Company Information [Board of Directors and Committees](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E5%A7%94%E5%93%A1%E6%9C%83) SMOORE International Holdings Limited's Board of Directors comprises executive, non-executive, and independent non-executive directors, with audit, nomination, remuneration, and ESG committees ensuring sound corporate governance - Board members include Chairman and President Mr. Chen Zhiping (executive director), Ms. Jiang Min (non-executive director), and Mr. Zhong Shan (independent non-executive director)[7](index=7&type=chunk) - The company has established an Audit Committee, Nomination Committee, Remuneration Committee, and Environmental, Social and Governance Committee to strengthen corporate governance[7](index=7&type=chunk) [Registered and Business Address](index=3&type=section&id=%E6%B3%A8%E5%86%8C%E5%8F%8A%E8%90%A5%E4%B8%9A%E5%9C%B0%E5%9D%80) The company is registered in the Cayman Islands, with its principal place of business in Kowloon, Hong Kong, and its China headquarters in Shenzhen, Guangdong Province - Registered office is located at Cricket Square, Cayman Islands[7](index=7&type=chunk) - Hong Kong principal place of business is Unit B, 28/F, EGL Tower, 83 Hung To Road, Kowloon, Hong Kong[8](index=8&type=chunk) - China headquarters is located at No. 16 Dongcai Industrial Zone, Gushu Community, Xixiang Street, Bao'an District, Shenzhen, Guangdong Province[8](index=8&type=chunk) [Stock Information and Advisors](index=4&type=section&id=%E8%82%A1%E7%A5%A8%E4%BF%A1%E6%81%AF%E4%B8%8E%E9%A1%BE%E9%97%AE) The company's stock ticker is "SMOORE International" with stock code **6969**, and it has appointed IR Asia Limited as its investor relations advisor - Stock ticker: SMOORE International, Stock code: **6969**[9](index=9&type=chunk) - Investor relations advisor is IR Asia Limited[9](index=9&type=chunk) Chairman's Statement [Business Review](index=5&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%B1) In the first half of 2025, SMOORE International achieved significant growth in its Heated Tobacco Product (HNB) business, supported key clients in launching high-end HNB products, saw a strong recovery in its vaping business due to enhanced global regulatory enforcement and strong compliance capabilities, and continued investing in emerging businesses like medical atomization and beauty atomization while optimizing management efficiency - **2025** marks a key milestone for SMOORE, with the HNB business achieving significant growth, successfully assisting a core client in launching a high-end HNB product series in Sendai, Japan, receiving positive market feedback[12](index=12&type=chunk)[13](index=13&type=chunk) - The vaping business experienced a strong recovery, with both ToB and own-brand businesses recording revenue growth, primarily benefiting from strengthened global regulatory enforcement against non-compliant products[12](index=12&type=chunk)[14](index=14&type=chunk) - Increased sales and distribution expenses and a significant rise in share-based non-cash expenses were the main reasons affecting net profit, but these are considered important investments for long-term growth[12](index=12&type=chunk) - Continued investment in emerging businesses such as medical atomization (Transpire Bio Inc.) and beauty atomization ("Lan Zhi" brand), achieving key milestones like "Lan Zhi" professional beauty device obtaining China Class II medical device certification[12](index=12&type=chunk)[15](index=15&type=chunk) - Implemented strategic initiatives such as strengthening talent management, decentralizing decision-making authority, and optimizing performance management to enhance management efficiency and operational capabilities[16](index=16&type=chunk) [Outlook](index=7&type=section&id=%E5%89%8D%E6%99%AF%E5%B1%95%E6%9C%9B) For the second half of 2025, SMOORE International will continue to strengthen R&D, enhance organizational agility, and improve management efficiency, planning to promote HNB products nationwide in Japan and in more core markets, while also launching new compliant vaping products, deepening localized operations, and increasing investment in medical and beauty atomization businesses - In the second half of **2025**, the company will continue to strengthen R&D capabilities, enhance organizational agility, and improve management efficiency[18](index=18&type=chunk) - The HNB business plans to assist strategic clients in launching their product series nationwide in Japan by September **2025** and expand to more core markets, continuously investing in R&D to optimize user experience[18](index=18&type=chunk) - The vaping business will continue to adhere to principles of compliance, innovation, and agility, launching new products that meet regulatory requirements and strengthening the VAPORESSO brand's competitiveness[19](index=19&type=chunk) - The special-purpose atomization product business will deepen localized operations, optimize its business model, and launch innovative products to drive business recovery[19](index=19&type=chunk) - In the medical atomization sector (Transpire Bio), the company will increase investment in independent R&D and collaborative development, and evaluate external licensing opportunities[20](index=20&type=chunk) - The beauty atomization business ("Lan Zhi" brand) will increase promotion efforts in professional institutions and continuously optimize its strategy[21](index=21&type=chunk) [Heartfelt Thanks](index=8&type=section&id=%E8%A1%B7%E5%BF%83%E6%84%9F%E8%B0%A2) The Chairman, on behalf of the Group, extends sincere gratitude to all colleagues, clients, regulators, and shareholders for their contributions and support in achieving solid results in the first half of 2025, looking forward to continued collaboration and value creation - Thanks to all colleagues for their full efforts in a challenging environment, contributing to the solid performance in the first half of **2025**[22](index=22&type=chunk) - Thanks to clients for their consistent trust and partnership, and to regulatory bodies for their commitment to fostering a more sustainable and compliant industry environment[22](index=22&type=chunk) - Sincere appreciation to all shareholders for their steadfast support and confidence in the Group's vision and strategy[22](index=22&type=chunk) Financial Summary [Key Financial Performance](index=9&type=section&id=%E5%85%B3%E9%94%AE%E8%B4%A2%E5%8A%A1%E4%B8%9A%E7%BB%A9) In the first half of 2025, the company's revenue increased by **18.3%** to **RMB 6.013 billion**, gross profit grew by **16.6%** to **RMB 2.244 billion**, but gross margin slightly decreased, while profit for the period declined by **28.0%** to **RMB 492 million**, mainly due to increased share-based payment expenses and market development costs, with adjusted profit for the period decreasing by **2.1%** to **RMB 737 million** Key Financial Data for the 6 Months Ended June 30 | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 6,013,290 | 5,083,554 | 18.3 | | Gross Profit | 2,243,850 | 1,923,951 | 16.6 | | Gross Margin | 37.3% | 37.8% | (0.5 percentage points) | | Profit Before Tax | 698,735 | 811,555 | (13.9) | | Profit for the Period | 492,154 | 683,198 | (28.0) | | Total Comprehensive Income for the Period | 501,166 | 724,597 | (30.8) | | Total Comprehensive Income for the Period Attributable to Shareholders | 501,166 | 724,597 | (30.8) | | Adjusted Profit for the Period | 737,410 | 752,851 | (2.1) | | Adjusted Net Profit Margin | 12.3% | 14.8% | (2.5 percentage points) | Adjusted Profit for the Period Reconciliation | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period Before Adjustment | 492,154 | 683,198 | (28.0) | | Add: Share-based Payment Expenses Related to Share Option Scheme and Share Award Scheme | 245,256 | 69,653 | 252.1 | | Adjusted Profit for the Period | 737,410 | 752,851 | (2.1) | - Adjusted profit for the period excludes non-cash share-based payment expenses to provide a clearer view of operating performance[27](index=27&type=chunk) [Key Financial Position Indicators](index=10&type=section&id=%E5%85%B3%E9%94%AE%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E6%8C%87%E6%A0%87) As of June 30, 2025, the company's total assets slightly decreased, total equity grew by **2.5%**, cash and cash equivalents remained stable, and both the debt-to-asset ratio and current ratio improved, indicating a sound financial position, while trade receivables turnover days remained stable and inventory turnover days slightly increased Key Financial Position Indicators | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 27,331,803 | 27,654,378 | (1.2) | | Total Equity | 22,445,554 | 21,904,711 | 2.5 | | Cash and Cash Equivalents | 5,211,753 | 5,170,700 | 0.8 | | Debt-to-Asset Ratio (%) | 17.9 | 20.8 | (2.9 percentage points) | | Current Ratio (%) | 336.7 | 320.3 | 16.4 percentage points | | Trade Receivables and Bills Receivable Turnover Days (days) | 61.4 | 61.5 | (0.2) | | Inventory Turnover Days (days) | 45.7 | 41.8 | 9.3 | | Trade Payables and Bills Payable Turnover Days (days) | 62.4 | 65.2 | (4.3) | Management Discussion and Analysis [Principal Businesses of the Group](index=11&type=section&id=%E6%9C%AC%E9%9B%86%E5%9B%A2%E4%B8%BB%E8%A6%81%E4%B8%9A%E5%8A%A1) SMOORE International, a global leader in atomization technology solutions, primarily operates two business segments: business-to-business (ToB) and own-brand, with ToB covering atomization products, HNB, special-purpose atomization products, and medical atomization products, while own-brand focuses on vaping and beauty atomization products, achieving an **18.3%** revenue increase in the first half of 2025 due to strengthened global regulatory enforcement and rapid launch of compliant innovative products - The Group's principal businesses are divided into business-to-business (ToB business) and own-brand business[30](index=30&type=chunk) - ToB business provides R&D, design, and manufacturing of atomization products, HNB products, special-purpose atomization products, and medical atomization products, along with related technical services, to leading global tobacco companies, independent vaping brands, and other enterprise clients[30](index=30&type=chunk) - Own-brand business focuses on R&D, design, manufacturing, and sales of own-brand vaping products and beauty atomization products[30](index=30&type=chunk) - Revenue for the first half of **2025** was approximately **RMB 6.013 billion**, an **18.3%** year-on-year increase, primarily due to strengthened global enforcement against non-compliant products and the Group's rapid launch of innovative and compliant products[31](index=31&type=chunk) - ToB business revenue was approximately **RMB 4.739 billion**, a **19.5%** year-on-year increase; own-brand business revenue was approximately **RMB 1.274 billion**, a **14.1%** year-on-year increase[31](index=31&type=chunk) - Sales and distribution expenses were approximately **RMB 491 million**, a **31.2%** year-on-year increase, mainly due to expanding overseas market sales channel coverage[12](index=12&type=chunk)[32](index=32&type=chunk) - R&D expenses were approximately **RMB 723 million**, a **4.9%** year-on-year decrease, mainly due to focusing on strategic segments (HNB and medical atomization) and optimizing resource allocation[32](index=32&type=chunk) - Administrative expenses increased to approximately **RMB 610 million**, a significant **79.7%** year-on-year increase, primarily affected by increased non-cash share-based payment expenses resulting from the grant of share options and awarded shares in the fourth quarter of **2024**[33](index=33&type=chunk) - Profit for the period was approximately **RMB 492 million**, a **28.0%** year-on-year decrease; adjusted profit for the period was approximately **RMB 737 million**, a **2.1%** year-on-year decrease[33](index=33&type=chunk) [Business Review](index=13&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%B1) This section details the company's business progress in the first half of 2025, including legal and regulatory updates in key markets, sales and marketing strategies, R&D breakthroughs, and production optimization, demonstrating the company's proactive response to global regulatory changes, consolidation of market position through innovative products and localized operations, and significant advancements in emerging areas like HNB, medical atomization, and beauty atomization [Summary of Major Legal, Regulatory, Administrative Orders and Policy Updates](index=13&type=section&id=%E9%87%8D%E5%A4%A7%E6%B3%95%E5%BE%8B%E3%80%81%E6%B3%95%E8%A7%84%E3%80%81%E8%A1%8C%E6%94%BF%E5%91%BD%E4%BB%A4%E5%8F%8A%E6%94%BF%E7%AD%96%E6%9B%B4%E6%96%B0%E6%A6%82%E8%A6%81) Global major markets continue to tighten regulations on e-cigarettes and atomization products, with the US FDA acting on over **99%** of ENDS PMTA applications, issuing MDOs for non-tobacco and non-menthol flavored products, the UK banning disposable vaping products from June 1, 2025, EU countries implementing flavor restrictions and disposable e-cigarette bans, and China's Hong Kong and mainland regulating alternative smoking products and e-cigarette production, to which the Group actively adjusts R&D and production to ensure compliance - The US FDA has acted on over **99%** of ENDS product PMTA applications, issuing Marketing Denial Orders (MDOs), though some MDOs have been overturned in court; the FDA has issued marketing authorizations for **25** tobacco-flavored and **4** menthol-flavored ENDS products manufactured by the Group's clients[35](index=35&type=chunk) - The UK will ban the sale of disposable e-cigarettes from June 1, **2025**, and the Group has developed products compliant with the new regulations[35](index=35&type=chunk) - Multiple EU countries (e.g., Finland, Netherlands, Belgium, France) have implemented or plan to implement flavor restrictions and disposable e-cigarette bans, and the Group has developed compliant products[36](index=36&type=chunk)[37](index=37&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - The EU has updated battery regulations, and the Group has developed new solutions compliant with the new battery requirements[38](index=38&type=chunk) - China's Hong Kong has banned the import, promotion, manufacture, sale, and commercial possession of alternative smoking products since April 30, **2022**, and proposed banning possession of ASPs in public places from April 30, **2026**[43](index=43&type=chunk)[44](index=44&type=chunk) - Mainland China issued regulations on tobacco monopoly licenses for e-cigarette production and wholesale enterprises in May **2025**[48](index=48&type=chunk) - The Group has established a dedicated team to closely monitor global regulatory developments, promptly adjust business activities to ensure compliance, and promote the application of atomization technology in medical, health, and other industries[45](index=45&type=chunk)[46](index=46&type=chunk) [Sales and Marketing](index=16&type=section&id=%E9%94%80%E5%94%AE%E4%B8%8E%E8%90%A5%E9%94%80) Stricter global regulations on vaping products create growth opportunities for compliant companies, with enhanced enforcement in the US and disposable vaping product bans in Europe, leading to SMOORE International's **18.3%** revenue growth in the first half of 2025, driven by **19.5%** growth in ToB business and **14.1%** in own-brand business, while its VAPORESSO brand performed strongly in Europe and its "Lan Zhi" beauty atomization products saw significant revenue growth in mainland China and obtained Class II medical device certification - The global regulatory landscape for vaping products is clearer and enforcement measures are stricter, creating growth opportunities for compliant participants[49](index=49&type=chunk) - The US FDA seized nearly **2 million** unauthorized vaping products with a retail value of approximately **USD 33.8 million**; **13** states passed vaping product registration bills[49](index=49&type=chunk) - The UK will implement a ban on the sale of disposable vaping products from June 1, **2025**, creating significant market opportunities for compliant products[50](index=50&type=chunk) H1 2025 Revenue by Business Segment | Business Segment | H1 2025 Revenue (RMB '000) | Year-on-Year Growth (%) | % of Total Revenue | | :--- | :--- | :--- | :--- | | Own-brand Business | 1,274,306 | 14.1 | 21.2 | | Business-to-Business (ToB) | 4,738,984 | 19.5 | 78.8 | | **Total** | **6,013,290** | **18.3** | **100.0** | - Own-brand vaping product revenue in Europe and other markets was approximately **RMB 1.069 billion**, a **15.1%** year-on-year increase, mainly due to the excellent performance of the VAPORESSO brand and the launch of upgraded XROS 5 and XROS 5 Mini series[51](index=51&type=chunk) - Own-brand beauty atomization product "Lan Zhi" revenue in mainland China was approximately **RMB 31 million**, a **2,595.2%** year-on-year increase, with professional devices obtaining Class II medical device certification[53](index=53&type=chunk) - ToB business revenue in Europe and other countries was approximately **RMB 2.734 billion**, a **38.0%** year-on-year increase, primarily driven by sales of vaping products and HNB products, and technical services[54](index=54&type=chunk)[77](index=77&type=chunk) - ToB business revenue in the US market was approximately **RMB 1.888 billion**, a **1.5%** year-on-year increase, including vaping and special-purpose atomization products, with the company strengthening localized operations[55](index=55&type=chunk)[77](index=77&type=chunk) - ToB business revenue in mainland China market was approximately **RMB 117 million**, a **6.1%** year-on-year decrease[55](index=55&type=chunk)[77](index=77&type=chunk) [Research and Development](index=18&type=section&id=%E7%A0%94%E7%A9%B6%E4%B8%8E%E5%BC%80%E5%8F%91) SMOORE International continues to invest in R&D to solidify its technological leadership, with R&D expenses of approximately **RMB 723 million** in the first half of 2025, a **4.9%** year-on-year decrease due to focusing on HNB and medical atomization and capitalizing some development costs, while achieving significant progress in HNB products, medical atomization, vaping, and special-purpose atomization products, and continuously building a global intellectual property protection system - Total R&D expenses were approximately **RMB 723 million**, a **4.9%** year-on-year decrease, with the percentage of revenue decreasing from **15.0%** to **12.0%**[56](index=56&type=chunk)[61](index=61&type=chunk) - R&D focus is on HNB products and medical atomization, with eligible R&D expenditures capitalized[56](index=56&type=chunk) - Successfully supported a strategic client in launching a high-end HNB product series in Sendai, Japan, with plans for a nationwide launch in Japan by September **2025**[57](index=57&type=chunk) - Medical atomization subsidiary Transpire Bio established an inhalation product R&D center in Miami, Florida, and collaborated with CDMOs to build manufacturing capabilities[57](index=57&type=chunk) - Vaping business launched FEELM multi-category solution portfolio (adjustable flavor system, large puff transparent oil tank, and 2+10 platform) and upgraded VAPORESSO XROS 5 and XROS 5 Mini series[59](index=59&type=chunk) - Special-purpose atomization product business began to recover, launching several innovative product solutions[60](index=60&type=chunk) - Own-brand "Lan Zhi" professional devices obtained Class II medical device certification and published three academic papers with IFSCC[60](index=60&type=chunk) - **839** new patent applications globally (including **464** invention patents), with a cumulative total of **10,092** patent applications (including **5,224** invention patents)[60](index=60&type=chunk) R&D Expenses by Area | R&D Area | 2025 (RMB '000) | % of Total | 2024 (RMB '000) | % of Total | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | R&D for Electronic Nicotine Delivery Systems (including vaping products and HNB products) | 478,591 | 66.2 | 481,988 | 63.4 | (0.7) | | R&D for Medical Atomization and Beauty Atomization Products | 179,241 | 24.8 | 185,471 | 24.4 | (3.4) | | R&D for Special-Purpose Atomization Products and Solutions | 64,732 | 9.0 | 92,653 | 12.2 | (30.1) | | **Total** | **722,564** | **100.0** | **760,112** | **100.0** | **(4.9)** | [Production and Operations](index=20&type=section&id=%E7%94%9F%E4%BA%A7%E8%BF%90%E8%90%A5) The company's production system demonstrated exceptional agility, continuously improving capacity utilization through flexible operational adjustments and strategic optimization of production layout, establishing a KPI system and regular tracking mechanisms to optimize quality control, cost management, and delivery assurance, with breakthrough progress in the HNB business effectively supported by the operations team, laying a foundation for future growth - The production system continuously improved capacity utilization through flexible operational adjustments and strategic optimization of production layout, ensuring rapid market response and customer delivery[62](index=62&type=chunk) - Established a Key Performance Indicator (KPI) system and regular tracking and benchmarking mechanisms to identify best practices in quality control, cost management, and delivery assurance[62](index=62&type=chunk) - Breakthroughs in the HNB business were effectively supported by the operations team for the launch and delivery of major clients' HNB products, establishing a strict quality control system and improving production efficiency[62](index=62&type=chunk) [Future Prospects and Strategies](index=21&type=section&id=%E6%9C%AA%E6%9D%A5%E5%89%8D%E6%99%AF%E5%8F%8A%E7%AD%96%E7%95%A5) In the second half of 2025, SMOORE International will continue to focus on "atomization technology," deepening its presence in key areas such as vaping, HNB, special-purpose atomization products, medical atomization, and beauty atomization, accelerating the commercialization of technology platforms, continuously investing in strategic R&D projects, and strengthening localized operations, channel expansion, and market insights, while optimizing authorization and empowerment within business segments, enhancing talent development and management, and improving employee incentive mechanisms to achieve long-term sustainable growth and create shareholder value - In the second half of **2025**, the company will continue to adhere to "atomization technology" as its core, deepening its presence in key areas such as vaping, HNB, special-purpose atomization products, medical atomization, and beauty atomization[64](index=64&type=chunk) - The HNB product market size is expected to reach **USD 66.86 billion** by **2029**, with a CAGR of approximately **10.1%** from **2024-2029**; the company plans to support strategic clients in launching high-end HNB products nationwide in Japan and continuously invest in R&D to enhance user experience[65](index=65&type=chunk) - The global vaping product market size is expected to reach **USD 91.42 billion** by **2029**, with a CAGR of approximately **7.4%** from **2024-2029**; the company will leverage its technology and manufacturing expertise to provide innovative and compliant products and deepen cooperation with clients[66](index=66&type=chunk) - The special-purpose atomization product market size is expected to reach **USD 3.44 billion** by **2029**, with a CAGR of approximately **17.2%** from **2024-2029**; the company will launch innovative products, expand its product portfolio, and refine its business model[67](index=67&type=chunk) - In the medical atomization sector, Transpire Bio will steadily advance the development of drug-device combination products for respiratory diseases and seek cooperation with more international pharmaceutical companies[68](index=68&type=chunk) - The beauty atomization market in China is expected to expand significantly by **2025**; the company will closely monitor "Lan Zhi" product sales trends and adjust its business model as needed[69](index=69&type=chunk) - R&D efforts will focus on accelerating the commercialization of technology platforms, continuously investing in strategic R&D projects, addressing core technical challenges and user pain points, and collaborating with clients on joint research[70](index=70&type=chunk) - Continue to invest in localized operations, channel expansion, and market insights, deepening commercial cooperation with some clients to provide comprehensive one-stop solutions[70](index=70&type=chunk) - Optimize authorization and empowerment within business segments, strengthen talent development and management, and improve employee incentive mechanisms to build a sustainable and successful long-term enterprise[72](index=72&type=chunk) - Strengthen production and operations management, combining automated equipment with intelligent production management systems to enhance automation and efficiency, and promote a "prevention-first" quality assurance approach[72](index=72&type=chunk) [Financial Review](index=23&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B1) This section provides a detailed review of SMOORE International's financial performance in the first half of 2025, with total revenue increasing by **18.3%** to **RMB 6.013 billion**, gross profit growing by **16.6%** to **RMB 2.244 billion**, but gross margin slightly decreasing to **37.3%**, while profit for the period declined by **28.0%** to **RMB 492 million**, primarily due to significant increases in share-based payment expenses, market development costs, and legal and compliance service fees, with adjusted profit for the period decreasing by **2.1%** to **RMB 737 million**, also analyzing revenue composition, cost structure, expense changes, other income and losses, finance costs, income tax expenses, and liquidity and financial resources [Overall Financial Performance](index=23&type=section&id=%E6%95%B4%E4%BD%93%E8%B4%A2%E5%8A%A1%E8%A1%A8%E7%8E%B0) In the first half of 2025, SMOORE International's total revenue increased by **18.3%** to **RMB 6.013 billion**, gross profit grew by **16.6%** to **RMB 2.244 billion**, gross margin slightly decreased to **37.3%**, and profit for the period declined by **28.0%** to **RMB 492 million**, mainly due to significant increases in share-based payment expenses, market development costs, and legal and compliance service fees, with adjusted profit for the period decreasing by **2.1%** to **RMB 737 million** - Total revenue was approximately **RMB 6,013,290 thousand**, an increase of approximately **18.3%** compared to the same period last year[73](index=73&type=chunk) - Gross profit was approximately **RMB 2,243,850 thousand**, an increase of approximately **16.6%** compared to the same period last year, with gross margin slightly decreasing from approximately **37.8%** in the same period last year to approximately **37.3%** in the review period[73](index=73&type=chunk) - Profit for the period was approximately **RMB 492,154 thousand**, a decrease of approximately **28.0%** compared to the same period last year[73](index=73&type=chunk) - The decrease in profit for the period was primarily attributable to: (i) a significant increase in share-based payment expenses; (ii) a significant increase in market development expenses for own-brand products; and (iii) a significant increase in legal and compliance service-related fees[73](index=73&type=chunk) - Excluding share-based payment expenses, adjusted profit for the period was approximately **RMB 737,410 thousand**, a decrease of approximately **2.1%** compared to the same period last year[73](index=73&type=chunk) [Revenue — By Business Type](index=24&type=section&id=%E6%94%B6%E7%9B%8A%E2%80%94%E6%8C%89%E4%B8%9A%E5%8A%A1%E7%B1%BB%E5%9E%8B%E5%88%92%E5%88%86) In the first half of 2025, own-brand business revenue was approximately **RMB 1.274 billion**, a **14.1%** year-on-year increase, accounting for **21.2%** of total revenue, with beauty atomization products in China seeing a significant **2,595.2%** revenue increase, while business-to-business (ToB) revenue was approximately **RMB 4.739 billion**, a **19.5%** year-on-year increase, accounting for **78.8%** of total revenue, with strong performance in Europe and other countries/regions (**38.0%** increase) and a **6.1%** decrease in the China market Revenue by Business Type | Business Type | 2025 (RMB '000) | % of Total | 2024 (RMB '000) | % of Total | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Own-brand Business | 1,274,306 | 21.2 | 1,116,743 | 22.0 | 14.1 | | Business-to-Business | 4,738,984 | 78.8 | 3,966,811 | 78.0 | 19.5 | | **Total** | **6,013,290** | **100.0** | **5,083,554** | **100.0** | **18.3** | - Within own-brand business, revenue from Europe and other countries/regions increased by **15.1%**, all from vaping product sales[75](index=75&type=chunk) - Within own-brand business, revenue from the US market decreased by **6.7%**, all from vaping product sales[75](index=75&type=chunk) - Within own-brand business, revenue from the China market increased by **2,595.2%**, primarily from beauty atomization product sales[75](index=75&type=chunk) - Within business-to-business, revenue from Europe and other countries/regions increased by **38.0%**, primarily from vaping products, HNB product sales, and technical services[77](index=77&type=chunk) - Within business-to-business, revenue from the US market increased by **1.5%**, primarily from vaping products, special-purpose atomization product sales, and technical services[77](index=77&type=chunk) - Within business-to-business, revenue from the China market decreased by **6.1%**, primarily from vaping product sales and technical services[77](index=77&type=chunk) [Gross Profit and Cost of Revenue](index=27&type=section&id=%E6%AF%9B%E5%88%A9%E4%B8%8E%E6%94%B6%E7%9B%8A%E6%88%90%E6%9C%AC) In the first half of 2025, the company's gross profit increased by **16.6%** to **RMB 2.244 billion**, while gross margin slightly decreased by **0.5** percentage points to **37.3%**, with cost of revenue increasing by **19.3%**, and raw material costs' proportion slightly decreasing, while labor and indirect costs' proportions both increased - Gross profit was approximately **RMB 2,243,850 thousand**, an increase of approximately **16.6%** compared to the same period last year, with gross margin slightly decreasing from approximately **37.8%** in the same period last year to approximately **37.3%** in the review period[80](index=80&type=chunk) Cost of Revenue Composition | Cost Type | 2025 (RMB '000) | % of Total | 2024 (RMB '000) | % of Total | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Raw Material Costs | 2,845,798 | 47.3 | 2,428,773 | 47.8 | 17.2 | | Labor Costs | 433,682 | 7.2 | 341,758 | 6.7 | 26.9 | | Indirect Costs | 454,955 | 7.6 | 354,390 | 7.0 | 28.4 | | Taxes and Surcharges | 35,005 | 0.6 | 34,682 | 0.7 | 0.9 | | **Total** | **3,769,440** | **62.7** | **3,159,603** | **62.2** | **19.3** | - The proportion of raw material costs to revenue slightly decreased, mainly due to continuous efforts to reduce product costs and improve efficiency[81](index=81&type=chunk) [Distribution and Selling Expenses](index=27&type=section&id=%E5%88%86%E9%94%80%E5%8F%8A%E9%94%80%E5%94%AE%E5%BC%80%E6%94%AF) In the first half of 2025, distribution and selling expenses increased by **31.2%** to **RMB 491 million**, with its proportion of revenue rising from **7.4%** to **8.2%**, primarily due to increased marketing investment in own-brand business, leading to significantly higher staff remuneration and market development costs - Distribution and selling expenses were approximately **RMB 491,229 thousand**, a year-on-year increase of approximately **31.2%**, with the percentage of revenue increasing from **7.4%** to **8.2%**[82](index=82&type=chunk) - Staff remuneration and benefits increased by **24.9%**, mainly due to increased remuneration for marketing personnel[82](index=82&type=chunk) - Market development expenses increased by **123.2%**, mainly due to increased promotion efforts for vaping products and beauty atomization products[85](index=85&type=chunk) [Administrative Expenses](index=28&type=section&id=%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) In the first half of 2025, administrative expenses increased by **79.7%** to **RMB 610 million**, with its proportion of revenue rising from **6.7%** to **10.1%**, primarily due to significant increases in share-based payment expenses and professional fees related to legal and compliance services - Administrative expenses were approximately **RMB 609,548 thousand**, a year-on-year increase of approximately **79.7%**, with the percentage of revenue increasing from **6.7%** to **10.1%**[85](index=85&type=chunk) - Staff remuneration and benefits increased by **76.2%**, mainly due to increased share-based payment expenses[86](index=86&type=chunk) - Professional fees increased by **819.6%**, mainly due to increased legal and compliance service-related fees[86](index=86&type=chunk) [Research and Development Expenses](index=29&type=section&id=%E7%A0%94%E5%8F%91%E5%BC%80%E6%94%AF) In the first half of 2025, R&D expenses decreased by **4.9%** to **RMB 723 million**, with its proportion of revenue falling from **15.0%** to **12.0%**, primarily due to reduced investment in vaping products and the capitalization of eligible development costs - R&D expenses were approximately **RMB 722,564 thousand**, a year-on-year decrease of approximately **4.9%**, with the percentage of revenue decreasing from **15.0%** to **12.0%**[88](index=88&type=chunk) - R&D expenses for electronic nicotine delivery systems decreased by **0.7%**, for medical atomization and beauty atomization products decreased by **3.4%**, and for special-purpose atomization products and solutions decreased by **30.1%**[88](index=88&type=chunk) - The decrease in R&D expenses was mainly due to reduced investment in vaping products and the capitalization of eligible development costs during the review period[88](index=88&type=chunk) [Other Income and Expenses](index=29&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E4%B8%8E%E5%BC%80%E6%94%AF) In the first half of 2025, total other income decreased by **9.3%** to **RMB 350 million**, mainly due to reduced bank deposit interest income and government grants, while total other losses significantly increased by **811.9%** to **RMB 55.177 million**, primarily due to exchange losses and losses from disposal/write-off of property, plant, and equipment Other Income Composition | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Interest Income from Bank Deposits | 235,658 | 322,425 | (26.9) | | Interest Income from Investment Notes Measured at Amortized Cost | 87,130 | — | Not Applicable | | Government Grants | 19,192 | 57,955 | (66.9) | | Others | 7,711 | 5,255 | 46.7 | | **Total** | **349,691** | **385,635** | **(9.3)** | Other Gains and Losses | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Net Exchange (Loss) Gain | (37,238) | 