatory Commission for sixteen consecutive years; its risk management system adheres to principles of comprehensiveness, sustainability, independence, and effectiveness, and has established a four-tier organizational structure comprising the Board of Directors, Risk Management Committee, Chief Risk Officer, and risk control specialists in each business department - The company's risk management objective is to ensure business operations comply with laws and regulations, control risks within acceptable limits, and maximize enterprise value[106](index=106&type=chunk) - The company has been continuously awarded the **"Class A, Grade A"** regulatory category by the China Securities Regulatory Commission for **sixteen consecutive years**[106](index=106&type=chunk) [(1) Risk Management Principles](index=36&type=section&id=(1)%20Risk%20Management%20Principles) The company's risk management system aims to prevent ethical, market, and credit risks, ensure the safety of client and company assets, guarantee the reliability of business records, and enhance operational efficiency, with its design adhering to principles of comprehensiveness (covering all processes and departments), sustainability (proactively setting goals and implementing measures), independence (compliance and risk control departments operating independently), and effectiveness (consistent with business scale, scope, and actual conditions) - Risk management system objectives include preventing ethical, market, and credit risks, ensuring asset safety, guaranteeing record reliability, and enhancing operational efficiency[108](index=108&type=chunk) - The risk management system design adheres to principles of comprehensiveness, sustainability, independence, and effectiveness[108](index=108&type=chunk) [(2) Risk Management System](index=37&type=section&id=(2)%20Risk%20Management%20System) The company's risk management organizational structure includes the Board of Directors, Risk Management Committee, Chief Risk Officer, and risk control specialists in each business department; the Board is responsible for strategic goal setting and policy approval, the Risk Management Committee reviews strategies and analyzes risks, the Chief Risk Officer ensures internal policy execution and business policy compliance, and departmental risk control specialists are responsible for implementing risk management policies - The risk management organizational structure includes the Board of Directors, Risk Management Committee, Chief Risk Officer, and risk control specialists in each business department[111](index=111&type=chunk) - The Board of Directors is responsible for setting strategic goals and approving policies, the Risk Management Committee reviews strategies and assesses risks, and the Chief Risk Officer ensures policy execution and business compliance[111](index=111&type=chunk)[112](index=112&type=chunk) Part III [Corporate Governance](index=39&type=section&id=Corporate%20Governance) This section outlines the company's corporate governance framework, including compliance with regulatory codes, board responsibilities, and other significant corporate matters [1. Explanation of Corporate Governance Related Matters](index=39&type=section&id=1.%20Explanation%20of%20Corporate%20Governance%20Related%20Matters) As a domestic and overseas listed company, the company strictly adheres to relevant laws and regulations, operates in a standardized manner, and has established a corporate governance structure where the Board of Directors, Supervisory Committee, and management are separate and mutually checking, ensuring stable and compliant operations, with true, accurate, timely, and complete information disclosure and efficient, pragmatic investor relations management - The company strictly adheres to the "Company Law," "Securities Law," "Futures and Derivatives Law," and other laws and regulations, as well as its Articles of Association, to establish and improve its corporate governance structure, compliance and risk control systems, and internal control management system[114](index=114&type=chunk) - The procedures for convening and holding general meetings of shareholders, board meetings, and supervisory committee meetings, as well as voting procedures, are legal and effective, and information disclosure is true, accurate, timely, and complete[114](index=114&type=chunk) [(1) Compliance with the Corporate Governance Code](index=39&type=section&id=(1)%20Compliance%20with%20the%20Corporate%20Governance%20Code) During the reporting period, the company complied with the code provisions set out in Part Two of the "Corporate Governance Code" and adopted most of the recommended best practices - During the reporting period, the company complied with the code provisions set out in Part Two of the "Corporate Governance Code" and adopted most of the recommended best practices[115](index=115&type=chunk) [(2) Compliance with the Model Code](index=39&type=section&id=(2)%20Compliance%20with%20the%20Model%20Code) The company has adopted the "Model Code" for securities transactions by directors and supervisors, with all directors and supervisors confirming full compliance during the reporting period; the company has also adopted the "Model Code" for employees who may possess price-sensitive information, and no breaches were noted during the reporting period - The company has adopted the "Model Code" for securities transactions by directors and supervisors, and all directors and supervisors confirmed full compliance[116](index=116&type=chunk) - The company has adopted the "Model Code" for employees who may possess price-sensitive information, and no breaches were noted during the reporting period[116](index=116&type=chunk) [(3) Independent Non-Executive Directors](index=40&type=section&id=(3)%20Independent%20Non-Executive%20Directors) In accordance with the Hong Kong Stock Exchange Listing Rules, the company has appointed three independent non-executive directors with appropriate professional qualifications or financial management expertise: Mr. Huang Dechun, Mr. Lu Huawei, and Mr. Zhang Hongfa - The company has appointed three independent non-executive directors, complying with the Hong Kong Stock Exchange Listing Rules[118](index=118&type=chunk) [(4) Audit Committee](index=40&type=section&id=(4)%20Audit%20Committee) The company established an Audit Committee in accordance with the Hong Kong Stock Exchange Listing Rules, with primary responsibilities including recommending the appointment and removal of external auditors, overseeing internal audit, reviewing financial information, and risk management systems; as of the end of the reporting period, the Audit Committee comprised three members and had reviewed and confirmed the Group's interim results for the six months ended June 30, 2025 - The Audit Committee's primary responsibilities include recommending the appointment of external auditors, overseeing internal audit, and reviewing financial information and risk management systems[119](index=119&type=chunk) - As of the end of the reporting period, the Audit Committee comprised two independent non-executive directors and one non-executive director[119](index=119&type=chunk) - The Audit Committee has reviewed and confirmed the Group's interim results for the six months ended June 30, 2025[120](index=120&type=chunk) [(5) Directors' Responsibilities for Financial Statements](index=40&type=section&id=(5)%20Directors'%20Responsibilities%20for%20Financial%20Statements) The company's directors acknowledge their responsibility for the preparation of the company's financial statements, and the financial information contained in this interim report is unaudited - The company's directors acknowledge their responsibility for the preparation of the company's financial statements[121](index=121&type=chunk) [Other Matters](index=41&type=section&id=Other%20Matters) This chapter covers important information such as the company's share capital structure, articles of association amendments, public float, interim results announcement, dividend policy, listed securities transactions, connected transactions, interests of directors and major shareholders, significant legal proceedings, executive changes, company name change, and post-reporting period events [1. Share Capital](index=41&type=section&id=1.%20Share%20Capital) As of the end of the reporting period, the company's total share capital was RMB 1,007,777,778, divided into 758,077,778 A-shares and 249,700,000 H-shares, with a par value of RMB 1.00 per share - As of the end of the reporting period, the company's total share capital was **RMB 1,007,777,778**, divided into A-shares and H-shares[123](index=123&type=chunk) [2. Amendments to the Articles of Association](index=41&type=section&id=2.%20Amendments%20to%20the%20Articles%20of%20Association) The company's Articles of Association were approved by shareholders at the first extraordinary general meeting in 2025 held on February 18, 2025, to comply with the latest laws and regulations such as the "Company Law" and "Securities Law" - The company's Articles of Association were approved for amendment by the general meeting of shareholders on **February 18, 2025**, to comply with the latest laws and regulations[124](index=124&type=chunk) [3. Sufficiency of Public Float](index=41&type=section&id=3.%20Sufficiency%20of%20Public%20Float) During the reporting period, the company's H-share public float was approximately 24.78%, and its A-share public float was 32.39%, both complying with the relevant provisions of the Hong Kong Stock Exchange Listing Rules - The company's H-share public float was approximately **24.78%**, and its A-share public float was approximately **32.39%**, both complying with the Hong Kong Stock Exchange Listing Rules[125](index=125&type=chunk) [4. Interim Results](index=41&type=section&id=4.%20Interim%20Results) The Group's interim results for the six months ended June 30, 2025, were published on the Hong Kong Stock Exchange website and the company's website on August 28, 2025 - The Group's interim results for the first half of **2025** were published on the Hong Kong Stock Exchange and the company's website on **August 28, 2025**[126](index=126&type=chunk) [5. Interim Dividend](index=41&type=section&id=5.%20Interim%20Dividend) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[127](index=127&type=chunk) [6. Purchase, Sale, or Redemption of Listed Securities](index=42&type=section&id=6.%20Purchase,%20Sale,%20or%20Redemption%20of%20Listed%20Securities) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and as of June 30, 2025, the company held no treasury shares - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[128](index=128&type=chunk) [7. Connected Transactions](index=42&type=section&id=7.%20Connected%20Transactions) The Group strictly conducts connected transactions in accordance with the "Listing Rules" and "Connected Transaction Management Measures," primarily with its controlling shareholder, Soho Holdings; the company has signed "Trade Framework Agreements," "Financial Investment Framework Agreements," and "Financial Services Framework Agreements" with Soho Holdings, setting annual transaction caps - The Group strictly conducts connected transactions in accordance with the **"Listing Rules"** and **"Connected Transaction Management Measures,"** primarily with its controlling shareholder, Soho Holdings[129](index=129&type=chunk) [(1) Connected Persons](index=42&type=section&id=(1)%20Connected%20Persons) Soho Holdings is the company's controlling shareholder, wholly controlled by the Jiangsu Provincial State-owned Assets Supervision and Administration Commission, directly and indirectly holding approximately 51.58% of the company's equity, primarily engaged in finance, industrial investment, and international trade - Soho Holdings is the company's controlling shareholder, wholly controlled by the Jiangsu Provincial State-owned Assets Supervision and Administration Commission, directly and indirectly holding approximately **51.58%** of the company's equity[130](index=130&type=chunk) [(2) Continuing Connected Transactions](index=43&type=section&id=(2)%20Continuing%20Connected%20Transactions) The company signed "Trade Framework Agreements" (annual cap: RMB 700 million payable by the Group, RMB 100 million payable by Soho Holdings), "Financial Investment Framework Agreements" (annual cap: RMB 50 million), and "Financial Services Framework Agreements" (annual cap: RMB 2.6 million) with Soho Holdings, all conducted on normal commercial terms - The company signed **"Trade Framework Agreements," "Financial Investment Framework Agreements,"** and **"Financial Services Framework Agreements"** with Soho Holdings[132](index=132&type=chunk) - The annual cap for the **"Trade Framework Agreements"** is **RMB 700 million** payable by the Group and **RMB 100 million** payable by Soho Holdings[132](index=132&type=chunk) - The annual cap for the **"Financial Investment Framework Agreements"** is **RMB 50 million**; the annual cap for the **"Financial Services Framework Agreements"** is **RMB 2.6 million**[132](index=132&type=chunk) [8. Interests and Short Positions of Directors, Supervisors, and Chief Executive in Shares, Underlying Shares, and Debentures of the Company and Associated Corporations](index=43&type=section&id=8.%20Interests%20and%20Short%20Positions%20of%20Directors,%20Supervisors,%20and%20Chief%20Executive%20in%20Shares,%20Underlying%20Shares,%20and%20Debentures%20of%20the%20Company%20and%20Associated%20Corporations) As of June 30, 2025, none of the company's directors, supervisors, or chief executive held any interests or short positions in shares, underlying shares, or debentures of the company or associated corporations that are required to be disclosed under the "Securities and Futures Ordinance" or the "Model Code" - As of June 30, 2025, none of the company's directors, supervisors, or chief executive held any interests or short positions in shares, underlying shares, or debentures that are required to be disclosed[133](index=133&type=chunk) [9. Interests and Short Positions of Major Shareholders in Shares and Underlying Shares of the Company](index=44&type=section&id=9.%20Interests%20and%20Short%20Positions%20of%20Major%20Shareholders%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, major shareholder Soho Holdings directly and indirectly held 51.58% of the company's shares, making it the controlling shareholder; other major shareholders include Zhongshan Company, Soho Holly, and Holly Group Major Shareholder Holdings (As of June 30, 2025) | Shareholder Name | Share Class | Capacity | Number of Shares Held (Long Position) | Approximate Percentage of Total Issued Shares (1) | | :--- | :--- | :--- | :--- | :--- | | Soho Holdings | A-share/H-share | Beneficial Owner and Controlled Corporation Interest | 519,827,256 | 51.58% | | Zhongshan Company | H-share | Beneficial Owner | 24,255,000 | 2.41% | | Soho Holly | A-share | Beneficial Owner | 147,900,000 | 14.68% | | Holly Group | A-share | Beneficial Owner | 63,930,134 | 6.34% | - Soho Holdings is the company's controlling shareholder, holding approximately **51.58%** of the company's total issued shares[136](index=136&type=chunk) [10. Significant Legal Proceedings and Arbitrations](index=45&type=section&id=10.%20Significant%20Legal%20Proceedings%20and%20Arbitrations) During the reporting period, the company received an administrative regulatory decision from the Jiangsu Securities Regulatory Bureau ordering rectification, but there were no new, concluded, or pending significant lawsuits or arbitrations - The company received an administrative regulatory decision from the Jiangsu Securities Regulatory Bureau ordering rectification on **January 24, 2025**[137](index=137&type=chunk) - During the reporting period, there were no new, concluded, or pending significant lawsuits or arbitrations[137](index=137&type=chunk) [11. Changes in Directors, Supervisors, and Senior Management](index=46&type=section&id=11.%20Changes%20in%20Directors,%20Supervisors,%20and%20Senior%20Management) During the reporting period, there were changes in the company's Board of Directors and Supervisory Committee members, including Ms. Jiang Haiying's appointment as a non-executive director, Mr. Jiang Lin and Ms. Zhang Lei no longer holding their respective positions, and Ms. Gong Qi's appointment as a supervisor; additionally, Mr. Zhao Dong ceased to be a Vice General Manager, and Holly Capital's board members were also adjusted - Ms. Jiang Haiying was appointed as a non-executive director, a member of the Risk Management Committee, and a member of the Strategy and ESG Committee[139](index=139&type=chunk) - Mr. Jiang Lin ceased to be a non-executive director, Ms. Zhang Lei ceased to be a company supervisor, and Ms. Gong Qi was appointed as a company supervisor[139](index=139&type=chunk) - Mr. Zhao Dong ceased to be a Vice General Manager of the company[139](index=139&type=chunk) - Changes occurred in Holly Capital's Board of Directors, with Mr. Jia Fuhua and Ms. Yao Aili appointed as directors[140](index=140&type=chunk) [12. Company Name Change](index=47&type=section&id=12.%20Company%20Name%20Change) The company completed the industrial and commercial change procedures for its Chinese name from "Holly Futures Co., Ltd." to "Soho Holly Futures Co., Ltd." on May 12, 2025, and the relevant changes with the Hong Kong Companies Registry on June 4, 2025, with its stock short name and stock code on the Stock Exchange remaining unchanged - The company's Chinese name has been changed from **"Holly Futures Co., Ltd."** to **"Soho Holly Futures Co., Ltd."**[143](index=143&type=chunk) - The company's stock short name (Holly Futures/HOLLY FUTURES) and stock code (03678) on the Stock Exchange remain unchanged[143](index=143&type=chunk) [13. Post-Reporting Period Events](index=47&type=section&id=13.%20Post-Reporting%20Period%20Events) As of the date of this report, apart from the resolution passed at the Fifth Board of Directors' Fifth Meeting on August 28, 2025, to adjust the composition of the Nomination Committee, the Group has no other significant affecting events - On **August 28, 2025**, the Fifth Board of Directors' Fifth Meeting approved the proposal to adjust the composition of the Nomination Committee[144](index=144&type=chunk) Part IV [Interim Financial Information](index=47&type=section&id=Part%20IV%20Interim%20Financial%20Information) This section presents the interim financial statements, including review report, balance sheets, income statements, cash flow statements, statements of changes in equity, and detailed notes to the financial statements [Review Report](index=48&type=section&id=Review%20Report) ShineWing Certified Public Accountants (Special General Partnership) reviewed Soho Holly Futures Co., Ltd.'s consolidated and parent company financial statements as of June 30, 2025, concluding that nothing came to their attention to suggest the financial statements were not prepared in all material respects in accordance with Enterprise Accounting Standards, or failed to fairly reflect the company's financial position, operating results, and cash flows - ShineWing Certified Public Accountants reviewed, rather than audited, the company's financial statements[147](index=147&type=chunk) - The review concluded that nothing came to their attention to suggest the financial statements were not prepared in all material respects in accordance with Enterprise Accounting Standards, or failed to fairly reflect the company's financial position, operating results, and cash flows[147](index=147&type=chunk) [Consolidated Balance Sheet](index=49&type=section&id=Consolidated%20Balance%20Sheet) This chapter presents the consolidated balance sheet as of June 30, 2025, and January 1, 2025, detailing the Group's assets, liabilities, and shareholders' equity [Parent Company Balance Sheet](index=51&type=section&id=Parent%20Company%20Balance%20Sheet) This chapter presents the parent company balance sheet as of June 30, 2025, and January 1, 2025, detailing Soho Holly Futures Co., Ltd.'s (parent company) assets, liabilities, and shareholders' equity [Consolidated Income Statement](index=53&type=section&id=Consolidated%20Income%20Statement) This chapter presents the consolidated income statement for January-June 2025 and January-June 2024, reflecting the Group's operating results during the reporting period, including operating revenue, operating expenses, total profit, net profit, and earnings per share [Parent Company Income Statement](index=55&type=section&id=Parent%20Company%20Income%20Statement) This chapter presents the parent company income statement for January-June 2025 and January-June 2024, reflecting Soho Holly Futures Co., Ltd.'s (parent company) operating results during the reporting period, including operating revenue, operating expenses, total profit, net profit, and earnings per share [Consolidated Cash Flow Statement](index=57&type=section&id=Consolidated%20Cash%20Flow%20Statement) This chapter presents the consolidated cash flow statement for January-June 2025 and January-June 2024, detailing the Group's net cash flows from operating, investing, and financing activities, as well as the net change in cash and cash equivalents [Parent Company Cash Flow Statement](index=59&type=section&id=Parent%20Company%20Cash%20Flow%20Statement) This chapter presents the parent company cash flow statement for January-June 2025 and January-June 2024, detailing Soho Holly Futures Co., Ltd.'s (parent company) net cash flows from operating, investing, and financing activities, as well as the net change in cash and cash equivalents [Consolidated Statement of Changes in Equity](index=61&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) This chapter presents the consolidated statement of changes in equity for January-June 2025 and January-June 2024, reflecting the opening and closing balances and period changes for equity items such as share capital, capital reserves, other comprehensive income, surplus reserves, general risk reserves, and undistributed profits [Parent Company Statement of Changes in Equity](index=63&type=section&id=Parent%20Company%20Statement%20of%20Changes%20in%20Equity) This chapter presents the parent company statement of changes in equity for January-June 2025 and January-June 2024, reflecting Soho Holly Futures Co., Ltd.'s (parent company) opening and closing balances and period changes for equity items such as share capital, capital reserves, other comprehensive income, surplus reserves, general risk reserves, and undistributed profits [Notes to Financial Statements](index=65&type=section&id=Notes%20to%20Financial%20Statements) This chapter provides detailed notes to the financial statements, covering the company's basic information, basis of financial statement preparation, significant accounting policies and estimates, taxation, notes to financial statement items, changes in consolidation scope, interests in other entities, government grants, financial instruments and risk management, fair value disclosure management, related parties and related party transactions, commitments and contingencies, post-balance sheet events, and other significant matters, offering necessary supplementary information for understanding the financial statements - The company began implementing the **"Administrative Rules for Bulk Commodity Risk Management Business of Futures Risk Management Companies"** and the **"Implementation Guidance on Accounting Treatment for Standard Warehouse Receipt Transactions under Enterprise Accounting Standards"** on **January 1, 2025**, standardizing accounting treatment for trade-related business revenue and standard warehouse receipt transactions[314](index=314&type=chunk) - During January-June 2025, due to changes in accounting policies, the company retrospectively adjusted accounts such as inventories, other assets, other operating income, other operating costs, investment income, fair value change income, asset impairment losses, income tax expenses, deferred income tax assets, and undistributed profits[312](index=312&type=chunk) - The company's financial instruments and risk management section details exposures and management strategies for market risks (exchange rate risk, interest rate risk, other price risks), credit risk, and liquidity risk[483](index=483&type=chunk)[502](index=502&type=chunk)[506](index=506&type=chunk) [1. Basic Information of the Company](index=65&type=section&id=1.