Financial Performance - The Group recorded a profit attributable to shareholders of HK$64.87 million for the six months ended June 30, 2025, an increase of 94.9% compared to the same period in 2024[20]. - The Group's basic earnings per share was HK$0.1086[20]. - The financial services business reported an unaudited profit after tax of HK$70.75 million in the first half of 2025, representing a 38.1% increase compared to HK$51.24 million in the same period of 2024[44]. - The Group recorded an unaudited profit attributable to shareholders of HK$64.87 million for the first half of 2025, a 94.9% increase from HK$33.29 million in the same period of 2024[42]. - The profit for the period reached HK$64,868,000, more than doubling from HK$33,292,000 in 2024[146]. - Profit before taxation rose to HK$69,140,000, a substantial increase from HK$36,629,000 in the prior year[145]. - The profit for the period for the six months ended June 30, 2025, was HK$64,868,000, an increase from HK$54,404,000 for the same period in 2024, representing a growth of approximately 19.5%[152]. Assets and Liabilities - Total assets of the Group increased by 4.7% to HK$9.34 billion as of June 30, 2025, compared to HK$8.92 billion at the end of 2024[21]. - As of June 30, 2025, the Group's total liabilities amounted to HK$1,127.02 million, an increase from HK$1,096.92 million as of December 31, 2024, with a total liabilities to equity ratio of 13.7% compared to 14% previously[86][88]. - Total assets as of June 30, 2025, amounted to HK$9,344,397,000, an increase from HK$8,915,071,000 at the end of 2024[149]. - Total liabilities increased to HK$1,127,024,000 in 2025 from HK$1,096,924,000 in 2024, representing a rise of approximately 2.8%[196]. Investments and Shareholder Information - The net asset value per share reached HK$13.76, with 80.9% derived from investments in Xiamen International Bank[24]. - As of June 30, 2025, Samba Limited holds 144,885,000 shares, representing approximately 24.26% of the issued share capital of the Company[122]. - Guixin Limited and Fujian Investment & Development Group Co., Ltd. collectively hold 355,552,883 shares, accounting for approximately 59.53% of the issued share capital[122]. - The public float of the Company was approximately 24.40% as of June 30, 2025, below the minimum required percentage of 25%[142]. - Following the disposal of 3,800,000 shares by Citychamp, the public float increased to approximately 25.03%, restoring compliance with the minimum requirement[143]. Insurance Operations - Min Xin Insurance maintained a Financial Strength Rating of B++ and a Long-Term Issuer Credit Rating of bbb+ with a stable outlook[31]. - The insurance service recorded a surplus of HK$13.43 million for the six months ended June 30, 2025, an increase of 157.8% compared to HK$5.21 million in the same period of 2024[32]. - Min Xin Insurance recorded insurance revenue of HK$90.46 million, a decrease of 1.6% compared to HK$91.91 million in the same period of 2024[59]. - Min Xin Insurance's profit after tax increased by 120.1% to HK$8.76 million, up from HK$3.98 million in the same period of 2024[60]. Economic Outlook and Strategic Focus - The Group is focused on prudent business development and diversifying income sources amid ongoing global economic volatility[18]. - The overall economic outlook remains uncertain due to geopolitical risks and international tariff issues, but the Group's performance improved from the appreciation of the Renminbi against the Hong Kong dollar[41]. - The Group is optimistic about long-term growth prospects due to early signs of recovery in capital markets[36]. Segment Performance - The financial services segment includes banking operations in Mainland China, Hong Kong, and Macau, as well as microcredit services in Mainland China[186]. - The insurance segment encompasses general insurance operations in Hong Kong and Macau[186]. - Property investment segment involves leasing high-quality office space in Mainland China[186]. - Strategic investments include A-share investments in Huaneng Power International and high-tech projects[186]. Cash Flow and Financing Activities - Net cash inflow from operating activities for the six months ended June 30, 2025, was HK$55,247,000, compared to a net outflow of HK$21,243,000 in the same period of 2024[152]. - The company reported a net cash outflow from investing activities of HK$236,415,000 for the six months ended June 30, 2025, a significant decrease from a net inflow of HK$290,102,000 in 2024[154]. - The company obtained bank loans totaling HK$756,330,000 during the six months ended June 30, 2025, compared to HK$233,370,000 in the same period of 2024[154]. - The company paid dividends amounting to HK$53,753,000 during the reporting period[151]. Governance and Compliance - The Group confirmed compliance with the Corporate Governance Code throughout the six months ended June 30, 2025[106]. - The Audit Committee, consisting of three Independent Non-executive Directors, reviewed the Group's accounting principles and risk management practices[108][111]. - The Company’s corporate governance practices were reviewed, ensuring compliance with the Securities and Futures Ordinance[120].

目 錄 2 業績概覽 3 管理層討論及分析 9 中期股息 10 簡明綜合損益及其他全面收益表 12 簡明綜合財務狀況表 14 簡明綜合權益變動表 16 簡明綜合現金流量表 17 簡明綜合財務報表附註 33 董事及最高行政人員之證券權益 35 其他人士於股份及相關股份之權益 36 企業管治及其他資料 業績概覽 英皇鐘錶珠寶有限公司（「本公司」）之董事會（「董事會」或「董事」）提呈本公司及 其附屬公司（統稱「本集團」）截至2025年6月30日止6個月（「本期間」）之未經審 核簡明綜合業績。 | | 截至6月30日止6個月 | | 變動 | | --- | --- | --- | --- | | | 2024年 （未經審核） | 2025年 （未經審核） | | | | 百萬港元 | 百萬港元 | | | 總收入 | 2,597 | 2,794 | + 7.6% | | 毛利 | 780 | 840 | + 7.7% | | 毛利率 | 30 0% . | 30.1% | + 0.1百分點 | | 經調整EBITD* | 282 | 297 | + 5.3% | | 淨利潤 | 185 | 194 | + 4.9% ...