8,134 | Not Applicable | | Loss from Forward Foreign Exchange Contracts/Swap Contracts | (482) | — | Not Applicable | | Gain from Short-term Floating Rate Bank Deposits | 5,524 | 1,118 | 394.1 | | Gain from Debt Instruments | 2,498 | — | Not Applicable | | Gain from Early Termination of Leases | 258 | 396 | (34.8) | | Loss from Disposal/Write-off of Property, Plant and Equipment | (25,737) | (22,935) | 12.2 | | Others | — | 7,236 | Not Applicable | | **Total** | **(55,177)** | **(6,051)** | **811.9** | [Finance Costs and Income Tax Expenses](index=30&type=section&id=%E8%9E%8D%E8%B5%84%E6%88%90%E6%9C%AC%E4%B8%8E%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) In the first half of 2025, finance costs decreased by **26.4%** to **RMB 13.619 million**, mainly from interest expenses on lease liabilities and discounted bills receivable, while income tax expenses increased by **60.9%** to **RMB 207 million**, primarily due to increased tax provisions related to international business expansion - Finance costs were approximately **RMB 13,619 thousand**, a decrease of approximately **26.4%** compared to the same period last year, mainly from interest expenses on lease liabilities and discounted bills receivable[91](index=91&type=chunk) - Income tax expenses were approximately **RMB 206,581 thousand**, an increase of approximately **60.9%** compared to the same period last year, primarily due to increased tax provisions related to international business expansion[92](index=92&type=chunk) [Profit for the Period and Total Comprehensive Income](index=31&type=section&id=%E6%9C%9F%E5%86%85%E6%BA%A2%E5%88%A9%E5%8F%8A%E5%85%A8%E9%9D%A2%E7%BB%BC%E5%90%88%E6%94%B6%E7%9B%8A%E6%80%BB%E9%A2%9D) In the first half of 2025, profit for the period decreased by **28.0%** to **RMB 492 million**, and total comprehensive income for the period decreased by **30.8%** to **RMB 501 million**, primarily because the growth in revenue and gross profit was insufficient to offset the increase in expenses - Profit for the period was approximately **RMB 492,154 thousand**, a decrease of approximately **28.0%** compared to the same period last year[94](index=94&type=chunk) - Total comprehensive income for the period was approximately **RMB 501,166 thousand**, a decrease of approximately **30.8%** compared to the same period last year[94](index=94&type=chunk) - The decrease was mainly because the growth in revenue and gross profit was insufficient to offset the increase in expenses[94](index=94&type=chunk) [Liquidity and Financial Resources](index=31&type=section&id=%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E5%8F%8A%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90) As of June 30, 2025, the company's net current assets were approximately **RMB 10.20 billion**, cash and cash equivalents were approximately **RMB 5.21 billion**, the current ratio increased to **336.7%**, and the debt ratio decreased to **21.8%**, indicating a sound financial position, with no bank or other financial institution borrowings but available bank credit facilities of approximately **RMB 7.3 billion**, of which approximately **RMB 723 million** has been utilized - Net current assets were approximately **RMB 10,198,578 thousand** (December 31, **2024**: approximately **RMB 11,587,063 thousand**)[95](index=95&type=chunk) - Cash and cash equivalents were approximately **RMB 5,211,753 thousand** (December 31, **2024**: approximately **RMB 5,170,700 thousand**)[95](index=95&type=chunk) - Current ratio was approximately **336.7%** (December 31, **2024**: approximately **320.3%**)[95](index=95&type=chunk) - No bank or other financial institution borrowings (December 31, **2024**: none)[97](index=97&type=chunk) - Possesses bank credit facilities of approximately **RMB 7,300.0 million**, of which approximately **RMB 722.9 million** has been utilized[97](index=97&type=chunk) - Debt ratio was approximately **21.8%** (December 31, **2024**: approximately **26.2%**)[98](index=98&type=chunk) - No assets pledged (December 31, **2024**: bank deposits of approximately **RMB 590.0 million**)[99](index=99&type=chunk) [Foreign Exchange Risk](index=32&type=section&id=%E5%A4%96%E6%B1%87%E9%A3%8E%E9%99%A9) The company's functional currency is RMB, with approximately **70%** of revenue settled in USD and **30%** in RMB, while approximately **80%** of expenses are settled in RMB, making USD exposure the primary foreign exchange risk, which the company manages through timely settlement or forward foreign exchange contracts, with a sensitivity analysis showing a **10%** change in USD to RMB exchange rate would impact total comprehensive income by approximately **RMB 1.146 billion** - The Company's functional currency is RMB, with approximately **70%** of revenue settled in USD and approximately **30%** settled in RMB[100](index=100&type=chunk) - Approximately **80%** of expenses are settled in RMB, with foreign exchange risk primarily arising from USD exposure[100](index=100&type=chunk) - Foreign exchange risk is controlled through timely settlement or entering into forward foreign exchange contracts[101](index=101&type=chunk) - Sensitivity analysis shows that if the USD to RMB exchange rate increases/decreases by **10%**, total comprehensive income would increase/decrease by approximately **RMB 1,145,717 thousand**[101](index=101&type=chunk) [Employment, Training and Development](index=32&type=section&id=%E9%9B%87%E4%BD%A3%E3%80%81%E5%9F%B9%E8%AE%AD%E4%B8%8E%E5%8F%91%E5%B1%95) As of June 30, 2025, the company had **20,978** employees in China and **2,205** overseas employees, offering attractive remuneration, retirement plans, share incentive schemes, and benefits, while prioritizing employee learning, growth, and career development through targeted talent cultivation programs, with total employee costs representing approximately **28.5%** of revenue, an increase primarily due to higher share-based payment expenses - As of June 30, **2025**, the Group had **20,978** employees in China (including mainland China and Hong Kong) and **2,205** employees in other countries and regions[102](index=102&type=chunk) - Provides comprehensive and attractive remuneration, retirement plans, share incentive schemes, and benefits[102](index=102&type=chunk) - Developed targeted talent cultivation programs, such as the "Hong Yi Program," "Zhen Yu Program," and a "1–3–5–7–10" ten-year development path for fresh graduates[102](index=102&type=chunk) - Total employee costs accounted for approximately **28.5%** of the Group's revenue (same period **2024**: approximately **25.6%**), with the increase primarily due to a year-on-year increase in share-based payment expenses[104](index=104&type=chunk) [Capital Expenditure and Commitments](index=33&type=section&id=%E8%B5%84%E6%9C%AC%E5%BC%80%E6%94%AF%E4%B8%8E%E6%89%BF%E8%AF%BA) In the first half of 2025, the company's total investment in property, plant, and equipment and intangible assets was approximately **RMB 785 million**, primarily for its headquarters building, equipment, and capitalized R&D expenditures, with capital commitments of approximately **RMB 474 million** as of June 30, 2025 - For the six months ended June 30, **2025**, the Group's total investment in property, plant and equipment and intangible assets was approximately **RMB 784,581 thousand** (same period **2024**: approximately **RMB 282,315 thousand**)[105](index=105&type=chunk) - Investments were primarily due to the recognition of (1) capital expenditures related to the headquarters building, (2) capital expenditures related to equipment, and (3) capitalized R&D expenditures[105](index=105&type=chunk) - As of June 30, **2025**, the Group had capital commitments contracted for the acquisition of property, plant and equipment of approximately **RMB 474,461 thousand** (December 31, **2024**: approximately **RMB 707,750 thousand**)[106](index=106&type=chunk) [Significant Events](index=33&type=section&id=%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A1%B9) For the six months ended June 30, 2025, the company did not undertake any significant acquisitions or disposals, nor did it have any significant investments or material contingent liabilities - For the six months ended June 30, **2025**, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures[107](index=107&type=chunk) - For the six months ended June 30, **2025**, the Group did not have any significant investments[108](index=108&type=chunk) - As of June 30, **2025**, the Group did not have any material contingent liabilities[109](index=109&type=chunk) Other Information [Major Customers and Suppliers](index=34&type=section&id=%E4%B8%BB%E8%A6%81%E5%AE%A2%E6%88%B7%E5%8F%8A%E4%BE%9B%E5%BA%94%E5%95%86) For the six months ended June 30, 2025, sales to the company's top five customers accounted for approximately **54.7%** of total sales, and purchases from the top five suppliers accounted for approximately **21.0%** of total purchases, with the company committed to maintaining long-term cooperative relationships with reputable customers and suppliers - Sales to the top five customers accounted for approximately **54.7%** of total sales (same period **2024**: approximately **56.2%**)[112](index=112&type=chunk) - Purchases from the top five suppliers accounted for approximately **21.0%** of total purchases (same period **2024**: approximately **22.3%**)[112](index=112&type=chunk) [Corporate Governance](index=34&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) The company is committed to maintaining good corporate governance practices and complies with all code provisions and recommended best practices of the Corporate Governance Code, except for the combined roles of Chairman and CEO, with a diverse Board of Directors and established Audit, Remuneration, Nomination, and ESG Committees to ensure checks and balances and effective operation, and an independent internal audit mechanism to assess risk management and internal control systems - The company has complied with all code provisions and recommended best practices of the Corporate Governance Code, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Chen Zhiping[113](index=113&type=chunk) - The Board believes the current arrangement of Chairman and Chief Executive Officer is appropriate, as there are sufficient checks and balances within the Board, and the Board comprises individuals with diverse experience in various fields[113](index=113&type=chunk)[114](index=114&type=chunk) - The Audit Committee consists of three independent non-executive directors and is responsible for reviewing financial matters, risk management, and internal controls[117](index=117&type=chunk) - The Remuneration Committee is responsible for making recommendations on the remuneration policies and structure for directors and senior management[118](index=118&type=chunk) - The Nomination Committee is responsible for reviewing the Board's composition, making recommendations on director rotation, appointment, and succession, and assessing the independence of independent non-executive directors[120](index=120&type=chunk) - An Environmental, Social and Governance (ESG) Committee has been established to enhance the company's ESG management level[121](index=121&type=chunk) - The company has established an internal audit mechanism to independently assess the effectiveness of risk management and internal control systems[123](index=123&type=chunk) [Information on Directors and Senior Management](index=37&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%91%98%E4%BF%A1%E6%81%AF) All directors have confirmed strict compliance with the Model Code for Securities Transactions by Directors and, for the six months ended June 30, 2025, no director held any interest in any business competing with the company or its subsidiaries, with directors continuously participating in professional training and no significant changes in information on directors and senior management - All directors have confirmed strict compliance with the Model Code for Securities Transactions by Directors[126](index=126&type=chunk) - For the six months ended June 30, **2025**, no director held any interest in any business competing with the Company or any of its subsidiaries[127](index=127&type=chunk) - All directors are required to attend continuous professional training[128](index=128&type=chunk) - As of June 30, **2025**, there were no changes in the information of directors and senior management[129](index=129&type=chunk) [Investor Relations and Dividends](index=37&type=section&id=%E6%8A%95%E8%B5%84%E8%80%85%E5%85%B3%E7%B3%BB%E4%B8%8E%E8%82%A1%E6%81%AF) The company communicates with shareholders and investors through various channels, including its website, AGMs, and press conferences, and to thank shareholders, the Board resolved to declare an interim dividend of **HKD 20 cents** per share for the six months ended June 30, 2025, a significant increase from the prior year, with share transfer registration suspended from September 9 to 11, 2025 - The company has established various communication channels with shareholders and investors, including its company website, annual general meetings, press conferences, and investor analyst briefings[130](index=130&type=chunk) - The Board resolved to declare an interim dividend of **HKD 20 cents** per share for the six months ended June 30, **2025** (same period **2024**: **HKD 5 cents** per share)[132](index=132&type=chunk) - The interim dividend will be paid on September 25, **2025**, with the ex-dividend date on September 5, **2025**, and the record date on September 11, **2025**[132](index=132&type=chunk) - The company will suspend share transfer registration from September 9, **2025**, to September 11, **2025**[133](index=133&type=chunk) [Share Movements and Holdings](index=38&type=section&id=%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E4%B8%8E%E6%8C%81%E8%82%A1%E6%83%85%E5%86%B5) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, and this section details the interests and short positions of directors and chief executives, substantial shareholders, and other persons in the company's shares and related shares, as well as changes in share option schemes and share award schemes, noting that controlling shareholders' pledged shares have been fully released and the company maintains sufficient public float - During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities (including treasury shares)[134](index=134&type=chunk) Interests and Short Positions of Directors or Chief Executives in the Company's Shares (as of June 30, 2025) | Name of Director or Chief Executive | Nature of Interest | Long/Short Position | Number of Ordinary Shares Held | Approximate % of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Chen Zhiping | Interest in controlled corporation | Long Position | 2,073,708,600 | 33.51% | | Chen Zhiping | Interest of parties acting in concert | Long Position | 280,201,400 | 4.53% | | Chen Zhiping | Beneficial owner | Long Position | 61,000,000 | 0.99% | | Chen Zhiping | Other | Long Position | 40,927,848 | 0.66% | | Xiong Shaoming | Interest in controlled corporation | Long Position | 319,692,100 | 5.17% | | Xiong Shaoming | Interest of parties acting in concert | Long Position | 1,997,635,600 | 32.28% | | Xiong Shaoming | Beneficial owner | Long Position | 1,437,148 | 0.0232% | | Xiong Shaoming | Other | Long Position | 137,073,000 | 2.22% | | Wang Guisheng | Interest in controlled corporation | Long Position | 12,000,000 | 0.19% | | Wang Guisheng | Beneficial owner | Long Position | 4,003,486 | 0.0647% | | Wang Xin | Interest in controlled corporation | Long Position | 1,243,000 | 0.0201% | | Wang Xin | Beneficial owner | Long Position | 1,586,557 | 0.0256% | Interests and Short Positions of Substantial Shareholders and Other Persons in Shares and Related Shares (as of June 30, 2025) | Name of Substantial Shareholder/Person | Nature of Interest | Long/Short Position | Number of Ordinary Shares Held | Approximate % of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | SMR & Alon Limited | Beneficial owner | Long Position | 1,997,635,600 | 32.28% | | Zhao Zihan | Spouse's interest | Long Position | 2,455,837,848 | 39.69% | | Andy Xiong Holding Limited | Beneficial owner | Long Position | 319,692,100 | 5.17% | | Han Xiao | Spouse's interest | Long Position | 2,455,837,848 | 39.69% | | EVE BATTERY INVESTMENT LTD. | Beneficial owner | Long Position | 1,901,520,000 | 30.73% | | EVE Asia Limited | Interest in controlled corporation | Long Position | 1,901,520,000 | 30.73% | | Huizhou EVE Energy Co., Ltd. | Interest in controlled corporation | Long Position | 1,901,520,000 | 30.73% | | Liu Jincheng | Interest in controlled corporation | Long Position | 1,950,240,000 | 31.51% | | Luo Jinhong | Spouse's interest | Long Position | 1,950,240,000 | 31.51% | - The share option scheme aims to incentivize and reward eligible individuals for their contributions to the Group; **2,390,000** share options were granted on May 7, **2025**, and Mr. Chen Zhiping was conditionally granted **61,000,000** share options on December 27, **2024**, which became effective on February 18, **2025**[143](index=143&type=chunk)[144](index=144&type=chunk) - The share award scheme aims to recognize and reward eligible participants for their contributions to the Group; **1,614,000** awarded shares were granted on May 7, **2025**[152](index=152&type=chunk) - The controlling shareholder's **USD 350 million** secured exchangeable bonds due in **2026** were delisted from the Stock Exchange on December 23, **2024**, and the **60,909,821** ordinary shares of the Company pledged by EVE Battery were fully released[160](index=160&type=chunk) - For the six months ended June 30, **2025**, the public held at least **25%** of the total issued share capital of the Company (excluding treasury shares)[161](index=161&type=chunk) [Use of Proceeds from Global Offering](index=51&type=section&id=%E5%85%A8%E7%90%83%E5%8F%91%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A1%B9%E7%94%A8%E9%80%94) The company listed on July 10, 2020, raising net proceeds of approximately **HKD 7.91 billion**, of which approximately **HKD 5.31 billion** had been utilized as of June 30, 2025, primarily for automated production, ERP system upgrades, R&D investments, and working capital, with approximately **HKD 2.60 billion** remaining unutilized, mainly for increasing production capacity - Net proceeds from listing were approximately **HKD 7,909.9 million**[163](index=163&type=chunk) Use of Proceeds from Global Offering and Actual Utilization (as of June 30, 2025) | Intended Use of Proceeds | Approximate % of Total | Net Proceeds Allocated (HKD millions) | Actual Utilization During Review Period (HKD millions) | Actual Utilization as of June 30, 2025 (HKD millions) | Unutilized Amount as of June 30, 2025 (HKD millions) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Increase production capacity, including establishing industrial parks | 50% | 3,954.9 | 24.8 | 1,356.0 | 2,598.9 | By end of 2026 | | Implement automated production, upgrade ERP system and existing factories | 25% | 1,977.5 | — | 1,977.5 | — | — | | Invest in R&D, including establishing research institutes, developing new technologies, and paying for product certification expenses | 20% | 1,582.0 | — | 1,582.0 | — | — | | Allocate for working capital and other general corporate purposes | 5% | 395.5 | — | 395.5 | — | — | | **Total** | **100%** | **7,909.9** | **24.8** | **5,311.0** | **2,598.9** | | [Use of Proceeds from Placing](index=52&type=section&id=%E9%85%8D%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A1%B9%E7%94%A8%E9%80%94) The company completed a placing and subscription in February 2021, raising net proceeds of approximately **HKD 4.45 billion**, of which approximately **HKD 2.20 billion** had been utilized as of June 30, 2025, primarily for investments in electronic atomization equipment for the healthcare and pharmaceutical industries, with approximately **HKD 2.25 billion** remaining unutilized, mainly for expanding production capacity and PMTA applications - Net proceeds from placing and subscription were approximately **HKD 4,445.5 million**[165](index=165&type=chunk) Use of Proceeds from Placing and Actual Utilization (as of June 30, 2025) | Intended Use of Proceeds | Approximate % of Total | Net Proceeds Allocated (HKD millions) | Actual Utilization During Review Period (HKD millions) | Actual Utilization as of June 30, 2025 (HKD millions) | Unutilized Amount as of June 30, 2025 (HKD millions) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Expand production capacity | 55% | 2,445.0 | 59.5 | 640.8 | 1,804.2 | Before end of 2026 | | Allocate more resources and funds for PMTA applications | 10% | 444.5 | — | — | 444.5 | Before end of 2026 | | Invest in electronic atomization equipment for healthcare and pharmaceutical industries | 35% | 1,556.0 | — | 1,556.0 | — | — | | **Total** | **100%** | **4,445.5** | **59.5** | **2,196.8** | **2,248.7** | | [Other Disclosures](index=53&type=section&id=%E5%85%B6%E4%BB%96%E6%8A%AB%E9%9C%B2) The company confirms no material changes to matters listed in Appendix D2 of the Listing Rules, and the independent auditor has reviewed the condensed consolidated interim financial information, finding no material issues, with no significant events requiring disclosure after the reporting period - The company confirms that there are no material changes to the existing information disclosed in the **2024** Annual Report regarding matters listed in paragraph 32 of Appendix D2 of the Listing Rules[168](index=168&type=chunk) - Independent auditor Deloitte Touche Tohmatsu has reviewed the unaudited condensed consolidated interim financial information for the six months ended June 30, **2025**[169](index=169&type=chunk) - No significant events after June 30, **2025**, requiring disclosure by the Company[170](index=170&type=chunk) Review Report on Condensed Consolidated Financial Statements [Review Conclusion](index=54&type=section&id=%E5%AE%A1%E9%98%85%E7%BB%93%E8%AE%BA) Deloitte Touche Tohmatsu has reviewed SMOORE International Holdings Limited's condensed consolidated financial statements for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410, concluding that nothing has come to their attention to indicate that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 - Independent auditor Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements[172](index=172&type=chunk) - The scope of review is substantially less than an audit, thus no audit opinion is expressed[173](index=173&type=chunk) - Nothing has come to their attention to indicate that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[174](index=174&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Profit or Loss Statement Overview](index=55&type=section&id=%E6%8D%9F%E7%9B%8A%E8%A1%A8%E6%A6%82%E8%A7%88) For the six months ended June 30, 2025, the company reported revenue of **RMB 6.013 billion**, gross profit of **RMB 2.244 billion**, profit for the period of **RMB 492 million**, and total comprehensive income of **RMB 501 million**, with basic earnings per share of **8.08 RMB cents** and diluted earnings per share of **7.96 RMB cents** Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the 6 Months Ended June 30, 2025) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue | 6,013,290 | 5,083,554 | | Cost of Revenue | (3,769,440) | (3,159,603) | | Gross Profit | 2,243,850 | 1,923,951 | | Other Income and Expenses | 349,691 | 385,635 | | Distribution and Selling Expenses | (491,229) | (374,516) | | Administrative Expenses | (609,548) | (339,229) | | Research and Development Expenses | (722,564) | (760,112) | | Finance Costs | (13,619) | (18,512) | | Other Gains and Losses | (55,177) | (6,051) | | Net Impairment Loss Recognized on Trade Receivables | (2,669) | 389 | | Profit Before Tax | 698,735 | 811,555 | | Income Tax Expense | (206,581) | (128,357) | | Profit for the Period | 492,154 | 683,198 | | Exchange Differences Arising from Translation of Overseas Operations | 9,012 | 41,399 | | Total Comprehensive Income for the Period | 501,166 | 724,597 | | Basic Earnings Per Share (RMB cents) | 8.08 | 11.20 | | Diluted Earnings Per Share (RMB cents) | 7.96 | 11.11 | Condensed Consolidated Statement of Financial Position [Balance Sheet Overview](index=56&type=section&id=%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8%E6%A6%82%E8%A7%88) As of June 30, 2025, the company's total non-current assets were **RMB 12.824 billion**, total current assets were **RMB 14.508 billion**, total current liabilities were **RMB 4.309 billion**, net current assets were **RMB 10.199 billion**, net assets were **RMB 22.446 billion**, and total equity was **RMB 22.446 billion** Condensed Consolidated Statement of Financial Position (as of June 30, 2025) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 4,989,627 | 4,637,073 | | Intangible Assets | 369,205 | 196,363 | | Other Non-current Assets Total | 7,465,382 | 5,974,514 | | **Total Non-current Assets** | **12,824,214** | **10,807,950** | | **Current Assets** | | | | Inventories | 1,003,180 | 910,425 | | Trade and Bills Receivables | 2,015,323 | 2,084,825 | | Other Current Assets Total | 11,489,086 | 13,851,178 | | **Total Current Assets** | **14,507,589** | **16,846,428** | | **Current Liabilities** | | | | Trade and Bills Payables | 1,241,857 | 1,369,576 | | Other Current Liabilities Total | 3,067,154 | 3,889,789 | | **Total Current Liabilities** | **4,309,011** | **5,259,365** | | **Net Current Assets** | **10,198,578** | **11,587,063** | | **Total Assets Less Current Liabilities** | **23,022,792** | **22,395,013** | | **Non-current Liabilities** | | | | Lease Liabilities | 275,852 | 190,214 | | Deferred Income | 13,397 | 13,965 | | Deferred Tax Liabilities | 287,989 | 286,123 | | **Total Non-current Liabilities** | **577,238** | **490,302** | | **Net Assets** | **22,445,554** | **21,904,711** | | **Capital and Reserves** | | | | Share Capital | 431,909 | 431,299 | | Reserves | 21,994,903 | 21,465,789 | | Equity Attributable to Shareholders of the Company | 22,426,812 | 21,897,088 | | Non-controlling Interests | 18,742 | 7,623 | | **Total Equity** | **22,445,554** | **21,904,711** | Condensed Consolidated Statement of Changes in Equity [Overview of Changes in Equity](index=58&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For the six months ended June 30, 2025, total equity attributable to shareholders of the company increased from **RMB 21.897 billion** as of January 1, 2025, to **RMB 22.427 billion**, with profit for the period at **RMB 492 million** and total comprehensive income at **RMB 501 million**, and share-based payment expenses, exercise of share options, and dividend distribution being key factors in the changes Condensed Consolidated Statement of Changes in Equity (for the 6 Months Ended June 30, 2025) | Item | Share Capital (RMB '000) | Share Premium (RMB '000) | Share Option Reserve (RMB '000) | Share Award Reserve (RMB '000) | Shares Held (RMB '000) | Retained Profits (RMB '000) | Equity Attributable to Shareholders of the Company (RMB '000) | Non-controlling Interests (RMB '000) | Total Equity (RMB '000) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | January 1, 2025 (Audited) | 431,299 | 7,681,080 | 405,821 | 94,882 | (738,726) | 15,120,057 | 21,897,088 | 7,623 | 21,904,711 | | Profit for the Period | — | — | — | — | — | 492,154 | 492,154 | — | 492,154 | | Other Comprehensive Income for the Period | — | — | — | — | — | — | 9,012 | — | 9,012 | | Total Comprehensive Income for the Period | — | — | — | — | — | 492,154 | 501,166 | — | 501,166 | | Share-based Payment Expenses Recognized | — | — | 113,320 | 120,817 | — | — | 234,137 | 11,119 | 245,256 | | Exercise of Share Options | 610 | 91,950 | (18,831) | — | — | — | 73,729 | — | 73,729 | | Lapsed Share Options | — | — | (31,347) | — | — | 31,347 | — | — | — | | Vesting of Share Awards | — | 12,500 | — | (25,372) | 12,872 | — | — | — | — | | Lapsed Share Awards | — | — | — | (16,887) | — | 16,887 | — | — | — | | Dividends Declared | — | (283,456) | — | — | 4,148 | — | (279,308) | — | (279,308) | | **June 30, 2025 (Unaudited)** | **431,909** | **7,502,074** | **468,963** | **173,440** | **(721,706)** | **15,660,445** | **22,426,812** | **18,742** | **22,445,554** | Condensed Consolidated Statement of Cash Flows [Cash Flow Overview](index=59&type=section&id=%E7%8E%B0%E9%87%91%E6%B5%81%E6%A6%82%E8%A7%88) For the six months ended June 30, 2025, net cash from operating activ

[Company Background](index=2&type=section&id=Company%20Background) Langham Hospitality Investments primarily owns and invests in a portfolio of completed hotels in Asia, with an initial focus on the region - Langham Hospitality Investments' core business is owning and investing in a portfolio of completed hotels in Asia, with an initial focus on the region[3](index=3&type=chunk) - Hotel Portfolio | Hotel | Category | | :--- | :--- | | The Langham Hong Kong | Grade A Luxury Hotel | | Cordis Hong Kong | Grade A Luxury Hotel | | Eaton HK | Grade B Luxury Hotel | - All hotels are strategically located in the bustling commercial and leisure districts of Kowloon Peninsula, Hong Kong, adjacent to major transportation hubs[3](index=3&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) This section provides details on Langham Hospitality Investments' trust structure, its holding company, board of directors, committees, and principal bankers - Langham Hospitality Investments is a fixed single investment trust established under Hong Kong law pursuant to a trust deed[7](index=7&type=chunk) - Langham Hospitality Investments Limited, incorporated in the Cayman Islands, serves as the holding company for the Trust Group's hotel business operations[7](index=7&type=chunk) - The Board of Directors includes Chairman Dr. Lo Ka Shui, Chief Executive Officer Brett Stephen BUTCHER, and several non-executive and independent non-executive directors[7](index=7&type=chunk) - The company has an Audit Committee, Remuneration Committee, and Nomination Committee, with their respective members listed[7](index=7&type=chunk) - Principal bankers include Agricultural Bank of China, Bank of China (Hong Kong), and The Hongkong and Shanghai Banking Corporation Limited[8](index=8&type=chunk) [Financial Highlights](index=6&type=section&id=Financial%20Highlights) This section presents a comparative financial summary for the first half of 2025 versus 2024, alongside key balance sheet indicators - Financial Highlights: H1 2025 vs H1 2024 | Metric (HK$ million) | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Hotel portfolio revenue | 737.5 | 772.9 | -4.6% | | Total gross operating profit of hotel portfolio (before global marketing fees) | 217.0 | 232.5 | -6.7% | | Total rental income of Trust Group after service fees | 184.8 | 191.1 | -3.3% | | Profit attributable to stapled security holders (excluding fair value changes of investment properties, derivative financial instruments, and arrangements related to hotel management and license fees) | 28.4 | 4.3 | 560.5% | | Distributable income | 28.0 | 34.0 | -17.6% | - Key Balance Sheet Metrics | Metric | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total value of hotel portfolio (HK$ million) | 15,764 | 15,895 | 15,725 | | Net asset value per stapled security | HK$2.70 | HK$2.77 | HK$2.75 | | Gearing ratio | 38.5% | 38.2% | 38.1% | [Chairman's Report](index=7&type=section&id=Chairman's%20Report) The Chairman's Report provides an overview of market conditions, operational performance, financial status, and future outlook for the period [Market Review and Operating Performance](index=7&type=section&id=Market%20Review%20and%20Operating%20Performance) Visitor arrivals to Hong Kong increased in H1 2025, but overnight stays remain below pre-pandemic levels, with mainland visitors as the primary source - In the first half of 2025, visitor arrivals to Hong Kong reached **23.6 million**, an **11.7% year-on-year increase**[13](index=13&type=chunk) - Overnight visitor arrivals accounted for **47.7%** (approximately **11.3 million**), a **7.0% year-on-year increase**, but still below 2018 and 2019 levels[13](index=13&type=chunk) - Mainland China remains the largest source market, accounting for **65.0%** of overnight visitors[14](index=14&type=chunk) - The hotel portfolio's average room rate remained stable at **HK$1,561 per night**, while occupancy slightly decreased by **1.4 percentage points to 88.4%**[15](index=15&type=chunk) - Revenue per available room (RevPAR) decreased by **1.5% year-on-year** to **HK$1,379 per night**[15](index=15&type=chunk) - Food and beverage segment revenue declined by **8.2% year-on-year**, primarily due to shifts in consumer dining preferences and a structural reduction in banquet events[15](index=15&type=chunk) - Total gross operating profit of the hotels (before global marketing fees) decreased by **6.7% to HK$217.0 million**[15](index=15&type=chunk) [Financial Position and Distribution](index=8&type=section&id=Financial%20Position%20and%20Distribution) The hotel investment portfolio valuation slightly decreased, leading to a net loss attributable to stapled security holders, with no interim distribution declared - The hotel investment portfolio valuation decreased to **HK$15,764 million**, a reduction from December 31, 2024[16](index=16&type=chunk) - Fair value losses on investment properties and derivative financial instruments totaled **HK$170.6 million**[16](index=16&type=chunk) - Finance costs decreased by **15.4% (HK$25.1 million)** due to a decline in the average Hong Kong Interbank Offered Rate (HIBOR)[16](index=16&type=chunk) - Net loss attributable to stapled security holders was **HK$142.2 million**[16](index=16&type=chunk) - Total distributable income was **HK$28.0 million**, a **17.6% decrease** compared to the same period last year[16](index=16&type=chunk) - The Board decided not to declare an interim distribution for the current period, adopting a prudent capital management strategy[16](index=16&type=chunk) [Outlook](index=9&type=section&id=Outlook) The hotel industry faces continued weakness due to geopolitical tensions and changing consumer behavior, with profitability pressured by low room rates and rising operating costs - The macroeconomic environment is affected by geopolitical tensions, global trade uncertainties, and shifts in consumer behavior[17](index=17&type=chunk) - Hotel industry performance is expected to remain weak, with the second half of 2025 anticipated to be similar to the first half[17](index=17&type=chunk) - Profitability is pressured by subdued room rates and continuously rising operating costs, particularly frontline labor expenses[17](index=17&type=chunk) - Hotels will optimize dynamic pricing strategies and enhance their value-added service portfolio to capture new opportunities[18](index=18&type=chunk) - Management will closely monitor interest rate movements and consider measures