%20Basic%20Information%20of%20the%20Company) This section introduces Soho Holly Futures Co., Ltd.'s registration information, historical evolution, listing status, headquarters and branch distribution, parent company and ultimate controlling company, and its main business scope in the futures industry - The company's registered capital is **RMB 1.008 billion**, and its legal representative is Chu Kairong[173](index=173&type=chunk) - The company's H-shares were listed on the Hong Kong Stock Exchange on **December 31, 2015**, and its A-shares were listed on the Shenzhen Stock Exchange on **August 5, 2022**[174](index=174&type=chunk) - The company primarily engages in commodity futures brokerage, financial futures brokerage, futures investment consulting, asset management, and fund sales[177](index=177&type=chunk) [2. Basis of Preparation of Financial Statements](index=65&type=section&id=2.%20Basis%20of%20Preparation%20of%20Financial%20Statements) This section explains that the financial statements are prepared in accordance with Enterprise Accounting Standards issued by the Ministry of Finance of China, information disclosure rules of the China Securities Regulatory Commission, and the Hong Kong Companies Ordinance and Listing Rules of the Stock Exchange, and are presented on a going concern basis - The financial statements are prepared in accordance with Enterprise Accounting Standards, China Securities Regulatory Commission information disclosure rules, and the Hong Kong Companies Ordinance and Listing Rules of the Stock Exchange[179](index=179&type=chunk) - These financial statements are presented on a going concern basis, and no matters have been identified that cast significant doubt on the ability to continue as a going concern[180](index=180&type=chunk) [3. Significant Accounting Policies and Accounting Estimates](index=66&type=section&id=3.%20Significant%20Accounting%20Policies%20and%20Accounting%20Estimates) This section details the significant accounting policies and estimates followed by the Group in preparing its financial statements, including business combinations, financial instruments, depreciation of fixed assets, amortization of intangible assets, revenue recognition and measurement, and fair value measurement, also disclosing policy changes effective January 1, 2025, regarding accounting treatment for futures risk management companies' bulk commodity risk management business and standard warehouse receipt transactions - The Group determines specific accounting policies and estimates based on its actual operating characteristics, including business combinations, financial instruments, depreciation of

[Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Overview of Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99%E6%A6%82%E8%A7%88) This chapter provides an overview of the company's board members, key personnel, corporate offices, auditor, and listing details - Board member changes: **Mr. Li Zhonghui** was appointed **President and Executive Director** on August 1, 2025, while **Mr. Tang Jun** resigned from the same positions on the same day[12](index=12&type=chunk) - Auditor: **Deloitte Touche Tohmatsu**[13](index=13&type=chunk) - Listing information: Ordinary shares on The Stock Exchange of Hong Kong Limited, stock code: **563**[13](index=13&type=chunk) [Financial Highlights](index=5&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Key Financial Data and Ratios](index=5&type=section&id=%E5%85%B3%E9%94%AE%E8%B4%A2%E5%8A%A1%E6%95%B0%E6%8D%AE%E4%B8%8E%E6%AF%94%E7%8E%87) This chapter reports key financial data and ratios for the six months ended June 30, 2025, showing significant revenue decline, expanded losses, and an increased net debt-to-equity ratio Key Financial Data (For the six months ended June 30) | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 1,827,835 | 2,980,833 | -38.7% | | Loss attributable to owners of the Company | (492,139) | (231,564) | Loss widened | | Basic loss per share (HK cents) | (10.29) | (4.84) | Loss widened | | Proceeds received from pre-sales of properties | 719,348 | 1,106,886 | -35.0% | | Net debt to total equity ratio | 76.1% | 64.8% | Increased by 11.3 percentage points | | Current ratio | 1.3 | 1.2 | Increased by 0.1 | - Debt maturity structure: Debt is primarily concentrated in maturities of less than one year and one to two years, accounting for **39.1%** and **25.6%** respectively[15](index=15&type=chunk) [Chairman's Report](index=6&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A%E6%9B%B8) [Macroeconomic and Real Estate Market Review](index=6&type=section&id=%E5%AE%8F%E8%A7%82%E7%BB%8F%E6%B5%8E%E4%B8%8E%E6%88%BF%E5%9C%B0%E4%BA%A7%E5%B8%82%E5%9C%BA%E5%9B%9E%E9%A1%BE) The Chairman's report reviews the complex global macroeconomic and Chinese real estate market environment in H1 2025, highlighting the company's steady development strategy and achievements amid challenges - Global economic growth slowed with increasing divergence, constrained by trade frictions and policy uncertainties; China's economy showed strong resilience, with H1 GDP growing by **5.3%** year-on-year[17](index=17&type=chunk) - Chinese real estate policies continued to strengthen, focusing on destocking, expanding demand, new models, and risk mitigation; core cities stabilized first, but the overall market still faces sales slowdown and inventory pressure[18](index=18&type=chunk) [Company's H1 Operational Highlights and Honors](index=6&type=section&id=%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%8D%8A%E5%B9%B4%E7%BB%8F%E8%90%A5%E4%BA%AE%E7%82%B9%E4%B8%8E%E8%8D%A3%E8%AA%89) The company maintained a steady development strategy, advancing quality projects and achieving stable operating indicators, while receiving multiple industry awards for its outstanding performance - Three high-quality, exquisitely furnished bungalows at Xi'an Shanghai Industrial Qiyuan were successfully delivered, reflecting Shanghai Industrial Urban Development's commitment from 'delivering houses' to 'delivering lifestyles'[18](index=18&type=chunk) - The Qianji brand gained recognition in the affordable rental housing market, with Qianji • Hui Community and Qianji • Xin Community both rated as 'Shanghai 5A Youth Centers'; **302** new units at Qianji • Chuang Community West District also launched in April, receiving positive market feedback[20](index=20&type=chunk) - Shanghai Chenkai (Group) Co., Ltd. successfully issued the first tranche of 2025 medium-term notes, with a principal of **RMB 900 million** over **3 years** at an interest rate of **1.99%**, setting a new low for comparable notes issued by Chinese real estate developers with the same credit rating and maturity[20](index=20&type=chunk) - Received the **GA+ AWARDS 2024 Platinum Award for Residential Architecture Design**, listed among the **'2025 Top 500 Real Estate Development Enterprises'** and **'2025 Top Real Estate Listed Companies'**, with flagship project Shanghai Industrial Tinghai selected as one of the first **'Shanghai Good House Collection Cases'**[21](index=21&type=chunk)[22](index=22&type=chunk) [H2 Outlook and Strategy](index=8&type=section&id=%E4%B8%8B%E5%8D%8A%E5%B9%B4%E5%B1%95%E6%9C%9B%E4%B8%8E%E6%88%98%E7%95%A5) For H2 2025, the company will align with national policies, optimize its core business, deepen structural adjustments, enhance operational efficiency, and strengthen cash flow management - The Chinese real estate market remains in a phase of adjustment and recovery, but with a series of favorable policy supports, it is expected to achieve stable and orderly development[22](index=22&type=chunk) - Shanghai Industrial Urban Development will respond to national policy guidance, focusing on its strategic positioning as a 'core urban industry-city integrated developer,' precisely grasp market dynamics, steadfastly optimize and expand its main business, deepen structural adjustments, and comprehensively enhance operational management efficiency and core competitive advantages[23](index=23&type=chunk) - The Group will focus on strengthening sales collection efficiency and cash flow management, driving asset revitalization, cost reduction, and efficiency improvement through dual efforts in debt structure optimization and revenue enhancement, continuously boosting capital operation capabilities and risk resilience to solidify a stable operating foundation[23](index=23&type=chunk) [Management Discussion and Analysis](index=9&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) [Real Estate Market Environment](index=9&type=section&id=%E6%88%BF%E5%9C%B0%E7%94%A2%E5%B8%82%E5%A0%B4%E7%92%B0%E5%A2%83) In H1 2025, China's real estate market gradually stabilized with policy support, but regional differentiation persisted, with core cities showing resilience while lower-tier cities faced destocking pressure - The Chinese real estate market gradually stabilized under the dual effects of continuous policy efforts and market self-adjustment, but structural differentiation persists[25](index=25&type=chunk) - First-tier and core second-tier cities showed strong resilience, with some entering a virtuous development track, while third- and fourth-tier cities remain in an adjustment period with greater destocking pressure[25](index=25&type=chunk) H1 2025 China Real Estate Market Key Data (Y-o-Y) | Indicator | Y-o-Y Change | | :--- | :--- | | National real estate development investment | Decreased by 11.2% | | Sales of new commercial housing | Decreased by 5.5% | | Sales area of new commercial housing | Decreased by 3.5% | [Business Review](index=9&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The company actively responded to market pressures by optimizing resource allocation, focusing on core cities, expanding investment properties, and adopting a prudent land acquisition strategy, despite a significant decline in contract sales [Overview](index=9&type=section&id=%E7%B6%9C%E8%BF%B0) In H1 2025, the company actively optimized resource allocation, promoted project development, and enhanced investment and risk resistance capabilities, focusing on Shanghai and other core cities - Shanghai Industrial Urban Development actively responded to market challenges, focused on optimizing resource allocation, promoted multi-dimensional project development and business enhancement, pursued both revenue generation and cost reduction, continuously strengthened investment and risk resistance capabilities, and built a more resilient development model[26](index=26&type=chunk) - The Group will continue to strategically focus on Shanghai, steadily expand into other core first- and second-tier cities, actively optimize regional layout, deepen investment property business, flexibly increase quality land reserves, and focus on developing competitive high-end projects to further enhance comprehensive strength[26](index=26&type=chunk) [Contract Sales](index=9&type=section&id=%E5%90%88%E7%B4%84%E9%8A%B7%E5%94%AE) For the six months ended June 30, 2025, the company's contract sales value and area for commercial and affordable housing significantly decreased year-on-year, primarily due to a higher proportion of sales in second-tier cities Contract Sales Data (For the six months ended June 30) | Indicator | 2025 | 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Contract sales value (RMB) | 689,140,000 | 2,283,730,000 | Decreased by 69.8% | | Total contract sales area (sqm) | 41,000 | 98,000 | Decreased by 58.2% | | Total average selling price (RMB per sqm) | Approx. 16,800 | Approx. 23,300 | Decreased by approx. 27.8% | - The higher proportion of sales in second-tier cities during the period was the main reason for the decrease in the total average selling price[27](index=27&type=chunk) - Shanghai Industrial Wanghai, Tianjin Industrial Yangshan, Yantai Industrial Yunlu, Shanghai Industrial Tinghai, Xi'an Nature, and Xi'an Industrial Qiyuan were key sales projects, accounting for approximately **39.9%**, **20.8%**, **12.6%**, **10.1%**, **8.1%**, and **5.8%** of total contract sales value during the period, respectively[27](index=27&type=chunk) [Land Reserve](index=10&type=section&id=%E5%9C%9F%E5%9C%B0%E5%84%B2%E5%82%99) As of June 30, 2025, the company held 27 projects in 10 key cities, with a future saleable GFA of approximately **3.29 million sqm**, sufficient for **3-5 years** of development, while maintaining a prudent land acquisition strategy - As of June 30, 2025, the Group's land reserve comprised **27 projects** across **10 key mainland cities**, with a future saleable GFA of approximately **3,293,000 sqm**, sufficient for **3 to 5 years** of development[28](index=28&type=chunk) - The Group maintained a prudent land acquisition strategy, strictly controlling the pace of land acquisition, adhering to 'quality first, efficiency-oriented,' strengthening the development and conversion of existing land reserves, and opportunely supplementing high-potential land reserves[28](index=28&type=chunk) [Property Development](index=10&type=section&id=%E7%89%A9%E6%A5%AD%E7%99%BC%E5%B1%95) For the six months ended June 30, 2025, the company had **6 projects** under construction with a GFA of **906,000 sqm** and delivered **57,000 sqm**, with Shanghai Industrial Wanghai being the largest sales contributor - As of June 30, 2025, the Group had **6 projects** under construction, with a GFA of **906,000 sqm**, primarily including Xi'an Nature, Shanghai TODTOWN Tianhui, Shanghai Industrial Tinghai, Yantai Industrial Yunlu, and Xi'an Industrial Qiyuan[29](index=29&type=chunk) - Total delivered area was **57,000 sqm**, mainly comprising Shanghai Industrial Wanghai, Tianjin Industrial Yangshan, Xi'an Industrial Qiyuan, Xi'an Nature, and Shanghai Industrial Yunduan[29](index=29&type=chunk) - Projects such as Shanghai Industrial Wanghai, Tianjin Industrial Yangshan, Yantai Industrial Yunlu, Shanghai Industrial Tinghai, Xi'an Nature, and Xi'an Industrial Qiyuan received widespread market acclaim and achieved ideal pre-sales results, with Shanghai Industrial Wanghai being the largest sales contributor[29](index=29&type=chunk) [Investment Properties](index=10&type=section&id=%E6%8A%95%E8%B3%87%E6%80%A7%E7%89%A9%E6%A5%AD) As of June 30, 2025, the company held approximately **1.254 million sqm** of investment properties, with overall rental income decreasing by **4.3%** year-on-year, while its Qianji brand maintained a high average occupancy rate of **86.5%** in affordable rental housing - As of June 30, 2025, the Group had completed multiple commercial projects in **7 key cities** including Shanghai, Beijing, Tianjin, Chongqing, Shenyang, Xi'an, and Shenzhen, holding a total investment property area of approximately **1,254,000 sqm**[30](index=30&type=chunk) - During the period, the Group's overall rental income decreased by **4.3%** year-on-year to **HK$364,827,000** (H1 2024: HK$381,338,000)[30](index=30&type=chunk) - The Shanghai Qianji brand has established a competitive advantage in the affordable rental housing market, continuously enriching its product lines, with an average occupancy rate stably maintained at a high level of **86.5%**[30](index=30&type=chunk) [Financial Performance](index=11&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE) In H1 2025, the company faced financial challenges with significant year-on-year declines in revenue and gross profit, leading to an expanded loss for the period, despite reduced distribution, sales, and administrative expenses [Revenue](index=11&type=section&id=%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, total revenue decreased by **38.7%** year-on-year, primarily due to lower sales from project deliveries, though property sales remained the main source, with rental, property management, and hotel businesses providing stable contributions - For the six months ended June 30, 2025, the Group's revenue was **HK$1,827,835,000**, a year-on-year decrease of **38.7%**, mainly due to lower sales from multiple project deliveries compared to the same period last year[31](index=31&type=chunk) Revenue Composition (For the six months ended June 30) | Revenue Source | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | 2025 Share | 2024 Share | Y-o-Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Property sales | 1,336,687 | 2,453,892 | 73.1% | 82.3% | -45.5% | | Rental income | 364,827 | 381,338 | 20.0% | 12.8% | -4.3% | | Hotel operations | 119,528 | 138,461 | 6.5% | 4.7% | -13.7% | | Property management | 6,793 | 7,142 | 0.4% | 0.2% | -4.8% | - Shanghai Industrial Wanghai, Tianjin Industrial Yangshan, Xi'an Industrial Qiyuan, Xi'an Nature, and Shanghai Industrial Yunduan accounted for **32.1%**, **31.2%**, **18.3%**, **10.2%**, and **4.3%** of property sales revenue, respectively[31](index=31&type=chunk) [Gross Profit and Gross Profit Margin](index=11&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) For the six months ended June 30, 2025, gross profit significantly decreased by **56.5%** year-on-year, with the gross profit margin falling by **6.0 percentage points** to **14.8%**, mainly due to lower-margin projects and reduced selling prices - For the six months ended June 30, 2025, the Group's gross profit was **HK$269,874,000**, a **56.5%** decrease compared to the same period in 2024[32](index=32&type=chunk) - The gross profit margin was **14.8%**, a **6.0 percentage point** decrease from the same period in 2024, mainly due to fewer high-margin projects delivered and a reduction in average selling prices due to market conditions[32](index=32&type=chunk) [Revaluation of Investment Properties](index=11&type=section&id=%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD%E9%87%8D%E4%BC%B0) For the six months ended June 30, 2025, the company recorded a net impairment loss of approximately **HK$151 million** from investment property revaluation, primarily due to a slight decrease in the fair value of multiple properties - For the six months ended June 30, 2025, the Group recorded a net impairment loss from investment property revaluation of approximately **HK$151,069,000** (H1 2024: impairment of HK$210,465,000), mainly due to a slight decrease in the fair value of multiple investment properties[33](index=33&type=chunk) [Distribution and Selling Expenses](index=11&type=section&id=%E5%88%86%E9%8A%B7%E5%8F%8A%E9%8A%B7%E5%94%AE%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, distribution and selling expenses decreased by **5.1%** year-on-year to **HK$101.6 million**, primarily due to a decline in commercial property deliveries - For the six months ended June 30, 2025, the Group's distribution and selling expenses decreased by **5.1%** year-on-year to **HK$101,616,000** (H1 2024: HK$107,098,000), mainly due to a year-on-year decrease in the delivery of the Group's commercial properties[34](index=34&type=chunk) [General and Administrative Expenses](index=11&type=section&id=%E4%B8%80%E8%88%AC%E5%8F%8A%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, general and administrative expenses decreased by **8.9%** year-on-year to **HK$197.5 million**, primarily due to the continuous strict implementation of cost control measures - For the six months ended June 30, 2025, the Group's general and administrative expenses decreased by **8.9%** year-on-year to **HK$197,546,000** (H1 2024: HK$216,773,000), mainly due to the continuous strict implementation of cost control measures during the period, which yielded good results[35](index=35&type=chunk) [Other Expenses, Income and Losses, Net](index=11&type=section&id=%E5%85%B6%E4%BB%96%E9%96%8B%E6%94%AF%E3%80%81%E6%94%B6%E7%9B%8A%E5%8F%8A%E虧%E6%90%8D%E6%B7%A8%E9%A1%8D) For