to mitigate interest rate risks[18](index=18&type=chunk) - The long-term outlook for Hong Kong's hotel industry remains optimistic, supported by limited new supply, prime locations, and resilient tourism infrastructure[18](index=18&type=chunk) [Chief Executive Officer's Review](index=10&type=section&id=Chief%20Executive%20Officer's%20Review) The CEO's review covers rental income, service fees, net property income, finance costs, profitability, distributable income, and hotel operating performance [Rental Income and Service Fees](index=10&type=section&id=Rental%20Income%20and%20Service%20Fees) The Trust Group's total rental income, comprising fixed and floating components, decreased by 3.5% year-on-year before service fees - The Trust Group's rental income consists of fixed rent (**HK$225.0 million annually**) and floating rent (**50%** of the hotels' total gross operating profit)[19](index=19&type=chunk) - Rental Income Breakdown (HK$ million) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Fixed rental income | 111.6 | 111.9 | -0.3% | | Floating rental income | 108.5 | 116.2 | -6.6% | | Total rental income before service fees | 220.9 | 229.0 | -3.5% | | Service fee expenses | (36.1) | (37.9) | -4.7% | | Total rental income of Trust Group | 184.8 | 191.1 | -3.3% | - Service Fee Breakdown (HK$ million) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Hotel management fees | 20.6 | 21.9 | -5.9% | | License fees | 7.4 | 7.7 | -3.9% | | Global marketing fees | 8.1 | 8.3 | -2.4% | | Total service fees | 36.1 | 37.9 | -4.7% | [Net Property Income and Finance Costs](index=11&type=section&id=Net%20Property%20Income%20and%20Finance%20Costs) Net property income decreased due to higher property-related expenses, while total finance costs reduced despite a shift in interest rate swaps to net expense - Net Property Income (HK$ million) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total rental income (after service fees) | 184.8 | 191.1 | -3.3% | | Hotel property related expenses | (10.9) | (10.2) | 6.9% | | Net property income | 173.9 | 180.9 | -3.9% | - Total finance costs decreased to **HK$137.7 million**, a **15.4% year-on-year reduction**, primarily due to a **24.6% decrease** in interest expense on bank borrowings[24](index=24&type=chunk) - Interest rate swaps shifted from a net interest income in H1 2024 to a net interest expense of **HK$8.3 million** in H1 2025[24](index=24&type=chunk)[26](index=26&type=chunk) - The Group added **HK$1,100.0 million** in new swaps, increasing the total notional amount to **HK$2,600.0 million**, representing **41.9%** of total outstanding bank borrowings[25](index=25&type=chunk)[41](index=41&type=chunk) [Profitability and Distributable Income](index=12&type=section&id=Profitability%20and%20Distributable%20Income) The Group recorded a net loss attributable to stapled security holders due to fair value losses, despite a significant increase in adjusted profit after tax - The Group recorded fair value losses of **HK$143.3 million** on investment properties and **HK$27.3 million** on derivative financial instruments[26](index=26&type=chunk) - Net loss attributable to stapled security holders was **HK$142.2 million**[26](index=26&type=chunk) - Excluding the impact of fair value changes, net profit after tax significantly increased by **560.5% to HK$28.4 million** year-on-year[27](index=27&type=chunk) - Profit/(Loss) Attributable to Stapled Security Holders (HK$ million) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net property income | 173.9 | 180.9 | -3.9% | | Fair value (decrease)/increase of investment properties | (143.3) | 37.4 | N/A | | Fair value changes of derivative financial instruments | (27.3) | 15.9 | N/A | | Finance costs | (137.7) | (162.8) | -15.4% | | (Loss)/Profit attributable to stapled security holders | (142.2) | 43.0 | N/A | | Profit attributable to stapled security holders (excluding fair value changes) | 28.4 | 4.3 | 560.5% | - Total distributable income for H1 2025 was **HK$28.0 million**, a **17.6% decrease** from the prior year period[30](index=30&type=chunk)[31](index=31&type=chunk) - The Board decided not to declare any interim distribution for H1 2025[31](index=31&type=chunk) [Hotel Operating Performance](index=14&type=section&id=Hotel%20Operating%20Performance) The hotel portfolio's total revenue decreased, with Langham and Cordis outperforming the Grade A luxury market, while Eaton HK exceeded the Grade B luxury market - Hotel Portfolio Revenue Breakdown (HK$ million) | Revenue Detail | The Langham Hong Kong | Cordis Hong Kong | Eaton HK | Total | Year-on-year Change (Total) | | :--- | :--- | :--- | :--- | :--- | :--- | | Rooms | 150.4 | 172.4 | 84.5 | 407.3 | -1.9% | | Food & Beverage | 94.8 | 125.4 | 90.7 | 310.9 | -8.2% | | Other | 2.4 | 8.1 | 8.8 | 19.3 | 3.2% | | **Total Revenue** | **247.6** | **305.9** | **184.0** | **737.5** | **-4.6%** | - Hotel Portfolio Operating Metrics | Hotel | Occupancy (H1 2025) | Average Room Rate (HK$) (H1 2025) | RevPAR (HK$) (H1 2025) | Occupancy (Y-o-Y Change) | Average Room Rate (Y-o-Y Change) | RevPAR (Y-o-Y Change) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | The Langham Hong Kong | 85.6% | 1,950 | 1,669 | -2.1 percentage points | +0.2% | -2.2% | | Cordis Hong Kong | 89.2% | 1,596 | 1,424 | -3.1 percentage points | – | -3.3% | | Eaton HK | 90.1% | 1,114 | 1,003 | +1.6 percentage points | +1.9% | +3.7% | | **Hotel Portfolio** | **88.4%** | **1,561** | **1,379** | **-1.4 percentage points** | **+0.1%** | **-1.5%** | - RevPAR for The Langham Hong Kong and Cordis Hong Kong decreased by **2.2% and 3.3%**, respectively, outperforming the **7.9% decline** in the Grade A luxury hotel market[34](index=34&type=chunk) - RevPAR for Eaton HK increased by **3.7% year-on-year**, surpassing the **6.6% decline** in the Grade B luxury hotel market[35](index=35&type=chunk) - Eaton HK led the hotel portfolio with a high occupancy rate of **90.1%**[38](index=38&type=chunk) [Financial Review](index=16&type=section&id=Financial%20Review) Net asset value per stapled security decreased, while the gearing ratio slightly increased, with a significant portion of borrowings hedged by interest rate swaps - Net asset value attributable to stapled security holders was **HK$9,310.0 million** or **HK$2.70 per stapled security** as of June 30, 2025[39](index=39&type=chunk) - Total outstanding borrowings (before underwriting fees) slightly decreased to **HK$6,201.6 million**[40](index=40&type=chunk) - **41.9%** of total outstanding bank borrowings were hedged at a weighted average fixed interest rate swap of **3.59% per annum**[41](index=41&type=chunk) - The gearing ratio was **38.5%**, a slight increase from **38.2%** as of December 31, 2024[41](index=41&type=chunk) - The Group held cash balances of **HK$241.2 million** and undrawn revolving loan facilities of **HK$598.4 million**[42](index=42&type=chunk) - Restricted bank deposits of **HK$51.0 million** were maintained to meet the minimum interest coverage ratio required by bank financing agreements[42](index=42&type=chunk) [Biographies of Directors](index=18&type=section&id=Biographies%20of%20Directors) This section provides brief biographies of the Board of Directors, including their roles, experience, and affiliations - Dr. Lo Ka Shui serves as Chairman and Non-executive Director, also holding the position of Chairman and Managing Director of Great Eagle Holdings Limited[45](index=45&type=chunk) - Mr. Brett Stephen BUTCHER serves as Chief Executive Officer and Executive Director, with over forty years of experience in hotel operations[47](index=47&type=chunk) - Professor Chan Ka Keung, Professor Lin Hsiaohui, and Mr. Wong Kwai Lam serve as Independent Non-executive Directors, each possessing extensive experience in finance, academia, and business[48](index=48&type=chunk)[50](index=50&type=chunk)[54](index=54&type=chunk) - Mr. Lo Chun Him and Mr. Lo Chun Lai serve as Non-executive Directors, holding key positions within Great Eagle Holdings Limited and Langham Hospitality Group, and are related to Dr. Lo Ka Shui[52](index=52&type=chunk)[53](index=53&type=chunk) [Governance and Compliance](index=22&type=section&id=Governance%20and%20Compliance) This section outlines the Trust Group's corporate governance framework, compliance with codes, and mechanisms for handling potential conflicts of interest and connected transactions [Corporate Governance Structure and Code Compliance](index=22&type=section&id=Corporate%20Governance%20Structure%20and%20Code%20Compliance) The Trust Group maintains high corporate governance standards, with Langham Hospitality Investments structured as a fixed single investment trust - The Trust Group is committed to maintaining and enhancing high standards of corporate governance practices[57](index=57&type=chunk) - Langham Hospitality Investments is a fixed single investment trust established under a trust deed, permitted to invest only in the company's securities[58](index=58&type=chunk) - Stapled securities comprise one trust unit, one beneficial interest in an ordinary share, and one stapled preference share, which can only be traded together[59](index=59&type=chunk)[60](index=60&type=chunk) - For the six months ended June 30, 2025, both the Trust and the Company complied with all applicable Code Provisions[61](index=61&type=chunk) [Handling Potential Conflicts of Interest](index=23&type=section&id=Handling%20Potential%20Conflicts%20of%20Interest) The Trust Group addresses potential conflicts of interest arising from its close relationship with Great Eagle Holdings through various corporate governance measures - The Trust Group maintains a close business relationship with Great Eagle Holdings Limited, governed by formal agreements, which may lead to potential conflicts of interest[62](index=62&type=chunk) - Great Eagle Holdings Limited has granted the Company a Right of First Refusal Deed, giving the Trust Group priority to participate in and acquire completed standalone hotels managed under The Langham or Eaton brands in Asia (excluding Australia and New Zealand)[62](index=62&type=chunk) - Corporate governance measures include directors abstaining from voting on transactions where they have a material interest, and the Trustee-Manager's directors prioritizing the overall interests of all stapled security holders over the Manager's interests[65](index=65&type=chunk) - Independent Non-executive Directors and auditors are required to conduct annual reviews and report on connected transactions[65](index=65&type=chunk) - The Audit Committee is responsible for overseeing the implementation of the Great Eagle Right of First Refusal Deed and annually reviewing its execution[64](index=64&type=chunk)[65](index=65&type=chunk) [Connected Transactions and Continuing Connected Transactions](index=25&type=section&id=Connected%20Transactions%20and%20Continuing%20Connected%20Transactions) This section details connected and continuing connected transactions for H1 2025, including various agreements with Great Eagle Group and its subsidiaries - Total Connected Transactions for H1 2025 (HK$ thousand) | Transaction Type | Total Transaction Amount | | :--- | :--- | | Master Lease Agreement – Base Rent | 111,575 | | Master Lease Agreement – Variable Rent | 108,520 | | Hotel Management Agreement – Basic Fee | 11,062 | | Hotel Management Agreement – Incentive Fee | 9,523 | | Centralised Services and Marketing Agreement – Reimbursed Costs | 3,631 | | Centralised Services and Marketing Agreement – Global Marketing Fees | 8,147 | | Centralised Services and Marketing Agreement – Reservation Fees | 5,059 | | Trademark Licence Agreement | 7,374 | - The Master Lease Agreement stipulates that the Master Lessee pays the Lessor an annual fixed base rent of **HK$225.0 million** and variable rent calculated at **50%** of the total gross operating profit of the hotels[69](index=69&type=chunk)[70](index=70&type=chunk) - The Hotel Management Agreement specifies that the Hotel Manager receives a basic fee (**1.5% of gross revenue**) and an incentive fee (**5.0% of adjusted gross operating profit**)[72](index=72&type=chunk)[74](index=74&type=chunk) - The Centralised Services and Marketing Agreement provides for the service provider to receive global marketing fees (**2.0% of total room revenue**) and reservation fees[75](index=75&type=chunk)[76](index=76&type=chunk) - The Trademark Licence Agreement requires the hotel companies to pay a license fee (**1.0% of gross revenue**)[77](index=77&type=chunk) - Hotel management fees can be paid in cash, by issuing stapled securities, or a combination of both, with the stapled securities issuance cap increased from **1.5% to 3.5%**[73](index=73&type=chunk)[78](index=78&type=chunk) [Disclosure of Interests](index=30&type=section&id=Disclosure%20of%20Interests) This section details the issued stapled securities, directors' interests in stapled securities and associated corporations, and major stapled security holders' interests [Issued Stapled Securities](index=30&type=section&id=Issued%20Stapled%20Securities) As of June 30, 2025, the total number of issued stapled securities was 3,444,141,132, an increase primarily for hotel manager fees - As of June 30, 2025, the total number of issued stapled securities was **3,444,141,132**[79](index=79&type=chunk)[81](index=81&type=chunk) - **10,594,487** new stapled securities were issued in H1 2025, representing **0.31%** of the total, for partial payment of hotel manager fees for H2 2024[79](index=79&type=chunk)[80](index=80&type=chunk) - **46,320,885** deferred stapled securities will be issued over three years to pay a portion of hotel manager fees[81](index=81&type=chunk) - For the six months ended June 30, 2025, neither the Trust, the Trustee-Manager, the Company, nor its subsidiaries repurchased, sold, or redeemed any stapled securities[82](index=82&type=chunk) [Directors' Interests in Stapled Securities and Associated Corporations](index=32&type=section&id=Directors'%20Interests%20in%20Stapled%20Securities%20and%20Associated%20Corporations) Dr. Lo Ka Shui holds a significant interest in Langham Hospitality Investments, with other directors holding minor personal interests, and interests in associated corporations are also disclosed - Directors' Long Positions in Stapled Securities (as of June 30, 2025) | Director Name | Capacity | Nature of Interest | Number of Stapled Securities Held | Percentage of Issued Stapled Securities | | :--- | :--- | :--- | :--- | :--- | | Lo Ka Shui | Beneficial Owner | Personal Interest | 31,584,000 | 0.92% | | | Interest in Controlled Corporations | Corporate Interest | 2,505,361,939 | 72.74% | | | Grantor, Advisory Committee and Management Committee Member of Charitable Trust | Trust Interest | 90,010,250 | 2.61% | | Brett Stephen BUTCHER | Beneficial Owner and Jointly Held with Spouse | Joint Interest | 2,170,545 | 0.06% | | Lo Chun Lai | Beneficial Owner | Personal Interest | 300,000 | 0.01% | - Dr. Lo Ka Shui in Great Eagle Holdings Limited holds a **64.38% interest**, including personal, controlled corporation, and discretionary trust interests[89](index=89&type=chunk) - Dr. Lo Ka Shui in Champion REIT holds a **70.76% interest**[91](index=91&type=chunk) [Major Stapled Security Holders' Interests](index=35&type=section&id=Major%20Stapled%20Security%20Holders'%20Interests) As of June 30, 2025, Great Eagle Holdings Limited is the major stapled security holder, with LHIL Assets Holdings Limited and HSBC International Trustee Limited also holding significant interests - Major Stapled Security Holders' Interests (as of June 30, 2025) | Name | Number of Stapled Securities Held | Percentage of Issued Stapled Securities | | :--- | :--- | :--- | | Great Eagle Holdings Limited | 2,502,271,939 | 72.65% | | LHIL Assets Holdings Limited | 2,358,327,439 | 68.47% | | HSBC International Trustee Limited | 2,448,103,067 | 71.08% | - Great Eagle Holdings Limited indirectly holds the majority of stapled securities through its wholly-owned subsidiaries[95](index=95&type=chunk) [Financial Information](index=36&type=section&id=Financial%20Information) This section presents the condensed consolidated financial statements, including the review report, statements of profit or loss, financial position, changes in equity, cash flows, and detailed notes [Review Report on Condensed Consolidated Financial Statements](index=37&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) Deloitte Touche Tohmatsu reviewed the Trust Group's condensed consolidated financial statements for H1 2025, finding no material issues and compliance with HKAS 34 - Deloitte Touche Tohmatsu has reviewed the Trust Group's condensed consolidated financial statements[102](index=102&type=chunk) - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants[102](index=102&type=chunk) - The review found no matters that caused the accountants to believe the condensed consolidated financial statements were not prepared, in all material respects, in accordance with HKAS 34[104](index=104&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=38&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For H1 2025, the Trust Group reported revenue of HK$184,823 thousand, a net loss of HK$142,254 thousand attributable to stapled security holders, and a basic and diluted loss per stapled security of 4 HK cents - Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 184,823 | 191,166 | | Net property income | 173,916 | 180,956 | | Fair value (decrease)/increase of investment properties | (143,327) | 37,373 | | Fair value changes of derivative financial instruments | (27,317) | 15,912 | | Finance costs | (137,726) | (162,843) | | (Loss)/Profit before tax | (136,617) | 50,705 | | Total (expense)/income and comprehensive (expense)/income for the period attributable to stapled security holders | (142,254) | 43,020 | | (Loss)/Earnings per stapled security (basic and diluted) | (4 HK cents) | 1 HK cent | [Condensed Consolidated Statement of Financial Position](index=39&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were HK$16,087,429 thousand, with investment properties at HK$15,764,000 thousand, and net assets at HK$9,310,045 thousand - Condensed Consolidated Statement of Financial Position (as of June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current assets | 15,773,150 | 15,904,746 | | Investment properties | 15,764,000 | 15,895,000 | | Current assets | 314,279 | 333,598 | | Current liabilities | 104,052 | 87,180 | | Non-current liabilities | 6,673,332 | 6,648,753 | | Secured bank loans (due after one year) | 6,168,404 | 6,164,604 | | Net assets | 9,310,045 | 9,502,411 | [Condensed Consolidated Statement of Changes in Equity](index=40&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For H1 2025, the Group's total equity decreased from HK$9,502,411 thousand to HK$9,310,045 thousand, primarily due to the period's loss and distributions paid - Condensed Consolidated Statement of Changes in Equity (for the six months ended June 30, 2025) | Metric | June 30, 2025 (HK$ thousand) | January 1, 2025 (HK$ thousand) | | :--- | :--- | :--- | | Share capital/units | 3,444 | 3,434 | | Share premium | 8,275,787 | 8,325,924 | | Other reserves | (11,562,543) | (11,562,543) | | Share-based payment reserve | 15,850 | 15,835 | | Property revaluation reserve | 12,598,157 | 12,598,157 | | (Accumulated losses)/Retained profits | (20,650) | 121,604 | | **Total Equity** | **9,310,045** | **9,502,411** | - Total loss and comprehensive expense for the period was **HK$142,254 thousand**[109](index=109&type=chunk) - Distributions paid amounted to **HK$55,106 thousand**[109](index=109&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=41&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For H1 2025, net cash from operating activities was HK$66,750 thousand, while net cash used in investing and financing activities totaled HK$60,357 thousand and HK$58,562 thousand, respectively - Condensed Consolidated Statement of Cash Flows (for the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net cash from operating activities | 66,750 | 71,657 | | Net cash used in investing activities | (60,357) | (25,930) | | Cash used in financing activities | (58,562) | (556) | | Net (decrease)/increase in cash and cash equivalents | (52,169) | 45,171 | | Cash and cash equivalents at end of period | 241,233 | 167,687 | - Additions to investment properties amounted to **HK$13,417 thousand**, and restricted bank deposits were **HK$51,000 thousand**[111](index=111&type=chunk) - Distributions paid were **HK$55,106 thousand**, and bank loans repaid totaled **HK$3,000 thousand**[111](index=111&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=42&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, covering general information, accounting policies, revenue, segments, finance costs, tax, distributable income, earnings per stapled security, investment property valuation, balance sheet items, commitments, operating leases, and related party disclosures [General Information and Basis of Presentation](index=42&type=section&id=General%20Information%20and%20Basis%20of%20Presentation) Langham Hospitality Investments is a trust listed on May 30, 2013, primarily engaged in property investment, with financial statements presented in HKD - Langham Hospitality Investments is a trust whose stapled securities were listed on the Stock Exchange on **May 30, 2013**[112](index=112&type=chunk) - The Trust Group's principal business activity is property investment[113](index=113&type=chunk) - The condensed consolidated financial statements are presented in Hong Kong Dollars and include the financial position of both the Trust Group and the Company Group[114](index=114&type=chunk)[115](index=115&type=chunk) [Significant Accounting Policies and Application](index=43&type=section&id=Significant%20Accounting%20Policies%20and%20Application) The condensed consolidated financial statements are prepared under HKAS 34 and Appendix 16 of the Listing Rules, primarily on a historical cost basis, with no material impact from new accounting standards - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and Appendix 16 of the Listing Rules[117](index=117&type=chunk) - They are prepared on a historical cost basis, except for investment properties and derivative financial instruments, which are measured at fair value[118](index=118&type=chunk) - The revised HKAS 21 'Lack of Exchangeability' was first applied in the current period, but it had no material impact on the financial position and performance[119](index=119&type=chunk) [Revenue and Segment Information](index=43&type=section&id=Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from rental income from the Master Lessee and retail shops, with operating segments focused on the performance of its three Hong Kong hotels - Revenue Breakdown (for the six months ended June 30) | Revenue Source | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Rental income from GE (LHIL) Lessee Limited (after service fee expenses) | 183,989 | 190,240 | | Rental income from retail shops at Eaton HK | 834 | 926 | | **Total Revenue** | **184,823** | **191,166** | - The Group's operating segments are focused on the operating results of leasing The Langham Hong Kong, Cordis Hong Kong, and Eaton HK[121](index=121&type=chunk) - Segment Revenue and Results (for the six months ended June 30, 2025) | Hotel | Segment Revenue (HK$ thousand) | Segment Results (HK$ thousand) | | :--- | :--- | :--- | | The Langham Hong Kong | 77,631 | 62,316 | | Cordis Hong Kong | 97,100 | 75,866 | | Eaton HK | 46,198 | 35,734 | | **Total Segments** | **220,929** | **173,916** | - As of the end of the reporting period, the fair values of The Langham Hong Kong, Cordis Hong Kong, and Eaton HK were **HK$5,410 million, HK$6,770 million, and HK$3,584 million**, respectively[125](index=125&type=chunk) [Finance Costs and Income Tax Expense](index=46&type=section&id=Finance%20Costs%20and%20Income%20Tax%20Expense) Total finance costs for H1 2025 were HK$137,726 thousand, primarily from bank borrowings and interest rate swaps, with income tax expense at HK$5,637 thousand - Finance Costs Breakdown (for the six months ended June 30) | Finance Costs | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest on bank borrowings | 122,155 | 162,063 | | Net interest on interest rate swaps | 8,346 | (4,151) | | Amortisation of underwriting/loan extension fees | 6,800 | 4,685 | | **Total Finance Costs** | **137,726** | **162,843** | - Income Tax Expense (for the six months ended June 30) | Income Tax Expense | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong Profits Tax (current tax) | 2,185 | 1,246 | | Deferred tax | 3,452 | 6,430 | | **Total Income Tax Expense** | **5,637** | **7,685** | [Distributable Income and Distribution Statement](index=47&type=section&id=Distributable%20Income%20and%20Distribution%20Statement) Total distributable income for H1 2025 was HK$28,027 thousand, a decrease from the prior year, with no interim distribution declared for the period - Calculation of Total Distributable Income (for the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | (Loss)/Profit for the period attributable to stapled security holders | (142,254) | 43,020 | | Fair value decrease/(increase) of investment properties | 143,327 | (37,373) | | Fair value changes of derivative financial instruments | 27,317 | (15,912) | | Furniture, fixtures and equipment reserve | (11,062) | (11,593) | | **Total Distributable Income** | **28,027** | **34,022** | - The Board decided not to declare any interim distribution for the six months ended June 30, 2025[131](index=131&type=chunk) - The 2024 final distribution of **1.6 HK cents per stapled security**, totaling **HK$55,106 thousand**, was paid to stapled security holders on June 4, 2025[131](index=131&type=chunk) [Earnings Per Stapled Security](index=50&type=section&id=Earnings%20Per%20Stapled%20Security) For H1 2025, basic and diluted loss per stapled security was 4 HK cents, compared to earnings of 1 HK cent in the prior year period - Basic and Diluted (Loss)/Earnings Per Stapled Security (for the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | (Loss)/Profit for the period (HK$ thousand) | (142,254) | 43,020 | | Weighted average number of stapled securities (thousand) | 3,440,746 | 3,361,407 | | **Basic and Diluted (Loss)/Earnings Per Stapled Security** | **(4 HK cents)** | **1 HK cent** | [Investment Properties](index=51&type=section&id=Investment%20Properties) As of June 30, 2025, the Group's investment properties had a fair value of HK$15,764,000 thousand, valued by Knight Frank using discounted cash flow and term and reversion methods - Fair Value Changes of Investment Properties (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Fair value at beginning of period/year | 15,895,000 | 15,662,000 | | Additions | 12,327 | 46,474 | | Fair value (decrease)/increase recognised in profit or loss | (143,327) | 186,526 | | **Fair value at end of period/year** | **15,764,000** | **15,895,000** | - The fair value of investment properties was assessed by independent professional property valuer Knight Frank Petty Limited[137](index=137&type=chunk) - Hotel properties were valued using the discounted cash flow analysis, while retail shops were valued using the term and reversion method[138](index=138&type=chunk)[139](index=139&type=chunk) [Notes to Statement of Financial Position Items](index=52&type=section&id=Notes%20to%20Statement%20of%20Financial%20Position%20Items) This section details accounts receivable, restricted bank deposits, accounts payable, derivative financial instruments, secured bank loans, and issued share capital - Accounts Receivable, Deposits and Prepayments (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Amounts due from Master Lessee | 13,314 | 29,417 | | Deposits and prepayments | 8,989 | 11,299 | | **Total classified as current** | **14,579** | **32,678** | - Restricted bank deposits of **HK$51,000 thousand** are held to maintain the minimum interest coverage ratio required by bank financing agreements[144](index=144&type=chunk) - Accounts Payable, Deposits and Accruals (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 50,895 | 34,498 | | Accruals and other payables | 13,461 | 23,440 | | **Total** | **65,844** | **61,131** | - Derivative financial instruments are all interest rate swaps with a total notional amount of **HK$2,600,000 thousand**, used to manage interest rate risk[147](index=147&type=chunk)[148](index=148&type=chunk) - Total secured bank loans amount to **HK$6,201,600 thousand**, bearing interest at HIBOR plus **0.82%**, and are due in December 2027[149](index=149&type=chunk)[150](index=150&type=chunk) - The total number of issued stapled securities is **3,444,141,132**[152](index=152&type=chunk)[153](index=153&type=chunk) [Commitments and Operating Leases](index=57&type=section&id=Commitments%20and%20Operating%20Leases) As of June 30, 2025, the Group had no significant capital expenditure commitments, with minimum operating lease receivables from the Master Lessee and other tenants - As of June 30, 2025, the Group had no significant capital expenditure commitments[156](index=156&type=chunk) - Minimum Operating Lease Receivables (HK$ thousand) | Lessee | Within 1 year | In 2nd year | In 3rd year | Total | | :--- | :--- | :--- | :--- | :--- | | From Master Lessee | 225,000 | 205,274 | – | 430,274 | | From other tenants | 1,300 | 981 | 582 | 2,863 | - The lease term with the Master Lessee is fourteen years, with a fixed base rent of **HK$225,000 thousand annually** and variable rent calculated at **50%** of the total gross operating profit[159](index=159&type=chunk) [Related and Connected Party Disclosures](index=59&type=section&id=Related%20and%20Connected%20Party%20Disclosures) The Group engaged in various significant related and connected party transactions with Great Eagle Group and its subsidiaries during the period, including rental income, management fees, and administrative services - The Group entered into several significant related and connected party transactions with subsidiaries of Great Eagle Holdings Limited (the ultimate holding company)[160](index=160&type=chunk) - Related and Connected Party Transactions (for the six months ended June 30) | Transaction Type | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Rental income (Master Lessee) | 220,095 | 228,111 | | Hotel management fees and license fees (Langham Hospitality International Limited) | 27,959 | 29,563 | | Global marketing fees (Langham Hospitality Services Limited) | 8,147 | 8,308 | | Property management service fees (Kinsland Property Management Services Limited) | 1,530 | 1,529 | | Administrative support service fees (Great Eagle Company, Limited) | 480 | 480 | - Hotel management fees and license fees will be paid in cash (compared to stapled securities in the prior year period)[163](index=163&type=chunk) - Remuneration for directors and other key management personnel was **HK$924 thousand** in H1 2025, a decrease from **HK$1,811 thousand** in H1 2024[165](index=165&type=chunk) [Review Report on Condensed Financial Statements of Langham Hospitality Investments Management Limited](index=64&type=section&id=Review%20Report%20on%20Condensed%20Financial%20Statements%20of%20Langham%20Hospitality%20Investments%20Management%20Limited) Deloitte Touche Tohmatsu reviewed Langham Hospitality Investments Management Limited's condensed financial statements for H1 2025, finding no material issues and compliance with HKAS 34 - Deloitte Touche Tohmatsu has reviewed the condensed financial statements of Langham Hospitality Investments Management Limited[171](index=171&type=chunk) - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants[171](index=171&type=chunk) - The review found no matters that caused the accountants to believe the condensed financial statements were not prepared, in all material respects, in accordance with HKAS 34[173](index=173&type=chunk) [Condensed Statement of Profit or Loss and Other Comprehensive Income of Langham Hospitality Investments Management Limited](index=65&type=section&id=Condensed%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income%20of%20Langham%20Hospitality%20Investments%20Management%20Limited) For H1 2025, Langham Hospitality Investments Management Limited reported zero revenue and profit/loss, as administrative expenses are borne by affiliated companies and the Trust - Condensed Statement of Profit or Loss and Other Comprehensive Income of Langham Hospitality Investments Management Limited (for the six months ended June 30) | Metric | 2025 (HK$) | 2024 (HK$) | | :--- | :--- | :--- | | Revenue | – | – | | Administrative expenses | 11,857 | 11,857 | | Less: Amounts borne by fellow subsidiaries and the Trust | (11,857) | (11,857) | | Profit or loss before tax | – | – | | **Total profit or loss and comprehensive income/expense for the period** | **–** | **–** | [Condensed Statement of Financial Position of Langham Hospitality Investments Management Limited](index=65&type=section&id=Condensed%20Statement%20of%20Financial%20Position%20of%20Langham%20Hospitality%20Investments%20Management%20Limited) As of June 30, 2025, Langham Hospitality Investments Management Limited's current assets, net assets, and share capital all stood at HK$1, reflecting its lean financial structure as a trust manager - Condensed Statement of Financial Position of Langham Hospitality Investments Management Limited (as of June 30, 2025) | Metric | June 30, 2025 (HK$) | December 31, 2024 (HK$) | | :--- | :--- | :--- | | Current assets (cash) | 1 | 1 | | Net assets | 1 | 1 | | Share capital | 1 | 1 | | **Total Equity** | **1** | **1** | [Condensed Statement of Changes in Equity of Langham Hospitality Investments Management Limited](index=66&type=section&id=Condensed%20Statement%20of%20Changes%20in%20Equity%20of%20Langham%20Hospitality%20Investments%20Management%20Limited) For H1 2025, Langham Hospitality Investments Management Limited's share capital remained unchanged at HK$1 - Condensed Statement of Changes in Equity of Langham Hospitality Investments Management Limited (for the six months ended June 30) | Metric | Share Capital (HK$) | | :--- | :--- | | January 1, 2024 (audited) and June 30, 2024 (unaudited) | 1 | | January 1, 2025 (audited) and June 30, 2025 (unaudited) | 1 | [Notes to the Condensed Financial Statements of Langham Hospitality Investments Management Limited](index=67&type=section&id=Notes%20to%20the%20Condensed%20Financial%20Statements%20of%20Langham%20Hospitality%20Investments%20Management%20Limited) This section provides notes to the financial statements of Langham Hospitality Investments Management Limited, detailing its role as Trustee-Manager, its zero revenue, and its lean financial structure - Langham Hospitality Investments Management Limited's principal business is acting as the Trustee-Manager of the Trust[181](index=181&type=chunk) - The Company does not charge any fees for managing the Trust, with administrative costs borne by the Trust estate[181](index=181&type=chunk) - The Company had no revenue and no cash transactions during both periods, hence no condensed statement of cash flows is presented[182](index=182&type=chunk)[183](index=183&type=chunk) - The condensed financial statements are prepared in accordance with HKAS 34, with the first-time application of revised HKAS 21 having no material impact[184](index=184&type=chunk)[187](index=187&type=chunk) - The Company had no assessable profits during both periods, and its share capital remained at **HK$1**[188](index=188&type=chunk)[189](index=189&type=chunk) [Glossary](index=69&type=section&id=Glossary) This section provides definitions for key terms and acronyms used throughout the interim report - This section provides definitions for key terms and acronyms used throughout the interim report[192](index=192&type=chunk) - Terms include 'Board', 'Codes on Takeovers and Mergers', 'Company', 'Corporate Governance Code', 'Deferred Stapled Securities', 'Great Eagle', 'Great Eagle Group', 'Great Eagle Right of First Refusal Deed', 'Group', 'HKAS', 'HKEX', 'HKFRS', 'HKICPA', 'Stapled Security Holders', 'Hong Kong', 'Hotel Companies', 'Hotel Manager', 'Hotels', 'Listing Date', 'Listing Rules', 'Master Lessee', 'Model Code', 'RevPAR', 'SFO', 'Stapled Securities', 'Stock Exchange', 'Trust', 'Trust Deed', 'Trust Group', 'Trustee-Manager', and 'Trustee-Manager Board'[192](index=192&type=chunk)[193](index=193&type=chunk)