the six months ended June 30, 2025, the company recorded a net loss of approximately **HK$63.5 million** from other expenses, income, and losses, an increase from the prior year, mainly due to expected credit impairment losses from a joint venture and exchange losses - For the six months ended June 30, 2025, the Group recorded a net loss of approximately **HK$63,501,000** from other expenses, income, and losses (H1 2024: net loss of HK$19,850,000), mainly due to expected credit impairment losses from a joint venture and exchange losses[36](index=36&type=chunk) [Loss for the Period](index=12&type=section&id=%E6%9C%9F%E5%85%A7%E虧%E6%90%8D) For the six months ended June 30, 2025, the company recorded a loss of **HK$562.4 million** for the period, significantly wider than the prior year, primarily due to reduced sales and lower gross margins from delivered properties, resulting in a basic loss per share of **10.29 HK cents** - For the six months ended June 30, 2025, the Group recorded a loss of **HK$562,427,000** (H1 2024: loss of HK$188,301,000), mainly due to reduced sales from multiple projects and lower gross margins from delivered commercial properties[37](index=37&type=chunk) - Loss attributable to shareholders was approximately **HK$492,139,000** (H1 2024: loss of HK$231,564,000), with basic loss per share of **10.29 HK cents** (H1 2024: loss of 4.84 HK cents)[37](index=37&type=chunk) [Liquidity and Financial Resources](index=12&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of June 30, 2025, bank balances and cash decreased, and the net debt-to-total equity ratio rose to **76.1%**, but the current ratio remained at **1.3 times**, with management confident in sufficient cash for operations and future development - As of June 30, 2025, the Group's bank balances and cash amounted to **HK$3,588,286,000** (December 31, 2024: HK$5,342,774,000)[38](index=38&type=chunk) Financial Ratios (As of June 30, 2025) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Net debt to total equity ratio | 76.1% | 64.8% | Increased by 11.3 percentage points | | Current ratio | 1.3 times | 1.2 times | Increased by 0.1 times | - The Group continued to optimize HKD-denominated borrowings as per business needs, repaying offshore HKD borrowings with relatively low-interest loans[38](index=38&type=chunk) - The Group has sufficient cash, and management believes it has adequate funds and future earnings to meet current working capital and future development needs[39](index=39&type=chunk) [Foreign Exchange Risk](index=12&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) Most of the company's revenue and operating costs are RMB-denominated, limiting direct exposure to significant exchange rate fluctuations, and while no hedging arrangements are currently in place, future measures will be considered - During the period, most of the Group's revenue and operating costs were denominated in RMB, and apart from foreign currency-denominated bank deposits and loans, the Group's operating cash flow or liquidity was not significantly affected by other direct exchange rate fluctuations[40](index=40&type=chunk) - As of June 30, 2025, the Group had not entered into any foreign exchange hedging arrangements to control its exchange rate fluctuation risk, but will take necessary measures in due course to mitigate the impact of exchange rate fluctuations[40](index=40&type=chunk) [Human Resources and Remuneration Policy](index=13&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the company employed **706 staff**, with remuneration policies based on performance and qualifications, and provided job-related training and team-building activities to enhance human resource quality and employee belonging - As of June 30, 2025, the Group employed **706 staff** (including Hong Kong and China offices)[41](index=41&type=chunk) - The Group's employee remuneration policy is formulated based on employee performance, qualifications, experience, and capabilities; directors' remuneration is determined by the Remuneration Committee with reference to the Group's operating results, individual performance, and market comparison statistics[41](index=41&type=chunk) - The Group provides job-related training courses and regularly organizes team-building activities for employees to enhance the quality of its human resources and employee sense of belonging[41](index=41&type=chunk) [Outlook](index=13&type=section&id=%E5%B1%95%E6%9C%9B) For H2 2025, the company expects the Chinese real estate market to stabilize with policy support, and will continue to pursue steady operations, deepen core city development, diversify investment properties, and optimize capital structure to create long-term shareholder value - Looking ahead to H2 2025, the Chinese real estate market remains in a phase of adjustment and recovery, but with a series of favorable policy supports, it is expected to achieve stable and orderly development[42](index=42&type=chunk) - The Group will uphold a prudent operating philosophy, actively respond to national policies, leverage its professional advantages, continuously promote the development of high-quality projects, and strive to meet residents' growing housing demands[42](index=42&type=chunk) - The Group will flexibly seize policy opportunities and market trends, continue to focus on Shanghai, further deepen development in other core first- and second-tier cities, actively participate in high-quality urban development, strengthen resource integration and business innovation, actively explore diversified development paths for investment properties, continuously enhance project value and competitive advantages, and expand sustainable growth space[42](index=42&type=chunk) [Project Information](index=14&type=section&id=%E9%A0%85%E7%9B%AE%E8%B3%87%E6%96%99) [Land Reserve Overview](index=14&type=section&id=%E5%9C%9F%E5%9C%B0%E5%84%B2%E5%82%99%E6%A6%82%E8%A7%88) As of June 30, 2025, the company held **27 projects** in **10 cities**, with a total future saleable land reserve of approximately **3.29 million sqm**, covering various property types, and has adopted a prudent land acquisition strategy - The Group owns **27 projects** in **10 cities**, including mid-to-high-end residential units, serviced apartments, commercial properties, and offices; as of June 30, 2025, the total future saleable land reserve was approximately **3.29 million sqm**[45](index=45&type=chunk) - The Group has reorganized its projects and will adopt a prudent strategy for future land acquisitions[45](index=45&type=chunk) [Major Investment Properties](index=15&type=section&id=%E4%B8%BB%E8%A6%81%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD) This chapter lists the company's major investment properties across cities like Shanghai, Chongqing, and Beijing, encompassing commercial, office, exhibition, retail, and affordable rental housing, with a total GFA of approximately **1.254 million sqm** Major Investment Properties (As of June 30, 2025) | Project | City | Property Type | Planned GFA (sqm) | | :--- | :--- | :--- | :--- | | Shanghai Youth City | Shanghai | Commercial | 17,665 | | Wanyuan Block A | Shanghai | Commercial, Office | 58,556 | | Shanghai Mart | Shanghai | Exhibition Hall, Shops & Trade Center, Office & Parking Spaces | 284,651 | | Chenkai International Tower | Shanghai | Office & Parking Spaces | 45,239 | | Chenkai YoYo | Shanghai | Commercial | 13,839 | | Qianji Hui Community | Shanghai | Commercial, Affordable Rental Housing | 44,927 | | Qianji Xin Community | Shanghai | Commercial, Affordable Rental Housing | 126,702 | | Qianji Chuang Community | Shanghai | Commercial, Affordable Rental Housing | 115,799 | | Chenkai Youxiang+ Xinhonghui | Shanghai | Commercial | 9,777 | | City on City | Chongqing | Commercial, Office, Parking Spaces | 317,405 | | China Phoenix Tower | Shenzhen | Office | 1,048 | | Youth Hub | Beijing | Commercial | 24,931 | | Nature | Xi'an | Commercial | 26,917 | | Shenyang Chenkai Center | Shenyang | Commercial, Office | 100,446 | | Others | Shanghai & Tianjin | Commercial, Office & Parking Spaces | 66,030 | | **Total** | | | **1,253,932** | [Analysis of Future Saleable GFA](index=15&type=section&id=%E6%9C%AA%E4%BE%86%E5%8F%AF%E5%94%AE%E5%BB%BA%E7%AF%89%E9%9D%A2%E7%A9%8D%E5%88%86%E6%9E%90) As of June 30, 2025, the company's future saleable GFA was primarily concentrated in the Yangtze River Delta region (**54.1%**), followed by Xi'an (**14.1%**), Wuhan (**12.4%**), and Chongqing (**10.7%**), reflecting its strategic focus on core areas Regional Distribution of Future Saleable GFA (As of June 30, 2025) | Region | Share | | :--- | :--- | | Yangtze River Delta Region | 54.1% | | Xi'an | 14.1% | | Wuhan | 12.4% | | Chongqing | 10.7% | | Shenyang | 3.1% | | Yantai | 2.5% | | Tianjin | 1.8% | | Beijing | 1.3% | [Introduction to Major Projects in China](index=16&type=section&id=%E6%96%BC%E4%B8%AD%E5%9C%8B%E4%B8%BB%E8%A6%81%E9%A0%85%E7%9B%AE%E4%BB%8B%E7%B4%B9) [Shanghai Projects](index=16&type=section&id=%E4%B8%8A%E6%B5%B7%E9%A0%85%E7%9B%AE) This chapter details the company's key projects in Shanghai, including residential, commercial, hotel, office, and affordable rental housing, strategically located with comprehensive amenities to create high-quality living and urban complexes - Wanyuan City project is located in Gumei, Minhang District, Shanghai, with a total GFA of approximately **1.3 million sqm**, encompassing international apartments, detached villas, garden houses, large-flat luxury residences, modern commercial spaces, and green parks, integrating residential, commercial, cultural, educational, and business functions[52](index=52&type=chunk) - TODTOWN Tianhui is located at the south and north squares of Xinzhuang Station in Shanghai's sub-center, with a total GFA of **605,000 sqm**, an 'aerial city' integrating residential, commercial, and leisure functions, including offices, shopping malls, hotels, residences, serviced apartments, and public facilities[55](index=55&type=chunk) - Qianji Xin Community, jointly developed by Shanghai Industrial Urban Development and Xinzhuang Town, Minhang District, is one of Minhang District's first certified talent apartments, with a total GFA of approximately **186,000 sqm**, a rental community integrating apartments, green spaces, and commercial facilities[57](index=57&type=chunk) - Qianji Hui Community is one of Shanghai's first large-scale R4 affordable rental housing projects and a key supporting project for Xuhui District's 'talent highland strategy,' aiming to provide exquisite, comfortable, and quality ideal living spaces for dream chasers[61](index=61&type=chunk) - Qianji Chuang Community project is located in the 'Dalinghaowan' area of Wujing Town, Minhang District, with a total GFA of approximately **170,000 sqm**, creating a low-carbon, environmentally friendly, and green leisure lifestyle, supporting the Dalinghaowan construction[64](index=64&type=chunk) - Shanghai Industrial Tinghai project is located in the Main City 103 International Innovation Collaboration Zone of Lingang Modern Service Industry Open Zone, Pudong New Area, Shanghai, an international community for world-class technology institutions and high-end talents, with a total land area of approximately **120,000 sqm** and a total GFA of approximately **440,000 sqm**[86](index=86&type=chunk) [Yantai Projects](index=23&type=section&id=%E7%85%99%E5%8F%B0%E9%A0%85%E7%9B%AE) This chapter introduces the 'Shanghai Industrial Yunlu' project in Yantai, located in the core of Zhifu District's Xingfu New City, with a total GFA of approximately **159,000 sqm**, offering residential, commercial, and public service facilities, positioned as an upgraded residential product - The Shanghai Industrial Yunlu project is located in the core area of Yantai Xingfu New City, adjacent to the new city's business axis, with the coastline within **1.5 km** to the north; total GFA is approximately **159,000 sqm**, including residential, commercial, and some public service facilities[89](index=89&type=chunk) - The project is positioned as an upgraded residential product, with three- and four-bedroom units as main layouts, delivered with refined decoration; it aims to create a quality living environment integrating luxury, ecology, and technology, with butler-style property services, natural-themed community landscapes, and intelligent community management[89](index=89&type=chunk) [Wuhan Projects](index=24&type=section&id=%E6%AD%A6%E6%BC%A2%E9%A0%85%E7%9B%AE) This chapter introduces the 'Xiang Kai Chang Long Garden' project in Wuhan, located in the core of Yangtze River New Area's Yangluo Heart, with a total planned GFA of approximately **450,000 sqm**, encompassing residential and commercial properties, positioned as a high-end residential product with a self-owned prestigious school as a core advantage - The Xiang Kai Chang Long Garden project plot is located in the core area of Yangluo Heart, Yangtze River New Area, with a total planned GFA of approximately **450,000 sqm**, including residential and commercial properties[91](index=91&type=chunk) - The project is positioned as a high-end residential product, leveraging a self-owned prestigious school as a core advantage, with forward-looking product planning and a highlight of ultra-high usable area ratio, creating a high-end, quality living environment[91](index=91&type=chunk) [Beijing Projects](index=24&type=section&id=%E5%8C%97%E4%BA%AC%E9%A0%85%E7%9B%AE) This chapter introduces the 'Xidiaoyutai • Yuxi' project in Beijing, located on West Third Ring Road, near Kunyu River and Yuyuantan Park, offering rare riverside views; the project primarily features luxury riverside residences targeting high-end affluent individuals, with its third phase nearly sold out - The Xidiaoyutai • Yuxi project is located on West Third Ring Road, bordered by Kunyu River to the west and south, and the **137-hectare** Yuyuantan Park to the east, enjoying the capital's largest **67-hectare** water area and rare riverside views[93](index=93&type=chunk) - The project primarily features luxury riverside residences as its core product, targeting high-end affluent individuals; developed in three phases, the first and second phases are completed and sold out, and the third phase is nearly sold out[93](index=93&type=chunk) [Tianjin Projects](index=25&type=section&id=%E5%A4%A9%E6%B4%A5%E9%A0%85%E7%9B%AE) This chapter introduces the 'Shanghai Industrial Yangshan' project in Tianjin's Hedong District, with a total GFA of approximately **175,000 sqm**, including residential, commercial, and public service facilities; it is positioned as a high-end aesthetic community, aiming to create a quality living environment integrating ecology and technology - The Shanghai Industrial Yangshan project is located in Hedong District, Tianjin, with a total GFA of approximately **175,000 sqm**, including residential, commercial, and some public service facilities[96](index=96&type=chunk) - The project pioneers a high-end aesthetic community for regional, product, and lifestyle revitalization, creating ultimate innovative residential products; it aims to achieve a quality living environment integrating ecology and technology, becoming a significant driving force for Hedong District's development in Tianjin[96](index=96&type=chunk) [Shenyang Projects](index=25&type=section&id=%E7%80%8B%E9%99%BD%E9%A0%85%E7%9B%AE) This chapter introduces the 'Shenyang Chenkai Center' project, a landmark mixed-use complex in Shenyang's Taiyuan Street commercial district, with a total GFA of **230,000 sqm**, encompassing high-end offices, SOHO, serviced apartments, and open commercial streets - The Shenyang Chenkai Center project is located in Taiyuan Street, the most prosperous commercial district in downtown Shenyang, with a total GFA of **230,000 sqm**[100](index=100&type=chunk) - It encompasses four integrated business formats: high-end offices, SOHO, exquisitely furnished apartments, and open commercial streets, integrating cultural and creative, dining, leisure, entertainment, office, and high-end apartments, making it a landmark mixed-use complex in the city[100](index=100&type=chunk) [Wuxi Projects](index=26&type=section&id=%E7%84%A1%E9%8C%AB%E9%A0%85%E7%9B%AE) This chapter introduces the 'Shanghai Central Chenkai International' project in Wuxi, a landmark urban commercial complex in the core of Liyuan Economic Development Zone, comprising an international five-star hotel, serviced apartments, Grade A offices, and a commercial center - The Shanghai Central Chenkai International project is located in the core of Liyuan Economic Development Zone, Wuxi's new urban axis, a landmark building in the Lihu area, only **5 kilometers** from Wuxi city center, close to Lihu Scenic Area, Lihu Central Park, Bogong Island, and other attractions[103](index=103&type=chunk) - The project is an urban commercial complex composed of an international five-star hotel, serviced apartments, Grade A offices, and a commercial center[103](index=103&type=chunk) [Xi'an Projects](index=26&type=section&id=%E8%A5%BF%E5%AE%89%E9%A0%85%E7%9B%AE) This chapter introduces two projects in Xi'an: 'Nature,' a premier ecological development in Chanba Ecological Zone, and 'Shanghai Industrial Qiyuan,' a low-density high-end residential project in a core development area, emphasizing ecological resources and modern design - The Nature project is located in the core of Xi'an Chanba Ecological Zone, at the confluence of Chan and Ba rivers, a premier ecological development in Northwest China covering approximately **2 million sqm**; the area has comprehensive planning, rapid development, a complete road network, extensive public bus coverage, and Metro Line 3 is soon to open[104](index=104&type=chunk) - The Shanghai Industrial Qiyuan project is located at the intersection of Qiyuan 1st Road and Shangchun North Road, occupying a core position in Xi'an's planned development; total land area is approximately **51,000 sqm**, GFA approximately **102,000 sqm**, with a total plan of **15 residential buildings** (**8 high-rises**, **7 bungalows**), comprising **594 units**[107](index=107&type=chunk) - The Shanghai Industrial Qiyuan project features a public-building-style facade combining metal aluminum panels, real stone paint, and LOW-E glass, creating a fashionable, light-luxury aesthetic, while leveraging excellent ecological resources to create a comfortable and beautiful lifestyle[107](index=107&type=chunk) [Other Information](index=28&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Interim Dividend](index=28&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Company's Board of Directors ('Board') does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[110](index=110&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=28&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[111](index=111&type=chunk) [Pre-emptive Rights](index=28&type=section&id=%E5%84%AA%E5%85%88%E8%B3%BC%E8%B2%B7%E6%AC%8A) There are no provisions for pre-emptive rights in the company's bye-laws or Bermuda law that would require the company to offer new shares proportionally to existing shareholders - There are no provisions for pre-emptive rights in the Company's bye-laws or Bermuda law that would require the Company to offer new shares proportionally to its existing shareholders ('Shareholders')[112](index=112&type=chunk) [Corporate Governance](index=28&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) For the six months ended June 30, 2025, the company consistently complied with the Code Provisions of the Corporate Governance Code in Appendix C1 of the HKEX Listing Rules - During the six months ended June 30, 2025, the Company consistently complied with the Code Provisions of the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities ('Listing Rules') on The Stock Exchange of Hong Kong Limited ('Stock Exchange')[113](index=113&type=chunk) [Standard Code for Securities Transactions by Directors](index=28&type=section&id=%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%89%87) The company adopted a code of conduct no less stringent than the Listing Rules' Standard Code for directors' securities transactions, with all directors confirming compliance during the reporting period, and no non-compliance issues found among relevant employees - The Company has adopted a customized code of conduct ('Relevant Employee Securities Dealing Guidelines') for securities transactions by directors and relevant employees (who may possess inside information about the Company or its securities), with terms no less stringent than the Model Code for Securities Transactions by Directors of Listed Issuers ('Model Code') set out in Appendix C3 of the Listing Rules[114](index=114&type=chunk) - Following specific inquiries by the Company, all directors confirmed their compliance with the required standards set out in the Model Code and the customized code of conduct for directors' securities transactions during the six months ended June 30, 2025[114](index=114&type=chunk) - To the Company's knowledge, no relevant employees of the Group failed to comply with the Relevant Employee Securities Dealing Guidelines during the six months ended June 30, 2025[114](index=114&type=chunk) [Loan Agreements with Specific Performance Covenants from Controlling Shareholder](index=28&type=section&id=%E5%85%B7%E6%8E%A7%E8%82%A1%E8%82%A1%E6%9D%B1%E7%89%B9%E5%AE%9A%E5%B1%A5%E8%A1%8C%E5%A5%91%E8%AB%BE%E4%B9%8B%E8%B2%B8%E6%AC%BE%E5%8D%94%E8%AD%B0) The company's loan agreements include covenants requiring controlling shareholder Shanghai Industrial Holdings to maintain at least **51%** ownership and control over the company; as of June 30, 2025, Shanghai Industrial Holdings and Shanghai Industrial Group beneficially owned approximately **44.16%** and **70.44%** of the issued share capital, respectively - The loan agreements stipulate that during the term of the facilities, Shanghai Industrial Group, as the controlling shareholder of the Company and Shanghai Industrial Holdings (the Company's controlling and major shareholder), must directly or indirectly maintain not less than **51%** of the Company's total issued share capital and retain actual control and management rights over the Company[115](index=115&type=chunk) Controlling Shareholder's Equity (As of June 30, 2025) | Shareholder | Shareholding Percentage | | :--- | :--- | | Shanghai Industrial Holdings | Approx. 44.16% | | Shanghai Industrial Group | Approx. 70.44% | - The maturity date of the revolving loan facility was extended to **October 31, 2025**[116](index=116&type=chunk) [Audit Committee and Review of Interim Results](index=29&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E5%8F%8A%E5%AF%A9%E9%96%B1%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited interim financial statements for the six months ended June 30, 2025, and external auditor Deloitte Touche Tohmatsu also reviewed the condensed consolidated financial statements in accordance with HKSRS 2410 - The Company's Audit Committee ('Audit Committee') currently comprises three independent non-executive directors: Mr. Li Kah Fai, M.H. (Chairman of the Committee), Mr. To Wai Kai, B.B.S., J.P., and Dr. Fan Ren Da[117](index=117&type=chunk) - The Audit Committee is primarily responsible for reviewing the Group's adopted accounting principles and practices; reviewing the Group's financial reporting procedures, risk management, and internal control systems; and reviewing the independence and objectivity of the external auditor, the scope of audit services, and the audit fees paid to the external auditor[117](index=117&type=chunk) - The Group's external auditor, Deloitte Touche Tohmatsu, has reviewed the Company's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity,' issued by the Hong Kong Institute of Certified Public Accountants[117](index=117&type=chunk) [Directors' and Chief Executive's Interests in Shares and Underlying Shares of the Company and its Associated Corporations](index=30&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%E4%B9%8B%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, the company's directors and chief executive held long positions in the company's shares and underlying shares, with Mr. Tang Jun holding **178,000 ordinary shares** (0.00% of issued share capital) in the company and **65,000 ordinary shares** in Shanghai Industrial Holdings Directors' Long Positions in the Company's Shares (As of June 30, 2025) | Director's Name | Capacity | Number of Ordinary Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Tang Jun | Beneficial owner | 178,000 | 0.00% | Directors' Long Positions in Shares of Associated Corporation (Shanghai Industrial Holdings) (As of June 30, 2025) | Director's Name | Capacity | Number of Issued Ordinary Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Tang Jun | Beneficial owner | 65,000 | 0.00% | - Mr. Tang Jun resigned as President and Executive Director of the Company and ceased to be a member of the Company's Investment Appraisal Committee, effective **August 1, 2025**[118](index=118&type=chunk)[119](index=119&type=chunk) [Share Option Scheme](index=31&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) As of June 30, 2025, the company had no share option scheme or outstanding share options, and no discloseable share options were granted during the reporting period - As of June 30, 2025, following the expiry of its previous share option scheme on **May 21, 2023**, the Company had no share option scheme, nor any share options available for grant under any scheme mandate[120](index=120&type=chunk) - During the six months ended June 30, 2025, no share options were granted to any person that are required to be disclosed under Rule 17.07 of the Listing Rules, and the Company had no outstanding share options as of June 30, 2025[120](index=120&type=chunk) [Interests of Substantial Shareholders and Other Persons in Shares and Underlying Shares](index=31&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E5%8F%8A%E5%85%B6%E4%BB%96%E4%BA%BA%E5%A3%AB%E6%96%BC%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B9%8B%E6%AC%8A%E7%9B%8A) As of June 30, 2025, substantial shareholders Shanghai Industrial Holdings and Shanghai Industrial Group held long positions of **44.16%** and **70.44%** respectively in the company's shares, with Shanghai Industrial Holdings holding shares through its wholly-owned subsidiaries and Shanghai Industrial Group controlling Shanghai Industrial Holdings Substantial Shareholders' Long Positions in the Company's Shares (As of June 30, 2025) | Name of Substantial Shareholder | Capacity | Number of Shares in the Company Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Shanghai Industrial Holdings | Held by controlled corporations | 2,111,229,080(L) | 44.16% | | Shanghai Industrial Group | Held by controlled corporations | 3,367,223,977(L) | 70.44% | - Shanghai Industrial Holdings' interests include **2,061,229,080 shares** held by Shanghai Industrial Yingcai Co., Ltd. and **50,000,000 shares** deemed to be held by Yingjia Co., Ltd. under pledge[121](index=121&type=chunk) - Shanghai Industrial Group holds approximately **55.13%** of Shanghai Industrial Holdings' shares through Shanghai Investment Holdings Co., Ltd. (a subsidiary of Shanghai Industrial Group); additionally, Shanghai Industrial Group is deemed or taken to have an interest in **1,255,994,897 shares** held by its subsidiaries[121](index=121&type=chunk) [Changes in Directors' Information](index=32&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E8%AE%8A%E5%8B%95) This chapter discloses changes in directors' information for the six months ended June 30, 2025, including changes in roles for Ms. Zhou Yadong, Dr. Fan Renda, and Mr. Li Kah Fai, as well as the resignation of Mr. Tang Jun and the appointment of Mr. Li Zhonghui as President, Executive Director, and Investment Appraisal Committee member - Ms. Zhou Yadong ceased to be a Director and General Manager of Shanghai Industrial Group Finance Co., Ltd., effective **April 7, 2025**; she was appointed Vice President and Chief Financial Officer of Shanghai Pharmaceuticals Holding Co., Ltd., effective **April 8, 2025**[125](index=125&type=chunk) - Dr. Fan Renda ceased to be an independent non-executive director and a member of several committees of Tongfang Technovator International Limited and Tongfang Joyview Holdings Limited[125](index=125&type=chunk) - Mr. Tang Jun resigned as President and Executive Director of the Company and ceased to be a member of the Company's Investment Appraisal Committee, effective **August 1, 2025**; Mr. Li Zhonghui was appointed President, Executive Director, and member of the Investment Appraisal Committee, effective **August 1, 2025**[125](index=125&type=chunk) [Acknowledgement](index=32&type=section&id=%E8%87%B4%E8%AC%9D) The Chairman extends sincere gratitude to the Board, management, all employees for their hard work, and to clients, suppliers, business partners, and shareholders for their continuous support - I extend my sincere gratitude to the Board, our management, and all employees for their tireless efforts; and to our clients, suppliers, business partners, and shareholders for their continued strong support of the Group[124](index=124&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=33&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) [Conclusion of Review Report](index=33&type=section&id=%E5%AE%A1%E9%98%85%E6%8A%A5%E5%91%8A%E7%BB%93%E8%AE%BA) Deloitte Touche Tohmatsu reviewed the condensed consolidated financial statements in accordance with HKSRS 2410, concluding that no material matters were found indicating non-compliance with HKAS 34, though the review scope is less than an audit - Our auditor has conducted a review in accordance with Hong Kong Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity,' issued by the Hong Kong Institute of Certified Public Accountants[127](index=127&type=chunk) - The scope of a review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, and consequently, we do not guarantee that we will become aware of all significant matters that might be identified in an audit; accordingly, we do not express an audit opinion[127](index=127&type=chunk) - Based on our review, we have not found any matters that cause us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[128](index=128&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=34&type=section&id=%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%E5%85%A5%E5%A0%B1%E8%A1%A8) [Overview of Profit or Loss and Comprehensive Income](index=34&type=section&id=%E6%8D%9F%E7%9B%8A%E5%8F%8A%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E6%A6%82%E8%A7%88) For the six months ended June 30, 2025, total revenue decreased by **38.7%** to **HK$1.828 billion**, gross profit fell by **56.5%**, and the loss for the period expanded to **HK$562.4 million**, with basic loss per share of **10.29 HK cents**, while other comprehensive income was mainly driven by exchange differences from functional currency translation Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total revenue | 1,827,835 | 2,980,833 | -38.7% | | Gross profit | 269,874 | 620,521 | -56.5% | | Net fair value loss on investment properties | (151,069) | (210,465) | Impairment decreased | | Distribution and selling expenses | (101,616) | (107,098) | -5.1% | | General and administrative expenses | (197,546) | (216,773) | -8.9% | | Finance costs | (284,560) | (282,266) | +0.8% | | Loss for the period | (562,427) | (188,301) | Loss widened | | Loss for the period attributable to owners of the Company | (492,139) | (231,564) | Loss widened | | Basic loss per share (HK cents) | (10.29) | (4.84) | Loss widened | - Total other comprehensive income for the period was **HK$527,092 thousand**, mainly contributed by exchange differences on translation of functional currency to presentation currency of **HK$525,644 thousand**[131](index=131&type=chunk) [Condensed Consolidated Statement of Financial Position](index=36&type=section&id=%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 and Liabilities](index=36&type=section&id=%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E6%A6%82%E8%A7%88) As of June 30, 2025, total assets were **HK$47.439 billion**, with non-current assets at **HK$28.157 billion** and current assets at **HK$19.283 billion**; current liabilities were **HK$14.664 billion**, non-current liabilities **HK$13.709 billion**, and equity attributable to owners of the Company **HK$12.956 billion** Key Data from Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | **Non-current assets:** | | | | | Investment properties | 21,106,618 | 20,645,374 | Increased | | Properties under development for sale and properties held for sale | 13,957,346 | 14,578,442 | Decreased | | **Current assets:** | | | | | Bank balances and cash | 3,588,286 | 5,342,774 | Decreased | | **Current liabilities:** | | | | | Bank and other borrowings (current) | 7,129,016 | 8,487,763 | Decreased | | Proceeds received from pre-sales of properties | 719,348 | 1,106,886 | Decreased | | **Non-current liabilities:** | | | | | Bank and other borrowings (non-current) | 11,099,875 | 9,315,464 | Increased | | **Equity:** | | | | | Equity attributable to owners of the Company | 12,956,044 | 13,028,386 | Decreased | | Non-controlling interests | 6,111,410 | 6,081,618 | Increased | | Total equity | 19,067,454 | 19,110,004 | Decreased | - Net current assets increased to **HK$4,619,483 thousand** (December 31, 2024: HK$3,491,285 thousand)[134](index=134&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=38&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%82%A1%E6%9C%AC%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) [Overview of Changes in Equity](index=38&type=section&id=%E8%82%A1%E6%9C%AC%E6%AC%8A%E7%9B%8A%E5%8F%98%E5%8B%A8%E6%A6%82%E8%A7%88) For the six months ended June 30, 2025, total equity attributable to owners of the Company decreased from **HK$13.028 billion** to **HK$12.956 billion**, primarily due to a loss for the period of **HK$492.1 million**, partially offset by exchange differences of **HK$418.9 million** - Total equity attributable to owners of the Company decreased from **HK$13,028,386 thousand** as of January 1, 2025 (audited) to **HK$12,956,044 thousand** as of June 30, 2025 (unaudited)[137](index=137&type=chunk) - Key contributing factors included a loss for the period of **HK$(492,139) thousand** and exchange differences on translation from functional currency to presentation currency of **HK$418,943 thousand**[137](index=137&type=chunk) - Non-controlling interests increased from **HK$6,081,618 thousand** at the beginning of the year to **HK$6,111,410 thousand**[137](index=137&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=40&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) [Overview of Cash Flows](index=40&type=section&id=%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E6%A6%82%E8%A7%88) For the six months ended June 30, 2025, net cash used in operating activities was **HK$1.382 billion**, in investing activities **HK$42.27 million**, and in financing activities **HK$412.17 million**, resulting in a net decrease in cash and cash equivalents of **HK$1.837 billion**, with an ending balance of **HK$3.588 billion** Key Data from Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Activity Type | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (1,382,425) | (165,868) | Cash outflow widened | | Net cash used in investing activities | (42,269) | (374,511) | Cash outflow decreased | | Net cash used in financing activities | (412,172) | 63,036 | Turned from inflow to outflow | | Net decrease in cash and cash equivalents | (1,836,866) | (477,343) | Net decrease widened | | Cash and cash equivalents at end of period | 3,588,286 | 5,362,707 | Decreased | - Net cash used in operating activities significantly increased, mainly due to expanded loss before tax, decreased trade and other payables, and increased income tax paid[141](index=141&type=chunk) - Financing activities shifted from net cash inflow to net outflow; despite increased proceeds from new bank and other borrowings, expenditures such as repayment of bank and other borrowings, dividends paid to non-controlling interests, and interest paid also increased[142](index=142&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=42&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB)

Financial Performance - Revenue from smart marketing solutions reached RMB 668.1 million, a 39.1% increase compared to RMB 480.3 million in the same period last year[8]. - Gross income increased by 32.3% to RMB 900.4 million from RMB 680.4 million year-on-year[8]. - The company reported a net loss of RMB 1.7 million, a decline of 146.7% compared to a profit of RMB 3.5 million in the previous year[8]. - Adjusted net loss was RMB 0.9 million, down 119.8% from an adjusted profit of RMB 4.8 million in the same period last year[8]. - The company recorded revenue of approximately RMB 668.1 million for the reporting period, an increase of about RMB 187.8 million or 39.1% compared to approximately RMB 480.3 million in the same period of 2024[15]. - The gross profit for the reporting period was approximately RMB 32.3 million, up by about RMB 1.8 million or 6.1% from approximately RMB 30.5 million in the same period of 2024[16]. - The company experienced a loss attributable to owners of approximately RMB 1.7 million, a decrease of about RMB 5.2 million or 147% compared to a profit of approximately RMB 3.5 million in the same period of 2024[18]. - The adjusted net loss for the reporting period is expected to be approximately RMB 0.9 million, providing investors with a clearer view of operational performance[18]. - For the six months ended June 30, 2025, the company recorded revenue of approximately RMB 668,121,000, an increase of approximately RMB 187,834,000 or 39.1% compared to RMB 480,287,000 for the same period in 2024[35]. - Gross profit for the six months ended June 30, 2025, was approximately RMB 32,314,000, an increase of approximately RMB 1,846,000 or 6.1% compared to RMB 30,468,000 in 2024[39]. - The company reported a net loss of approximately RMB 1,653,000 for the six months ended June 30, 2025, a decrease of approximately RMB 5,195,000 or 146.7% compared to a profit of RMB 3,542,000 in 2024[46]. - The company reported a total comprehensive income of RMB 180 thousand for the period, down from RMB 3,836 thousand in the prior year[112]. Market Environment - China's GDP grew by 5.3% year-on-year in the first half of 2025, indicating a stable economic environment despite external challenges[9]. - The advertising market in China is undergoing a critical transformation, with advertisers increasingly demanding better campaign effectiveness[12]. - Consumer sentiment remains cautious, but there is a notable recovery in consumer demand, prompting advertisers to increase promotional investments[14]. - Despite a challenging macro environment, the Chinese economy is expected to maintain stable growth in the first half of 2025, with AIGC technology creating new marketing opportunities[59]. Technology and Innovation - The adoption of AI applications in the advertising industry is rapidly expanding, with brands showing greater enthusiasm for both hard and soft advertising[14]. - The company is actively expanding new business relationships and strengthening partnerships with leading AIGC technology providers[11]. - The company aims to further innovate and ensure technological differentiation through its self-developed solutions, particularly with the LinkBriAI platform[20]. - The company is enhancing its LinkBriAI system by integrating AIGC technology for content creation, data analysis, and business operations to improve overall efficiency[22]. - The strategic integration of AIGC technology is expected to improve operational efficiency and customer value, with ongoing investments in AI applications[63]. - The company is expanding its AIGC service offerings to meet the growing demand for AI-generated content and related applications, indicating a strategic focus on innovation[25]. Client and Customer Metrics - The company successfully acquired 156 new clients during the reporting period, compared to 172 in the same period of 2024, indicating stability in its client base despite market fluctuations[16]. - The total number of customers increased to 522 in the first half of 2025, up from 468 in the same period of 2024, reflecting a growth of approximately 11.5%[25]. - The number of returning customers rose to 366 during the reporting period, compared to 296 in the same period of 2024, indicating a growth of about 23.6%[26]. - Daily peak consumption with the partner company Honor exceeded 2 million during the reporting period, showcasing strong collaboration performance[27]. Cost and Expense Management - The service cost for the same period was approximately RMB 635,807,000, an increase of approximately RMB 185,988,000 or 41.3% compared to RMB 449,819,000 in 2024, primarily due to the increase in revenue[38]. - General and administrative expenses increased to approximately RMB 26,396,000, up by approximately RMB 5,323,000 or 25.3% from RMB 21,073,000 in 2024, mainly due to increased investment in AI and advanced technologies[41]. - The company has optimized its cost structure while maintaining its commitment to innovation, planning to launch further upgrades and new features at the appropriate time[22]. Shareholder and Equity Information - As of June 30, 2025, key executives hold significant shares, with Mr. Dong Hui owning 54.26% of the company[64]. - As of June 30, 2025, the total issued shares of the company are 600,000,000[65]. - Brilliant League Limited, Vast Ocean Limited, and Highland Triumph Limited collectively hold 325,537,469 shares, representing 54.26% of the total shares[68]. - The company did not declare or pay any interim dividends for the six months ended June 30, 2025, consistent with the previous period[72]. - The company has established a stock option plan to reward eligible individuals for their contributions[73]. - The maximum number of shares that can be issued under the share option plan is 500,000,000, which does not exceed 10% of the issued shares as of the listing date[76]. Financial Position and Liabilities - Total assets as of June 30, 2025, were approximately RMB 580,146,000, an increase from RMB 449,355,000 as of December 31, 2024[47]. - Total liabilities as of June 30, 2025, were approximately RMB 437,314,000, up from RMB 306,703,000 as of December 31, 2024[47]. - The company’s total liabilities increased to RMB 437,314 thousand as of June 30, 2025, compared to RMB 306,703 thousand at the end of 2024, representing an increase of 42.6%[113]. - Total borrowings as of June 30, 2025, amounted to RMB 138,617 thousand, with RMB 69,627 thousand due within one year[126]. - The company reported trade payables of RMB 107,224 thousand as of June 30, 2025, indicating stable supplier relationships[126]. Cash Flow and Financial Management - The company reported a net cash outflow from operating activities of RMB (52,208) thousand for the six months ended June 30, 2025, compared to RMB (19,013) thousand in the same period of 2024, indicating a deterioration in cash flow[116]. - The company’s financing activities generated a net cash inflow of RMB 50,348 thousand for the six months ended June 30, 2025, compared to a net cash outflow of RMB (20,193) thousand in the same period of 2024[116]. - The company maintained a cash and cash equivalents level deemed sufficient by senior management to support operations and reduce cash flow volatility[125]. Employee and Management Information - The group had 202 full-time employees as of June 30, 2025, a decrease from 209 as of December 31, 2024[58]. - The total compensation for key management personnel for the six months ended June 30, 2025, is RMB 1,886,000, slightly down from RMB 1,909,000 in the same period of 2024[185].