Gold Consumption and Market Trends - In the first half of 2025, domestic gold consumption in China was 505.205 tons, a year-on-year decrease of 3.54%[9] - Gold jewelry consumption dropped to 199.826 tons, reflecting a significant decline of 26.0% year-on-year, while gold bars and coins consumption increased by 23.69% to 264.242 tons[9] - The demand for gold jewelry has weakened, but investment in gold remains strong due to economic uncertainty and the depreciation of the RMB[10] - E-commerce and live streaming platforms have significantly enhanced the purchasing power of younger consumers, leading to a notable increase in online jewelry sales[11] - The trend of integrating modern fashion with traditional cultural elements in gold jewelry is becoming increasingly popular among younger consumers[12] - The overall market outlook remains stable, with potential for future growth driven by cultural relevance and investment demand[10] Company Financial Performance - The company's total revenue increased by 4.7% year-on-year to RMB 10,450.9 million, compared to RMB 9,979.9 million in the previous year[13] - The net loss for the period was RMB 64.0 million, a decline from a net profit of RMB 52.3 million in the same period last year[13] - Sales of gold jewelry and other gold products generated revenue of RMB 10,135.2 million, a 3.1% increase from RMB 9,834.9 million in 2024[30] - Revenue from K-gold jewelry and diamond-studded products surged by 163.2% to RMB 262.9 million, up from RMB 99.9 million in the previous year[31] - Service revenue increased by 17.8% to RMB 52.9 million, compared to RMB 44.9 million in 2024[31] - Revenue from the mainland China market was RMB 10,306.2 million, accounting for 98.6% of total revenue[34] Sales and Marketing Strategies - The company established a sales network covering 2,733 stores, including 2,704 franchise stores and 29 self-operated stores, as of June 30, 2025[13] - The shift towards online sales channels allows gold jewelry manufacturers to reach national and even overseas markets[11] - The company is focusing on design innovation to meet the evolving preferences of consumers, particularly the younger demographic[12] - A brand upgrade strategy was initiated in the first half of 2025, enhancing brand visibility and sales performance through integrated marketing efforts[25] - The company is actively exploring overseas market potential, launching international online operations in the first half of 2025 to expand brand awareness and market influence[77] Financial Position and Assets - Total assets as of June 30, 2025, were RMB 5,122.2 million, with total liabilities of RMB 2,836.5 million and net assets of RMB 2,285.7 million[49] - Inventory decreased by 5.4% to RMB 2,406.4 million, aligning with production plans[50] - Trade payables and notes payable decreased by 55.0% to RMB 177.4 million, mainly due to reduced costs associated with procurement[55] - As of June 30, 2025, contract liabilities amounted to RMB 56.8 million, a decrease of 46.5% compared to RMB 106.1 million on December 31, 2024, primarily due to a reduction in customer prepayments[57] - Interest-bearing borrowings amounted to RMB 1,511.8 million as of June 30, 2025, compared to RMB 1,348.9 million on December 31, 2024, primarily used for general operational needs[73] Research and Development - R&D expenses increased by 8.8% to RMB 12.3 million, driven by higher spending on mold and equipment development, product design, and intellectual property costs[40] - The company launched new product lines inspired by traditional Chinese aesthetics, emphasizing craftsmanship and cultural heritage[15] Shareholder and Corporate Governance - The company is committed to maintaining high standards of corporate governance and has complied with all relevant codes during the reporting period[79] - The company has adopted a share incentive plan effective from February 10, 2025, which will last for ten years until February 9, 2035[94] - The share incentive plan aims to attract, motivate, and retain skilled personnel for the company's future development and expansion[95] - The board has decided not to declare an interim dividend for the six months ending June 30, 2025, consistent with the previous year[115] Cash Flow and Financing Activities - The net cash generated from operating activities was RMB 65,606,000, compared to a net cash used of RMB 13,685,000 in the same period of 2024[143] - The total increase in cash and cash equivalents for the period was RMB 289,423,000, compared to RMB 208,076,000 in the same period of 2024[143] - The company successfully raised a net amount of HKD 452.5 million (approximately RMB 420.7 million) from its listing on the Hong Kong Stock Exchange on November 29, 2024[131] Losses and Impairments - The company reported a significant loss in other income and expenses, totaling RMB (695,934,000) for the six months ended June 30, 2025, compared to RMB (347,823,000) in 2024[152] - The company recorded a net loss attributable to owners of RMB 70,091,000 for the six months ended June 30, 2025, compared to a profit of RMB 47,433,000 in the same period of 2024[158]

[Corporate Profile and Group Structure](index=2&type=section&id=CORPORATE%20PROFILE) The Group specializes in manufacturing and selling automotive components, power systems, and commercial vehicles, with facilities across China, India, and Indonesia - The Group's main businesses cover the sales and manufacturing of automotive components, vehicle power supply systems, and commercial vehicles[5](index=5&type=chunk)[6](index=6&type=chunk) - Major manufacturing facilities are located in Liuzhou, Qingdao, Chongqing, Jingmen, Nanning, India, and Indonesia, with key subsidiaries recognized as high-tech enterprises in China[5](index=5&type=chunk)[6](index=6&type=chunk) [Messages from the Board of Directors](index=4&type=section&id=MESSAGES%20FROM%20THE%20BOARD%20OF%20DIRECTORS) The Board's message outlines the Group's H1 2025 performance and strategy amidst a challenging market, achieving moderate revenue growth and significant net profit increase - The Group adhered to a "stable growth, improved efficiency, and new opportunities" strategy amidst intensifying market competition and economic downturn[13](index=13&type=chunk)[16](index=16&type=chunk) - 2025 H1 Key Financial Indicators (Year-on-Year) | Indicator | 2025 H1 (RMB yuan) | 2024 H1 (RMB yuan) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 4,025,400,000 | 3,946,324,000 | +2% | | Gross Profit | 483,347,000 | 425,824,000 | +13.5% | | Gross Profit Margin | 12% | 10.8% | +1.2 percentage points | | Net Profit | 85,809,000 | 21,125,000 | +306% | | Profit Attributable to Owners of the Company | 39,416,000 | 1,586,000 | Significant improvement | [Preface](index=4&type=section&id=PREFACE) This section summarizes Wuling Motors Holdings Limited's unaudited H1 2025 results, highlighting moderate revenue growth and significant net profit improvement through strategic adjustments and cost control in a challenging market - The Group adhered to a "stable growth, improved efficiency, and new opportunities" operating strategy amidst intensifying market competition and economic downturn[13](index=13&type=chunk)[16](index=16&type=chunk) - The rebound in the automotive components and other industrial services segment, along with new customer contributions, offset the adverse economic impact on the vehicle power supply systems and commercial vehicles segments[14](index=14&type=chunk)[16](index=16&type=chunk) [I. Major Tasks in the First Half of 2025](index=5&type=section&id=I.%20MAJOR%20TASKS%20IN%20THE%20FIRST%20HALF%20OF%202025) This section details the Group's H1 2025 progress across business segments, including new customer acquisition, market expansion, technological upgrades, and efficiency initiatives - The component and part business secured **125 project nominations** from **46 customers** in H1, and established new manufacturing bases and an R&D center in Shandong Rizhao and Shanghai respectively[21](index=21&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - The commercial vehicles assembly business focused on four major categories of specialized vehicles, with strong performance in off-road vehicles domestically and internationally, and secured an order for **100 smart charging robots**[27](index=27&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[32](index=32&type=chunk) - The vehicle power supply systems business sold approximately **77,000 engines** in H1, with casting sales increasing by **24.5%**, and secured a strategic project in Vietnam[34](index=34&type=chunk)[35](index=35&type=chunk) - New energy vehicle sales reached approximately **8,640 units**, a **9% year-on-year increase**, with market penetration expected to rise from **30% to 60%** through product optimization and market expansion[36](index=36&type=chunk)[37](index=37&type=chunk) - The Group continues to refine its "one enterprise, one policy" strategy for loss reduction, aiming for a **dual decline** in the number and amount of loss-making subsidiaries within three years[39](index=39&type=chunk)[40](index=40&type=chunk) - Refined management initiatives include continuous "cost reduction and efficiency enhancement" and "three reductions" efforts to control structural and labor costs and revitalize idle assets[41](index=41&type=chunk)[42](index=42&type=chunk)[45](index=45&type=chunk) [Component and Part Business](index=5&type=section&id=1.%20The%20component%20and%20part%20business%20seized%20the%20opportune%20moment%20to%20embark%20on%20a%20new%20journey%20of%20advancement) The component and part business adopted a "stabilize existing, capture incremental, expand variable" strategy in H1, securing 125 project nominations, expanding into new and overseas markets, and establishing new manufacturing and R&D centers, leading to a 5.2% revenue increase - In H1, the component and part business secured **125 project nominations** from **46 customers**[21](index=21&type=chunk)[24](index=24&type=chunk) - Successfully expanded into new markets including SAIC Passenger Vehicle, Zhengzhou Yutong, and Weichai New Energy, and secured projects for rear axles and battery covers in overseas markets like VINFAST Vietnam, Indonesia, and Turkey[25](index=25&type=chunk) - Established a new manufacturing base in Rizhao, Shandong, and leveraged the Shanghai Technology R&D Foresight Center to deepen its product layout in "traditional energy technology upgrades + new energy component integrated development"[25](index=25&type=chunk) - Component and Part Business Revenue | Indicator | 2025 H1 (RMB yuan) | 2024 H1 (RMB yuan) | YoY Growth | | :--- | :--- | :--- | :--- | | Revenue | 2,839,699,000 | - | 5.2% | [Commercial Vehicles Assembly Business](index=6&type=section&id=2.%20The%20commercial%20vehicles%20assembly%20business%20move%20towards%20new%20stage%20with%20steady%20progress) The commercial vehicles assembly business focused on four categories of specialized vehicles—civilian, official, off-road, and intelligent driving—achieving significant progress in niche markets, particularly strong performance in off-road vehicles domestically and internationally, and securing smart charging robot orders, despite a slight revenue decrease - The business focuses on developing specialized vehicles in four major categories: civilian, official, off-road, and intelligent driving[29](index=29&type=chunk) - Off-road vehicles achieved strong performance in domestic and international markets, with **1,093 units sold domestically** (including **160 units** for Shandong Nanshan International Golf Carts) and **552 units sold overseas**[30](index=30&type=chunk)[32](index=32&type=chunk) - The intelligent driving business secured a single batch order for **100 smart charging robots**[30](index=30&type=chunk)[32](index=32&type=chunk) - Commercial Vehicles Assembly Business Revenue | Indicator | 2025 H1 (RMB yuan) | 2024 H1 (RMB yuan) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 312,918,000 | - | Slight decrease | [Vehicles' Power Supply Systems Business](index=8&type=section&id=3.%20The%20vehicles'%20power%20supply%20systems%20business%20segment%20forged%20a%20new%20path%20with%20surging%20momentum) The vehicle power supply systems business pursued a dual-engine strategy of "engine technology upgrades and new energy integrated applications," selling approximately 77,000 engines in H1, with casting sales growing by 24.5%, and achieving new progress in domestic and international markets, including HEV hybrid projects and a strategic project in Vietnam - Adhered to a dual-engine strategy of "engine technology upgrades and new energy integrated applications"[34](index=34&type=chunk)[35](index=35&type=chunk) - H1 engine sales were approximately **77,000 units**, with casting business sales increasing by **24.5%** year-on-year[34](index=34&type=chunk)[35](index=35&type=chunk) - Domestic market sales increased to new customers like BAIC Foton, SAIC Maxus, and JAC, while promoting H15TD-DHT hybrid and H16B projects[35](index=35&type=chunk) - Secured a strategic project nomination in Vietnam and efficiently advanced production line construction for flat wire stators in overseas markets[35](index=35&type=chunk) [New Energy Vehicle Business](index=9&type=section&id=4.%20The%20new%20energy%20vehicle%20business%20gained%20momentum%20to%20strengthen%20foundations) The new energy vehicle business optimized technology and products, expanded its product matrix, launched new models, and actively developed domestic and international markets, collaborating with leading enterprises and covering 39 countries and regions with overseas sales channels, achieving a 9% sales increase in H1 - Joint venture Wuling New Energy is building a diversified vehicle system through R&D and product innovation, aiming to increase its market participation in segmented markets from **30% to 60%**[36](index=36&type=chunk)[37](index=37&type=chunk) - Developed large-space G230B and G230V "Golden Cabin" models, offering **15% more loading space** than comparable products[37](index=37&type=chunk) - Collaborated with leading enterprises such as Huolala, SF Express, and Meituan, with overseas sales channels reaching **33 partners** covering **39 countries and regions**[37](index=37&type=chunk) - New Energy Vehicle Sales | Indicator | 2025 H1 (units) | YoY Growth | | :--- | :--- | :--- | | Sales | 8,640 | 9% | [Loss Reduction and Efficiency Enhancement](index=10&type=section&id=1.%20Loss%20reduction%20efforts%20to%20achieve%20a%20%22dual%20decline%22%20in%20losses) The Group continues to refine its "one enterprise, one policy" strategy for loss reduction based on a three-year governance plan for loss-making enterprises, focusing on major loss-making subsidiaries and developing operating strategies for strategic emerging businesses, aiming for a dual decline in the number and amount of loss-making subsidiaries within three years - Continuously improved "one enterprise, one policy" strategies for loss reduction, intensifying governance efforts and focusing on subsidiaries with significant losses[39](index=39&type=chunk)[40](index=40&type=chunk) - Formulated relevant operating strategies for strategic emerging businesses to enhance corporate operational quality and efficiency[40](index=40&type=chunk) - Strives to achieve a **dual decline** in the number and amount of loss-making subsidiaries year-on-year within three years[40](index=40&type=chunk) [Refined Management](index=10&type=section&id=2.%20Implementing%20fine%20management%20to%20enhance%20corporate%20efficiency%20and%20effectiveness) In 2025, the Group continues to refine work measures in market development, expense control, policy utilization, financial management, and labor cost optimization, including ongoing "cost reduction and efficiency enhancement" efforts, strict control of structural and labor costs, and revitalizing idle assets through "three reductions" initiatives to improve asset returns - Continuously implemented "cost reduction and efficiency enhancement" initiatives, setting structural cost control targets and strictly controlling structural cost increases[41](index=41&type=chunk) - Strictly enforced the mechanism linking total wages to economic benefits, reducing labor costs through rational allocation of personnel[42](index=42&type=chunk)[45](index=45&type=chunk) - Continuously carried out "three reductions" initiatives, reviewing asset conditions, revitalizing idle assets, and improving asset returns[42](index=42&type=chunk)[45](index=45&type=chunk) [II. Work Plan and Major Initiatives for the Second Half of 2025](index=11&type=section&id=II.%20WORK%20PLAN%20AND%20MAJOR%20INITIATIVES%20FOR%20THE%20SECOND%20HALF%20OF%202025) In H2 2025, the Group will deepen transformation and upgrading, adjusting product structures, expanding into mid-to-high-end markets, enhancing brand competitiveness, focusing on R&D for high-efficiency engines and hybrid systems, and expanding the new energy vehicle business, while intensifying loss governance and refined internal management - The component and part business will leverage advantageous products to support more new energy vehicle models, enhance product added value, and actively expand into the mid-to-high-end customer market of the top 10 domestic brands[43](index=43&type=chunk)[46](index=46&type=chunk) - The automotive services and sales business will focus on brand synergy, integrating service and sales resources to enhance customer loyalty and brand effect[44](index=44&type=chunk)[47](index=47&type=chunk) - The vehicle power supply systems business will concentrate on R&D for high-efficiency engines and hybrid power systems, accelerating the industrialization of technological achievements[48](index=48&type=chunk)[49](index=49&type=chunk) - The new energy vehicle business will continue to optimize its product matrix, strengthen marketing, promote new models like the medium-range "Golden Mini-Truck" and "Golden Cabin," and expand into high-potential overseas markets such as Japan, South Korea, and Italy[50](index=50&type=chunk) - The Group will strictly implement the "Company-Specific Policy" to intensify loss governance, aiming to achieve the goal of a **dual decline** in the number and amount of loss-making subsidiaries year-on-year[51](index=51&type=chunk)[53](index=53&type=chunk) - Refined internal management will be further promoted through continuous "three reductions" initiatives, strengthening "two funds" control, and establishing special task forces to address non-performing inventory, overdue accounts receivable, and idle asset revitalization[52](index=52&type=chunk)[54](index=54&type=chunk) [Transformation and Upgrading of Component and Part Business](index=11&type=section&id=(i)%20Accelerating%20the%20transformation%20and%20upgrading%20of%20the%20component%20and%20part%20business%20through%20continuous%20adjustment%20of%20product%20portfolio) In H2, the component and part business will continue to adjust its product structure, leveraging advantageous products to support more new energy vehicle models and enhance added value, while actively expanding into mid-to-high-end customer markets of top 10 domestic brands and accelerating the application and industrialization of new products/processes like hydroforming, 3-in-1 electric drive axles, and magnesium-aluminum alloy die-casting - Leveraging advantageous products such as chassis, light-duty electric drives, and energy-saving hybrid systems to actively support more new energy vehicle models and enhance product added value[43](index=43&type=chunk)[46](index=46&type=chunk) - Vigorously expanding into mid-to-high-end customer markets of top 10 domestic brands like Chery, Geely, BYD, and SAIC to increase external market share[43](index=43&type=chunk)[46](index=46&type=chunk) - Accelerating the application and industrialization of new products/processes such as hydroforming, 3-in-1 electric drive axles, and magnesium-aluminum alloy die-casting[43](index=43&type=chunk)[46](index=46&type=chunk) [Synergies in Automotive Services and Sales](index=11&type=section&id=(ii)%20Strengthening%20synergies%20in%20automotive%20services%20and%20sales%20to%20enhance%20brand%20competitiveness) The Group will leverage brand synergy to integrate service and sales resources, creating a unified brand image, accelerating capital turnover, increasing the application of new models, and optimizing resource allocation to enhance customer loyalty, brand effect, and promote sales growth - Leveraging brand synergy as a breakthrough, integrating service and sales resources to form a联动 advantage and create a unified brand image[44](index=44&type=chunk)[47](index=47&type=chunk) - Accelerating capital turnover efficiency, increasing the application of new models, optimizing resource allocation, enhancing customer loyalty and brand effect, and promoting brand sales growth[44](index=44&type=chunk)[47](index=47&type=chunk) [Enhancing Core Competitiveness of Vehicles' Power Supply Systems Business](index=12&type=section&id=(iii)%20Accelerating%20transformation%20and%20upgrading%20to%20drive%20core%20competitiveness%20in%20the%20vehicles'%20power%20supply%20systems%20business) The vehicle power supply systems business will accelerate its transformation and upgrading, focusing on R&D for high-efficiency engines and hybrid power system assemblies, establishing collaborative development mechanisms with vehicle projects, accelerating the industrialization of technological achievements, and actively expanding external markets through precise market research and customer profiling to create new growth poles - Focusing on R&D for high-efficiency engines and hybrid power system assemblies, establishing collaborative development mechanisms with vehicle projects, and accelerating the industrialization of technological achievements[48](index=48&type=chunk)[49](index=49&type=chunk) - Identifying high-quality potential customers through precise market research and customer profiling to create new growth poles for the power system business[49](index=49&type=chunk) [Expansion of New Energy Vehicle Business](index=12&type=section&id=(iv)%20Seizing%20domestic%20and%20international%20market%20opportunities%20to%20expand%20the%20new%20energy%20vehicle%20business) The new energy vehicle business will continue to optimize its product matrix, strengthen marketing, focusing on promoting new products like medium-range "Golden Mini-Trucks," "Golden Trucks," "Golden Cabins," and double-row mini-trucks to increase market share; simultaneously accelerating the launch of cost-reduced G050 platform models and right-hand drive "Golden Cabin" models, expanding into high-potential overseas markets such as Japan, South Korea, and Italy, and actively broadening collaborations with major clients - Continuously optimizing the product matrix and strengthening marketing, with a focus on promoting new products such as medium-range "Golden Mini-Trucks," "Golden Trucks," "Golden Cabins," and double-row mini-trucks to increase market share[50](index=50&type=chunk) - Accelerating the launch of cost-reduced G050 platform models and right-hand drive "Golden Cabin" models, expanding into high-potential overseas markets such as Japan, South Korea, and Italy[50](index=50&type=chunk) - Actively expanding collaborations with major clients, partnering with leading enterprises like Huolala, Didi, SF Express, and Meituan to build an efficient market-oriented operating mechanism[50](index=50&type=chunk) [Loss Governance](index=13&type=section&id=(v)%20Strictly%20implementing%20the%20%22Company-Specific%20Policy%22%20approach%20to%20further%20intensify%20loss%20governance) The Group will strictly implement the "one enterprise, one policy" approach to further intensify loss governance, striving to achieve the goal set by the Autonomous Region State-owned Assets Supervision and Administration Commission of a "dual decline in the number and amount of loss-making subsidiaries year-on-year by 2025," through technical optimization, commercial control, and continuous cleanup efforts for non-performing enterprises - Intensifying governance efforts to achieve the goal set by the Autonomous Region State-owned Assets Supervision and Administration Commission of a "dual decline in the number and amount of loss-making subsidiaries year-on-year by 2025"[51](index=51&type=chunk)[53](index=53&type=chunk) - For new energy strategic emerging enterprises, reducing production costs and procurement expenses through technical optimization and commercial control to achieve cost reduction and efficiency enhancement[53](index=53&type=chunk) - For enterprises unable to achieve profitability through their own development, strictly controlling expenses and continuously carrying out various cleanup efforts[53](index=53&type=chunk) [Further Promoting Refined Internal Management](index=13&type=section&id=(vi)%20Further%20promoting%20refined%20internal%20management%20to%20enhance%20asset%20efficiency) The Group will deeply advance refined internal management, continuously implementing "three reductions" initiatives, strengthening "two funds" control, and promoting the establishment of special task forces across its enterprises to specifically address non-performing inventory, overdue accounts receivable, and idle asset revitalization to enhance asset efficiency - Continuously advancing "three reductions" initiatives and strengthening "two funds" control[52](index=52&type=chunk)[54](index=54&type=chunk) - Promoting the establishment of special task forces across Group enterprises to specifically address non-performing inventory, overdue accounts receivable, and idle asset revitalization[54](index=54&type=chunk) [Conclusion](index=14&type=section&id=Conclusion) Management is confident in the Group's long-term business potential in the automotive supply chain industry and believes in a bright future with continued support from its ultimate controlling shareholder and customers - Management believes the Group's long-term business potential in the automotive supply chain industry will continue to strengthen[55](index=55&type=chunk)[56](index=56&type=chunk) - With the continuous support of its ultimate controlling shareholder and joint venture partner, Guangxi Automobile, and its customers, the Group's business prospects are bright and will generate returns for shareholders in the future[55](index=55&type=chunk)[56](index=56&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section reviews the Group's H1 2025 operating and financial performance, highlighting moderate revenue growth, significant net profit increase, progress in all major business segments, especially in new energy, and a stable financial position with ample liquidity - The Group's total revenue for H1 2025 was **RMB 4,025,400,000**, a **2% year-on-year increase**[164](index=164&type=chunk)[166](index=166&type=chunk) - Net profit was **RMB 85,809,000**, a **306% year-on-year increase**, with profit attributable to owners of the Company at **RMB 39,416,000**, representing significant improvement[169](index=169&type=chunk)[172](index=172&type=chunk) - Improved business volume and cost control measures in the automotive components and other industrial services segment were key drivers of enhanced profitability[168](index=168&type=chunk)[172](index=172&type=chunk) - R&D expenses significantly increased by **42.6%** to **RMB 184,154,000**, primarily for new products and development projects in the automotive components and other industrial services segment[182](index=182&type=chunk)[187](index=187&type=chunk) - The Group's net current assets were **RMB 557,144,000**, a further improvement from the end of 2024[192](index=192&type=chunk)[195](index=195&type=chunk) [Operation Review — By Main Business Segments](index=15&type=section&id=OPERATION%20REVIEW%20—%20BY%20MAIN%20BUSINESS%20SEGMENTS) This section reviews the H1 2025 operating performance of the Group's three main business segments: vehicle power supply systems, automotive components and other industrial services, and commercial vehicles, highlighting the power system's return to profitability, component's moderate growth, and commercial vehicle's stable sales and profit despite market weakness, with all segments actively pursuing technological upgrades and market expansion - The vehicle power supply systems segment successfully **returned to profitability**, recording an operating profit of **RMB 6,609,000**, an improvement from an operating loss of **RMB 17,112,000** in the same period of 2024[64](index=64&type=chunk)[67](index=67&type=chunk) - The automotive components and other industrial services segment's total revenue moderately increased by **5.2%** to **RMB 2,839,699,000**, with operating profit increasing by approximately **2.6%** to **RMB 77,874,000**[89](index=89&type=chunk)[90](index=90&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) - Despite a slight decrease in revenue, the commercial vehicles assembly segment's operating profit moderately increased by approximately **6.2%** to **RMB 27,970,000**, driven by stable business volume and cost control[121](index=121&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) - All business segments are actively transitioning towards new energy, with the power system completing its "traditional power technology upgrade + new energy power integrated development" product layout, automotive components expanding new energy vehicle support, and commercial vehicles developing low-speed intelligent driving products[70](index=70&type=chunk)[73](index=73&type=chunk)[117](index=117&type=chunk)[119](index=119&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk) [Vehicles' Power Supply Systems](index=15&type=section&id=Vehicles'%20Power%20Supply%20Systems) The vehicle power supply systems segment's total revenue decreased by 4.8% in H1 2025, but it successfully returned to profitability with an operating profit of RMB 6,609,000 due to cost control; strong casting product sales grew by 24.5%, mitigating adverse market factors, as the segment actively transforms into a multi-dimensional power system supplier, integrating new energy development and achieving breakthroughs in high-efficiency engines and HEV hybrid solutions - Vehicle Power Supply Systems Segment Key Financial Data | Indicator | 2025 H1 (RMB yuan) | 2024 H1 (RMB yuan) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 858,640,000 | 902,113,000 | -4.8% | | Engine Sales Volume | Approx. 77,000 units | - | Approx. -8.3% | | Casting Product Sales Revenue | 257,138,000 | - | Approx. +24.5% | | Operating Profit/(Loss) | 6,609,000 | (17,112,000) | Returned to profitability | | Sales to SGMW | 426,588,000 | - | Approx. +10% | - The segment has completed its product layout for "traditional power technology upgrades + new energy power integrated development," aiming to become a leading national enterprise in small and medium displacement energy-saving hybrid power systems[70](index=70&type=chunk)[73](index=73&type=chunk) - Successfully developed a new generation of H-series ultra-efficient engines, methanol engines, and hydrogen internal combustion engines, recognized as pioneering in their domestic categories[75](index=75&type=chunk)[79](index=79&type=chunk) - The launch of HEV hybrid power solutions made the Group the first supplier in the Guangxi region with comprehensive hybrid capabilities, capable of saving over **30% in fuel consumption**[78](index=78&type=chunk)[80](index=80&type=chunk)[82](index=82&type=chunk)[86](index=86&type=chunk) [Automotive Components and Other Industrial Services](index=20&type=section&id=Automotive%20Components%20and%20Other%20Industrial%20Services) The automotive components and other industrial services segment achieved total revenue of RMB 2,839,699,000 in H1 2025, a 5.2% year-on-year increase, with operating profit growing by 2.6%, driven by a rebound in major customer business and new client contributions; the segment actively expanded domestic and international markets, established new production bases, and made significant progress in developing axles, frames, hydroformed products, and core components, moving towards lightweight, integrated, intelligent, and high-end solutions - Automotive Components and Other Industrial Services Segment Key Financial Data | Indicator | 2025 H1 (RMB yuan) | 2024 H1 (RMB yuan) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 2,839,699,000 | 2,698,094,000 | +5.2% | | Operating Profit | 77,874,000 | 75,883,000 | +2.6% | | Sales to SGMW | 1,606,971,000 | 1,486,464,000 | +8.1% | | Sales to Expanded Customers | 1,159,301,000 | - | Significant growth | | Sales to Wuling New Energy | 73,427,000 | - | Gradually increasing | - Established new production bases in Jingmen, Hubei, and Rizhao, Shandong, enhancing industrial reach and market competitiveness[97](index=97&type=chunk)[100](index=100&type=chunk) - In axles, cumulative production and sales of micro electric drive axles exceeded **2,000,000 units**, coaxial electric drive axles were first commercialized domestically, and integrated products like 3-in-1 electric drive axles were developed[103](index=103&type=chunk)[105](index=105&type=chunk) - Non-load-bearing frames and other lightweight integrated body products were awarded "Guangxi Manufacturing Single Champion," widely applied in SUV, pickup, commercial, special, and new energy vehicle sectors[104](index=104&type=chunk)[106](index=106&type=chunk) - Hydroforming technology successfully reduced high-strength steel tube wall thickness to **1.2 millimeters**, achieving over **30% weight reduction** and material utilization exceeding **90%**, with a second production line expanded[108](index=108&type=chunk)[111](index=111&type=chunk) - Possesses full-process, independent development capabilities for spiral bevel gears, and has begun undertaking spiral bevel gear products for BYD FinDreams Power[110](index=110&type=chunk)[113](index=113&type=chunk) [Commercial Vehicles Assembly](index=25&type=section&id=Commercial%20Vehicles%20Assembly) The commercial vehicles assembly segment's revenue decreased by 5.4% in H1 2025, but sales increased by 6%, achieving an operating profit of RMB 27,970,000, a 6.2% increase, attributed to stable business volume, lower raw material costs, and cost control measures; the segment focuses on specialized vehicle production and low-speed intelligent driving product development, and has transferred its new energy vehicle assembly business to its associate, Wuling New Energy, to optimize its business structure - Commercial Vehicles Assembly Segment Key Financial Data | Indicator | 2025 H1 (RMB yuan) | 2024 H1 (RMB yuan) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 312,918,000 | - | Approx. -5.4% | | Sales Volume | Approx. 