Financial Performance - Revenue for the six months ended June 30, 2025, was $45.9 million, a decrease of 25.8% compared to $61.9 million in the same period of 2024[8]. - Gross profit for the same period was $18.2 million, down 8.4% from $19.8 million, with a gross margin of 39.6%, an increase of 7.6 percentage points from 32.0%[8]. - Profit attributable to owners of the parent was $4.0 million, a decline of 46.4% from $7.5 million in the prior year[8]. - Earnings per share decreased to 0.16 US cents, down 46.7% from 0.30 US cents[8]. - The Group's profit attributable to owners for the period was US$4,003,000, a decrease of 46.5% compared to US$7,471,000 in 1H 2024[70][72]. - Revenue fell to USD 45.9 million, while profit attributable to owners of the Company was approximately USD 4.0 million, maintaining a gross profit margin of 39.6%[121]. - The Group recorded a revenue decrease of approximately 25.8% to US$45.9 million during the period, compared to US$61.9 million in 1H 2024[177]. - The Group's net profit attributable to owners of the parent was US$4.0 million, down from US$7.5 million in 1H 2024[182]. Assets and Liabilities - Total assets as of June 30, 2025, increased to $176.5 million, a rise of 7.8% from $163.7 million at the end of 2024[8]. - Shareholders' funds grew to $141.1 million, reflecting a 3.0% increase from $137.0 million[8]. - The current ratio decreased to 4.83 from 6.17, indicating a decline in liquidity[8]. - The debt to equity ratio remained low at 0.009, suggesting minimal leverage[8]. - Total current liabilities increased to US$34,182,000 from US$24,762,000, indicating a rise of 37.96%[15]. - Net assets reached US$141,123,000 as of June 30, 2025, compared to US$137,041,000 at the end of 2024, showing an increase of 2.03%[15]. - Total trade receivables increased to US$20,537,000 as of June 30, 2025, compared to US$19,886,000 at the end of 2024, reflecting a growth of 3.3%[81][82]. - As of June 30, 2025, trade payables increased to US$9,089,000 from US$7,535,000, representing a growth of 20.6%[86]. - Accrued expenses and other payables rose to US$17,237,000, up from US$11,313,000, indicating a 52.3% increase[86]. - Contract liabilities increased to US$3,288,000 from US$2,647,000, reflecting a growth of 24.2%[86]. Cash Flow - Net cash flows from operating activities decreased to $7,322,000 for the six months ended June 30, 2025, down from $14,031,000 in the same period of 2024, representing a decline of approximately 48.0%[17]. - Cash and cash equivalents rose to US$112,513,000, compared to US$104,242,000 at December 31, 2024, an increase of 7.73%[15]. - Cash flows from financing activities resulted in a net inflow of $574,000, contrasting with a net outflow of $1,150,000 in the same period last year[17]. - The company reported interest received of $2,171,000, slightly up from $2,132,000 in the previous year, marking an increase of about 1.8%[17]. - Total cash and cash equivalents increased to US$116.0 million as of June 30, 2025, up from US$107.7 million at the end of 2024, reflecting an increment of US$8.3 million[190]. Research and Development - Research and development costs increased to $9.9 million from $8.0 million, indicating a focus on innovation despite declining revenues[13]. - Research and development costs increased by 24.3% to US$9.9 million, representing 21.6% of total revenue, up from 12.9% in the same period last year[179]. Market and Product Development - The company specializes in the design and development of integrated circuits for various display applications, including smartphones and smart home devices[18]. - The Group is actively exploring new application areas, with a mini-LED backlight solution expected to launch in the second half of 2025 for automotive HUD systems[128]. - A seven-colour electronic display label IC prototype is scheduled for release in the fourth quarter, with plans for driver ICs for extra-large e-paper learning whiteboards to enter mass production in the latter half of the year[129]. - The Group's OLED Display IC products continue to be applied across smart home devices, portable devices, and Internet of Things (IoT) sectors, demonstrating product diversification[125]. - The Group is expanding into the emerging automotive display sector, indicating a strategic shift towards high-value applications[163]. Shareholder Information - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2025[9]. - The Group did not declare or pay any dividends for the year ended December 31, 2024, nor for the interim period ended June 30, 2025[77][79]. - The company had a total of 2,497,752,351 issued and fully paid shares as of June 30, 2025, unchanged from the previous period[90]. - The Group has a significant shareholder, CEC, which owns approximately 28.3% of the issued shares[102]. Operational Challenges - The ongoing geopolitical landscape and restructuring of global supply chains pose notable challenges, with market demand expected to soften in the second half of the year[132]. - The average selling price of new display IC products declined due to intensified market competition, despite increased demand driven by retailers accelerating orders[144]. - The Group's large display IC products faced significant declines in shipment volumes and revenue due to fierce competition in the market[161].

Financial Performance - Revenue for the six months ended June 30, 2025, amounted to approximately RMB 933.5 million, representing a decrease of approximately RMB 71.5 million or approximately 7.1% compared to the same period in 2024[14]. - Gross profit for the same period was approximately RMB 116.8 million, a decrease of approximately RMB 28.6 million or approximately 19.7% compared to the prior year[15]. - Net profit for the six months ended June 30, 2025, was approximately RMB 30.0 million, an increase of approximately RMB 6.5 million or approximately 27.7% compared to the same period in 2024[15]. - Basic and diluted earnings per share attributable to ordinary equity holders of the parent for the six months ended June 30, 2025, amounted to approximately RMB 0.01, a decrease of approximately RMB 0.01 or approximately 50% compared to the same period in 2024[16]. - The overall gross profit margin for the Group was 12.5% for the six months ended June 30, 2025[20]. - Profit attributable to equity holders of the parent decreased by approximately 40.4% to approximately RMB 9.3 million, with a profit margin of approximately 1.0%, down from approximately 1.6% in the same period of 2024[23]. - The Group's total revenue decreased by approximately 7.1% to approximately RMB 933.5 million for the six months ended 30 June 2025, compared to approximately RMB 1,005.0 million for the same period in 2024[22]. - Overall gross profit decreased by approximately 19.7% to approximately RMB 116.8 million, resulting in a gross profit margin of approximately 12.5%, down from approximately 14.5% in the same period of 2024[22]. Segment Performance - Revenue from battery materials segment was RMB 234.3 million, with a gross profit margin of -23.0%[20]. - Revenue from pigment intermediates was RMB 416.5 million, with a gross profit margin of 10.8%[20]. - Revenue from agricultural chemical intermediates was RMB 282.7 million, with a gross profit margin of 44.5%[20]. - Revenue from the battery materials segment decreased by approximately 16.9% to approximately RMB 234.3 million, accounting for approximately 25.1% of total revenue, down from approximately 28.1% in the same period of 2024[28]. - Revenue from dye intermediate products decreased by approximately 6.8% to approximately RMB 212.7 million, down from approximately RMB 228.1 million in the same period of 2024[35]. - The revenue from the dye and agricultural chemical intermediates segment decreased by approximately 17.1% to approximately RMB 416.5 million, accounting for about 44.6% of the Group's total revenue[39]. - The overall gross profit for the dye and agricultural chemical intermediates segment decreased by approximately 52.2% to approximately RMB 44.9 million, with a gross profit margin of approximately 10.8%[40]. - The pigment intermediates and new materials segment revenue increased by approximately 28.2% to approximately RMB 282.7 million, accounting for about 30.3% of total revenue[45]. - The overall gross profit for the pigment intermediates and new materials segment increased by approximately 53.3% to approximately RMB 125.9 million, with a gross profit margin of approximately 44.5%[46]. Dividends and Shareholder Information - The Board declared an interim dividend of RMB 0.015 per ordinary share for the six months ended June 30, 2025, compared to RMB 0.005 per ordinary share and a special dividend of RMB 0.025 per ordinary share for the same period in 2024[17]. - The total amount of the interim dividend is approximately RMB 14,531,000 based on the total number of issued shares of 968,722,500 as of the date of this report[141]. - As of June 30, 2025, the total number of issued shares was 970,918,000 shares[171]. - Mr. GE Yi holds 133,337,750 shares, representing approximately 13.73% of the Company's shareholding[165]. - The interest of children under 18 in shares amounts to 266,675,500, which is 27.47% of the total shares[180]. - The combined interest of Hero Time Ventures Limited and Star Path Ventures Limited amounts to 266,675,500 shares, which is 27.47% of the total shareholding[183]. Cash Flow and Financial Position - Net cash inflows from operating activities were approximately RMB 69.9 million, an increase of about RMB 34.7 million compared to RMB 35.2 million in the same period of 2024[84][88]. - Net cash outflows from investing activities were approximately RMB 18.8 million, an increase of about RMB 8 million compared to RMB 10.8 million in the same period of 2024[85][89]. - As of June 30, 2025, the Group had cash and cash equivalents of approximately RMB 300.4 million, an increase from RMB 266.8 million as of December 31, 2024[91]. - The Group's total current assets as of June 30, 2025, were approximately RMB 1,325.2 million, down from RMB 1,562.3 million as of December 31, 2024[100]. - The Group's gearing ratio increased to approximately 12.8% as of June 30, 2025, compared to 10.7% as of December 31, 2024[99]. - Trade and notes receivable decreased to approximately RMB 625.7 million as of June 30, 2025, from approximately RMB 974.2 million as of December 31, 2024[105]. - Total current liabilities decreased to approximately RMB 907.8 million as of June 30, 2025, from approximately RMB 1,200.0 million as of December 31, 2024[107]. Corporate Governance and Compliance - The Company has adopted the Corporate Governance Code and complied with all applicable code provisions during the Review Period[152]. - The Audit Committee, consisting of three independent non-executive Directors, has reviewed the unaudited interim financial statements for the six months ended June 30, 2025[155]. - The Company has not identified any incidents of non-compliance with the Model Code by employees during the Review Period[153]. - The Board will continue to review and monitor corporate governance practices to maintain high standards[152]. - The Company has complied with all code provisions of the Corporate Governance Code, except for the separation of the roles of chairman and chief executive officer[148]. Employee Information - The Group had 2,098 employees as of June 30, 2025, a slight decrease from 2,117 employees as of June 30, 2024[129]. - For the six months ended June 30, 2025, total staff costs amounted to approximately RMB 129.0 million, an increase from approximately RMB 111.6 million for the same period in 2024, mainly due to higher wages and salaries[130]. Share Repurchase - The Company repurchased a total of 1,706,500 shares at a total consideration of HK$1,365,560 during the six months ended 30 June 2025[191]. - The repurchased shares included 1,082,500 shares cancelled on 19 February 2025 and 624,000 shares cancelled on 6 August 2025[191]. - The highest purchase price per share was HK$0.88 and the lowest was HK$0.67 during the repurchase period[197]. - The Company believes that the value of its shares does not reflect their intrinsic value, which justified the share repurchase[191].

[Company Information](index=3&type=section&id=Company%20Information) This section provides essential company details, including board composition, contact information, and auditor details [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) This section lists the company's board members (executive, non-executive, and independent non-executive directors) and the composition of the Audit, Remuneration, and Nomination Committees - The Board of Directors comprises Cheng Chi Him (Non-executive Chairman), Ting Wai Chuen (Chief Executive Officer, Executive Director), Lau Ho Chi, Li Kwok Hang, Sun Chung Yan (Non-executive Directors), Wong Man Chung, Cheung Pak To, and To Chun Wai (Independent Non-executive Directors)[4](index=4&type=chunk) - Wong Man Chung chairs the Audit Committee and Remuneration Committee, while To Chun Wai chairs the Nomination Committee[4](index=4&type=chunk) [Company Basic Information](index=3&type=section&id=Company%20Basic%20Information) This section provides the company's basic registration information, contact details, stock code, auditor, principal bankers, and share registrar - The Company Secretary is Fung Ka Man, and the authorized representatives are Ting Wai Chuen and Fung Ka Man[4](index=4&type=chunk) - The registered office is in Bermuda, and the principal place of business in Hong Kong is located at Fortis Tower, Gloucester Road, Wan Chai, Hong Kong[4](index=4&type=chunk) - The stock code is **94**, and the independent auditor is Deloitte Touche Tohmatsu[4](index=4&type=chunk) - The company website is http://www.greenheartgroup.com, and the investor relations email is ir@greenheartgroup.com[5](index=5&type=chunk) [Chairman's Statement](index=5&type=section&id=Chairman's%20Statement) The Chairman's Statement highlights strategic steps taken in H1 2025, including the disposal of loss-making Suriname operations and a rights issue, to improve financial health and focus on New Zealand operations [Overall Performance Overview](index=5&type=section&id=Overall%20Performance%20Overview) The Chairman's Statement indicates that the Group took significant strategic steps in H1 2025, including the disposal of loss-making Suriname operations and a rights issue, to improve financial position and concentrate resources on New Zealand operations - The Group disposed of most of its loss-making Suriname operations in H1 2025 to focus resources on New Zealand operations[6](index=6&type=chunk) - A rights issue was completed in August, raising net proceeds of approximately **HK$31.8 million**, improving working capital[6](index=6&type=chunk) [New Zealand Segment Performance](index=5&type=section&id=New%20Zealand%20Segment%20Performance) The New Zealand segment saw revenue growth during the period, driven by recently acquired harvesting rights, and recorded fair value gains on plantation assets despite volatile market conditions impacting gross margins - The New Zealand segment recorded revenue of approximately **HK$20.632 million** during the period, a **10.3% increase** from the same period last year[7](index=7&type=chunk) - Declining softwood log prices in the China market impacted gross margin during the period[7](index=7&type=chunk) - Plantation assets recorded a fair value gain of **HK$22.727 million** during the period, primarily reflecting tree growth[7](index=7&type=chunk) [Disposal of Suriname Segment](index=6&type=section&id=Disposal%20of%20Suriname%20Segment) The Group disposed of most of its severely loss-making subsidiaries in Suriname in March 2025, resulting in a gain on disposal but a net loss due to derecognition of negative non-controlling interests - On March 28, 2025, the Group disposed of most of its severely loss-making subsidiaries in Suriname[8](index=8&type=chunk) - The disposal resulted in a gain on disposal of **HK$1.458 million**, but a net loss of **HK$82.506 million** due to the write-off of negative non-controlling interests of the non-wholly owned Suriname subsidiaries[8](index=8&type=chunk) - Following the disposal, the Group will no longer bear significant fixed overhead costs from the Suriname segment[8](index=8&type=chunk) [Outlook and Strategy](index=6&type=section&id=Outlook%20and%20Strategy) Facing global timber industry challenges and financial constraints, the Group will adjust its strategy to focus on acquiring mature forest harvesting rights for short-term harvesting and actively explore funding methods to support reinvestment - The Group's largest plantation asset is currently in a regrowth phase, not generating revenue until after 2028, incurring high holding costs during this period[9](index=9&type=chunk) - The Group has adjusted its strategy to acquire mature forest harvesting rights that can be harvested in the short term to address uneven timber flow[9](index=9&type=chunk) - Actively exploring fundraising methods, including converting non-current assets into cash for reinvestment, prioritizing the acquisition of short-term harvesting rights for mature trees[9](index=9&type=chunk) [Acknowledgements](index=7&type=section&id=Acknowledgements) The Chairman, on behalf of the Board, thanks shareholders, business partners, stakeholders, management, and employees for their support and efforts, committing to enhancing long-term shareholder value in a challenging market - The Board sincerely thanks shareholders, business partners, and stakeholders for their continued support[10](index=10&type=chunk) - Appreciation is extended to the management team and employees for their tireless efforts and perseverance during challenging times[10](index=10&type=chunk) - The Group remains committed to maintaining operational efficiency and financial discipline while exploring strategic opportunities to enhance long-term shareholder value[10](index=10&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed review of the Group's financial performance, liquidity, and future outlook, highlighting key drivers and strategic responses [Business Review](index=8&type=section&id=Business%20Review) The Group's unaudited net loss for the period decreased, primarily due to fair value gains on New Zealand plantation assets, although the discontinued Suriname operations negatively impacted the loss. Revenue and gross profit from continuing operations (New Zealand segment) both increased - The unaudited net loss from continuing and discontinued operations for the period decreased to **HK$97.598 million** (2024: HK$113.273 million)[12](index=12&type=chunk) - The reduction in net loss was mainly due to the net effect of a fair value gain of **HK$22.727 million** on New Zealand plantation assets and a negative impact of **HK$82.506 million** from the disposal of Suriname subsidiaries[12](index=12&type=chunk) [Discontinued Operations - Suriname Segment](index=8&type=section&id=Discontinued%20Operations%20-%20Suriname%20Segment) - The Suriname segment recorded negative results for many years, with a significant decline in asset value[13](index=13&type=chunk) - The Group disposed of most of its loss-making subsidiaries in Suriname during the period and ceased its Suriname operations[13](index=13&type=chunk) - The loss from discontinued operations for the period was **HK$90.223 million** (2024: HK$34.444 million, restated)[13](index=13&type=chunk) [Continuing Operations](index=8&type=section&id=Continuing%20Operations) - Revenue: Total revenue from the New Zealand segment increased by **10.3%** to **HK$20.632 million** compared to the same period last year, mainly due to a **12.8% increase** in sales volume of New Zealand Radiata Pine and a **2.6% increase** in average export selling price to **US$80 per cubic meter**[14](index=14&type=chunk) - Gross Profit: Gross profit was **HK$1.933 million** (2024: HK$0.844 million), with a gross margin of **9.4%** (2024: 4.5%), benefiting from lower operating costs due to the depreciation of the New Zealand dollar[15](index=15&type=chunk) - Fair Value Gain on Plantation Assets: **HK$22.727 million** (2024: loss of HK$70.285 million), primarily from tree growth of the largest plantation asset[19](index=19&type=chunk) - Selling and Distribution Costs: Remained at **HK$2.775 million** (2024: HK$2.748 million), a net effect of increased sales volume and New Zealand dollar depreciation[20](index=20&type=chunk) - Administrative Expenses: Remained at **HK$15.798 million** (2024: HK$15.846 million)[21](index=21&type=chunk) - Finance Costs: Slightly decreased by **1.6%** or **HK$0.127 million**, mainly due to a general decrease in interest rates and the net effect of increased loans from a fellow subsidiary[22](index=22&type=chunk) - EBITDA: **HK$11.146 million** (2024: EBITDA loss of HK$79.128 million), primarily due to the fair value gain on New Zealand plantation assets[24](index=24&type=chunk) - Loss for the Period Attributable to Owners of the Company: **HK$7.375 million** (2024: HK$78.829 million, restated)[25](index=25&type=chunk) [Liquidity