3,870 vehicles | - | +6% | | Operating Profit | 27,970,000 | - | Approx. +6.2% | - Business volume was affected by adverse economic conditions, the transfer of new energy vehicle assembly business to Wuling New Energy, and a repositioning strategy for modified vehicles[122](index=122&type=chunk)[125](index=125&type=chunk) - The segment is capable of producing various specialized vehicles such as sightseeing cars, golf carts, refrigerated trucks, fire trucks, and electric logistics vehicles, sold under the "Wuling" brand[127](index=127&type=chunk)[128](index=128&type=chunk)[130](index=130&type=chunk) - Independently developed core chassis components like front and rear axles, EPB, EHB, vehicle-grade steer-by-wire chassis, and the Lingyu intelligent driving system, and launched low-speed intelligent driving products such as smart charging robots and unmanned patrol vehicles[129](index=129&type=chunk)[131](index=131&type=chunk)[133](index=133&type=chunk)[136](index=136&type=chunk) - New energy vehicle business was restructured, transferring assembly operations to associate Wuling New Energy, which became a core technology partner and customer[135](index=135&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) [Performance of Joint Ventures and Associates](index=29&type=section&id=PERFORMANCE%20OF%20JOINT%20VENTURES%20AND%20ASSOCIATES) This section evaluates the H1 2025 performance of the Group's key joint ventures and associates; Wuling New Energy, the primary new energy vehicle entity, saw revenue growth but remained in a loss-making phase with 9.4% sales growth, while other entities like Guangxi Weixiang and Faurecia Interior Systems maintained profitable growth, and Faurecia Seating and Faurecia Exhaust narrowed losses or returned to profitability amidst revenue growth or stability - Wuling New Energy, as the Group's primary new energy vehicle business entity, achieved total revenue of **RMB 565,487,000** in H1, but incurred a net operating loss of **RMB 211,348,000** due to its initial development stage[147](index=147&type=chunk)[150](index=150&type=chunk) - Wuling New Energy sold approximately **8,640 new energy vehicles**, a **9.4% year-on-year increase**, primarily driven by the launch of new models[151](index=151&type=chunk) - Guangxi Weixiang Machinery Co Ltd's total revenue increased by **42%** year-on-year to **RMB 391,428,000**, with net operating profit growing by **60%** to **RMB 7,606,000**[157](index=157&type=chunk)[160](index=160&type=chunk) - Faurecia (Liuzhou) Automotive Seating Co Ltd's revenue increased by **44%** year-on-year to **RMB 265,835,000**, with a significant narrowing of its net operating loss[158](index=158&type=chunk)[161](index=161&type=chunk) - Faurecia (Liuzhou) Automotive Interior Systems Co Ltd's revenue increased by **30%** year-on-year to **RMB 191,860,000**, with net operating profit further increasing to **RMB 21,509,000**[159](index=159&type=chunk)[162](index=162&type=chunk) - Faurecia (Liuzhou) Exhaust Control Technology Co Ltd successfully **returned to profitability** with a net operating profit of **RMB 2,406,000**, driven by improved gross profit margin[163](index=163&type=chunk)[165](index=165&type=chunk) [Wuling New Energy](index=29&type=section&id=Wuling%20New%20Energy) Wuling New Energy, the Group's primary new energy vehicle entity, achieved total revenue of RMB 565,487,000 in H1 2025 but recorded an operating loss due to its initial development stage; despite intense market competition, its new energy vehicle sales grew by 9.4%, with plans to launch more "Ling Shi" brand new models in H2 and continue expanding overseas markets, aiming to become a leader in the light-duty new energy commercial vehicle market - Wuling New Energy Key Financial Data | Indicator | 2025 H1 (RMB yuan) | 2024 H1 (RMB yuan) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 565,487,000 | - | - | | Net Operating Loss | (211,348,000) | - | - | | Loss Attributable to the Group | (54,316,000) | - | Slight increase | | New Energy Vehicle Sales Volume | 8,640 vehicles | - | +9.4% | - Business performance continues to be affected by intense competition in the Chinese market, declining electric vehicle prices, and uncertainties in domestic insurance policies and overseas import regulations[148](index=148&type=chunk)[150](index=150&type=chunk) - Plans are in place to launch multiple new models under the "Ling Shi" brand in 2025, with the pure electric "Golden Truck" already promoted in H1[152](index=152&type=chunk)[155](index=155&type=chunk) - Continuously expanding overseas markets, further developing Southeast Asia and South America while maintaining presence in Japan, the US, South Korea, and Europe[153](index=153&type=chunk)[155](index=155&type=chunk) [Other Material Joint Ventures and Associates](index=31&type=section&id=Other%20Material%20Joint%20Ventures%20and%20Associates) The Group's other material joint ventures and associates showed varied performance in H1 2025; Guangxi Weixiang maintained profitability with growth in both revenue and profit, Faurecia Seating saw significant revenue growth but remained loss-making, Faurecia Interior Systems improved both revenue and profit, and Faurecia Exhaust successfully returned to profitability with stable revenue, demonstrating the Group's diversified market presence and operational resilience - Other Material Joint Ventures and Associates Key Financial Data | Company Name | Business Type | 2025 H1 Total Revenue (RMB yuan) | YoY Change | 2025 H1 Net Operating Profit/(Loss) (RMB yuan) | Profit/(Loss) Attributable to the Group (RMB yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Guangxi Weixiang Machinery Co Ltd | Engineering machinery and industrial vehicles | 391,428,000 | +42% | 7,606,000 | 3,803,000 | | Faurecia (Liuzhou) Automotive Seating Co Ltd | Automotive seating products | 265,835,000 | +44% | (7,356,000) | (3,678,000) | | Faurecia (Liuzhou) Automotive Interior Systems Co Ltd | Automotive interior systems | 191,860,000 | +30% | 21,509,000 | 10,755,000 | | Faurecia (Liuzhou) Exhaust Control Technology Co Ltd | Automotive exhaust control systems | 137,016,000 | Stable | 2,406,000 | 1,203,000 | [Financial Review](index=32&type=section&id=FINANCIAL%20REVIEW) This section provides a comprehensive review of the Group's H1 2025 financial performance, including profit or loss, financial position, liquidity, and capital structure, noting growth in total revenue and net profit, improved gross margin, increased net current assets, and sufficient liquidity, while actively managing financial risks in a complex market environment - The Group's total revenue was **RMB 4,025,400,000**, a slight increase of **2%** compared to the same period in 2024[164](index=164&type=chunk)[166](index=166&type=chunk) - Gross profit was **RMB 483,347,000**, an increase of **13.5%**, with gross profit margin improving from **10.8% to 12%**[168](index=168&type=chunk)[172](index=172&type=chunk) - Net profit was **RMB 85,809,000**, a substantial increase of **306%** compared to the same period in 2024[169](index=169&type=chunk)[172](index=172&type=chunk) - R&D expenses significantly increased by **42.6%** to **RMB 184,154,000**, primarily for new products and development projects in the automotive components and other industrial services segment[182](index=182&type=chunk)[187](index=187&type=chunk) - As of June 30, 2025, the Group recorded net current assets of **RMB 557,144,000**, a further improvement from December 31, 2024[192](index=192&type=chunk)[195](index=195&type=chunk) - Total bank borrowings increased by **36.5%** to **RMB 4,068,396,000**, while advances drawn on bills receivable discounted with recourse decreased by **21.1%** to **RMB 1,932,109,000**[200](index=200&type=chunk)[204](index=204&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=32&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section analyzes the Group's H1 2025 profit or loss and other comprehensive income, showing a moderate 2% increase in total revenue, improved gross profit and margin, and a significant 306% rise in net profit; R&D expenses increased substantially, while selling and distribution costs, general and administrative expenses, and finance costs decreased, with associates still reporting a net loss but joint ventures achieving a net profit - 2025 H1 Condensed Consolidated Statement of Profit or Loss Key Data | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 4,025,400 | 3,946,324 | +2% | | Gross Profit | 483,347 | 425,824 | +13.5% | | Net Profit | 85,809 | 21,125 | +306% | | Profit Attributable to Owners of the Company | 39,416 | 1,586 | Significant improvement | | Basic Earnings Per Share | 1.20 cents | 0.05 cents | Significant improvement | | Other Income | 99,297 | 136,879 | -27.5% | | Other Gains and Losses | 6,770 | (22,603) | Returned to profitability | | Selling and Distribution Costs | (38,854) | (52,696) | -26.3% | | General and Administrative Expenses | (177,610) | (212,483) | -16.4% | | R&D Expenses | (184,154) | (129,117) | +42.6% | | Finance Costs | (50,532) | (59,858) | -15.6% | - Share of results of associates recorded a total net loss of **RMB 39,871,000**, primarily from Wuling New Energy and Faurecia Seating[175](index=175&type=chunk)[179](index=179&type=chunk) - Share of results of joint ventures recorded a total net profit of **RMB 5,763,000**, mainly attributable to the contribution from Guangxi Weixiang[176](index=176&type=chunk)[180](index=180&type=chunk) [Condensed Consolidated Statement of Financial Position](index=35&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were RMB 14,447,828,000, and total liabilities were RMB 11,362,586,000; net current assets significantly improved to RMB 557,144,000, with non-current liabilities primarily consisting of bank borrowings, indicating a stable financial position - 2025 June 30 Condensed Consolidated Statement of Financial Position Key Data | Indicator | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | Total Assets | 14,447,828 | - | | Total Liabilities | 11,362,586 | - | | Non-current Assets | 4,029,991 | 4,162,391 | | Current Assets | 10,417,837 | 9,606,525 | | Current Liabilities | 9,860,693 | 9,532,503 | | Net Current Assets | 557,144 | 74,022 | | Non-current Liabilities | 1,501,893 | 1,195,363 | | Equity Attributable to Owners of the Company | 1,992,026 | 1,973,393 | - Total capital expenditure for the acquisition of property, plant, and equipment was **RMB 133,727,000**[185](index=185&type=chunk)[189](index=189&type=chunk) - Amounts due from SAIC-GM-Wuling, an associate and major customer, totaled **RMB 1,049,607,000**[190](index=190&type=chunk) [Liquidity and Capital Structure](index=36&type=section&id=Liquidity%20and%20Capital%20Structure) The Group manages its capital by balancing debt and equity to ensure continued operation and maximize shareholder returns; as of June 30, 2025, total bank borrowings increased by 36.5%, while advances drawn on bills receivable discounted with recourse decreased by 21.1%, maintaining relatively high bank cash balances, with the Board confident in the current robust financial position to withstand market risks and challenges - The Group's capital structure comprises debt (advances drawn on bills receivable discounted with recourse and bank borrowings) and equity attributable to owners of the Company[194](index=194&type=chunk)[197](index=197&type=chunk) - Liquidity and Capital Structure Key Data | Indicator | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Total Bank Borrowings | 4,068,396 | 2,980,139 | +36.5% | | Outstanding Advances Drawn on Bills Receivable Discounted with Recourse | 1,932,109 | 2,448,817 | -21.1% | | Total Bills Receivable Discounted | 3,131,157 | - | - | | Bank Cash Balances (including pledged deposits) | 5,195,075 | - | Slight increase | | Total Equity Attributable to Company Shareholders | 1,992,026 | - | - | | Net Asset Value Per Share | 60.4 cents | - | - | - The Directors believe that the Group's current financial position will enable it to withstand the risks and challenges of the current market environment[203](index=203&type=chunk)[205](index=205&type=chunk) [Seasonality or Cyclicality of Interim Operations](index=38&type=section&id=Seasonality%20or%20Cyclicality%20of%20Interim%20Operations) The Group's three main business segments typically experience higher product demand in the second half of the year, consistent with automotive industry practices, driven by exhibitions and promotional activities in September and October; consequently, the Group usually reports higher revenue and segment results in H2, though revenue for the 12 months ended June 30, 2025, decreased due to adverse market conditions and the repositioning of the commercial vehicles segment - Product demand for the Group's three main business segments is typically higher in the second half of the year, consistent with automotive industry practice[207](index=207&type=chunk)[210](index=210&type=chunk) - For the 12 months ended June 30, 2025, the Group's three main reportable segments generated revenue of **RMB 7,997,074,000**, a decrease from the same period in 2024, primarily due to adverse market conditions and the repositioning strategy of the commercial vehicles segment[208](index=208&type=chunk)[210](index=210&type=chunk) [Pledge of Assets](index=38&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group's bank deposits of RMB 636,042,000 and bills receivable discounted with recourse of RMB 1,929,774,000 were pledged to banks, primarily as collateral for bank, bills payable, and bills discounting financing - 2025 June 30 Asset Pledge Situation | Pledged Asset Type | Amount (RMB yuan) | Purpose of Pledge | | :--- | :--- | :--- | | Bank Deposits | 636,042,000 | Collateral for bank, bills payable, and bills discounting financing | | Bills Receivable Discounted with Recourse (undue) | 1,929,774,000 | Collateral for bank, bills payable, and bills discounting financing | [Exposure to Fluctuation in Exchange Rates](index=39&type=section&id=Exposure%20to%20Fluctuation%20in%20Exchange%20Rates) As of June 30, 2025, the Group held bank deposits and trade and other receivables equivalent to RMB 14,965,000 in HKD, USD, and EUR; the Group considers its exposure to exchange rate fluctuations reasonable compared to its RMB-denominated assets, liabilities, and major transactions, and will continue to monitor and formulate appropriate strategies - As of June 30, 2025, the Group held bank deposits, trade receivables, and other receivables equivalent to **RMB 14,965,000** in HKD, USD, and EUR[213](index=213&type=chunk)[216](index=216&type=chunk) - The Group considers its exposure to exchange rate and currency fluctuations reasonable and will continue to monitor foreign exchange risks and formulate appropriate strategies[213](index=213&type=chunk)[216](index=216&type=chunk) [Commitments](index=39&type=section&id=Commitments) As of June 30, 2025, the Group had outstanding capital commitments of RMB 95,027,000 for the acquisition of property, plant, and equipment, which were contracted but not yet provided for in the financial statements - 2025 June 30 Capital Commitments | Commitment Type | Amount (RMB yuan) | | :--- | :--- | | Acquisition of property, plant and equipment | 95,027,000 | [Contingent Liabilities](index=39&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[215](index=215&type=chunk)[218](index=218&type=chunk) [Disclosure of Interests](index=40&type=section&id=DISCLOSURE%20OF%20INTERESTS) This section discloses the interests of the Company's directors, chief executive, and substantial shareholders in the Company's shares and underlying shares as of June 30, 2025, noting that several directors hold shares, and key shareholders include Dragon Hill, Ms. Guan Duoyan, Wuling (Hong Kong) Holdings Limited, Wuling Motors (Hong Kong) Company Limited, and Guangxi Automobile Group Co Ltd; additionally, all unexercised share options under the share option scheme lapsed due to unmet performance targets - As of June 30, 2025, several directors and the chief executive held shares in the Company, with Mr. Yuan Zhijun holding **3,000,000 shares (0.09%)**[220](index=220&type=chunk) - Substantial shareholders include Dragon Hill Development Limited (**10.81%**), Ms. Guan Duoyan (**11.03%**), Wuling (Hong Kong) Holdings Limited (**56.54%**), Wuling Motors (Hong Kong) Company Limited (**56.54%**), and Guangxi Automobile Group Co Ltd (**56.54%**)[228](index=228&type=chunk) - All unexercised share options under the share option scheme lapsed on December 31, 2024, as the Group failed to meet the stipulated performance targets[236](index=236&type=chunk)[237](index=237&type=chunk) [Directors' and Chief Executive's Interests in Shares, Underlying Shares and Debentures](index=40&type=section&id=DIRECTORS'%20AND%20CHIEF%20EXECUTIVE'S%20INTERESTS%20IN%20SHARES,%20UNDERLYING%20SHARES%20AND%20DEBENTURES) As of June 30, 2025, the Company's directors and chief executive held shares in the Company, with Mr. Yuan Zhijun holding 3,000,000 shares, Mr. Ye Xiang holding 1,030,300 shares, Mr. Wei Mingfeng holding 270,000 shares, and Mr. Yang Jie holding 390,000 shares - Directors' and Chief Executive's Shareholdings | Name | Capacity | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Yuan Zhijun | Beneficial owner | 3,000,000 | 0.09% | | Mr. Ye Xiang | Beneficial owner | 1,030,300 | 0.03% | | Mr. Wei Mingfeng | Beneficial owner | 270,000 | 0.01% | | Mr. Yang Jie | Beneficial owner | 390,000 | 0.01% | [Directors' Rights to Acquire Shares and Debentures](index=41&type=section&id=DIRECTORS'%20RIGHTS%20TO%20ACQUIRE%20SHARES%20AND%20DEBENTURES) During the six months ended June 30, 2025, neither the Company nor its subsidiaries, fellow subsidiaries, or holding company entered into any arrangements enabling directors to benefit from acquiring shares or debentures of the Company or any other entity - During the six months ended June 30, 2025, neither the Company nor its related parties entered into any arrangements enabling directors to benefit from acquiring shares or debentures of the Company or any other entity[224](index=224&type=chunk)[226](index=226&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company](index=41&type=section&id=SUBSTANTIAL%20SHAREHOLDERS'%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20SHARES%20AND%20UNDERLYING%20SHARES%20OF%20THE%20COMPANY) As of June 30, 2025, the Company's substantial shareholders included Dragon Hill Development Limited, Ms. Guan Duoyan, Wuling (Hong Kong) Holdings Limited, Wuling Motors (Hong Kong) Company Limited, and Guangxi Automobile Group Co Ltd, with Guangxi Automobile Group Co Ltd indirectly holding 56.54% of the Company's shares through its wholly-owned subsidiaries - Substantial Shareholders' Shareholdings | Shareholder Name/Entity | Capacity | Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Dragon Hill Development Limited | Beneficial owner | Corporate | 356,622,914 | 10.81% | | Ms. Guan Duoyan | Interest in controlled corporation/Beneficial owner/Interest of spouse | Corporate/Individual/Family | 363,731,984 | 11.03% | | Wuling (Hong Kong) Holdings Limited | Beneficial owner | Corporate | 1,864,698,780 | 56.54% | | Wuling Motors (Hong Kong) Company Limited | Interest in controlled corporation | Corporate | 1,864,698,780 | 56.54% | | Guangxi Automobile Holdings Limited | Interest in controlled corporation | Corporate | 1,864,698,780 | 56.54% | - Guangxi Automobile Group Co Ltd is deemed to have an interest in the shares held by Wuling (Hong Kong) Holdings Limited through its wholly-owned subsidiaries, Wuling Motors (Hong Kong) Company Limited and Wuling (Hong Kong) Holdings Limited[235](index=235&type=chunk) [Share Option Scheme](index=43&type=section&id=SHARE%20OPTION%20SCHEME) The Company's share option scheme, adopted on November 10, 2021, aimed to recognize employee contributions, incentivize performance, and establish a profit-sharing mechanism; however, all unexercised share options under the scheme lapsed on December 31, 2024, as the Group failed to meet the stipulated performance targets - The share option scheme aimed to recognize and reward participants' contributions, encourage optimal performance and efficiency, and establish a mechanism for shared benefits and risks[233](index=233&type=chunk)[236](index=236&type=chunk) - All unexercised share options lapsed on December 31, 2024, as the Group failed to meet the performance targets stipulated by the share option scheme[236](index=236&type=chunk)[237](index=237&type=chunk) [Other Information](index=45&type=section&id=OTHER%20INFORMATION) This section covers other significant information for the Company in H1 2025, including the Board's decision not to declare an interim dividend, no purchases, redemptions, or sales of listed securities by the Company or its subsidiaries, full compliance with the Corporate Governance Code, and disclosures regarding the Audit and Remuneration Committees, human resources and remuneration policies, and changes in the Chief Executive Officer - The Board does not recommend the declaration of an interim dividend for the six months ended June 30, 2025[239](index=239&type=chunk)[243](index=243&type=chunk) - Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any listed securities of the Company during the six months ended June 30, 2025[240](index=240&type=chunk)[244](index=244&type=chunk) - The Company confirms full compliance with all code provisions of the Corporate Governance Code as set out in Appendix 14 of the Listing Rules of the Stock Exchange[241](index=241&type=chunk)[245](index=245&type=chunk) - Mr. Song Wei resigned as the Chief Executive Officer due to a management rotation plan by the parent company, effective February 18, 2025, and was succeeded by the current Chief Executive Officer, Mr. Yang Jie[255](index=255&type=chunk)[258](index=258&type=chunk) [Interim Dividend](index=45&type=section&id=INTERIM%20DIVIDEND) The Board does not recommend the declaration of an interim dividend for the six months ended June 30, 2025, consistent with the same period in 2024 - The Board does not recommend the declaration of an interim dividend for the six months ended June 30, 2025 (2024: nil)[239](index=239&type=chunk)[243](index=243&type=chunk) [Purchase, Redemption and Sale of Listed Securities of the Company](index=45&type=section&id=PURCHASE,%20REDEMPTION%20AND%20SALE%20OF%20LISTED%20SECURITIES%20OF%20THE%20COMPANY) During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any listed securities of the Company, consistent with the same period in 2024 - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any listed securities of the Company (2024: nil)[240](index=240&type=chunk)[244](index=244&type=chunk) [Corporate Governance](index=45&type=section&id=CORPORATE%20GOVERNANCE) The Company recognizes the importance of good corporate governance and confirms full compliance with all code provisions of the Corporate Governance Code as set out in Appendix 14 of the Listing Rules of the Stock Exchange for the six months ended June 30, 2025 - The Company confirms full compliance with all code provisions of the Corporate Governance Code as set out in Appendix 14 of the Listing Rules of the Stock Exchange[241](index=241&type=chunk)[245](index=245&type=chunk) [Compliance with Model Code for Securities Transactions by Directors](index=45&type=section&id=COMPLIANCE%20WITH%20MODEL%20CODE%20FOR%20SECURITIES%20TRANSACTIONS%20BY%20DIRECTORS) The Company has adopted a code of conduct for directors' securities transactions no less stringent than the Model Code, and all directors have confirmed compliance with both the Company's code and the Model Code for the six months ended June 30, 2025 - The Company has adopted its own code of conduct for directors' securities transactions, with terms no less stringent than the Model Code[242](index=242&type=chunk)[246](index=246&type=chunk) - All Directors confirmed compliance with both the Company's code and the Model Code for the six months ended June 30, 2025[242](index=242&type=chunk)[246](index=246&type=chunk) [Audit Committee](index=46&type=section&id=AUDIT%20COMMITTEE) The Company's Audit Committee, comprising three independent non-executive directors and one non-executive director, is responsible for reviewing and overseeing the Group's financial reporting, internal control, and risk management systems; the unaudited interim financial information for the six months ended June 30, 2025, has been reviewed by KPMG and the Audit Committee - The Audit Committee comprises three independent non-executive directors (with Mr. Ye Xiang as Chairman) and one non-executive director[247](index=247&type=chunk)[250](index=250&type=chunk) - The Audit Committee is responsible for reviewing and monitoring the Group's financial reporting, internal control, and risk management systems[247](index=247&type=chunk)[250](index=250&type=chunk) - The unaudited interim financial information for the six months ended June 30, 2025, has been reviewed by KPMG and the Audit Committee[248](index=248&type=chunk)[250](index=250&type=chunk) [Human Resources and Remuneration Policy](index=46&type=section&id=HUMAN%20RESOURCES%20AND%20REMUNERATION%20POLICY) As of June 30, 2025, the Group had approximately 7,700 employees, with total staff costs decreasing by 9.1% year-on-year; the Group prioritizes human resource management, maintaining comprehensive policies covering remuneration structure, training, and employee development, with remuneration policies reviewed annually by the Remuneration Committee - As of June 30, 2025, the Group had approximately **7,700 employees**[249](index=249&type=chunk)[251](index=251&type=chunk) - Staff Costs | Indicator | 2025 H1 (RMB yuan) | 2024 H1 (RMB yuan) | YoY Change | | :--- | :--- | :--- | :--- | | Total Staff Costs | 353,558,000 | 388,864,000 | -9.1% | - The Remuneration Committee proposes and approves remuneration policies, structures, and packages for executive directors and senior management[253](index=253&type=chunk)[257](index=257&type=chunk) [Change of Chief Executive Officer](index=47&type=section&id=CHANGE%20OF%20CHIEF%20EXECUTIVE%20OFFICER) Mr. Song Wei resigned as the Company's Chief Executive Officer, effective February 18, 2025, due to a management rotation plan implemented by the parent company, and was succeeded by the current Chief Executive Officer, Mr. Yang Jie - Mr. Song Wei resigned as the Company's Chief Executive Officer, effective **February 18, 2025**, due to a management rotation plan by the parent company[255](index=255&type=chunk)[258](index=258&type=chunk) - His position was succeeded by the current Chief Executive Officer, Mr. Yang Jie[255](index=255&type=chunk)[258](index=258&type=chunk) [Approval of Interim Report](index=47&type=section&id=APPROVAL%20OF%20INTERIM%20REPORT) This interim report and the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, were approved and authorized for issue by the Board on August 26, 2025 - This interim report and the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, were approved and authorized for issue by the Board on **August 26, 2025**[256](index=256&type=chunk)[259](index=259&type=chunk) [Report on Review of Condensed Consolidated Financial Statements](index=48&type=section&id=REPORT%20ON%20REVIEW%20OF%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) KPMG conducted a review of Wuling Motors Holdings Limited's condensed consolidated financial statements for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410; the review concluded that nothing came to their attention to suggest that the interim financial report is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 - KPMG has reviewed this interim financial report in accordance with Hong Kong Standard on Review Engagements 2410[260](index=260&type=chunk)[264](index=264&type=chunk)[262](index=262&type=chunk)[266](index=266&type=chunk) - The review concluded that nothing came to their attention to suggest that the interim financial report is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[265](index=265&type=chunk)[267](index=267&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=50&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS) This condensed consolidated statement of profit or loss presents Wuling Motors Holdings Limited's unaudited financial results for the six months ended June 30, 2025, with total revenue of RMB 4,025,400,000, gross profit of RMB 483,347,000, profit for the period of RMB 85,809,000, and basic earnings per share of RMB 1.20 cents - Condensed Consolidated Statement of Profit or Loss Summary (Six Months Ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 4,025,400 | 3,946,324 | | Cost of Sales and Services | (3,542,053) | (3,520,500) | | Gross Profit | 483,347 | 425,824 | | Other Income | 99,297 | 136,879 | | Other Gains and Losses | 6,770 | (22,603) | | Selling and Distribution Costs | (38,854) | (52,696) | | General and Administrative Expenses | (177,610) | (212,483) | | R&D Expenses | (184,154) | (129,117) | | Share of Results of Associates | (39,871) | (59,928) | | Share of Results of Joint Ventures | 5,763 | (1,283) | | Finance Costs | (50,532) | (59,858) | | Profit Before Taxation | 97,583 | 22,397 | | Income Tax Expense | (11,774) | (1,272) | | Profit for the Period | 85,809 | 21,125 | | Profit Attributable to Owners of the Company | 39,416 | 1,586 | | Non-controlling Interests | 46,393 | 19,539 | | Basic Earnings Per Share | RMB 1.20 cents | RMB 0.05 cents | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=51&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME) This condensed consolidated statement of profit or loss and other comprehensive income presents Wuling Motors Holdings Limited's financial performance for the six months ended June 30, 2025, with a profit for the period of RMB 85,809,000 and net other comprehensive expenses of RMB 6,118,000, resulting in a total comprehensive income for the period of RMB 79,691,000 - Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (Six Months Ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period | 85,809 | 21,125 | | Revaluation Surplus Arising from Change in Property, Plant and Equipment and Right-of-Use Assets to Investment Properties | 3,513 | 7,337 | | Equity Investments at Fair Value Through Other Comprehensive Income — Net Change in Fair Value Reserve | (6,001) | – | | Exchange Differences Arising from Translation of Operations Outside Mainland China | (4,680) | (793) | | Bills Receivable at Fair Value Through Other Comprehensive Income — Net Change in Fair Value Reserve | 1,050 | 11,071 | | Other Comprehensive (Expenses) Income for the Period | (6,118) | 17,615 | | Total Comprehensive Income for the Period | 79,691 | 38,740 | | Attributable to Owners of the Company | 33,861 | 12,003 | | Non-controlling Interests | 45,830 | 26,737 | [Condensed Consolidated Statement of Financial Position](index=52&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) This condensed consolidated statement of financial position presents Wuling Motors Holdings Limited's unaudited financial position as of June 30, 2025, with total assets of RMB 14,447,828,000, primarily comprising current assets; net current assets significantly improved to RMB 557,144,000 from year-end 2024, total liabilities were RMB 11,362,586,000, and equity attributable to owners of the Company was RMB 1,992,026,000 - Condensed Consolidated Statement of Financial Position Summary (As of June 30, 2025) | Indicator | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 4,029,991 | 4,162,391 | | Current Assets | 10,417,837 | 9,606,525 | | Current Liabilities | 9,860,693 | 9,532,503 | | Net Current Assets | 557,144 | 74,022 | | Non-current Liabilities | 1,501,893 | 1,195,363 | | Net Assets | 3,085,242 | 3,041,050 | | Equity Attributable to Owners of the Company | 1,992,026 | 1,973,393 | | Non-controlling Interests | 1,093,216 | 1,067,657 | [Condensed Consolidated Statement of Changes in Equity](index=54&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CHANGES%20IN%20EQUITY) This condensed consolidated statement of changes in equity illustrates Wuling Motors Holdings Limited's equity movements for the six months ended June 30, 2025, showing a profit attributable to owners of the Company of RMB 39,416,000 and net other comprehensive expenses resulting in a total comprehensive income of RMB 33,861,000, alongside changes from dividends paid to non-controlling interests and declared dividends - Condensed Consolidated Statement of Changes in Equity Summary (Six Months Ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Balance at January 1 (Attributable to Owners of the Company) | 1,973,393 | 1,934,858 | | Profit for the Period (Attributable to Owners of the Company) | 39,416 | 1,586 | | Other Comprehensive (Expenses) Income for the Period (Attributable to Owners of the Company) | (5,555) | 10,417 | | Total Comprehensive Income for the Period (Attributable to Owners of the Company) | 33,861 | 12,003 | | Dividends Recognized as Distributed to Non-controlling Interests | (20,271) | (17,317) | | Dividends Declared | (15,228) | (15,057) | | Balance at June 30 (Attributable to Owners of the Company) | 1,992,026 | 1,922,528 |

豐城控股有限公司 Maxicity Holdings Limited 股份代號: 2295 （於開曼群島註冊成立的成員有限公司） 目錄 | 公司資料 | 2 | | --- | --- | | 財務摘要 | 4 | | 未經審核簡明綜合損益及其他全面收益表 | 5 | | 未經審核簡明綜合財務狀況表 | 6 | | 未經審核簡明綜合權益變動表 | 7 | | 未經審核簡明綜合現金流量表 | 8 | | 未經審核簡明綜合財務報表附註 | 9 | | 管理層討論及分析 | 22 | | 企業管治及其他資料 | 29 | 1 豐城控股有限公司 公司資料 董事會 執行董事 謝城基先生 （主席） 何家淇先生 （行政總裁） 獨立非執行董事 趙少玲女士 鄺志成先生 凌肇曾先生 曹炳昌先生 審核委員會 曹炳昌先生 （主席） 趙少玲女士 鄺志成先生 凌肇曾先生 公司秘書 林教宏先生 (HKICPA, ACCA) 合規主任 何家淇先生 授權代表 何家淇先生 林教宏先生 薪酬委員會 凌肇曾先生 （主席） 謝城基先生 趙少玲女士 鄺志成先生 提名委員會 謝城基先生 （主席） 趙少玲女士 鄺志成先生 凌肇曾先生 主要往來銀行 恒生銀行 ...

[Corporate Overview](index=1&type=section&id=Corporate_Overview) Provides definitions of key entities and terms, along with fundamental corporate information including registration, business activities, and ultimate parent company [Definitions](index=2&type=section&id=Definitions) This report provides definitions of key terms to ensure consistent understanding of the company, group, subsidiaries, and relevant markets and regulations - Key entities such as "Company," "Group," "HHGrace," and "Hua Hong Manufacturing," along with geographical and market terms like "China," "HKEX," and "STAR Market," are defined in the report[4](index=4&type=chunk) [Corporate Information](index=3&type=section&id=Corporate_Information) Hua Hong Semiconductor Limited, incorporated in Hong Kong in 2005, primarily engages in investment holding, with its subsidiaries focusing on semiconductor product manufacturing and trading; the ultimate parent company is Shanghai SASAC; this section lists basic corporate information including board members, committees, auditors, principal bankers, share registrars, registered office, and principal places of business - The company primarily engages in semiconductor product manufacturing and trading, with its ultimate parent company being **Shanghai SASAC**[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) Basic Corporate Information | Indicator | Details | | :--- | :--- | | Company Name | Hua Hong Semiconductor Limited | | Place of Registration | Hong Kong | | Date of Registration | January 21, 2005 | | Principal Activities | Investment Holding (Company Level), Semiconductor Product Manufacturing and Trading (Group Level) | | Ultimate Parent Company | Shanghai State-owned Assets Supervision and Administration Commission (Shanghai SASAC) | | HKEX Stock Code | 01347 | | SSE STAR Market Stock Code | 688347 | [Key Financials Summary](index=5&type=section&id=Key_Financials_Summary) Presents a concise overview of the company's key financial performance indicators for the first half of 2025, highlighting revenue, gross margin, and profit changes [Key Financial Highlights](index=5&type=section&id=Key_Financial_Highlights) In the first half of 2025, the company's revenue reached **$1.107 billion**, an **18.0% year-on-year increase**, but gross margin decreased from 29.9% in H1 2024 to **10.1%**, and profit attributable to owners of the parent significantly declined by **69.6% to $11.7 million** Key Financial Indicators for H1 2025 | Indicator | H1 2025 (Million USD) | H1 2024 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,107.0 | 938.5 | +18.0% | | Gross Margin | 10.1% | 29.9% | -19.8 percentage points | | Profit Attributable to Owners of the Parent | 11.7 | 38.5 | -69.6% | | Earnings Per Share (USD) | 0.007 | 0.022 | -68.2% | [Management Discussion & Analysis](index=6&type=section&id=Management_Discussion_Analysis) Provides an in-depth analysis of the company's financial performance, status, and cash flows, along with insights into business operations, strategic investments, and future outlook [Financial Performance](index=6&type=section&id=Financial_Performance) In the first half of 2025, the company's revenue increased by **18.0% to $1.107 billion**, and gross profit grew by **40.0% to $111.6 million**, but increased administrative expenses, other expenses, and income tax expenses, coupled with reduced profits from associates, led to a **26.7% expansion in loss for the period to $85 million** H1 2025 Key Financial Performance (vs. H1 2024) | Indicator | H1 2025 (Thousand USD) | H1 2024 (Thousand USD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,107,002 | 938,510 | 18.0% | | Cost of Sales | (995,394) | (858,815) | 15.9% | | Gross Profit | 111,608 | 79,695 | 40.0% | | Other Income and Gains | 59,916 | 71,095 | (15.7)% | | Selling and Distribution Expenses | (4,844) | (4,770) | 1.6% | | Administrative Expenses | (190,183) | (164,078) | 15.9% | | Other Expenses | (17,300) | (13,813) | 25.2% | | Finance Costs | (41,551) | (49,432) | (15.9)% | | Share of Profits of Associates | 1,243 | 2,805 | (55.7)% | | Loss Before Tax | (81,111) | (78,498) | 3.3% | | Income Tax (Expense)/Credit | (3,852) | 11,464 | (133.6)% | | Loss for the Period | (84,963) | (67,034) | 26.7% | | Attributable to Owners of the Parent | 11,702 | 38,491 | (69.6)% | [Revenue](index=6&type=section&id=Revenue) Revenue increased significantly in the first half of 2025, primarily driven by higher wafer shipments - Revenue increased by **18.0% year-on-year to $1.107 billion**, primarily driven by an increase in wafer shipments[20](index=20&type=chunk) [Cost of Sales](index=6&type=section&id=Cost_of_Sales) Cost of sales rose due to increased wafer shipments and higher depreciation costs - Cost of sales increased by **15.9% to $995.4 million**, mainly due to higher wafer shipments and increased depreciation costs[21](index=21&type=chunk) [Gross Profit](index=6&type=section&id=Gross_Profit) Gross profit improved significantly, benefiting from enhanced production line utilization despite rising depreciation - Gross profit increased by **40.0% to $111.6 million**, primarily benefiting from improved production line utilization, though partially offset by rising depreciation costs[22](index=22&type=chunk) [Other Income and Gains](index=6&type=section&id=Other_Income_and_Gains) Other income and gains decreased, mainly due to lower interest income, partially mitigated by increased government subsidies - Other income and gains decreased by **15.7% to $59.9 million**, primarily due to lower interest income, partially offset by increased government subsidies[23](index=23&type=chunk) [Administrative Expenses](index=7&type=section&id=Administrative_Expenses) Administrative expenses increased, primarily driven by higher engineering wafer expenditures - Administrative expenses increased by **15.9% to $190.2 million**, primarily due to higher engineering wafer expenditures[24](index=24&type=chunk) [Other Expenses](index=7&type=section&id=Other_Expenses) Other expenses rose, mainly influenced by increased foreign exchange losses - Other expenses increased by **25.2% to $17.3 million**, primarily due to higher foreign exchange losses[25](index=25&type=chunk) [Finance Costs](index=7&type=section&id=Finance_Costs) Finance costs decreased, mainly attributable to lower interest rates on bank borrowings - Finance costs decreased by **15.9% to $41.6 million**, primarily due to lower interest rates on bank borrowings[26](index=26&type=chunk) [Share of Profits of Associates](index=7&type=section&id=Share_of_Profits_of_Associates) Share of profits from associates declined, reflecting a decrease in their profitability - Share of profits from associates decreased by **55.7% to $1.2 million**, reflecting a decline in the profitability of associates[27](index=27&type=chunk) [Income Tax (Expense)/Credit](index=7&type=section&id=Income_Tax_Expense_Credit) Income tax shifted from a credit to an expense, mainly due to reduced reversal of dividend withholding tax - Income tax shifted from a **$11.5 million credit in H1 2024 to a $3.9 million expense in H1 2025**, primarily due to a reduced reversal of dividend withholding tax[28](index=28&type=chunk) [Loss for the Period](index=7&type=section&id=Loss_for_the_Period) The loss for the period expanded due to the combined impact of various financial factors - Considering the combined impact of various factors, the loss for the period expanded by **26.7% to $85 million**[29](index=29&type=chunk) [Financial Status](index=8&type=section&id=Financial_Status) As of June 30, 2025, the company's total net assets slightly decreased by **0.4% to $8.8736 billion**; total non-current assets grew by **4.7%**, driven by increases in property, plant, and equipment and investment properties; total current assets declined by **8.4%**, mainly due to a decrease in cash and cash equivalents; and total current liabilities decreased by **9.7%**, primarily due to reduced trade payables and payables for capital expenditures H1 2025 Financial Position Overview (vs. End of 2024) | Indicator | June 30, 2025 (Thousand USD) | December 31, 2024 (Thousand USD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 6,892,127 | 6,582,605 | 4.7% | | Total Current Assets | 5,344,953 | 5,832,503 | (8.4)% | | Total Current Liabilities | 1,410,798 | 1,562,238 | (9.7)% | | Total Non-current Liabilities | 1,952,639 | 1,946,251 | 0.3% | | Net Assets | 8,873,643 | 8,906,619 | (0.4)% | [Investment Properties](index=9&type=section&id=Investment_Properties) Investment properties increased, indicating the company's expansion in this asset category - Investment properties increased by **33.1% to $218.5 million**, reflecting the company's expansion in investment properties[31](index=31&type=chunk)[32](index=32&type=chunk) [Due from Related Parties](index=9&type=section&id=Due_from_Related_Parties) Amounts due from related parties decreased, primarily due to a reduction in trade receivables - Amounts due from related parties decreased by **21.6% to $14.4 million**, mainly due to a reduction in trade receivables[31](index=31&type=chunk)[33](index=33&type=chunk) [Other Current Assets](index=9&type=section&id=Other_Current_Assets) Other current assets increased, primarily driven by a rise in input VAT credit - Other current assets increased by **15.1% to $674.2 million**, primarily driven by an increase in input VAT credit[31](index=31&type=chunk)[34](index=34&type=chunk) [Cash and Cash Equivalents](index=9&type=section&id=Cash_and_Cash_Equivalents) Cash and cash equivalents decreased, with specific reasons requiring reference to the cash flow analysis - Cash and cash equivalents decreased by **13.7% to $3.8469 billion**, with specific reasons requiring reference to the cash flow analysis[31](index=31&type=chunk)[35](index=35&type=chunk) [Trade Payables Financial Status](index=9&type=section&id=Trade_Payables_Financial_Status) Trade payables decreased, mainly due to a reduction in amounts owed to suppliers - Trade payables decreased by **11.7% to $263.4 million**, mainly due to a reduction in amounts owed to suppliers[31](index=31&type=chunk)[36](index=36&type=chunk) [Other Current Liabilities](index=9&type=section&id=Other_Current_Liabilities) Other current liabilities decreased, primarily due to a reduction in payables for capital expenditures - Other current liabilities decreased by **19.4% to $738.5 million**, primarily due to a reduction in payables for capital expenditures[31](index=31&type=chunk)[37](index=37&type=chunk) [Interest-bearing Bank Borrowings](index=9&type=section&id=Interest_bearing_Bank_Borrowings) Total interest-bearing bank borrowings increased slightly - Total interest-bearing bank borrowings increased by **3.5% to $2.2753 billion**[38](index=38&type=chunk) [Lease Liabilities](index=9&type=section&id=Lease_Liabilities) Lease liabilities decreased, mainly due to payments made on lease obligations - Lease liabilities decreased by **16.8% to $15 million**, primarily due to payments made on lease obligations[31](index=31&type=chunk)[39](index=39&type=chunk) [Deferred Tax Liabilities](index=9&type=section&id=Deferred_Tax_Liabilities) Deferred tax liabilities significantly decreased, mainly due to the reversal of dividend withholding tax provisions from 2024 - Deferred tax liabilities significantly decreased by **66.8% to $3.6 million**, primarily due to the reversal of dividend withholding tax provisions from 2024[31](index=31&type=chunk)[40](index=40&type=chunk) [Cash Flow](index=10&type=section&id=Cash_Flow) In the first half of 2025, net cash flow from operating activities significantly increased by **59.8% to $219.8 million**, but net cash outflow from investing activities surged by **86.8% to $879.8 million**, and net cash flow from financing activities sharply declined by **97.2% to $34 million**, resulting in a net decrease of **$626.1 million** in cash and cash equivalents at period-end H1 2025 Cash Flow Overview (vs. H1 2024) | Indicator | H1 2025 (Thousand USD) | H1 2024 (Thousand USD) | Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flows Generated from Operating Activities | 219,816 | 137,550 | 59.8% | | Net Cash Flows Used in Investing Activities | (879,847) | (470,924) | 86.8% | | Net Cash Flows Generated from Financing Activities | 33,952 | 1,206,061 | (97.2)% | | Net (Decrease)/Increase in Cash and Cash Equivalents | (626,079) | 872,687 | (171.7)% | | Cash and Cash Equivalents at End of Period | 3,846,900 | 6,423,866 | (40.1)% | [Net Cash Flows Generated from Operating Activities](index=10&type=section&id=Net_Cash_Flows_Generated_from_Operating_Activities) Net cash flow from operating activities increased, primarily driven by higher revenue from customers - Net cash flow from operating activities increased by **59.8% to $219.8 million**, primarily driven by higher revenue from customers[43](index=43&type=chunk) [Net Cash Flows Used in Investing Activities](index=10&type=section&id=Net_Cash_Flows_Used_in_Investing_Activities) Net cash outflow from investing activities significantly increased, mainly due to capital investments and investments in associates - Net cash outflow from investing activities significantly increased by **86.8% to $879.8 million**, primarily used for capital investments and investments in associates[44](index=44&type=chunk) [Net Cash Flows Generated from Financing Activities](index=10&type=section&id=Net_Cash_Flows_Generated_from_Financing_Activities) Net cash flow from financing activities sharply declined, mainly due to bank loan repayments nearly offsetting new borrowings and higher interest payments - Net cash flow from financing activities sharply declined by **97.2% to $34 million**, primarily due to bank loan repayments nearly offsetting new borrowings and higher interest payments[45](index=45&type=chunk) [Financial Resources and Liquidity](index=10&type=section&id=Financial_Resources_and_Liquidity) The company adopts prudent cash and financial management strategies, primarily funding operations through internal cash flow and bank loans; as of June 30, 2025, cash and bank balances were approximately **$3.8469 billion**, a **$612.2 million decrease** from the end of 2024; the company is committed to improving financing practices, with a slight increase in total bank borrowings - The company primarily funds its operations through internally generated cash flows and bank loans, and regularly monitors its liquidity needs[46](index=46&type=chunk)[47](index=47&type=chunk) - The capital management objective is to maintain going concern ability and maximize shareholder value, with no changes to capital management objectives, policies, or procedures as of June 30, 2025[48](index=48&type=chunk) [Financial Resources](index=10&type=section&id=Financial_Resources) Cash and bank balances decreased in the first half of 2025 compared to the end of 2024 - As of June 30, 2025, cash and bank balances were approximately **$3.8469 billion**, a **$612.2 million decrease** from the end of 2024[46](index=46&type=chunk) [Liquidity](index=10&type=section&id=Liquidity) The company's policy is to regularly monitor liquidity needs to ensure sufficient cash reserves and financing commitments - The company's policy is to regularly monitor current and anticipated liquidity needs to ensure sufficient cash reserves and adequate financing commitments from major financial institutions[47](index=47&type=chunk) [Capital Management](index=11&type=section&id=Capital_Management) Capital management aims to maintain going concern ability and maximize shareholder value - The primary objective of capital management is to maintain going concern ability and a sound capital ratio to support business operations and maximize shareholder value[48](index=48&type=chunk) [Bank Loans](index=11&type=section&id=Bank_Loans) Total bank borrowings increased, with most loans denominated in RMB and a significant portion in USD Bank Loan Structure (Thousand USD) | Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Portion | 341,313 | 280,704 | | Non-current Portion | 1,933,971 | 1,917,235 | | **Total** | **2,275,284** | **2,197,939** | | Of which: Secured | 2,051,100 | 2,192,598 | | Of which: Unsecured | 224,200 | 226,565 | - Total bank borrowings increased by **3.5% to $2.2753 billion**, with most borrowings denominated in RMB and a **$666.7 million** portion denominated in USD[49](index=49&type=chunk) [Charges on Group Assets](index=12&type=section&id=Charges_on_Group_Assets) The book value of pledged assets increased, primarily driven by property, plant, and equipment Book Value of Pledged Assets (Thousand USD) | Asset Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property, Plant and Equipment | 2,303,423 | 2,064,974 | | Investment Properties | 53,203 | – | | Right-of-use Assets | 38,005 | 47,069 | | Completed Properties Held for Sale | 221,661 | – | | Properties Under Development | – | 90,275 | | **Total** | **2,616,292** | **2,202,318** | [Exposure to Fluctuations in Exchange Rates](index=12&type=section&id=Exposure_to_Fluctuations_in_Exchange_Rates) The company faces transactional foreign exchange risk, with a portion of sales and borrowings denominated in non-functional currencies - The company faces transactional foreign exchange risk, with approximately **18% of sales** and **$532 million** of interest-bearing bank borrowings denominated in non-functional currencies[52](index=52&type=chunk)[53](index=53&type=chunk) - A **5% appreciation or depreciation of the USD against the RMB** would result in a fluctuation of approximately **$1.2 million** in profit before tax[54](index=54&type=chunk) - The company currently does not engage in foreign exchange hedging, but management will continue to monitor and consider appropriate measures[55](index=55&type=chunk) [Contingent Liabilities](index=13&type=section&id=Contingent_Liabilities) As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[56](index=56&type=chunk) [RMB Share Issue](index=13&type=section&id=RMB_Share_Issue) The company was listed on the Shanghai Stock Exchange STAR Market on August 7, 2023, issuing **407.75 million ordinary shares** and raising net proceeds of **RMB 20.9207 billion**; the proceeds are primarily allocated to the Hua Hong Manufacturing (Wuxi) project, 8-inch fab optimization, specialty process technology R&D, and working capital, with no significant changes or delays in use - The company was listed on the Shanghai Stock Exchange STAR Market on August 7, 2023, issuing a total of **407,750,000 ordinary shares**[57](index=57&type=chunk) Planned Use of Proceeds from RMB Share Issue (Thousand RMB) | Planned Use | Committed Investment Amount | Unutilized Cumulative Amount as of June 30, 2025 | Estimated Time of Use | | :--- | :--- | :--- | :--- | | Hua Hong Manufacturing (Wuxi) Project | 12,500,000 | 133,837 | Before end of 2025 | | 8-inch Fab Optimization and Upgrade Project | 2,000,000 | 1,713,418 | Before end of 2025 | | Specialty Process Technology Innovation R&D Project | 2,500,000 | 1,714,429 | Before end of 2026 | | Replenishment of Working Capital | 1,000,000 | 0 | Not Applicable | - There have been no significant changes or delays in the use of proceeds, and the over-raised funds of **RMB 2.921 billion** will also be used for the Group's principal business in accordance with relevant regulations[59](index=59&type=chunk)[60](index=60&type=chunk) [Business Review](index=14&type=section&id=Business_Review) In the first half of 2025, the global semiconductor market continued to grow, with the company's 8-inch and 12-inch production lines operating at full capacity, leveraging leading technology platforms and customer relationships; the Hua Hong Manufacturing project (Fab 9) achieved mass production and contributed to sales; the company made significant progress in analog and power management, embedded non-volatile memory, standalone non-volatile memory, and power device platforms, while strengthening ecological supply chain construction and capacity expansion - In the first half of 2025, global semiconductor sales reached **$366.7 billion**, an approximate **16% year-on-year increase**, with sustained demand in application areas such as new energy vehicles and power devices[62](index=62&type=chunk) - The company's **8-inch and 12-inch production lines are operating at full capacity**, and the Hua Hong Manufacturing project (Fab 9) has achieved mass production and contributed to the company's sales, with both sales and shipments maintaining a year-on-year and quarter-on-quarter growth trend[63](index=63&type=chunk) - The analog and power management platform performed exceptionally, with **55nm eFlash MCU products** in the embedded non-volatile memory platform and **48nm NOR Flash products** in the standalone non-volatile memory platform both entering mass production[64](index=64&type=chunk) - In power devices, the deep trench super junction MOSFET platform achieved **double-digit revenue growth**, **12-inch platinum (Pt) process development was completed**, and Super IGBT technology in the Insulated Gate Bipolar Transistor (IGBT) platform entered mass production and promotion[64](index=64&type=chunk) - The company continues to advance ecological cooperation with customers in the automotive, high-end home appliance, and new energy sectors, and anticipates initiating the **second phase of Fab 9 capacity deployment ahead of schedule by the end of 2025**[65](index=65&type=chunk)[66](index=66&type=chunk) - Looking ahead to the second half, the company will continue to leverage its "8-inch + 12-inch" specialty process advantages, enhance R&D capabilities, accelerate capacity expansion, and promote the "China for China" strategy for overseas customers[67](index=67&type=chunk) [Significant Investment and Future Plans](index=15&type=section&id=Significant_Investment_and_Future_Plans) As of June 30, 2025, the company held no significant investments; future plans include a potential acquisition of equity in Shanghai Huali Microelectronics Corporation, but this transaction is subject to uncertainties and requires approval from the board, shareholders, and regulatory authorities - As of June 30, 2025, the company held no significant investments (valued at 5% or more of the company's total assets)[68](index=68&type=chunk) - The company is preparing for a potential acquisition of equity in Shanghai Huali Microelectronics Corporation, but the finalization of this transaction is uncertain and requires approval from the board, shareholders, and competent regulatory authorities[69](index=69&type=chunk) [Interim Consolidated Financial Information](index=29&type=section&id=Interim_Consolidated_Financial_Information) Presents the interim condensed consolidated financial statements, including the profit or loss, comprehensive income, financial position, changes in equity, and cash flows for the period [Interim Condensed Consolidated Statement of Profit or Loss](index=29&type=section&id=Interim_Condensed_Consolidated_Statement_of_Profit_or_Loss) In the first half of 2025, the company reported revenue of **$1.107 billion**, gross profit of **$111.6 million**, a loss for the period of **$85 million**, profit attributable to owners of the parent of **$11.7 million**, and basic and diluted earnings per share of **$0.007** H1 2025 Interim Condensed Consolidated Statement of Profit or Loss Summary (Thousand USD) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 1,107,002 | 938,510 | | Gross Profit | 111,608 | 79,695 | | Loss for the Period | (84,963) | (67,034) | | Attributable to Owners of the Parent | 11,702 | 38,491 | | Basic Earnings Per Share (USD) | 0.007 | 0.022 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=30&type=section&id=Interim_Condensed_Consolidated_Statement_of_Comprehensive_Income) In the first half of 2025, the loss for the period was **$85 million**, but other comprehensive income of **$35.1 million** from foreign exchange differences on translating overseas operations narrowed the total comprehensive loss for the period to **$49.8 million** H1 2025 Interim Condensed Consolidated Statement of Comprehensive Income Summary (Thousand USD) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss for the Period | (84,963) | (67,034) | | Exchange Differences on Translating Overseas Operations | 35,116 | (49,338) | | Total Comprehensive Loss for the Period | (49,847) | (116,743) | | Attributable to Owners of the Parent | 36,005 | 3,062 | [Interim Condensed Consolidated Statement of Financial Position](index=31&type=section&id=Interim_Condensed_Consolidated_Statement_of_Financial_Position) As of June 30, 2025, the company's total non-current assets were **$6.8921 billion**, total current assets were **$5.3450 billion**, total current liabilities were **$1.4108 billion**, and net assets were **$8.8736 billion** June 30, 2025 Interim Condensed Consolidated Statement of Financial Position Summary (Thousand USD) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Non-current Assets | 6,892,127 | 6,582,605 | | Total Current Assets | 5,344,953 | 5,832,503 | | Total Current Liabilities | 1,410,798 | 1,562,238 | | Total Non-current Liabilities | 1,952,639 | 1,946,251 | | Net Assets | 8,873,643 | 8,906,619 | | Total Equity Attributable to Owners of the Parent | 6,299,902 | 6,247,026 | [Interim Condensed Consolidated Statement of Changes in Equity](index=33&type=section&id=Interim_Condensed_Consolidated_Statement_of_Changes_in_Equity) As of June 30, 2025, total equity attributable to owners of the parent was **$6.2999 billion**, an increase from the beginning of the period, mainly influenced by profit for the period and shares issued upon exercise of share options, while non-controlling interests decreased H1 2025 Interim Condensed Consolidated Statement of Changes in Equity Summary (Thousand USD) | Indicator | January 1, 2025 | June 30, 2025 | | :--- | :--- | :--- | | Total Equity Attributable to Owners of the Parent | 6,247,026 | 6,299,902 | | Non-controlling Interests | 2,659,593 | 2,573,741 | | Total Equity | 8,906,619 | 8,873,643 | - The exercise of share options resulted in an increase in share capital of **$22.398 million**[134](index=134&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=34&type=section&id=Interim_Condensed_Consolidated_Statement_of_Cash_Flows) In the first half of 2025, net cash flow from operating activities was **$219.8 million**, net cash outflow from investing activities was **$879.8 million**, and net cash flow from financing activities was **$34 million**, resulting in cash and cash equivalents of **$3.8469 billion** at period-end, a decrease from the beginning of the period H1 2025 Interim Condensed Consolidated Statement of Cash Flows Summary (Thousand USD) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash Flows Generated from Operating Activities | 219,816 | 137,550 | | Net Cash Flows Used in Investing Activities | (879,847) | (470,924) | | Net Cash Flows Generated from Financing Activities | 33,952 | 1,206,061 | | Net (Decrease)/Increase in Cash and Cash Equivalents | (626,079) | 872,687 | | Cash and Cash Equivalents at End of Period | 3,846,900 | 6,423,866 | [Notes to Interim Financial Information](index=36&type=section&id=Notes_to_Interim_Financial_Information) Provides detailed notes to the interim condensed consolidated financial information, covering corporate details, accounting policies, segment data, revenue, expenses, and other financial disclosures [Corporate Information Notes](index=36&type=section&id=Corporate_Information_Notes) Hua Hong Semiconductor Limited, incorporated in Hong Kong on January 21, 2005, primarily engages in investment holding, with its subsidiaries focusing on semiconductor product manufacturing and trading; the ultimate parent company is Shanghai SASAC; this section also details the registered places, percentage of equity interest held by the company, and principal business activities of the Group's major subsidiaries - The company and its subsidiaries primarily engage in semiconductor product manufacturing and trading, with the ultimate parent company being **Shanghai SASAC**[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) Major Subsidiary Information | Subsidiary Name | Place of Registration | Equity Interest Held by the Company | Principal Business Activities | | :--- | :--- | :--- | :--- | | HHGrace | China/Mainland China | 100% | Semiconductor Product Production and Sales | | Hua Hong Wuxi | China/Mainland China | 51% (22.2% direct, 28.8% indirect) | Semiconductor Product Production and Sales | | Hua Hong Manufacturing Wuxi | China/Mainland China | 51% (21.9% direct, 29.1% indirect) | Semiconductor Product Production and Sales | [Basis of Preparation and Changes in Accounting Policies](index=38&type=section&id=Basis_of_Preparation_and_Changes_in_Accounting_Policies) The interim condensed consolidated financial information is prepared in accordance with HKAS 34 and should be read in conjunction with the 2024 annual consolidated financial statements; amendments to Hong Kong Financial Reporting Standards (such as HKAS 21 amendments) adopted for the first time in this period had no significant financial impact on the Group's financial information - The interim condensed consolidated financial information has been prepared in accordance with HongAS 34 "Interim Financial Reporting" and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024[144](index=144&type=chunk) - The revised Hong Kong Financial Reporting Standards (including the amendment to HKAS 21 "Lack of Exchangeability") adopted for the first time in this period had no significant financial impact on the Group's interim condensed consolidated financial information[148](index=148&type=chunk)[149](index=149&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) [Operating Segment Information](index=40&type=section&id=Operating_Segment_Information) For management purposes, the Group is organized into a single business unit primarily comprising the manufacturing and sale of semiconductor products; this section presents geographical revenue by customer location, showing that China (including Hong Kong) is the company's largest revenue source - The Group is organized as a single business unit, primarily comprising the manufacturing and sale of semiconductor products, and therefore no segment analysis is presented[153](index=153&type=chunk) Revenue by Customer Location (Thousand USD) | Region | H1 2025 | H1 2024 | | :--- | :--- | :--- | | China (including Hong Kong) | 912,132 | 751,214 | | North America | 109,434 | 93,070 | | Asia (excluding China) | 55,471 | 55,314 | | Europe | 29,965 | 38,912 | | **Total** | **1,107,002** | **938,510** | [Revenue and Other Income and Gains Notes](index=41&type=section&id=Revenue_and_Other_Income_and_Gains_Notes) In the first half of 2025, all of the company's revenue from customer contracts, totaling **$1.107 billion**, was derived from semiconductor product sales; other income and gains amounted to **$59.9 million**, primarily comprising interest income and government subsidies Revenue and Other Income and Gains Analysis (Thousand USD) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Sale of Goods (Semiconductor Products) | 1,107,002 | 938,510 | | Rental Income from Operating Leases of Investment Properties | 6,973 | 7,118 | | Interest Income | 30,913 | 54,808 | | Government Grants | 21,096 | 8,577 | | Others | 934 | 592 | | **Total Other Income and Gains** | **59,916** | **71,095** | [Loss Before Tax Notes](index=42&type=section&id=Loss_Before_Tax_Notes) The Group's loss before tax is arrived at after deducting items such as cost of inventories sold, inventory write-downs, impairment of trade receivables, and net foreign exchange differences Loss Before Tax Adjustments (Thousand USD) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cost