and Financial Review](index=11&type=section&id=Liquidity%20and%20Financial%20Review) The Group had net current liabilities of **HK$3.439 million**, but the Board believes several measures have been taken to ensure sufficient working capital. The gearing ratio increased, and the Group closely monitors exchange rate risk and complies with bank loan covenants Liquidity and Liabilities (as at June 30) | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Current Assets | 41,014 | 44,928 | | Current Liabilities | 44,453 | 37,495 | | Net Current (Liabilities) Assets | (3,439) | 7,433 | - The gearing ratio (calculated as outstanding borrowings as a percentage of equity attributable to owners of the Company) was **92.3%** (December 31, 2024: 72.9%)[26](index=26&type=chunk) - The Board believes the Group will have sufficient working capital, having taken measures including the disposal of Suriname operations, commitments for loans from a fellow subsidiary, rights issue fundraising, increased loans from a fellow subsidiary, considering disposal of non-current assets, and implementing cost controls[27](index=27&type=chunk)[51](index=51&type=chunk)[55](index=55&type=chunk) - Most of the Group's sales are denominated in USD, and major costs are in USD, with some New Zealand segment operations denominated in NZD, thus exchange rate risk will be closely monitored[27](index=27&type=chunk) - All financial covenants related to bank loan facilities were complied with during the period[28](index=28&type=chunk) [Prospects](index=12&type=section&id=Prospects) The New Zealand softwood log market is expected to remain challenging in H2 2025; although China market prices have slightly recovered, high port inventories and weak real estate demand pose risks. The Group will focus on operational efficiency, cost control, and acquiring short-term harvesting rights - The New Zealand softwood log market may remain challenging in H2 2025, although minor improvements show cautious signs of recovery[29](index=29&type=chunk) - Cost and freight prices for China A-grade benchmark logs slightly increased, but China port inventories rose by **10%** in July to approximately **4.0 million cubic meters**, with continued weak demand from the China housing and property development sector[29](index=29&type=chunk) - The Group expects cost and freight prices for the remainder of 2025 to range between **US$108 and US$118 per JAS cubic meter**, with potential for an upward trend by the end of Q4[30](index=30&type=chunk) - The Group will continue to prioritize improving operational efficiency, strict cost control, and securing more short-term harvesting rights to strengthen cash flow[30](index=30&type=chunk) [Pledge of Assets](index=13&type=section&id=Pledge%20of%20Assets) The Group's bank loan facilities are secured by various assets, including properties of selected group companies, forest land and plantation assets in New Zealand, and pledged bank deposits - Bank loan facilities are secured by the following: all existing and subsequently acquired properties of selected group companies[33](index=33&type=chunk) - Fixed charges include forest land (located in New Zealand) with a carrying amount of approximately **HK$143.872 million** and plantation assets (located in New Zealand) with a carrying amount of approximately **HK$318.060 million**[33](index=33&type=chunk) - Pledged bank deposits with a carrying amount of approximately **HK$2.377 million**[33](index=33&type=chunk) [Interim Dividend](index=13&type=section&id=Interim%20Dividend) The Board has decided not to declare any interim dividend for the six months ended June 30, 2025 - The Board has resolved not to recommend the declaration of any dividend for the six months ended June 30, 2025[31](index=31&type=chunk) [Capital Expenditure](index=13&type=section&id=Capital%20Expenditure) Capital expenditure during the period primarily focused on investments in property, plant, and equipment, amounting to approximately **HK$0.367 million** - During the period, the Group's capital expenditure on investment properties, plant, and equipment was approximately **HK$0.367 million**[32](index=32&type=chunk) [Business Acquisitions and Disposals](index=14&type=section&id=Business%20Acquisitions%20and%20Disposals) Aside from the disposal of discontinued operations (Suriname segment), the Group did not undertake any other significant business acquisitions or disposals during the period - Except as disclosed in Note 11 to the unaudited condensed consolidated interim financial statements, the Group did not undertake any other significant business acquisitions or disposals during the period[34](index=34&type=chunk) [Contingent Liabilities](index=14&type=section&id=Contingent%20Liabilities) As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities - As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities[35](index=35&type=chunk) [Events After Reporting Period](index=14&type=section&id=Events%20After%20Reporting%20Period) Details of significant events occurring after the reporting period are disclosed in Note 22 to the condensed consolidated interim financial statements - Details of significant events occurring after the reporting period for the Group are set out in Note 22 to the unaudited condensed consolidated interim financial statements[36](index=36&type=chunk) [Employees and Remuneration Policy](index=14&type=section&id=Employees%20and%20Remuneration%20Policy) The Group's total number of employees significantly decreased, leading to a corresponding reduction in employee costs. Remuneration policy includes salaries, discretionary bonuses, and medical and retirement benefit plans - As of June 30, 2025, the Group had a total of **19 employees** (December 31, 2024: 125 employees)[37](index=37&type=chunk) - Employee costs for the six months ended June 30, 2025, were approximately **HK$10.756 million** (2024: HK$15.439 million)[37](index=37&type=chunk) - Employee remuneration includes salaries and discretionary bonuses based on the Group's performance and individual performance, along with medical and retirement benefit plans[37](index=37&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the Group's financial performance, showing a reduced net loss primarily due to fair value gains on plantation assets and a positive shift in other comprehensive income from foreign currency translation differences [Profit or Loss and Comprehensive Income Overview](index=15&type=section&id=Profit%20or%20Loss%20and%20Comprehensive%20Income%20Overview) The Group's net loss for the period decreased, mainly due to the positive impact of fair value gains on plantation assets in continuing operations, despite a significant loss from discontinued operations. Other comprehensive income turned positive due to exchange differences on foreign operations Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000, restated) | | :--- | :--- | :--- | | **Continuing Operations** | | | | Revenue | 20,632 | 18,698 | | Cost of sales and services | (18,699) | (17,854) | | Gross profit | 1,933 | 844 | | Fair value gain (loss) on plantation assets | 22,727 | (70,285) | | Loss before tax | (3,321) | (95,108) | | Loss for the period from continuing operations | (7,375) | (78,829) | | **Discontinued Operations** | | | | Loss for the period from discontinued operations | (90,223) | (34,444) | | **Loss for the period** | (97,598) | (113,273) | | **Other Comprehensive Income (Expense)** | | | | Exchange differences on translation of foreign operations | 22,938 | (5,936) | | Total comprehensive expense for the period | (74,660) | (119,209) | | **Loss Per Share (HK$)** | | | | From continuing and discontinued operations (Basic) | (0.059) | (0.045) | | From continuing operations (Basic) | (0.004) | (0.038) | [Condensed Consolidated Statement of Financial Position](index=18&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the Group's assets, liabilities, and equity, showing an increase in total assets and equity, primarily driven by fair value gains on plantation assets, alongside a shift to net current liabilities [Assets and Liabilities Overview](index=18&type=section&id=Assets%20and%20Liabilities%20Overview) The Group's total assets and total equity both increased, mainly due to the increase in the fair value of plantation assets. In terms of liquidity, the Group shifted from net current assets to net current liabilities, with a high proportion of related party loans in non-current liabilities Condensed Consolidated Statement of Financial Position (as at June 30) | Indicator | June 30, 2025 (HK$'000, unaudited) | December 31, 2024 (HK$'000, audited) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, plant and equipment | 251,488 | 239,877 | | Plantation assets | 318,060 | 295,750 | | **Current Assets** | 41,014 | 44,928 | | Bank balances and cash | 22,159 | 19,508 | | **Current Liabilities** | 44,453 | 37,495 | | Net current (liabilities) assets | (3,439) | 7,433 | | Total assets less current liabilities | 586,497 | 572,019 | | **Non-current Liabilities** | 486,975 | 481,801 | | Loans from immediate holding company | 214,339 | 210,667 | | Loans from a fellow subsidiary | 211,115 | 191,863 | | **Net Assets** | 99,522 | 90,218 | | **Total Equity** | 99,522 | 90,218 | [Condensed Consolidated Statement of Changes in Equity](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement outlines the changes in the Group's total equity, which increased despite a recorded loss, positively impacted by exchange differences from foreign operations and significant changes in non-controlling interests due to subsidiary disposal [Changes in Equity Overview](index=21&type=section&id=Changes%20in%20Equity%20Overview) Total equity increased during the period; despite recording a loss, exchange differences from the translation of foreign operations had a positive impact, and the disposal of subsidiaries led to significant changes in non-controlling interests Condensed Consolidated Statement of Changes in Equity (for the six months ended June 30, 2025) | Indicator | June 30, 2025 (HK$'000, unaudited) | June 30, 2024 (HK$'000, unaudited) | | :--- | :--- | :--- | | Total equity at beginning of period | 90,218 | 287,054 | | Loss for the period | (97,598) | (113,273) | | Exchange differences on translation of foreign operations | 22,938 | (5,936) | | Total comprehensive income (expense) for the period | (74,660) | (119,209) | | Disposal of subsidiaries | 83,964 | – | | Total equity at end of period | 99,522 | 167,846 | [Condensed Consolidated Statement of Cash Flows](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes the Group's cash inflows and outflows from operating, investing, and financing activities, showing net cash outflows from operations and investing, offset by net cash inflows from financing, resulting in a slight increase in cash and cash equivalents at period-end [Cash Flow Overview](index=22&type=section&id=Cash%20Flow%20Overview) The Group experienced net cash outflows from both operating and investing activities, but net cash inflows from financing activities ultimately led to a slight increase in cash and cash equivalents at the end of the period Condensed Consolidated Statement of Cash Flows (for the six months ended June 30) | Indicator | 2025 (HK$'000, unaudited) | 2024 (HK$'000, unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | (9,353) | (11,909) | | Net cash used in investing activities | (2,076) | (5,554) | | Net cash from (used in) financing activities | 11,236 | (3,018) | | Net decrease in cash and cash equivalents | (193) | (20,481) | | Cash and cash equivalents at beginning of period | 19,508 | 47,714 | | Effect of foreign exchange rate changes | 2,844 | (684) | | Cash and cash equivalents at end of period | 22,159 | 26,549 | [Notes to the Condensed Consolidated Interim Financial Statements](index=23&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed explanations and breakdowns of the figures presented in the financial statements, covering accounting policies, segment information, and other significant disclosures [1. General Information](index=23&type=section&id=1.%20General%20Information) This note provides basic background information about the company's registration, listing, parent company, and the currency used for financial statement presentation - The Company is a public limited company incorporated in Bermuda, with its shares listed on The Stock Exchange of Hong Kong Limited[49](index=49&type=chunk) - Its ultimate holding company is Chow Tai Fook Capital Limited[49](index=49&type=chunk) - The unaudited condensed consolidated interim financial statements are presented in Hong Kong Dollars, while the Company's functional currency is US Dollars[49](index=49&type=chunk) [2. Basis of Preparation](index=23&type=section&id=2.%20Basis%20of%20Preparation) This note explains the basis for preparing the financial statements and details the measures taken by the Board to ensure the company's going concern despite recorded losses and net current liabilities - These unaudited condensed consolidated interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the disclosure requirements of the applicable Listing Rules of the Stock Exchange[50](index=50&type=chunk) - The Group recorded a loss of approximately **HK$97.598 million** for the period, and as of June 30, 2025, had net current liabilities of approximately **HK$3.439 million**[50](index=50&type=chunk) - To improve its financial position, the Board is taking measures including disposing of loss-making Suriname subsidiaries, obtaining loan commitments from a fellow subsidiary, completing a rights issue for fundraising, increasing loans from a fellow subsidiary, considering disposal of non-current assets, and implementing cost controls[51](index=51&type=chunk)[55](index=55&type=chunk) - The Board believes that with these measures, the Group will have sufficient working capital to meet its financial obligations as they fall due in the foreseeable future, thus preparing the financial statements on a going concern basis is appropriate[53](index=53&type=chunk) [3. Principal Accounting Policies](index=24&type=section&id=3.%20Principal%20Accounting%20Policies) This note describes the principal accounting policies adopted, including the historical cost convention and fair value measurement for plantation assets, noting no significant impact from new accounting standards - The unaudited condensed consolidated interim financial statements are prepared under the historical cost convention, except for plantation assets and forest land which are measured at fair value less costs to sell or revalued amounts at each reporting period end[54](index=54&type=chunk) - The application of revised Hong Kong Financial Reporting Standards during the period had no significant impact on the Group's financial position and performance for the current and prior periods[56](index=56&type=chunk) [4. Revenue](index=25&type=section&id=4.%20Revenue) This note details the disaggregation of the Group's revenue from contracts with customers, primarily comprising log sales and forest management fees, explaining revenue recognition timing and geographical sources [(i) Disaggregation of Revenue from Contracts with Customers](index=25&type=section&id=(i)%20Disaggregation%20of%20Revenue%20from%20Contracts%20with%20Customers) Disaggregation of Revenue from Contracts with Customers (for the six months ended June 30) | Type of Goods or Services | 2025 (HK$'000) | 2024 (HK$'000, restated) | | :--- | :--- | :--- | | Sales of logs | 18,092 | 15,687 | | Forest management fees | 2,540 | 3,011 | | **Total Revenue from Contracts with Customers** | **20,632** | **18,698** | | **Timing of Revenue Recognition** | | | | At a point in time | 18,092 | 15,687 | | Over time | 2,540 | 3,011 | - Revenue from New Zealand customers primarily relates to sales made on FOB terms with destinations in Mainland China[58](index=58&type=chunk) [(ii) Performance Obligations in Contracts with Customers](index=26&type=section&id=(ii)%20Performance%20Obligations%20in%20Contracts%20with%20Customers) - Revenue from sales of logs is recognized when control of the goods is transferred to the customer, which is when the goods are delivered to the port of discharge or port of loading[59](index=59&type=chunk) - Revenue from forest management services is recognized over time as performance obligations are satisfied, as the customer simultaneously receives and consumes the benefits provided by the Group's performance[61](index=61&type=chunk) [5. Operating Segments](index=27&type=section&id=5.%20Operating%20Segments) This note discloses the Group's operating segment information by geographical location, with New Zealand as the sole continuing operation. Segment performance is assessed based on adjusted EBITDA, and major customer revenue contributions are provided - The Group presents one operating and reportable segment: New Zealand, engaged in Radiata Pine plantation management, log harvesting, marketing, sales and trading of logs, and provision of forest management services[62](index=62&type=chunk) - The operating and reportable segment related to Suriname was discontinued during the period[62](index=62&type=chunk) - Segment performance is assessed by management based on adjusted EBITDA of the reportable segments[63](index=63&type=chunk) [Segment Revenue and Results](index=28&type=section&id=Segment%20Revenue%20and%20Results) Segment Revenue and Results (for the six months ended June 30, 2025) | Indicator | New Zealand (HK$'000) | Unallocated Corporate Items (HK$'000) | Consolidated Total (HK$'000) | | :--- | :--- | :--- | :--- | | Segment revenue – external | 20,632 | – | 20,632 | | Segment result ("Adjusted EBITDA") | (5,005) | (6,882) | (11,887) | | Fair value gain on plantation assets | 22,727 | – | 22,727 | | EBITDA | 18,016 | (6,870) | 11,146 | | Profit (Loss) before tax | 4,936 | (8,257) | (3,321) | Segment Revenue and Results (for the six months ended June 30, 2024, restated) | Indicator | New Zealand (HK$'000) | Unallocated Corporate Items (HK$'000) | Consolidated Total (HK$'000) | | :--- | :--- | :--- | :--- | | Segment revenue – external | 18,698 | – | 18,698 | | Segment result ("Adjusted EBITDA") | (1,578) | (7,247) | (8,825) | | Fair value loss on plantation assets | (70,285) | – | (70,285) | | EBITDA | (71,890) | (7,238) | (79,128) | | Loss before tax | (87,149) | (7,959) | (95,108) | [Information about Major Customers](index=30&type=section&id=Information%20about%20Major%20Customers) Major Customer Revenue (for the six months ended June 30) | Customer | 2025 (HK$'000) | 2024 (HK$'000, restated) | | :--- | :--- | :--- | | Customer 1 | 13,358 | 9,391 | | Customer 2 | Not applicable* | 2,743 | | Customer 3 | Not applicable* | 1,946 | * The corresponding revenue contribution from relevant customers to the Group's total revenue from continuing operations did not exceed 10% [6. Other Income, Other Gains and Losses](index=30&type=section&id=6.%20Other%20Income,%20Other%20Gains%20and%20Losses) This note details other income (primarily bank interest) and other gains and losses (primarily exchange losses) from continuing operations Other Income (for the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000, restated) | | :--- | :--- | :--- | | Bank and other interest income | 407 | 567 | | Others | 114 | 80 | | **Total** | **521** | **647** | Other Gains and Losses (for the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000, restated) | | :--- | :--- | :--- | | Exchange (loss) gain | (1,959) | 888 | [7. Finance Costs](index=31&type=section&id=7.%20Finance%20Costs) This note details the composition of finance costs from continuing operations, including interest expenses from loans from a fellow subsidiary, lease liabilities, and bank borrowings Finance Costs (for the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000, restated) | | :--- | :--- | :--- | | Interest on loans from a fellow subsidiary | 6,669 | 6,574 | | Interest on lease liabilities | 499 | 467 | | Interest on bank borrowings | 694 | 948 | | **Total** | **7,862** | **7,989** | [8. Loss Before Tax](index=32&type=section&id=8.%20Loss%20Before%20Tax) This note explains how the loss before tax from continuing operations is derived and lists related adjustments, such as forest harvested as agricultural produce and forest depletion costs Loss Before Tax Calculation Items (for the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Forest harvested as agricultural produce | 2,027 | 4,003 | | Amount capitalized to inventories at end of period | (232) | (381) | | Amount reversed from inventories at beginning of period | 360 | – | | Forest depletion costs from harvesting | 2,155 | 3,622 | [9. Income Tax Expense (Credit)](index=32&type=section&id=9.%20Income%20Tax%20Expense%20(Credit)) This note details the Group's income tax expense, primarily deferred tax expense from the New Zealand segment, and states that the Group is not subject to income tax under the global anti-base erosion rules due to not meeting the revenue threshold Income Tax Expense (Credit) (for the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000, restated) | | :--- | :--- | :--- | | Current tax – Hong Kong | – | – | | Current tax – Other jurisdictions | – | 925 | | Deferred tax | 4,054 | (17,204) | | **Total** | **4,054** | **(16,279)** | - The Group's management believes the Group is not subject to income tax under the global anti-base erosion rules ("Pillar Two Rules") as its consolidated annual revenue is not expected to reach **EUR750 million** or more[74](index=74&type=chunk) - No provision for Hong Kong Profits Tax has been made as the Group did not generate any assessable profits in Hong Kong[74](index=74&type=chunk) [10. Dividends](index=33&type=section&id=10.%20Dividends) This note confirms that the Board did not declare any interim dividend for the period - The Board did not declare an interim dividend for the six months ended June 30, 2025[75](index=75&type=chunk) [11. Discontinued Operations](index=33&type=section&id=11.%20Discontinued%20Operations) This note details the disposal of the Suriname business as a discontinued operation, including the reasons for disposal, the resulting loss, and the financial performance of the business prior to disposal - The Suriname business recorded negative results for many years, leading the Group to dispose of most of its loss-making subsidiaries during the period to improve financial sustainability[76](index=76&type=chunk) Loss from Discontinued Suriname Operations for the Period (for the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Loss from Suriname operations for the period | (7,717) | (34,444) | | Loss on disposal of Suriname operations | (82,506) | – | | **Total** | **(90,223)** | **(34,444)** | Results of Discontinued Suriname Operations (for the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Total revenue | 1,557 | 8,973 | | Gross loss | (2,375) | (25,062) | | Loss for the period | (7,717) | (34,444) | - The loss on disposal of subsidiaries was **HK$82.506 million**, primarily due to the write-off of negative non-controlling interests of the non-wholly owned Suriname subsidiaries[81](index=81&type=chunk) [12. Loss Per Share](index=38&type=section&id=12.%20Loss%20Per%20Share) This note calculates the Group's basic loss per share from continuing and discontinued operations, as well as from continuing operations separately, and explains that diluted loss per share is not presented due to the absence of potential ordinary shares [From Continuing and Discontinued Operations](index=38&type=section&id=From%20Continuing%20and%20Discontinued%20Operations) Basic Loss Per Share (From Continuing and Discontinued Operations) (for the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company used in calculating basic loss per share | (121,791) | (93,905) | | Weighted average number of ordinary shares | 2,072,688,531 | 2,072,688,531 | | **Basic Loss Per Share (HK$)** | **(0.059)** | **(0.045)** | - Diluted loss per share is not presented as there were no potential ordinary shares in issue during the current and prior periods[83](index=83&type=chunk) [From Continuing Operations](index=39&type=section&id=From%20Continuing%20Operations) Basic Loss Per Share (From Continuing Operations) (for the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company from continuing operations used in calculating basic loss per share | (7,375) | (78,829) | | **Basic Loss Per Share (HK$)** | **(0.004)** | **(0.038)** | - Diluted loss per share is not presented as there were no potential ordinary shares in issue during the current and prior periods[85](index=85&type=chunk) [From Discontinued Operations](index=39&type=section&id=From%20Discontinued%20Operations) - Basic loss per share from discontinued operations was **HK$0.055** (2024: HK$0.007 per share)[86](index=86&type=chunk) - Diluted loss per share is not presented as there were no potential ordinary shares in issue during the current and prior periods[87](index=87&type=chunk) [13. Forest Concessions and Harvesting Rights](index=40&type=section&id=13.%20Forest%20Concessions%20and%20Harvesting%20Rights) This note discloses changes in the Group's forest concessions and harvesting rights in Suriname, which were derecognized with the disposal of the Suriname business, resulting in a zero carrying amount Forest Concessions and Harvesting Rights (as at June 30) | Item | June 30, 2025 (HK$'000, unaudited) | December 31, 2024 (HK$'000, audited) | | :--- | :--- | :--- | | Cost at beginning of period/year | 880,459 | 880,459 | | Disposal of subsidiaries during the period/year | (880,459) | – | | Carrying amount at end of period/year | – | – | - As of December 31, 2024, the Group's total forest concessions and harvesting rights in Suriname covered an area of approximately **313,000 hectares**[89](index=89&type=chunk) [14. Plantation Assets](index=41&type=section&id=14.%20Plantation%20Assets) This note details the Group's plantation assets in New Zealand, including changes in carrying amount, fair value measurement methodology, key assumptions and inputs used in valuation, and sensitivity analysis to key variables Plantation Assets (as at June 30) | Item | June 30, 2025 (HK$'000, unaudited) | December 31, 2024 (HK$'000, audited) | | :--- | :--- | :--- | | Net carrying amount at beginning of period/year | 295,750 | 360,447 | | Change in fair value less costs to sell | 22,727 | (65,847) | | Net carrying amount at end of period/year | 318,060 | 295,750 | - The Group currently owns certain New Zealand plantation assets, primarily Radiata Pine, covering a total land area of approximately **15,306 hectares**[90](index=90&type=chunk)[91](index=91&type=chunk) - Plantation assets are measured at fair value less costs to sell, valued by independent valuer Indufor Asia Pacific Limited using the discounted cash flow method[93](index=93&type=chunk)[94](index=94&type=chunk) Key Valuation Inputs for Plantation Assets (as at June 30, 2025) | Unobservable Input | Range | Average/Applied | | :--- | :--- | :--- | | Forecast unit log price (AWG) | US$70 to US$88 per cubic meter | US$78 per cubic meter | | Yield (cubic meters per hectare) | 327 to 789 | 542 | | Production costs | US$25 to US$42 per cubic meter | US$34 per cubic meter | | Transportation costs | US$8 to US$28 per cubic meter | US$19 per cubic meter | | Discount rate | 7.0% | 7.0% | Sensitivity Analysis of Fair Value of Plantation Assets (for the six months ended June 30, 2025) | Factor | Change | Impact on Loss Before Tax (HK$'000) | | :--- | :--- | :--- | | Increase in production costs | 5% | 38,107 (increase) | | Decrease in production costs | (5%) | (38,107) (decrease) | | Increase in transportation costs | 5% | 21,030 (increase) | | Decrease in transportation costs | (5%) | (21,030) (decrease) | | Increase in log prices | 5% | (86,852) (decrease) | | Decrease in log prices | (5%) | 86,852 (increase) | | Increase in discount rate | 1% | 56,606 (increase) | | Decrease in discount rate | (1%) | (77,234) (decrease) | - Plantation assets with a carrying amount of **HK$318.060 million** are pledged as security for the Group's bank credit facilities[101](index=101&type=chunk) [15. Trade Receivables](index=47&type=section&id=15.%20Trade%20Receivables) This note provides detailed information on trade receivables, including their composition, provision for credit losses, credit terms, and aging analysis, demonstrating the Group's strict control over receivables Trade Receivables (as at June 30) | Item | June 30, 2025 (HK$'000, unaudited) | December 31, 2024 (HK$'000, audited) | | :--- | :--- | :--- | | Trade receivables | 15,757 | 11,901 | | Less: Provision for credit losses | (6,286) | (7,178) | | **Net Trade Receivables** | **9,471** | **4,720** | - Trade receivables are recognized when the Group's products are delivered to customers, and the right to consideration is unconditional, with payment typically collected within **90 days**[102](index=102&type=chunk) - The Group's trade terms granted to customers are mainly letters of credit at sight to **30 days** or open account transactions with credit periods of **5 to 30 days**[103](index=103&type=chunk) Aging Analysis of Trade Receivables (as at June 30) | Aging | June 30, 2025 (HK$'000, unaudited) | December 31, 2024 (HK$'000, audited) | | :--- | :--- | :--- | | Within 1 month | 9,302 | 4,612 | | 1 to 3 months | 169 | – | | Over 3 months | – | 108 | | **Total** | **9,471** | **4,720** | - As of June 30, 2025, over **99%** of the trade receivables balance was subsequently settled[105](index=105&type=chunk) [16. Impairment Assessment of Financial Assets and Other Items Subject to ECL Model](index=48&type=section&id=16.%20Impairment%20Assessment%20of%20Financial%20Assets%20and%20Other%20Items%20Subject%20to%20ECL%20Model) This note discloses the net impairment losses on financial assets (primarily trade receivables) from continuing operations and confirms that the assessment methodology is consistent with the annual consolidated financial statements Net Impairment Losses on Financial Assets (for the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000, restated) | | :--- | :--- | :--- | | Trade receivables | 101 | 585 | [17. Trade Payables](index=49&type=section&id=17.%20Trade%20Payables) This note provides an aging analysis of trade payables and states that these amounts are typically interest-free and settled within 30 days Aging Analysis of Trade Payables (as at June 30) | Aging | June 30, 2025 (HK$'000, unaudited) | December 31, 2024 (HK$'000, audited) | | :--- | :--- | :--- | | Within 1 month | 11,998 | 5,917 | | 1 to 3 months | – | 74 | | Over 3 months | 116 | 2,051 | | **Total** | **12,114** | **8,042** | - Trade payables are trade in nature, interest-free, and typically settled within a **30-day** period[108](index=108&type=chunk) [18. Bank Borrowings](index=49&type=section&id=18.%20Bank%20Borrowings) This note details the Group's bank borrowings, including their secured nature, repayment schedule, interest rates, and the assets pledged as collateral Bank Borrowings (as at June 30) | Item | June 30, 2025 (HK$'000, unaudited) | December 31, 2024 (HK$'000, audited) | | :--- | :--- | :--- | | Bank loans, secured | 23,774 | 21,817 | | Repayable within one year | 23,774 | – | | Repayable in the second year | – | 21,817 | - The total New Zealand bank loan facility is **NZ$5 million**, bearing interest at a base rate plus **1.35%**, repayable by May 1, 2026, and fully drawn down[110](index=110&type=chunk) - The loan facility is secured by: all personal properties of selected group companies, New Zealand forest land (carrying amount of approximately **HK$143.872 million**), New Zealand plantation assets (carrying amount of approximately **HK$318.060 million**), and pledged bank deposits (carrying amount of approximately **HK$2.377 million**)[111](index=111&type=chunk) [19. Financial Instruments by Category](index=51&type=section&id=19.%20Financial%20Instruments%20by%20Category) This note presents the carrying amounts of the Group's financial assets and financial liabilities classified by amortized cost Financial Instruments by Category (as at June 30) | Item | June 30, 2025 (HK$'000, unaudited) | December 31, 2024 (HK$'000, audited) | | :--- | :--- | :--- | | Financial assets (amortized cost) | 36,637 | 31,332 | | Financial liabilities (amortized cost) | 462,635 | 448,510 | [20. Related Party Disclosures](index=51&type=section&id=20.%20Related%20Party%20Disclosures) This note details the Group's transactions and outstanding balances with related parties, including interest expenses on loans from the immediate holding company and a fellow subsidiary, as well as key management personnel remuneration [(a) Related Party Transactions and Balances](index=51&type=section&id=(a)%20Related%20Party%20Transactions%20and%20Balances) Related Party Transactions (for the six months ended June 30) | Relationship | Nature of Transaction | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | :--- | | Immediate holding company | Interest expense paid and payable on loans | 3,672 | 4,132 | | Fellow subsidiary | Interest expense paid and payable on loans | 6,669 | 6,574 | | Fellow subsidiary | License fees received and administrative expenses received and receivable | 362 | 342 | - Multiple unsecured loans from the immediate holding company, with maturity dates extended to April 1, 2027, bear interest at the Hong Kong Prime Rate[117](index=117&type=chunk)[118](index=118&type=chunk) - Two unsecured loans from a fellow subsidiary, with principal amounts of **HK$156 million** and **HK$25.818 million** respectively, bear interest at the Secured Overnight Financing Rate plus **2.86%** or **3%** per annum, maturing on November 3, 2026, and August 4, 2027, respectively[120](index=120&type=chunk)[122](index=122&type=chunk) - Considering the immediate holding company's agreement to maintain the Company's existing directorships, these loans were classified as non-current as of June 30, 2025, and December 31, 2024[119](index=119&type=chunk)[124](index=124&type=chunk) [(b) Outstanding Balances with Related Parties](index=55&type=section&id=(b)%20Outstanding%20Balances%20with%20Related%20Parties) - Amounts due from a fellow subsidiary as of June 30, 2025, and December 31, 2024, are unsecured, interest-free, and repayable within one year[126](index=126&type=chunk) [(c) Key Management Personnel Remuneration](index=55&type=section&id=(c)%20Key%20Management%20Personnel%20Remuneration) Key Management Personnel Remuneration (for the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Short-term employee benefits | 5,224 | 5,288 | | Contributions to pension schemes | 16 | 18 | | **Total** | **5,240** | **5,306** | [21. Contingent Liabilities](index=55&type=section&id=21.%20Contingent%20Liabilities) This note confirms that the Group had no significant contingent liabilities at the end of the reporting period - As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities[128](index=128&type=chunk) [22. Events After the Reporting Period](index=55&type=section&id=22.%20Events%20After%20the%20Reporting%20Period) This note discloses significant events that occurred after the reporting period, primarily the completion of a rights issue by the Company, successfully raising funds [(a) Rights Issue](index=55&type=section&id=(a)%20Rights%20Issue) - The Company completed a rights issue on August 12, 2025, issuing a total of **927,495,528 ordinary shares** for a total cash consideration (before expenses) of approximately **HK$33.668 million**[130](index=130&type=chunk) - The rights issue was undersubscribed by **205,102,640 rights shares**, representing approximately **22.1%** of the total shares offered, which were fully placed to six independent third parties[129](index=129&type=chunk)[130](index=130&type=chunk) [23. Approval of Condensed Consolidated Interim Financial Statements](index=56&type=section&id=23.%20Approval%20of%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This note states the approval date of the condensed consolidated interim financial statements - These condensed consolidated interim financial statements were approved by the Board on August 26, 2025[131](index=131&type=chunk) [Other Information](index=57&type=section&id=Other%20Information) This section provides additional disclosures, including directors' and substantial shareholders' interests, share option scheme details, and corporate governance compliance [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=57&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) This section discloses the interests and short positions of the Company's directors and chief executive in the shares of the Company and its associated corporations [(1) Directors' and Chief Executive's Interests and Short Positions in Shares and Underlying Shares of the Company](index=57&type=section&id=(1)%20Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) - No director or chief executive of the Company held any interests or short positions in the shares, underlying shares, and debentures of the Company[132](index=132&type=chunk) [(2) Directors' and Chief Executive's Interests and Short Positions in Shares and Underlying Shares of Associated Corporations](index=57&type=section&id=(2)%20Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20Associated%20Corporations) Directors' Long Positions in Shares of Chow Tai Fook Jewellery Group Limited (as at June 30, 2025) | Director | Capacity | Number of Shares and Underlying Shares in which Interests are Held | Approximate Percentage of Total Issued Share Capital of Chow Tai Fook Jewellery | | :--- | :--- | :--- | :--- | | Li Kwok Hang | Beneficial owner | 400,000 | 0.004% | Directors' Short Positions in Shares of Chow Tai Fook Jewellery Group Limited (as at June 30, 2025) | Director | Capacity | Number of Shares and Underlying Shares in which Interests are Held | Approximate Percentage of Total Issued Share Capital of Chow Tai Fook Jewellery | | :--- | :--- | :--- | :--- | | Li Kwok Hang | Beneficial owner | 400,000 | 0.004% | [Directors' Right to Acquire Shares or Debentures](index=58&type=section&id=Directors'%20Right%20to%20Acquire%20Shares%20or%20Debentures) This section confirms that no rights to acquire shares or debentures of the Company were granted to or exercised by any director or their associates during the period - Save as disclosed, no rights to acquire benefits by way of acquisition of shares or debentures of the Company were granted to or exercised by any director or their respective spouse or minor children during the period[134](index=134&type=chunk) [Share Option Scheme](index=59&type=section&id=Share%20Option%20Scheme) The Company has a share option scheme, but as of the end of this reporting period, no share options were granted, exercised, cancelled, or lapsed - The Company adopted a share option scheme on May 24, 2022, with a ten-year validity period, expiring on May 23, 2032[136](index=136&type=chunk) - From the adoption date of the share option scheme to June 30, 2025, no share options were granted, exercised, cancelled, or lapsed[136](index=136&type=chunk) - At the beginning and end of the period, the number of share options authorized for grant under the share option scheme was **185,499,105**[136](index=136&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=59&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) This section lists the long positions of the Company's substantial shareholders and other persons in shares and explains the changes in shareholding percentages for some substantial shareholders after the completion of the rights issue, leading to them no longer meeting the definition of substantial shareholders Substantial Shareholders' Long Positions in Shares and Underlying Shares of the Company (as at June 30, 2025) | Substantial Shareholder | Capacity | Number of Shares | Number of Underlying Shares | Approximate Percentage of the Company's Issued Share Capital % | | :--- | :--- | :--- | :--- | :--- | | Newforest Limited | Beneficial owner | 1,122,005,927 | – | 60.49 | | Cheng Yu Tung Family (Holdings) Limited | Interest of controlled corporation | 1,122,005,927 | – | 60.49 | | Chow Tai Fook Capital Limited | Interest of controlled corporation | 1,122,005,927 | – | 60.49 | | China Forestry Group Corporation | Interest of controlled corporation | 110,000,000 | – | 5.93 | | Hong Kong Genghis Khan Group Limited | Beneficial owner | 110,000,000 | – | 5.93 | | Ge Jian | Interest of controlled corporation | 110,000,000 | – | 5.93 | - After the completion of the rights issue on August 12, 2025, Newforest Limited directly and beneficially owned **1,683,008,890 shares**, representing approximately **60.49%** of the Company's issued share capital[140](index=140&type=chunk) - After the completion of the rights issue, the interests of China Forestry Group Corporation, Hong Kong Genghis Khan Group Limited, and Mr. Ge Jian in the Company decreased from **5.93%** to **3.95%**, no longer meeting the definition of substantial shareholders under Part XV of the Securities and Futures Ordinance[144](index=144&type=chunk) [Changes in Directors' Information](index=63&type=section&id=Changes%20in%20Directors'%20Information) This section discloses changes in directors' positions in other listed companies as required by the Listing Rules - Mr. Wong Man Chung retired as an independent non-executive director of Q&M Technology (Cayman) Limited on June 4, 2025[145](index=145&type=chunk) - Mr. Cheung Pak To was appointed as an independent non-executive director of China Financial Investment Management Limited on June 30, 2025[145](index=145&type=chunk) [Audit Committee Review of Interim Results](index=64&type=section&id=Audit%20Committee%20Review%20of%20Interim%20Results) The Audit Committee has reviewed and discussed the Group's interim financial statements, confirming their compliance with applicable accounting standards and fair representation of financial position and performance - The Company's Audit Committee has reviewed and discussed the Group's unaudited condensed consolidated interim financial statements for the period with management[146](index=146&type=chunk) - The Audit Committee is satisfied that the Group's