of Inventories Sold | 995,394 | 858,815 | | Inventory Write-down/(Reversal of Write-down) | 5,098 | (8,237) | | Impairment/(Reversal of Impairment) of Trade Receivables | 1,132 | (438) | | Net Foreign Exchange Differences | (17,263) | 13,770 | [Income Tax Notes](index=43&type=section&id=Income_Tax_Notes) The Group faces varying income tax rates across different jurisdictions; mainland China subsidiaries are subject to a statutory tax rate of **25%**, but HHGrace and Hua Hong Wuxi, as "High and New Technology Enterprises," enjoy a preferential tax rate of **15%**; Hua Hong Wuxi and Hua Hong Manufacturing Wuxi also benefit from a five-year tax exemption followed by a five-year 50% tax reduction, though their tax holiday periods have not yet commenced due to accumulated losses; the Group has applied the temporary exception for Pillar Two income taxes and is assessing its potential impact - Mainland China subsidiaries are subject to a **25% corporate income tax rate**, but High and New Technology Enterprises (such as HHGrace and Hua Hong Wuxi) enjoy a **15% preferential tax rate**[165](index=165&type=chunk)[166](index=166&type=chunk) - Hua Hong Wuxi and Hua Hong Manufacturing Wuxi enjoy a **five-year tax exemption** followed by a **five-year 50% tax reduction**, but their tax holiday periods have not yet commenced[167](index=167&type=chunk) - The Group has applied the temporary exception for Pillar Two income taxes and is assessing its future potential impact on the financial statements[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) Major Components of Income Tax Expense/(Credit) (Thousand USD) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Current Income Tax Expense – China | 11,911 | 15,035 | | Current Income Tax Expense – Other Regions | 21 | 2 | | Deferred Tax | (8,080) | (26,501) | | **Total Income Tax Expense/(Credit)** | **3,852** | **(11,464)** | [Dividends Notes](index=45&type=section&id=Dividends_Notes) In the first half of 2025, the company neither declared nor paid dividends; in the first half of 2024, the company declared and paid a final dividend of **$28.876 million**, with an additional **$7.357 million** in declared but unpaid final dividends Dividend Information (Thousand USD) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Final Dividend Declared and Paid | – | 28,876 | | Final Dividend Declared but Not Paid | – | 7,357 | | **Total** | **–** | **36,233** | [Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=45&type=section&id=Earnings_Per_Share_Attributable_to_Ordinary_Equity_Holders_of_the_Parent) In the first half of 2025, basic and diluted earnings per share attributable to ordinary equity holders of the parent were both **$0.007**, a significant decrease from **$0.022** in the first half of 2024 Earnings Per Share Calculation (USD) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit Attributable to Ordinary Equity Holders of the Parent for Basic EPS Calculation (Thousand USD) | 11,702 | 38,491 | | Weighted Average Number of Ordinary Shares Issued for Basic EPS Calculation | 1,724,087,447 | 1,716,776,029 | | Basic Earnings Per Share | 0.007 | 0.022 | | Weighted Average Number of Ordinary Shares for Dilutive Effect of Share Options | 5,439,856 | 2,674,676 | | Diluted Earnings Per Share | 0.007 | 0.022 | [Property, Plant and Equipment Notes](index=47&type=section&id=Property_Plant_and_Equipment_Notes) In the first half of 2025, the Group's cost of additions to property, plant, and equipment was **$611.2 million**, and depreciation expense was **$344.0 million** - In the first half of 2025, the cost of additions to property, plant, and equipment was **$611.2 million**, an increase from **$511.8 million** in the first half of 2024[188](index=188&type=chunk) - Depreciation expense for the period was **$344.0 million**, an increase from **$258.5 million** in the first half of 2024[188](index=188&type=chunk) [Completed Properties Held For Sale And Properties Under Development](index=47&type=section&id=Completed_Properties_Held_For_Sale_And_Properties_Under_Development) In the first half of 2025, properties with a cost of **$221.7 million** were reclassified from properties under development to completed properties held for sale, as they were completed and obtained sales permits - Properties with a cost of **$221.7 million** were reclassified from properties under development to completed properties held for sale, reflecting project completion and obtaining sales permits[186](index=186&type=chunk) [Trade And Notes Receivables](index=47&type=section&id=Trade_And_Notes_Receivables) As of June 30, 2025, total trade and notes receivables amounted to **$264.3 million**, a slight decrease from the end of 2024, with the majority of amounts being not yet due Aging Analysis of Trade and Notes Receivables (Thousand USD) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Not yet due | 252,740 | 248,527 | | Overdue less than 3 months | 8,382 | 19,571 | | Overdue 3 to 6 months | 3,207 | 2,363 | | **Total** | **264,329** | **270,461** | [Trade Payables Notes](index=48&type=section&id=Trade_Payables_Notes) As of June 30, 2025, total trade payables amounted to **$263.4 million**, a decrease from the end of 2024, with most payables due within one month Aging Analysis of Trade Payables (Thousand USD) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 135,476 | 151,190 | | Over 1 month but within 3 months | 33,643 | 70,474 | | Over 3 months but within 6 months | 63,089 | 16,758 | | Over 6 months but within 12 months | 17,815 | 22,776 | | Over 12 months | 13,329 | 37,174 | | **Total** | **263,352** | **298,372** | - Trade payables are unsecured, non-interest-bearing, and typically settled within **30 to 60 days**[194](index=194&type=chunk) [Share Capital Notes](index=49&type=section&id=Share_Capital_Notes) As of June 30, 2025, the company's total issued shares were **1,727,079,598**, with share capital amounting to **$4.9609 billion**, an increase from the beginning of the period, primarily due to shares issued upon the exercise of share options Share Capital Movement (Thousand USD) | Date | Number of Issued Shares | Share Capital Amount | | :--- | :--- | :--- | | January 1, 2025 | 1,718,468,815 | 4,938,457 | | Shares Issued Upon Exercise of Share Options | 8,610,783 | 22,398 | | **June 30, 2025** | **1,727,079,598** | **4,960,855** | [Commitments](index=49&type=section&id=Commitments) As of June 30, 2025, the Group's contracted but unprovided capital commitments for property, plant, and equipment amounted to **$376.8 million**, a significant decrease from **$1.1876 billion** at the end of 2024 Contracted but Unprovided Capital Commitments (Thousand USD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property, Plant and Equipment | 376,826 | 1,187,570 | [Related Party Transactions](index=50&type=section&id=Related_Party_Transactions) The Group engages in multiple related party transactions with Hua Hong Group, its subsidiaries, and associates, including sales and purchases of goods, rental income, service fees, and expenses paid on behalf of related parties; as of June 30, 2025, amounts due from related parties were **$14.4 million**, and amounts due to related parties were **$8.56 million** - The Group has extensive related party transactions with its parent company, Hua Hong Group, its subsidiaries, and associates[198](index=198&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - Related party transactions include sales of goods to related parties, purchases of goods from related parties, rental income from related parties, service fees charged by related parties, and expenses paid on behalf of related parties[202](index=202&type=chunk) [Name and relationship](index=50&type=section&id=Name_and_relationship) This section lists the names and relationships of parties related to the Group - This section lists the names of parties with related party relationships with the Group and their relationships, primarily including Hua Hong Group and its subsidiaries, as well as the Group's associates[200](index=200&type=chunk) [Related party transactions details](index=51&type=section&id=Related_party_transactions_details) Details of major related party transactions for the first half of 2025 are presented H1 2025 Major Related Party Transactions (Thousand USD) | Transaction Type | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Sales of Goods to Related Parties | 860 | 9,505 | | Purchases of Goods from Related Parties | 23,100 | 17,071 | | Rental Income from Related Parties | 6,979 | 7,016 | | Service Fees Charged by Related Parties | 287 | 288 | | Expenses Paid on Behalf of Related Parties | 13,170 | 13,585 | [Outstanding balances with related parties](index=53&type=section&id=Outstanding_balances_with_related_parties) Outstanding balances with related parties as of June 30, 2025, are detailed, including amounts due from and to key related entities Outstanding Balances with Related Parties (Thousand USD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Amounts Due from Related Parties** | **14,360** | **18,324** | | Shanghai Huali | 12,556 | 10,074 | | Hua Hong Zhi Xin | 1,804 | 8,250 | | **Total Amounts Due to Related Parties** | **8,560** | **9,125** | | Hong Ri | 5,963 | 6,455 | | Shanghai Huali | 2,348 | 2,445 | [Compensation of key management personnel of the Group](index=53&type=section&id=Compensation_of_key_management_personnel_of_the_Group) Compensation for key management personnel of the Group for the first half of 2025 is detailed Key Management Personnel Compensation (Thousand USD) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Short-term Employee Benefits | 2,164 | 2,282 | | Contributions to Pension Schemes | 96 | 101 | | Equity-settled Share Option Expenses | – | 11 | | **Total Compensation** | **2,260** | **2,394** | [Fair Value and Fair Value Hierarchy of Financial Instruments](index=54&type=section&id=Fair_Value_and_Fair_Value_Hierarchy_of_Financial_Instruments) The fair value measurement of the Group's financial instruments uses market-based valuation techniques and is categorized into different levels based on observable and unobservable input data; the fair value of unlisted equity investments is primarily measured using Level 3 (significant unobservable inputs), with valuation multiples and illiquidity discounts as key inputs - The fair value measurement of financial instruments is the responsibility of the finance department and is reviewed and approved by the Chief Financial Officer[211](index=211&type=chunk) - The fair value of unlisted equity investments is estimated using market-based valuation techniques, based on assumptions not supported by observable market prices or rates[212](index=212&type=chunk) [Fair Value Overview](index=54&type=section&id=Fair_Value_Overview) Presents a comparison of the carrying amounts and fair values of selected financial instruments Carrying Amounts and Fair Values of Financial Instruments (Thousand USD) | Item | June 30, 2025 Carrying Amount | June 30, 2025 Fair Value | December 31, 2024 Carrying Amount | December 31, 2024 Fair Value | | :--- | :--- | :--- | :--- | :--- | | Equity Instruments Designated at FVTOCI | 290,515 | 290,515 | 289,311 | 289,311 | | Interest-bearing Bank Borrowings (Non-current) | 1,933,971 | 1,866,445 | 1,917,235 | 1,910,907 | [Fair Value Hierarchy](index=56&type=section&id=Fair_Value_Hierarchy) Financial assets measured at fair value are categorized into a hierarchy based on the observability of valuation inputs Fair Value Hierarchy of Financial Assets Measured at Fair Value (June 30, 2025, Thousand USD) | Item | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | Equity Instruments Designated at FVTOCI | – | 17,462 | 273,053 | 290,515 | - Level 3 fair value measurements primarily rely on unobservable inputs such as industry average price-to-book/price-to-sales multiples and illiquidity discounts[221](index=221&type=chunk)[224](index=224&type=chunk) - During the period, there were no transfers between Level 1 and Level 2 fair value measurements for financial assets and liabilities, and no transfers into or out of Level 3[218](index=218&type=chunk) [Share Option Scheme Notes](index=60&type=section&id=Share_Option_Scheme_Notes) The company has a share option scheme designed to incentivize eligible participants who contribute to the Group's development; as of June 30, 2025, a total of **10,722,269 share options** remained unexercised Share Option Movement | Item | Number of Share Options 2025 | Number of Share Options 2024 | | :--- | :--- | :--- | | Unexercised as of January 1 | 19,337,302 | 21,421,849 | | Exercised during the period | (8,610,783) | (739,451) | | Forfeited during the period | (4,250) | (204,426) | | **Unexercised as of June 30** | **10,722,269** | **20,477,972** | [Event After The Reporting Period](index=60&type=section&id=Event_After_The_Reporting_Period) As of the approval date of the interim condensed consolidated financial information, no significant events after the reporting period had occurred for the Group - As of the approval date of the interim condensed consolidated financial information, no significant events after the reporting period had occurred for the Group[229](index=229&type=chunk) [Approval Of The Interim Condensed Consolidated Financial Information](index=60&type=section&id=Approval_Of_The_Interim_Condensed_Consolidated_Financial_Information) The interim condensed consolidated financial information was approved and authorized for issue by the Board of Directors on August 28, 2025 - The interim condensed consolidated financial information was approved and authorized for issue by the Board of Directors on **August 28, 2025**[230](index=230&type=chunk)[232](index=232&type=chunk) [Other Disclosures](index=61&type=section&id=Other_Disclosures) Provides additional disclosures on share option schemes, directors' and substantial shareholders' interests, securities transactions, gearing ratio, employee policies, corporate governance, and audit committee review [Share Option Scheme Details](index=61&type=section&id=Share_Option_Scheme_Details) The company's share option scheme adopted on September 1, 2015, expired on September 1, 2022, with no new share options granted thereafter; as of June 30, 2025, **10,722,269 share options** remained unexercised, representing approximately **0.62%** of the company's issued shares - The company's share option scheme adopted on September 1, 2015, expired on **September 1, 2022**, and no further share options may be granted from that date[234](index=234&type=chunk) - As of June 30, 2025, the company had a total of **10,722,269 unexercised share options** under the share option scheme, representing approximately **0.62%** of the company's issued shares on that date[234](index=234&type=chunk)[235](index=235&type=chunk) Details of Unexercised Share Options as of June 30, 2025 | Participant Category | Number of Share Options | Vesting Period | Exercise Period | Exercise Price (HKD) | | :--- | :--- | :--- | :--- | :--- | | Director (Mr. Tang Junjun) | 437,500 | Note 1 | Note 5 | 18.400 | | Other Employees (Granted in 2018) | 9,566,099 | Note 3 | Note 7 | 15.056 | | Other Employees (Granted in 2019) | 718,670 | Note 4 | Note 8 | 17.952 | [Directors and Chief Executive Interests in Shares](index=64&type=section&id=Directors_and_Chief_Executive_Interests_in_Shares) As of June 30, 2025, among the company's directors and chief executive, Mr. Tang Junjun held a long position of **448,500 relevant shares**, representing **0.03%** of total interests, including **437,500 shares** under share options and **11,000 A shares** Directors' Share Interests (June 30, 2025) | Director Name | Capacity | Number of Relevant Shares Held in Long Position | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Mr. Tang Junjun | Beneficial Owner | 448,500 | 0.03% | - Mr. Tang Junjun's interests include a long position of **437,500 relevant shares** under share options and **11,000 A shares** of the company[245](index=245&type=chunk)[246](index=246&type=chunk) [Substantial Shareholders' Ownership in Shares](index=65&type=section&id=Substantial_Shareholders_Ownership_in_Shares) As of June 30, 2025, substantial shareholders, excluding directors, included Shanghai Hua Hong International Co., Ltd. (**20.13%**), Shanghai Hua Hong (Group) Co., Ltd. (**20.13%** direct and **0.07%** indirect), and Shanghai Alliance Investment Ltd. (indirectly holding **10.95%** through subsidiaries) Substantial Shareholders' Share Interests (June 30, 2025) | Substantial Shareholder | Capacity and Nature of Interest | Number of Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Shanghai Hua Hong International Co., Ltd. | Legal and Beneficial Owner | 347,605,650 | 20.13% | | Shanghai Hua Hong (Group) Co., Ltd. | Interest of Controlled Corporation | 347,605,650 | 20.13% | | Shanghai Hua Hong (Group) Co., Ltd. | Legal and Beneficial Owner | 1,198,517 | 0.07% | | Sino-Alliance International, Ltd. | Legal and Beneficial Owner | 160,545,541 | 9.30% | | Shanghai Alliance Investment Ltd. | Interest of Controlled Corporation | 188,961,147 | 10.95% | - Hua Hong Group is the company's parent company, and Shanghai Alliance Investment Ltd. indirectly holds interests in the company through two wholly-owned subsidiaries (including Sino-Alliance International)[250](index=250&type=chunk)[255](index=255&type=chunk) [Purchase, Sale or Redemption of Securities](index=66&type=section&id=Purchase_Sale_or_Redemption_of_Securities) For the six-month period ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - Neither the company nor any of its subsidiaries engaged in any purchase, sale, or redemption of listed securities during the reporting period[252](index=252&type=chunk)[254](index=254&type=chunk) [Gearing Ratio](index=67&type=section&id=Gearing_Ratio) As of June 30, 2025, the Group's gearing ratio was **-8.32%**, an improvement from **-14.94%** as of December 31, 2024 Gearing Ratio | Date | Ratio | | :--- | :--- | | June 30, 2025 | -8.32% | | December 31, 2024 | -14.94% | - The gearing ratio is calculated as net debt divided by total equity plus net debt, where net debt includes trade payables, other payables and accrued expenses, interest-bearing bank borrowings, lease liabilities, and amounts due to related parties, less cash and cash equivalents[256](index=256&type=chunk) [Employees and Remuneration Policies](index=67&type=section&id=Employees_and_Remuneration_Policies) As of June 30, 2025, the company had approximately **7,400 employees** globally, an increase from **6,700** as of June 30, 2024; the company's remuneration policy is regularly reviewed and determined with reference to market competitiveness, company performance, and individual performance - As of June 30, 2025, the company had approximately **7,400 employees** in China and overseas, an increase of approximately **10.4%** from June 30, 2024[257](index=257&type=chunk) - The company's remuneration policy is regularly reviewed and determined with reference to market competitiveness analysis, company performance, and employee competencies and job performance[257](index=257&type=chunk) [Compliance with Non-Competition and Right of First Refusal Deeds](index=67&type=section&id=Compliance_with_Non_Competition_and_Right_of_First_Refusal_Deeds) As of June 30, 2025, the company reviewed statements from controlling shareholders Hua Hong Group, Shanghai Alliance, and Yidian Group regarding compliance with non-competition and right of first refusal deeds, and independent non-executive directors confirmed that all undertakings have been complied with - The company has reviewed the undertakings from controlling shareholders Hua Hong Group, Shanghai Alliance, and Yidian Group regarding compliance with non-competition and right of first refusal deeds[261](index=261&type=chunk)[262](index=262&type=chunk) - The independent non-executive directors have reviewed the compliance and confirmed that all undertakings under the non-competition and right of first refusal deeds have been complied with by the relevant contracting parties[262](index=262&type=chunk) [Corporate Governance](index=68&type=section&id=Corporate_Governance) The company is committed to maintaining a high level of corporate governance to safeguard shareholders' interests and enhance corporate value and accountability; the Board believes that the company has complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules for the six-month period ended June 30, 2025 - The company is committed to maintaining a high level of corporate governance to safeguard shareholders' interests and enhance corporate value and accountability[263](index=263&type=chunk)[267](index=267&type=chunk) - The Board believes that the company has complied with the code provisions in the Corporate Governance Code set out in Appendix C1 of the Listing Rules for the six-month period ended June 30, 2025[268](index=268&type=chunk) [Code of Conduct for Securities Transactions by Directors](index=68&type=section&id=Code_of_Conduct_for_Securities_Transactions_by_Directors) The company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than those required by the Model Code; all directors have confirmed compliance with this code for the six-month period ended June 30, 2025 - The company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than those required by the Model Code[264](index=264&type=chunk) - All directors have confirmed their compliance with the required standards set out in the Model Code for the six-month period ended June 30, 2025[269](index=269&type=chunk) [Sufficiency of Public Float](index=68&type=section&id=Sufficiency_of_Public_Float) As of the date of this report, based on publicly available information and to the best of the directors' knowledge, the company has maintained the prescribed public float required by the Listing Rules - As of the date of this report, based on publicly available information and to the best of the directors' knowledge, the company has maintained the prescribed public float required by the Listing Rules[265](index=265&type=chunk)[270](index=270&type=chunk) [Audit Committee](index=69&type=section&id=Audit_Committee) The Audit Committee has reviewed and approved the Group's unaudited results for the six-month period ended June 30, 2025, and has discussed with management the accounting principles and practices adopted by the Group, internal controls, and financial reporting matters - The Audit Committee has reviewed and approved the Group's unaudited results for the six-month period ended June 30, 2025, and has discussed accounting principles, internal controls, and financial reporting matters with management[272](index=272&type=chunk)[274](index=274&type=chunk) [Publication of Interim Report](index=69&type=section&id=Publication_of_Interim_Report) The interim report for the six-month period ended June 30, 2025, containing information required by Appendix D2 of the Listing Rules, will be dispatched to shareholders and published on the HKEX website (www.hkexnews.hk) and the company's website (www.huahonggrace.com) in due course - The interim report will be published on the HKEX website and the company's website as required[273](index=273&type=chunk)[275](index=275&type=chunk)

[Corporate Information](index=3&type=section&id=Corporate%20Information) The Board of Directors comprises executive, non-executive, and independent non-executive directors, supported by various committees - The Board of Directors consists of executive, non-executive, and independent non-executive directors, with committees for audit, remuneration, nomination, independence, and corporate sustainability[6](index=6&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) - The company's auditor is Deloitte Touche Tohmatsu, and its stock code is **743**[12](index=12&type=chunk) [Financial Highlights](index=6&type=section&id=Financial%20Highlights) The company achieved a significant turnaround in profitability for the six months ended June 30, 2025, despite a slight revenue decrease Key Financial Performance for the Six Months Ended June 30 | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,496,296 | 2,689,407 | -7.18% | | Gross profit | 411,240 | 132,980 | +209.25% | | Profit (loss) for the period | 116,972 | (411,205) | Returned to profitability | | Profit (loss) attributable to owners | 114,418 | (404,853) | Returned to profitability | | Gross profit margin | 16% | 5% | +11 ppts | | Basic EPS | RMB0.073 | RMB(0.258) | Returned to profitability | Key Financial Position as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Total assets | 19,628,972 | 19,677,550 | -0.25% | | Net assets | 16,996,967 | 16,879,995 | +0.69% | | Current ratio | 3.59 | 4.77 | -24.74% | | Quick ratio | 3.35 | 4.53 | -26.05% | | Gearing ratio | 0.13 | 0.14 | -7.14% | [Condensed Consolidated Financial Statements](index=7&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated financial statements, including statements of profit or loss, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company returned to profitability with a profit of **RMB116,972 thousand**, driven by a **209.25% increase in gross profit** and an **18.44% decrease in cost of sales** Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,496,296 | 2,689,407 | -7.18% | | Cost of sales | (2,085,056) | (2,556,427) | -18.44% | | Gross profit | 411,240 | 132,980 | +209.25% | | Profit (loss) for the period | 116,972 | (411,205) | Returned to profitability | | Basic EPS | 0.073 | (0.258) | Returned to profitability | [Condensed Consolidated Statement of Financial Position](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total non-current assets increased by **31.43%** due to a significant rise in bank time deposits, while total current assets decreased by **26.36%** mainly from reduced cash and bank balances, with total equity showing a **0.69%** increase Summary of Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Total non-current assets | 11,686,695 | 8,891,959 | +31.43% | | Total current assets | 7,942,277 | 10,785,591 | -26.36% | | Total current liabilities | 2,212,351 | 2,263,184 | -2.19% | | Total non-current liabilities | 419,654 | 534,371 | -21.47% | | Total equity | 16,996,967 | 16,879,995 | +0.69% | - Bank time deposits with original maturity over three months increased from zero at the end of 2024 to **RMB2,948,000 thousand** (non-current) and **RMB4,552,214 thousand** (current) as of June 30, 2025[18](index=18&type=chunk) - Bank balances and cash significantly decreased from **RMB8,883,071 thousand** at the end of 2024 to **RMB1,564,157 thousand** as of June 30, 2025[18](index=18&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity increased by **1.59%**, primarily due to a **profit of RMB116,972 thousand** for the period, a significant improvement from the loss in the prior year Summary of Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended June 30) | Metric | June 30, 2025 (thousand RMB) | June 30, 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Profit (loss) attributable to owners of the Company for the period | 114,418 | (404,853) | Returned to profitability | | Total equity (end of period) | 16,996,967 | 16,731,355 | +1.59% | [Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities significantly increased by **119.46%**, while net cash used in investing and financing activities substantially decreased, resulting in a net increase of **RMB269,598 thousand** in cash and cash equivalents Summary of Condensed Consolidated Statement of Cash Flows (For the Six Months Ended June 30) | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Net cash generated from operating activities | 319,885 | 145,761 | +119.46% | | Net cash used in investing activities | (29,523) | (2,756,723) | -98.93% | | Net cash used in financing activities | (20,764) | (833,231) | -97.51% | | Net increase (decrease) in cash and cash equivalents | 269,598 | (3,444,193) | Returned to profitability | | Cash and cash equivalents at end of period | 1,564,157 | 2,273,824 | -31.21% | [Notes to the Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, covering basis of preparation, principal accounting policies, revenue, segment information, other income, other expenses, income tax, profit for the period, EPS, PPE, quarry, inventories, trade and other receivables, trade and other payables, contract liabilities, share capital, commitments, and related party transactions [1. Basis of Preparation](index=12&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with IAS 34 "Interim Financial Reporting" and applicable disclosure requirements of the HKEX Listing Rules - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[24](index=24&type=chunk)[28](index=28&type=chunk) [2. Principal Accounting Policies](index=12&type=section&id=2.%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with certain financial instruments measured at fair value, and current IFRS amendments have no significant impact - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value[25](index=25&type=chunk)[29](index=29&type=chunk) - The application of amendments to International Financial Reporting Standards in the current period had no significant impact on the Group's financial position and performance[27](index=27&type=chunk)[29](index=29&type=chunk) [3. Revenue](index=13&type=section&id=3.%20Revenue) Revenue for the period primarily derived from the sale of cement products and related products, which saw a **7.00% decrease**, while concrete sales also declined by **14.39%** Revenue Analysis (For the Six Months Ended June 30) | Product | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Sales of cement products and related products | 2,438,060 | 2,621,481 | -7.00% | | Sales of concrete | 58,236 | 67,926 | -14.39% | | **Total** | **2,496,296** | **2,689,407** | **-7.18%** | [4. Segment Information](index=13&type=section&id=4.%20Segment%20Information) The cement business segment returned to profitability with **RMB221,884 thousand**, while the concrete business segment's loss widened, resulting in a total segment profit turnaround Segment Results Analysis (For the Six Months Ended June 30) | Segment | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Cement business | 221,884 | (203,521) | Returned to profitability | | Concrete business | (17,089) | (14,924) | Loss widened | | **Total Segment Results** | **204,795** | **(218,445)** | Returned to profitability | - Segment results represent the profit earned (loss incurred) by each segment, before allocation of central administrative costs, directors' salaries, share of results of joint ventures and associates, investment income, and finance costs[37](index=37&type=chunk)[39](index=39&type=chunk) [5. Other Income](index=15&type=section&id=5.%20Other%20Income) Total other income decreased by **17.59%**, primarily due to a **51.96% reduction in government grants** and a **14.99% decrease in bank deposit interest income**, partially offset by new mining rights compensation Other Income Analysis (For the Six Months Ended June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Government grants | 3,000 | 6,245 | -51.96% | | Interest income from bank deposits | 85,369 | 100,442 | -14.99% | | Compensation income for mining rights settlement | 10,330 | – | N/A | | **Total** | **109,090** | **132,405** | **-17.59%** | [6. Other Expenses, Other Gains and Losses](index=15&type=section&id=6.