unaudited condensed consolidated interim financial statements for the period were prepared in accordance with applicable accounting standards and fairly reflect the Group's financial position and performance for the period[146](index=146&type=chunk) [Compliance with Corporate Governance Code](index=64&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules during the period, with one deviation regarding the Chairman's rotation, which the Board considers crucial for company stability - The Company has complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules during the period[147](index=147&type=chunk) - Code Provision B.2.2 stipulates that every director should retire by rotation at least once every three years, but Mr. Cheng Chi Him, the Chairman of the Company, is not subject to retirement by rotation, which the Board considers crucial for the stability and continuity of the Company's key management[147](index=147&type=chunk) [Compliance with Model Code](index=64&type=section&id=Compliance%20with%20Model%20Code) The Company has adopted a code of conduct for directors' securities transactions, and all directors confirmed compliance with this code and the Listing Rules' Model Code during the period - The Company has adopted a code of conduct for directors' securities transactions, the terms of which are no less exacting than those set out in the Model Code[148](index=148&type=chunk) - All directors have confirmed that they have complied with the required standards set out in the Model Code and the code of conduct during the period[148](index=148&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=65&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[149](index=149&type=chunk) [Forward-Looking Statements](index=65&type=section&id=Forward-Looking%20Statements) This section reminds readers that forward-looking statements in this interim report involve known and unknown risks and uncertainties, and actual results may differ materially from expectations - This interim report contains forward-looking statements regarding the Group's financial position, operating results, and business, which involve known and unknown risks and uncertainties[150](index=150&type=chunk) - Actual results, performance, or events may differ materially from those expressed or implied in such statements[150](index=150&type=chunk) [Acknowledgements](index=65&type=section&id=Acknowledgements) The Board takes this opportunity to express sincere gratitude to all shareholders, customers, suppliers, management, and employees for their support and contributions - The Board takes this opportunity to express its sincere gratitude to all shareholders, customers, and suppliers for their continued and valuable support[151](index=151&type=chunk) - Heartfelt thanks are also extended to our management and employees for their efforts and contributions to the Group[151](index=151&type=chunk) [By Order of the Board](index=65&type=section&id=By%20Order%20of%20the%20Board) This section is a formal statement issued by Mr. Ting Wai Chuen, Executive Director and Chief Executive Officer, on behalf of the Board, and lists the Board's composition as of the report publication date - This report is issued by Mr. Ting Wai Chuen, Executive Director and Chief Executive Officer of Greenheart Group Limited, on behalf of the Board[152](index=152&type=chunk) - As of the date of this report, the Board comprises one executive director, four non-executive directors, and three independent non-executive directors[153](index=153&type=chunk)

Financial Performance - The Group recorded total net revenue of HK$108.0 million, a slight decline of 1.7% from HK$109.8 million in the same period last year[9]. - Gross profit margin increased to 56.7%, up from 54.1% in 2024[9]. - Profit from operations rose by 23.3% to HK$17.7 million, with the operating profit margin improving to 14.7% from 11.3% in 2024[10]. - Consolidated net profit attributable to shareholders increased by 2.4% to HK$18.6 million, with basic earnings per share rising to 7.66 HK cents from 7.46 HK cents in 2024[12]. - The Group declared an interim dividend of 5.5 HK cents per ordinary share, consistent with the prior period[13]. - Other income and gains decreased by 13.2% to HK$6.3 million due to lower bank interest rates[11]. - The Group's net revenue after direct third-party costs declined by 1.7% to HK$108.0 million, primarily due to lower professional service income recognition and delays in new contract backlog[40]. - The Solutions and Integration Services segment recorded an 8.7% revenue decline to HK$51.6 million, attributed to reduced professional services revenue and absence of third-party product sales[23]. - Recurring revenue, including maintenance and SaaS income, continued to grow steadily despite the overall revenue decline[40]. Investments and Strategic Initiatives - The Group is actively exploring joint ventures and M&A opportunities for overseas market expansion, with a strategic initiative expected to materialize in the second half of the year[36]. - The Group is forming strategic partnerships with leading technology firms in Mainland China to integrate cutting-edge technologies into its product portfolio[26]. - The Group continues to invest in product research and development to enhance its software portfolio with new AI features[20]. Operational Efficiency - The cost of goods and services procured from third parties decreased by HK$5.5 million, or 30.9%, to HK$12.3 million[40]. - Overall staff costs decreased by 1.2% to HK$76.5 million, down from HK$77.4 million in the previous year[44]. - Selling and distribution expenses increased by 2.6% to HK$18.0 million, compared to HK$17.6 million last year[45]. - General and administrative expenses decreased by HK$3.2 million, or 10.7%, to HK$26.7 million from HK$29.9 million[46]. Assets and Liabilities - Current assets slightly declined by HK$5.9 million, or 1.4%, to HK$428.7 million[59]. - Current and non-current liabilities decreased by HK$22.4 million, or 13.1%, to HK$148.0 million[60]. - Total equity attributable to owners of the parent remained stable at HK$507.6 million, reflecting profit generated during the period[63]. - Non-current assets declined by HK$9.9 million, or 4.2%, to HK$228.1 million, mainly due to amortization and downward revaluation of investment property[54]. - The Group's cash and cash equivalents increased significantly to HK$326.9 million as of June 30, 2025, compared to HK$128.9 million as of December 31, 2024[70]. - The current ratio improved to 3.3 as of June 30, 2025, up from 2.9 as of December 31, 2024, indicating better short-term financial health[72]. - The gearing ratio decreased to 22.5% as of June 30, 2025, from 25.3% as of December 31, 2024, reflecting a reduction in total liabilities relative to total assets[72]. - The Group had no bank borrowings as of June 30, 2025, consistent with the position as of December 31, 2024[72]. Revenue Segmentation - Total segment revenue decreased to HK$123,322,000 in 2025 from HK$135,763,000 in 2024, representing a decline of approximately 9.1%[129]. - Application services segment revenue was HK$67,771,000 in 2025, down from HK$70,191,000 in 2024, a decrease of about 3.9%[129]. - Solutions and integration services segment revenue fell to HK$53,023,000 in 2025 from HK$63,598,000 in 2024, a decline of approximately 16.7%[129]. - The investments segment generated revenue of HK$920,000 in 2025, slightly down from HK$957,000 in 2024, a decrease of about 3.9%[129]. Taxation and Compliance - The total tax charge for the period was HK$2,969,000 in 2025, compared to HK$2,721,000 in 2024, reflecting an increase of 9.1%[174]. - The Group has been responding to multiple inquiries from the Hong Kong Inland Revenue Department regarding R&D tax deductions, with the latest inquiry issued on February 28, 2025[175]. - The tax authority issued protective assessments for the years 2016/17 and 2017/18, requiring approximately HK$0.8 million and HK$1.0 million in tax payments, respectively[178]. - The focus of the tax review is on the nature and deductibility of certain expenses and R&D Enhanced Deduction claims made by the subsidiaries[180]. Shareholder Information - An interim dividend of HK$0.055 per ordinary share has been determined for shareholders[186]. - The weighted average number of ordinary shares outstanding during the period was 242,787,539 for 2025, compared to 243,670,021 for 2024[187]. - The total dividends attributable to the previous financial year approved during the interim period amounted to HK$13.4 million[185].

Financial Performance - The company sold 4.74 million tons of fertilizers, representing a year-on-year increase of 1.72%[16] - The company achieved a revenue of RMB 14.715 billion, an increase of 7.56% year-on-year[16] - The profit attributable to shareholders was RMB 1.104 billion, reflecting a year-on-year growth of 5.04%[16] - The group achieved a revenue of RMB 14.715 billion for the six months ended June 30, 2025, with a profit attributable to shareholders of RMB 1.104 billion, representing a year-on-year growth of 5.04%[50] - The group’s urea production increased by 9.59% year-on-year in the first half of 2025, although export volumes decreased significantly, with a 44% drop in urea exports from January to June[48] - The group’s phosphoric acid exports saw a significant decline, with a 72.5% drop in monoammonium phosphate exports compared to the same period last year[48] - The group’s segment profit for the six months ended June 30, 2025, was RMB 1.439 billion, an increase of RMB 215 million compared to the same period in 2024[82] - The basic business segment achieved a profit of RMB 719 million, a 53% increase year-on-year, driven by strategic procurement and market expansion efforts[82] - The growth business segment realized a profit of RMB 420 million, a 5% increase year-on-year, supported by a 51% increase in sales of high-end "Bio+" products[82] - The production business segment reported a profit of RMB 301 million, a decrease of 16% year-on-year, impacted by rising raw material prices and market imbalances[82] - The income tax expense for the six months ended June 30, 2025, was RMB 254 million, an increase of RMB 88 million year-on-year, primarily due to an increase in pre-tax profit[87] - The net profit margin for the six months ended June 30, 2025, was 7.5%, remaining stable compared to the previous year[88] - Total expenses for the six months ended June 30, 2025, amounted to RMB 750 million, an increase of RMB 75 million or 11.11% compared to RMB 675 million for the same period in 2024[89] - The company's revenue for the six months ended June 30, 2025, was RMB 14,714,813 thousand, an increase of 7.5% compared to RMB 13,680,872 thousand for the same period in 2024[143] - Gross profit for the same period was RMB 2,024,721 thousand, reflecting a 21.7% increase from RMB 1,662,576 thousand in 2024[143] - Operating profit reached RMB 1,356,233 thousand, up 21.4% from RMB 1,117,712 thousand in the previous year[143] - The net profit attributable to shareholders for the period was RMB 1,104,114 thousand, a rise of 5.0% compared to RMB 1,050,926 thousand in 2024[144] Strategic Initiatives - The company is focusing on a "Biological +" strategic transformation, emphasizing innovation-driven growth and green development[16] - The company launched high-end biological fertilizer products such as "Huanfeng," "Songtian," and "Zhiyang®," contributing to a sales volume of 260,000 tons, up 51% year-on-year[20] - The group launched a high-end biological water-soluble fertilizer product "智養®" in February 2025, which integrates dual-core technologies to enhance crop immunity and yield[26] - The group signed a strategic cooperation agreement with Yunnan Yuntianhua Co., Ltd. in April 2025 to promote green and high-quality development in the fertilizer sector[36] - The group participated in the "Norway-China Green Transition Forum" in March 2025, emphasizing its commitment to agricultural green transformation[28] - The group is focused on advancing its "Biological +" strategic transformation, emphasizing technological innovation and digital transformation to enhance operational efficiency[22] - The company is committed to supporting food security and modernizing agriculture in China through its core business and strategic initiatives[49] - The company achieved a research and development transformation with a total conversion of scientific research results reaching 1.01 million tons, with high-end product conversion volume increasing by 59% year-on-year[52] - The company launched new products, including the seaweed polymer phosphorus-potassium biological stimulant "Songtian," enhancing its product portfolio[58] Market and Competition - The company is actively implementing policies to ensure supply and stabilize prices in the market[20] - The company is leveraging various service platforms to support farmers and ensure agricultural supply[20] - The company faces intensified market competition due to global supply chain restructuring and price stabilization policies in the domestic fertilizer industry[121] Operational Efficiency - The company has strengthened its collaboration with domestic and international suppliers to enhance supply chain coordination[20] - The company is committed to enhancing its core resource capabilities to solidify its development foundation[20] - The company is expanding its potassium fertilizer supplier cooperation system, completing the first batch of cooperation with new international suppliers[53] - The company’s comprehensive capacity utilization rate in the phosphate segment improved to 101.8%, with a significant increase in the consumption of phosphogypsum by 259% year-on-year, totaling 476,500 tons[64] - The company has conducted over 3,000 technical training sessions to address farmers' planting challenges[71] - The group conducted more than 7,000 offline promotional meetings, benefiting over 2.2 million farmers through digital marketing activities[1] Financial Position - The asset-liability ratio decreased to 43.31%, indicating a stable financial condition[16] - The current ratio was 1.45, and the debt-to-equity ratio was 15.82%, indicating strong solvency[111] - Total interest-bearing liabilities decreased to RMB 1.788 billion in June 2025 from RMB 1.870 billion in December 2024[115] - The company has unused bank credit facilities amounting to RMB 17.833 billion, including USD 744 million and RMB 1.250 billion[118] - The company's equity in joint ventures and associates decreased by RMB 146 million or 12.61% to RMB 1.012 billion, mainly due to increased profits and dividends from joint ventures[98] - The company's cash and cash equivalents amounted to RMB 3.162 billion, primarily held in RMB and USD[114] - The company's inventory balance as of June 30, 2025, was RMB 4.195 billion, a decrease of RMB 1.03 billion or 19.71% from RMB 5.225 billion at the end of 2024[94] - Trade receivables and notes increased by RMB 309 million to RMB 602 million, driven by credit extended to customers to boost sales during peak season[96] - The company reported a significant portion of its interest-bearing liabilities as floating rate, amounting to RMB 1.117 billion as of June 30, 2025[118] Employee and Training - The company employed approximately 4,317 full-time employees as of June 30, 2025, with a focus on competitive compensation structures to attract and retain talent[135] - A total of 5,375 training sessions were conducted, amounting to approximately 25,760 hours of training, aimed at enhancing leadership and professional skills[136]

Financial Performance - For the six months ended June 30, 2025, the company's revenue decreased by approximately 10.6% to RMB 425.2 million from RMB 475.7 million for the same period in 2024[11]. - The company's net profit attributable to shareholders for the same period was RMB 12.1 million, a decrease of about 8.3% compared to RMB 13.2 million in 2024[9]. - Gross profit for the period was RMB 179.1 million, a decrease of approximately 8.7% from RMB 196.2 million for the same period in 2024[14]. - Other income significantly decreased by approximately 81.3% to RMB 0.3 million from RMB 1.6 million in the previous year, primarily due to reduced sales of raw materials and a one-time high-interest bank deposit income in 2024[15]. - Profit for the period decreased by 8.3% from RMB 13.2 million to RMB 12.1 million[23]. - Earnings per share for the period was RMB 9.05, down from RMB 9.90 in 2024[56]. - The company reported a total depreciation and amortization expense of RMB 22,109,955, an increase from RMB 16,001,685 in the previous year[79]. - The company's income tax expense for the six months ended June 30, 2025, was RMB 3,644,182, a decrease of 43.3% from RMB 6,392,999 in the same period of 2024[83]. Revenue Breakdown - Revenue from the FIRS brand accounted for 67.5% of total revenue, amounting to RMB 286.98 million, while SHANSHAN brand revenue was RMB 136.07 million, representing 32.0% of total revenue[13]. - Retail sales through e-commerce platforms accounted for 34.3% of total revenue, amounting to RMB 146.02 million, down from 36.0% in the previous year[12]. - Revenue from apparel trading was RMB 374,483,426, down from RMB 421,878,831, reflecting a decline of 11.2% year-over-year[74]. - E-commerce platform sales decreased to RMB 146,022,393 from RMB 171,229,861, a decline of 14.7%[77]. Operational Changes - The total number of retail stores decreased by approximately 11.2%, from 662 stores as of December 31, 2024, to 588 stores as of June 30, 2025[10]. - The company has optimized its e-commerce platform, leading to a decline in e-commerce revenue during the period[11]. - The company has emphasized brand culture and launched new product lines, including a light business series under the SHANSHAN brand, which has gained consumer favor[9]. - Sales and distribution expenses decreased by approximately 2.7% from RMB 151.7 million to RMB 147.6 million, mainly due to a decline in revenue from franchisee channels[17]. - Administrative expenses decreased by approximately 14.2% from RMB 21.8 million to RMB 18.7 million, primarily due to reduced professional consulting fees[18]. Investments and Projects - The company is advancing its 5G new productivity industrial park project in Ningbo, expected to be completed in Q4 2025, focusing on technological research and digital transformation[10]. - The estimated total cost for the industrial park project is RMB 280 million, with RMB 41.3 million already paid for land use rights as of June 30, 2025[31]. - The company has a significant investment in a new integrated building for product R&D and smart manufacturing, indicating a focus on technological advancement and market expansion[85]. Shareholding Structure - The company and its affiliates hold a total of 52,021,000 domestic shares, representing approximately 39.00% of the total issued shares[35]. - The total shareholding structure indicates significant concentration among major shareholders, with the top shareholders holding substantial percentages of the total shares[43][44]. - The latest report indicates a shift in ownership dynamics following the passing of Mr. Zheng, impacting the overall share distribution[44]. - As of June 30, 2025, Mr. Luo and Ms. Zhou collectively own 52,021,000 domestic shares, representing 52.021% of the domestic shares and 38.996% of the total issued shares[41]. Financial Position - Cash and cash equivalents were approximately RMB 59.1 million as of June 30, 2025, down from RMB 106.5 million as of December 31, 2024[25]. - Current assets decreased to RMB 543,971,128 from RMB 655,385,875, with a notable decline in inventory and trade receivables[58]. - Total liabilities decreased from RMB 525,604,168 to RMB 441,273,041, indicating improved financial stability[58]. - Operating cash flow for the six months was a net outflow of RMB 40,102,503, compared to RMB 24,101,011 in the previous year, indicating increased cash usage[63]. Corporate Governance - The audit committee consists of three independent non-executive directors who reviewed and approved the interim results for the period[49]. - The company did not repurchase any of its H-shares during the reporting period and holds no treasury shares as of June 30, 2025[50]. - There are no reported conflicts of interest among directors, supervisors, or major shareholders with respect to the company's business[52]. - Changes in the board of directors include the resignation of Mr. Shen Jinxin and the appointment of Mr. Wang Mingming as a non-executive director effective June 9, 2025[53].

2025 INTERIM REPORT 中期報告 京北健康城 CONTENTS 目 錄 Page 頁 次 中國天保集團發展有限公司 China Tianbao Group Development Company Limited （Incorporated in the Cayman Islands with limited liability） （ 於開曼群島註冊成立的有限公司 ） Stock Code 股份代號: 01427 | 2 | CORPORATE INFORMATION | 公司資料 | | --- | --- | --- | | 6 | FINANCIAL HIGHLIGHT | 財 務 摘 要 | | 8 | BUSINESS REVIEW AND PROSPECT | 業務回顧及前景 | | 11 | MANAGEMENT DISCUSSION AND ANALYSIS | 管 理層討論與分析 | | 39 | CORPORATE GOVERNANCE AND OTHER | 企業管治及其他資料 | | | INFORMATION | | | 47 | INTERIM CONDENSED C ...