%20Other%20Expenses%2C%20Other%20Gains%20and%20Losses) The company achieved a net gain of **RMB1,694 thousand** from other expenses, other gains and losses, a significant turnaround from a net loss in the prior year, mainly due to the absence of tax-related surcharges Other Expenses, Other Gains and Losses Analysis (For the Six Months Ended June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Taxes and related surcharges | – | (89,034) | -100% | | Loss on disposal of property, plant and equipment | (10,460) | (21,287) | -50.86% | | Impairment loss on assets | – | (9,620) | -100% | | Gain on changes in fair value of financial assets | 11,259 | 36,920 | -69.50% | | **Total** | **1,694** | **(83,055)** | Returned to profitability | [7. Income Tax Expense](index=16&type=section&id=7.%20Income%20Tax%20Expense) Total income tax expense decreased by **71.77%**, primarily due to a **53.84% reduction in PRC corporate income tax** and a turnaround in deferred tax from an expense to a credit Income Tax Expense Analysis (For the Six Months Ended June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | PRC corporate income tax | 56,432 | 122,250 | -53.84% | | Deferred tax | (3,489) | 65,312 | Returned to profitability | | **Total** | **52,943** | **187,562** | **-71.77%** | - The applicable tax rates for the Group's PRC subsidiaries range from **15% to 25%**[45](index=45&type=chunk)[48](index=48&type=chunk) [8. Profit for the Period](index=16&type=section&id=8.%20Profit%20for%20the%20Period) Depreciation and amortization expenses decreased by **11.27%** for the six months ended June 30, 2025 Depreciation and Amortization (For the Six Months Ended June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Depreciation and amortization | 343,857 | 387,040 | -11.27% | [9. Dividends](index=17&type=section&id=9.%20Dividends) The Board did not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board did not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: **RMB nil**)[51](index=51&type=chunk)[52](index=52&type=chunk) [10. Earnings Per Share](index=17&type=section&id=10.%20Earnings%20Per%20Share) Basic earnings per share turned positive at **RMB0.073**, reflecting a significant turnaround from a loss per share in the prior year Earnings Per Share Analysis (For the Six Months Ended June 30) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Profit (loss) attributable to owners of the Company (thousand RMB) | 114,418 | (404,853) | Returned to profitability | | Basic EPS (RMB) | 0.073 | (0.258) | Returned to profitability | [11. Property, Plant and Equipment](index=18&type=section&id=11.%20Property%2C%20Plant%20and%20Equipment) The carrying value of property, plant and equipment decreased by **1.91%**, with additions of **RMB201,374 thousand** and depreciation of **RMB296,407 thousand** during the period Carrying Value of Property, Plant and Equipment (As of) | Item | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Carrying value | 5,680,555 | 5,791,017 | -1.91% | - Additions during the period amounted to **RMB201,374 thousand**, with depreciation of **RMB296,407 thousand**[56](index=56&type=chunk) [12. Quarry](index=18&type=section&id=12.%20Quarry) The carrying value of quarry assets decreased by **3.79%**, with amortization of **RMB29,029 thousand** during the period Carrying Value of Quarry (As of) | Item | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Carrying value | 735,320 | 764,349 | -3.79% | - Amortization during the period amounted to **RMB29,029 thousand**[58](index=58&type=chunk) [13. Inventories](index=19&type=section&id=13.%20Inventories) Total inventories increased slightly by **0.89%**, with increases in parts and materials and work-in-progress, while raw materials and finished goods decreased Inventories Analysis (As of) | Item | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Parts and materials | 114,300 | 105,592 | +8.25% | | Raw materials | 161,076 | 172,385 | -6.56% | | Work-in-progress | 114,134 | 96,952 | +17.72% | | Finished goods | 147,588 | 157,435 | -6.26% | | **Total** | **537,098** | **532,364** | **+0.89%** | [14. Trade and Other Receivables](index=19&type=section&id=14.%20Trade%20and%20Other%20Receivables) Total trade and other receivables remained stable with a **0.17% increase**, as a decrease in trade receivables was offset by increases in bills receivable and other receivables Trade and Other Receivables Analysis (As of) | Item | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Trade receivables (net of allowance for credit losses) | 262,970 | 298,334 | -11.85% | | Bills receivable | 334,129 | 331,626 | +0.75% | | Other receivables | 314,702 | 280,270 | +12.29% | | **Total** | **911,801** | **910,230** | **+0.17%** | - Credit terms for cement customers range from **30 to 180 days**, and for concrete customers from **180 to 365 days**[61](index=61&type=chunk)[62](index=62&type=chunk) Aging Analysis of Trade Receivables (Net of Allowance for Doubtful Debts, As of) | Aging | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | 0 to 90 days | 138,769 | 144,563 | -3.99% | | 91 to 180 days | 38,669 | 56,739 | -31.85% | | 181 to 365 days | 65,668 | 65,168 | +0.77% | | Over 365 days | 19,864 | 31,864 | -37.65% | | **Total** | **262,970** | **298,334** | **-11.85%** | [15. Trade and Other Payables](index=21&type=section&id=15.%20Trade%20and%20Other%20Payables) Total trade and other payables decreased by **15.50%**, driven by a **31.52% reduction in trade payables and bills payable** Trade and Other Payables Analysis (As of) | Item | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Trade payables and bills payable | 255,281 | 372,719 | -31.52% | | Other payables and accrued expenses | 621,047 | 664,390 | -6.52% | | **Total** | **876,328** | **1,037,109** | **-15.50%** | - The average credit period for trade purchases is **30 to 90 days**[69](index=69&type=chunk) [16. Contract Liabilities](index=22&type=section&id=16.%20Contract%20liabilities) Total contract liabilities increased by **13.68%**, primarily due to higher receipts for cement products prior to delivery Contract Liabilities Analysis (As of) | Item | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Receipts for cement products prior to delivery | 123,525 | 108,663 | +13.68% | | Receipts for concrete prior to delivery | 233 | 201 | +15.92% | | **Total** | **123,758** | **108,864** | **+13.68%** | [17. Share Capital](index=22&type=section&id=17.%20Share%20Capital) As of June 30, 2025, the issued share capital remained unchanged at **RMB140,390,000** - As of June 30, 2025, the issued share capital was **RMB140,390,000**, with no changes during the period[71](index=71&type=chunk)[72](index=72&type=chunk) [18. Commitments](index=22&type=section&id=18.%20Commitments) Total capital expenditure commitments significantly increased by **200.31%**, mainly driven by a substantial rise in commitments for the acquisition of property, plant, and equipment Capital Expenditure Commitments (As of) | Item | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Acquisition of property, plant and equipment | 629,909 | 169,732 | +271.12% | | Investment in a PRC enterprise | 59,000 | 59,000 | 0% | | **Total** | **688,909** | **228,732** | **+200.31%** | [19. Related Party Transactions](index=23&type=section&id=19.%20Related%20Party%20Transactions) Related party transactions included sales of goods to a joint venture and transportation expenses, while directors' emoluments saw a slight decrease Transactions with Joint Ventures (For the Six Months Ended June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Sales of goods | 22,764 | – | N/A | | Purchases of goods | – | 404 | -100% | | Transportation expenses | 40,372 | 48,930 | -17.49% | Directors' Emoluments (For the Six Months Ended June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Short-term employee benefits | 2,222 | 2,300 | -3.39% | [Management Discussion and Analysis](index=23&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's operational and financial performance, market conditions, and future outlook - In the first half of 2025, China's GDP grew by **5.3%** year-on-year, with fixed asset investment increasing by **2.8%** (excluding real estate development investment, which grew by **6.6%**)[79](index=79&type=chunk)[80](index=80&type=chunk) - National cumulative cement output was **815 million tons**, a **4.3%** year-on-year decrease, with the decline narrowing by **5.7 percentage points** compared to the same period last year[79](index=79&type=chunk)[80](index=80&type=chunk) - The cement market in the middle and lower reaches of the Yangtze River exhibited 'weak demand, with prices higher in the first half and lower in the second,' while the Sichuan market continued its downward price trend, but is expected to stabilize and rebound in the second half[79](index=79&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - The Group actively participated in staggered production and industry coordination, leading to a year-on-year increase in average cement selling prices and a return to profitability in the first half[82](index=82&type=chunk) [BUSINESS AND FINANCIAL REVIEW](index=23&type=section&id=BUSINESS%20AND%20FINANCIAL%20REVIEW) In the first half of 2025, despite a complex international environment and domestic economic pressures, the Group achieved a turnaround to profitability through increased average selling prices and reduced coal costs, despite a decline in national cement demand [Revenue](index=26&type=section&id=Revenue) The Group's revenue decreased by **7%** to **RMB2,496,296 thousand**, primarily due to lower product sales volumes - The Group's revenue was **RMB2,496,296 thousand**, a **7% decrease** compared to the same period in 2024, primarily due to lower product sales volume[84](index=84&type=chunk) Sales Analysis by Region (For the Six Months Ended June 30) | Region | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Southeast Region | 1,406,488 | 1,604,298 | -12.33% | | Central China Region | 368,955 | 282,491 | +30.61% | | Southwest Region | 720,853 | 802,618 | -10.20% | | **Total** | **2,496,296** | **2,689,407** | **-7.18%** | - Sales of cement and related products accounted for **98%** of revenue (2024: **97%**), while sales of ready-mixed concrete accounted for **2%** (2024: **3%**)[85](index=85&type=chunk) [Cost of Sales and Gross Profit](index=27&type=section&id=Cost%20of%20Sales%20and%20Gross%20Profit) Cost of sales decreased by **18.44%** to **RMB2,085,056 thousand**, leading to a **209.25% increase in gross profit** and a gross profit margin of **16%**, primarily due to reduced coal costs and higher product selling prices - Cost of sales was **RMB2,085,056 thousand** (2024: **RMB2,556,427 thousand**), a **18.44% decrease**, primarily due to reduced coal costs[87](index=87&type=chunk)[93](index=93&type=chunk) - Gross profit was **RMB411,240 thousand** (2024: **RMB132,980 thousand**), with a gross profit margin of **16%** (2024: **5%**), mainly due to increased product selling prices and reduced coal costs[88](index=88&type=chunk)[93](index=93&type=chunk) [Other Income](index=27&type=section&id=Other%20Income) Other income decreased by **18%** to **RMB109,090 thousand**, mainly attributable to lower interest income - Other income was **RMB109,090 thousand**, an **18% decrease** compared to the same period in 2024, primarily due to reduced interest income[89](index=89&type=chunk)[94](index=94&type=chunk) [Other Expenses, Other Gains and Losses](index=27&type=section&id=Other%20Expenses%2C%20Other%20Gains%20and%20Losses) Net other gains and losses significantly improved to a net gain of **RMB1,694 thousand** from a net loss in the prior year, mainly due to reduced tax-related surcharges - Net other gains and losses amounted to a net gain of **RMB1,694 thousand**, a significant improvement from a net loss of **RMB83,055 thousand** in the same period of 2024, primarily due to reduced tax-related surcharges levied by tax authorities[90](index=90&type=chunk)[95](index=95&type=chunk) [Distribution and Selling Expenses, Administrative Expenses and Finance Costs](index=27&type=section&id=Distribution%20and%20Selling%20Expenses%2C%20Administrative%20Expenses%20and%20Finance%20Costs) Distribution and selling expenses decreased by **1%**, administrative expenses by **4%**, and finance costs by **43%**, driven by reductions in depreciation, packaging materials, and average borrowing rates - Distribution and selling expenses decreased by **1%** to **RMB161,844 thousand**, mainly due to reduced depreciation and packaging materials[91](index=91&type=chunk)[96](index=96&type=chunk) - Administrative expenses decreased by **4%** to **RMB143,785 thousand**, mainly due to reduced depreciation and amortization expenses[92](index=92&type=chunk)[96](index=96&type=chunk) - Finance costs decreased by **43%** to **RMB18,162 thousand**, primarily due to a decrease in the average borrowing interest rate[92](index=92&type=chunk)[96](index=96&type=chunk) [Profit for the Period](index=28&type=section&id=Profit%20for%20the%20Period) The Group's net profit significantly increased to **RMB116,972 thousand** from a loss in the prior year, primarily due to higher product selling prices and reduced coal costs - The Group's net profit was **RMB116,972 thousand**, a substantial increase from a loss of **RMB411,205 thousand** in the same period of 2024, primarily due to increased product selling prices and reduced coal costs[97](index=97&type=chunk)[101](index=101&type=chunk) [Financial Resources and Liquidity](index=28&type=section&id=Financial%20Resources%20and%20Liquidity) As of June 30, 2025, the Group maintained a sound financial and liquidity position with total assets of **RMB19,628,972 thousand** and total equity of **RMB16,996,967 thousand** - As of June 30, 2025, the Group maintained a sound financial and liquidity position, with total assets of **RMB19,628,972 thousand** and total equity of **RMB16,996,967 thousand**[98](index=98&type=chunk)[102](index=102&type=chunk) - Cash and cash equivalents amounted to **RMB1,564,157 thousand**, and time deposits with original maturity over three months totaled **RMB7,500,214 thousand**[99](index=99&type=chunk)[102](index=102&type=chunk) - The gearing ratio was **13%** (December 31, 2024: **14%**)[100](index=100&type=chunk)[102](index=102&type=chunk) [Borrowings](index=28&type=section&id=Borrowings) Total borrowings remained unchanged at **RMB1,144,000 thousand**, all unsecured, unguaranteed, fixed-rate RMB borrowings with interest rates ranging from **1.99% to 3.55%** Borrowings Maturity Analysis (As of) | Maturity | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Within one year | 1,144,000 | 1,012,000 | +13.04% | | Over one year but not exceeding two years | – | 132,000 | -100% | | **Total** | **1,144,000** | **1,144,000** | **0%** | - All borrowings are unsecured and unguaranteed fixed-rate RMB borrowings, with interest rates ranging from **1.99% to 3.55%** (December 31, 2024: **2.60% to 3.68%**)[104](index=104&type=chunk) [Capital Expenditure and Capital Commitments](index=29&type=section&id=Capital%20Expenditure%20and%20Capital%20Commitments) Capital expenditure for the six months ended June 30, 2025, was **RMB217,168 thousand**, with planned investments in production line upgrades, capacity expansion, energy saving, and environmental protection measures - Capital expenditure for the six months ended June 30, 2025, amounted to **RMB217,168 thousand**[105](index=105&type=chunk)[111](index=111&type=chunk) - The Group will invest in the renovation and upgrade of production lines and facilities, including capacity replacement, expansion of non-cement business capacity, energy saving and consumption reduction, safety and environmental protection measures, and production process improvements[105](index=105&type=chunk)[115](index=115&type=chunk) - Payments for new reserve mining rights (Jiangxi Yadong and Huanggang Yadong mines) are also required in the short term[106](index=106&type=chunk)[111](index=111&type=chunk) [Pledge of Assets](index=29&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had no pledged or mortgaged assets, consistent with the prior year - As of June 30, 2025, the Group had no pledged or mortgaged assets (December 31, 2024: **nil**)[107](index=107&type=chunk)[112](index=112&type=chunk) [Contingent Liabilities](index=29&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Board was not aware of any significant contingent liabilities - As of June 30, 2025, the Board was not aware of any significant contingent liabilities (December 31, 2024: **nil**)[108](index=108&type=chunk)[113](index=113&type=chunk) [Human Resources](index=29&type=section&id=Human%20Resources) As of June 30, 2025, the Group had **2,760 employees**, with remuneration based on performance and experience, and no share options granted - As of June 30, 2025, the Group had a total of **2,760 employees**[109](index=109&type=chunk)[114](index=114&type=chunk) - The Group remunerates employees based on their performance and experience, with compensation packages reviewed regularly[109](index=109&type=chunk)[114](index=114&type=chunk) - No share options were granted or agreed to be granted under the share option scheme as of June 30, 2025[110](index=110&type=chunk)[114](index=114&type=chunk) [Material Acquisition and Disposals of Subsidiaries and Affiliated Companies](index=30&type=section&id=Material%20Acquisition%20and%20Disposals%20of%20Subsidiaries%20and%20Affiliated%20Companies) The Group had no material acquisitions or disposals of subsidiaries and affiliated companies for the six months ended June 30, 2025 - The Group had no material acquisitions or disposals for the six months ended June 30, 2025[116](index=116&type=chunk)[121](index=121&type=chunk) [Foreign Exchange Risk Management](index=30&type=section&id=Foreign%20Exchange%20Risk%20Management) The Group's sales and purchases are primarily denominated in RMB, and management monitors foreign exchange risk, considering hedging significant exposures when necessary - The majority of the Group's sales and purchases during the reporting period were denominated in RMB[117](index=117&type=chunk)[122](index=122&type=chunk) - The RMB is not a freely convertible currency, and its exchange rate may be affected by PRC government controls, domestic and international economic developments, and political changes[118](index=118&type=chunk)[122](index=122&type=chunk) - Management continuously monitors foreign exchange risk and will consider hedging significant foreign exchange exposures when necessary[119](index=119&type=chunk)[123](index=123&type=chunk) [EVENTS AFTER THE REPORTING PERIOD](index=30&type=section&id=EVENTS%20AFTER%20THE%20REPORTING%20PERIOD) No significant events affecting the Group occurred after the reporting period up to the date of this announcement - No significant events affecting the Group occurred from the end of the reporting period up to the date of publication of this interim results announcement[120](index=120&type=chunk)[124](index=124&type=chunk) [PROSPECTS](index=31&type=section&id=PROSPECTS) For the second half of 2025, overall cement demand is expected to continue its downward trend due to declining real estate demand, with industry profitability dependent on supply-side policy enforcement and corporate self-discipline, while the Group aims for continued performance improvement through high-efficiency operations and cost reduction - The decline in real estate demand has not yet reached an inflection point in the second half, with infrastructure investment continuing to provide support, but overall cement demand is unlikely to reverse its downward trend[125](index=125&type=chunk)[127](index=127&type=chunk) - The China Cement Association issued 'Opinions on Further Promoting High-Quality Development of the Cement Industry to Combat 'Involution' and Ensure 'Stable Growth',' aiming to rectify the 'misalignment of approved and constructed capacity' and promote strict adherence to registered production capacity by cement enterprises[125](index=125&type=chunk)[127](index=127&type=chunk) - The Group will adhere to a high-efficiency, high-quality, high-service, and high-environmental protection operating strategy, leveraging its integrated storage and transportation advantages to promote cost reduction and efficiency improvement[126](index=126&type=chunk)[127](index=127&type=chunk) - The Group will actively respond to national 'anti-involution' policies, strengthen industry communication, and strive to seize opportunities in intense market competition, with performance expected to continue improving in the second half[126](index=126&type=chunk)[127](index=127&type=chunk) [Other Information](index=31&type=section&id=Other%20Information) This section covers disclosures regarding directors' and substantial shareholders' interests, share option schemes, corporate governance, committee reviews, and other statutory information [DISCLOSURE OF INTERESTS](index=32&type=section&id=DISCLOSURE%20OF%20INTERESTS) This section discloses the long positions of directors and chief executives in the shares and underlying shares of the Company and its associated corporation, Asia Cement Corporation Directors' Long Positions in Shares of the Company (As of June 30, 2025) | Director Name | Total Interest (Number of Ordinary Shares) | Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | | Mr. Hsu Hsu-Tung | 3,000,000 | 0.19% | | Mr. Hsu Hsu-Ping | 200,000 | 0.01% | | Mr. Chang Chen-Kun | 713,000 | 0.05% | | Mr. Lin Sheng-Chang | 700,000 | 0.04% | | Mr. Lee Kun-Yen | 200,000 | 0.01% | | Ms. Wu Ling-Ling | 50,000 | 0.003% | Directors' Long Positions in Shares of Associated Corporation (Asia Cement Corporation) (As of June 30, 2025) | Director Name | Total Ordinary Shares Held in Associated Corporation | Percentage of Associated Corporation's Equity | | :--- | :--- | :--- | | Mr. Hsu Hsu-Tung | 29,630,801 | 0.84% | | Mr. Hsu Hsu-Ping | 13,454,981 | 0.38% | | Mr. Lee Kun-Yen | 3,933,557 | 0.11% | | Mr. Chang Chen-Kun | 35,103 | 0.001% | | Mr. Lin Sheng-Chang | 17,368 | 0.0005% | | Ms. Wu Ling-Ling | 305,000 | 0.01% | | Dr. Wang Kuo-Ming | 320 | 0.000009% | | Mr. Wu Chun-Pang | 160,086 | 0.005% | [SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTEREST IN SHARES AND UNDERLYING SHARES](index=34&type=section&id=SUBSTANTIAL%20SHAREHOLDERS%27%20AND%20OTHER%20PERSONS%27%20INTEREST%20IN%20SHARES%20AND%20UNDERLYING%20SHARES) This section identifies substantial shareholders, Asia Cement and Far Eastern New Century, both holding **73.07%** long positions in the Company's issued share capital Substantial Shareholders' Long Positions in Shares of the Company (As of June 30, 2025) | Name | Capacity | Number of Shares | Approximate Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Asia Cement Corporation | Beneficial owner and interest of controlled corporation | 1,144,862,000 | 73.07% | | Far Eastern New Century Corporation | Beneficial owner and interest of controlled corporation | 1,144,862,000 | 73.07% | - Asia Cement beneficially owns approximately **67.73%** interest in the Company and is deemed to have an additional approximately **5.34%** interest through its controlled corporations (Asia Cement Singapore, Asia Engineering Corporation, Falcon Investments Private Limited)[136](index=136&type=chunk) - Far Eastern New Century holds approximately **21.16%** of Asia Cement's issued share capital, and together with certain companies whose voting rights it controls, holds a total of approximately **24.96%** of Asia Cement's issued share capital[136](index=136&type=chunk) [SHARE OPTION SCHEMES](index=35&type=section&id=SHARE%20OPTION%20SCHEMES) The Company's share option scheme expired in 2018, and no share options were granted under the scheme as of June 30, 2025 - The Company's share option scheme, approved and adopted on April 27, 2008, expired on **April 26, 2018**[138](index=138&type=chunk)[144](index=144&type=chunk) - No share options were granted under the share option scheme as of June 30, 2025, or up to the date of this interim report[138](index=138&type=chunk)[144](index=144&type=chunk) [CORPORATE GOVERNANCE](index=35&type=section&id=CORPORATE%20GOVERNANCE) The Company has complied with all code provisions of Part 2 of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025 - The Company has complied with all code provisions of Part 2 of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025[139](index=139&type=chunk)[145](index=145&type=chunk) [AUDIT COMMITTEE](index=35&type=section&id=AUDIT%20COMMITTEE) The Audit Committee, chaired by Mr. Cham Tak Lung, has reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, and found them to be in compliance with relevant accounting standards and disclosure requirements - The Audit Committee was established on **April 27, 2008**, with primary responsibilities including reviewing the Group's financial reporting, risk management, and internal control systems[140](index=140&type=chunk)[146](index=146&type=chunk) - The Audit Committee is chaired by Mr. Cham Tak Lung[140](index=140&type=chunk)[146](index=146&type=chunk) - The Committee has reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, and considers them to be in compliance with relevant accounting standards and requirements[141](index=141&type=chunk)[146](index=146&type=chunk) [REMUNERATION COMMITTEE](index=35&type=section&id=REMUNERATION%20COMMITTEE) The Remuneration Committee, chaired by Dr. Wang Kuo-Ming, is responsible for reviewing the remuneration packages, bonuses, and other emoluments of directors and senior management - The primary responsibilities of the Remuneration Committee include reviewing the remuneration packages, bonuses, and other emoluments of directors and senior management[142](index=142&type=chunk)[147](index=147&type=chunk) - The Remuneration Committee is chaired by Dr. Wang Kuo-Ming[142](index=142&type=chunk)[147](index=147&type=chunk) [NOMINATION COMMITTEE](index=36&type=section&id=NOMINATION%20COMMITTEE) The Nomination Committee, chaired by Mr. Hsu Hsu-Tung, is responsible for reviewing the Board's structure, size, and composition, and identifying suitable candidates for Board membership - The primary duties of the Nomination Committee are to review the structure, size, and composition of the Board, and to identify individuals suitably qualified to become Board members[148](index=148&type=chunk)[153](index=153&type=chunk) - The Nomination Committee is chaired by Mr. Hsu Hsu-Tung[148](index=148&type=chunk)[153](index=153&type=chunk) [INDEPENDENCE COMMITTEE](index=36&type=section&id=INDEPENDENCE%20COMMITTEE) The Independence Committee reviews transactions and potential conflicts of interest between the Group, Asia Cement, and Far Eastern Group, with no other ongoing relationships or potential conflicts identified during the review period - The primary responsibilities of the Independence Committee include reviewing transactions between the Group, Asia Cement, and Far Eastern Group, and assessing any potential conflicts of interest involved[149](index=149&type=chunk)[154](index=154&type=chunk) - No other ongoing relationships or potential conflicts of interest were identified during the review period[149](index=149&type=chunk)[154](index=154&type=chunk) [CORPORATE SUSTAINABILITY COMMITTEE](index=36&type=section&id=CORPORATE%20SUSTAINABILITY%20COMMITTEE) The Corporate Sustainability Committee, chaired by Dr. Wang Kuo-Ming, is responsible for promoting and strengthening corporate governance, integrity management, and developing corporate sustainability matters - The primary responsibilities of the Corporate Sustainability Committee are to promote and strengthen corporate governance and integrity management systems, advance and develop corporate sustainability matters, and oversee sustainability-related work items resolved by the Board[150](index=150&type=chunk)[155](index=155&type=chunk) - The Corporate Sustainability Committee is chaired by Dr. Wang Kuo-Ming, an independent non-executive director[151](index=151&type=chunk)[155](index=155&type=chunk) [DISCLOSURE OF INFORMATION OF DIRECTORS PURSUANT TO RULE 13.51B(1) OF THE LISTING RULES](index=36&type=section&id=DISCLOSURE%20OF%20INFORMATION%20OF%20DIRECTORS%20PURSUANT%20TO%20RULE%2013.51B%281%29%20OF%20THE%20LISTING%20RULES) As of the date of this report, no changes in directors' information requiring disclosure under Rule 13.51B(1) of the Listing Rules have occurred - No changes in directors' information requiring disclosure under Rule 13.51B(1) of the Listing Rules have occurred[152](index=152&type=chunk)[156](index=156&type=chunk) [PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES](index=37&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20LISTED%20SECU RITIES) 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 - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[157](index=157&type=chunk)[161](index=161&type=chunk) [DIVIDENDS](index=37&type=section&id=DIVIDENDS) The Board does not recommend the payment of any dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of any dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: **nil**)[158](index=158&type=chunk)[162](index=162&type=chunk) [MODEL CODE FOR SECURITIES TRANSACTIONS](index=37&type=section&id=MODEL%20CODE%20FOR%20SECURITIES%20TRANSACTIONS) All directors confirmed compliance with the Model Code for Securities Transactions as set out in Appendix C3 of the Listing Rules throughout the review period - Following specific enquiries with all directors, all directors confirmed their compliance with the Model Code throughout the review period[159](index=159&type=chunk)[163](index=163&type=chunk) [SUFFICIENCY OF THE PUBLIC FLOAT](index=37&type=section&id=SUFFICIENCY%20OF%20THE%20PUBLIC%20FLOAT) The directors confirmed that the Company maintained the sufficient public float required under the Listing Rules for the six months ended June 30, 2025 - The directors confirmed that the Company maintained the sufficient public float required under the Listing Rules for the six months ended June 30, 2025[160](index=160&type=chunk)[164](index=164&type=chunk) [APPRECIATION](index=37&type=section&id=APPRECIATION) The Board expresses sincere gratitude to the Group's management, staff, shareholders, business partners, banks, and auditors for their dedication and support - The Board extends its sincere gratitude to the Group's management and all employees for their dedication and hard work, and also thanks shareholders, business partners, banks, and auditors for their strong support during the period[165](index=165&type=chunk)

ZMJ Group Company Limited 中創智領（鄭州）工業技術集團股份有限公司 INTERIM REPORT 中 期 報 告 2025 INTERIM REPORT 中 期 報 告 2025 ZMJ Group Company Limited 中創智領（鄭州）工業技術集團股份有限公司 Corporate Profile 公司簡介 Zhengzhou Coal Mining Machinery, the predecessor of ZMJ Group Company Limited (formerly known as Zhengzhou Coal Mining Machinery Group Company Limited) (the "Company" or "ZMJ") was established in 1958, and incorporated in the People's Republic of China (the "PRC") on 6 November 2002 as a limited liability company and incorporated in the ...

2025 Interim Report 中期報告 2025 目錄 | 74 | 董事長致辭 | 103 | 中期簡明合併財務狀況表 | | --- | --- | --- | --- | | 77 | 管理層討論與分析 | 105 | 中期簡明合併權益變動表 | | 94 | 補充資料 | 106 | 中期簡明合併現金流量表 | | 100 | 獨立審閱報告 | 107 | 中期簡明合併財務資料附註 | | 101 | 中期簡明合併損益表 | 144 | 公司指引 | | 102 | 中期簡明合併綜合收益表 | | | 公司概覽 中海油田服務股份有限公司（以下簡稱「公司」，「集團」或「中海油服」）在香港聯合交易所（香港股票代碼：2883）和 上海證券交易所（上海股票代碼：601808）上市，是全球最具規模的綜合型油田服務供應商之一，服務貫穿石油及 天然氣勘探、開發及生產的各個階段。 財務摘要 | | 2023年上半年 | 2024年上半年 | 2025年上半年 | | --- | --- | --- | --- | | | 人民幣百萬元 | 人民幣百萬元 | 人民幣百萬元 | | 營業收入 | 18,850 ...

目錄 公司資料 管理層討論與分析 企業管治及其他資料 未經審核中期簡明綜合損益及其他全面收益表 未經審核中期簡明綜合財務狀況表 未經審核中期簡明綜合權益變動表 未經審核中期簡明綜合現金流量表 未經審核中期簡明綜合財務資料附註 釋義及詞彙 2 4 23 43 44 46 47 49 82 公司資料 董事 執行董事 劉小楓先生 （主席） 翟芳女士 非執行董事 王曉暉先生 劉帆女士 獨立非執行董事 馬中駿先生 張森泉先生 鍾創新先生 審核委員會 張森泉先生 （主席） 劉帆女士 鍾創新先生 薪酬委員會 馬中駿先生 （主席） 劉小楓先生 鍾創新先生 提名委員會 馬中駿先生 （主席） 劉小楓先生 鍾創新先生 翟芳女士 （於2025年8月25日獲委任） 張森泉先生 （於2025年8月25日獲委任） 環境、社會及管治委員會 劉小楓先生 （主席） 翟芳女士 張森泉先生 聯席公司秘書 翟芳女士 張瀟女士 授權代表 翟芳女士 張瀟女士 註冊辦事處 Harneys Fiduciary (Cayman) Limited 4th Floor, Harbour Place 103 South Church Street P.O. Box ...