[Financial Performance Overview](index=3&type=section&id=%E8%B2%A1%E5%8B%99%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%BD) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group's loss narrowed year-on-year, driven by revenue growth and controlled administrative expenses, despite fair value changes and finance costs Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (RMB K) | 2024 (RMB K) | | :--- | :--- | :--- | | Revenue | 36,039 | 34,383 | | Gross Profit | 13,212 | 11,971 | | Operating Loss | (5,182) | (6,745) | | Loss Before Tax | (5,931) | (7,673) | | Loss for the Period | (7,172) | (8,909) | | Loss for the Period Attributable to Owners of the Company | (4,803) | (8,665) | | Basic Loss Per Share (RMB cents) | (0.51) | (0.96) | | Diluted Loss Per Share (RMB cents) | (0.38) | (1.00) | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's total assets slightly increased, net current assets decreased, but cash and bank balances remained robust, and total equity slightly reduced Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB K) | December 31, 2024 (RMB K) | | :--- | :--- | :--- | | Non-current Assets | 54,750 | 54,248 | | Current Assets | 195,914 | 196,378 | | Current Liabilities | 138,888 | 133,611 | | Net Current Assets | 57,026 | 62,767 | | Total Assets Less Current Liabilities | 111,776 | 117,015 | | Net Assets | 99,456 | 103,534 | | Total Equity | 99,456 | 103,534 | - Cash and bank balances increased from **RMB 109,256 K** on December 31, 2024, to **RMB 110,858 K** on June 30, 2025[7](index=7&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=7&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 H1 2025, equity attributable to owners changed due to period loss and non-controlling interest contributions, resulting in a slight overall equity decrease - Equity attributable to owners of the Company decreased from **RMB 123,452 K** on January 1, 2025, to **RMB 119,703 K** on June 30, 2025[9](index=9&type=chunk) - Loss attributable to owners of the Company for the period was **RMB 4,803 K**[9](index=9&type=chunk) - Non-controlling interests contributed **RMB 1,481 K** during the period[9](index=9&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) During the reporting period, the Group saw a significant reduction in net cash outflow from operating activities, net cash inflow from investing activities, net cash outflow from financing activities, and an increase in cash and cash equivalents at period-end Key Data from Condensed Consolidated Statement of Cash Flows | Metric | 2025 (RMB K) | 2024 (RMB K) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (1,989) | (12,145) | | Net Cash From Investing Activities | 74 | 704 | | Net Cash (Used in)/From Financing Activities | (1,255) | 1,534 | | Net Decrease in Cash and Cash Equivalents | (3,170) | (9,907) | | Cash and Cash Equivalents at June 30 | 110,858 | 118,770 | [Notes to the Financial Statements](index=9&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [1. General Information](index=9&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) The Company, incorporated in the Cayman Islands and listed on GEM, primarily engages in investment holding, with subsidiaries providing funeral services in China, Taiwan, Hong Kong, Vietnam, and selling biotech instruments and electronics in Hong Kong - The Company was incorporated in the Cayman Islands on February 24, 2005, and listed on GEM of the Stock Exchange on September 9, 2009[11](index=11&type=chunk) - The Group's principal activities include providing funeral and related services in China, Taiwan, and Hong Kong, selling burial plots and headstones and providing cemetery maintenance services in Vietnam, and selling high-end biotechnology instruments and other electronic products in Hong Kong[11](index=11&type=chunk) [2. Basis of Preparation](index=9&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) Interim financial statements are prepared under GEM Listing Rules and HKFRS, using consistent 2024 accounting policies, based on historical cost, with some assets/liabilities measured at fair value - The financial statements are prepared in accordance with Chapter 18 of the GEM Listing Rules and Hong Kong Financial Reporting Standards (including HKAS 34 'Interim Financial Reporting')[12](index=12&type=chunk) - The same accounting policies are adopted as in the 2024 annual financial statements, except for changes in accounting policies expected to be reflected in the annual financial statements for the year ending December 31, 2025[13](index=13&type=chunk) - The financial statements are presented in RMB, with all values rounded to the nearest thousand[15](index=15&type=chunk) - These unaudited condensed consolidated interim financial statements have not been audited by the Company's auditors but have been reviewed by the Company's Audit Committee[15](index=15&type=chunk) [3. Revenue and Segment Information](index=12&type=section&id=3.%20%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's revenue primarily derives from funeral services, segmented by business type and region, with China as the main source and a 3.9% year-on-year growth in funeral service revenue, while Vietnam operations are being terminated due to declining market demand Major Revenue Categories | Revenue Category | 2025 (RMB K) | 2024 (RMB K) | | :--- | :--- | :--- | | Funeral and Cremation Services | 34,298 | 33,007 | | Funeral Arrangement and Consulting Services | 1,125 | 1,376 | | Sale of Burial Plots and Headstones | 616 | – | | **Total Revenue** | **36,039** | **34,383** | - The Group has two reportable segments: funeral services (including funeral-related services, cremation services, and sale of burial plots and headstones) and biotechnology and other businesses (selling biotechnology instruments and electronic products)[19](index=19&type=chunk) Revenue by Region | Region | 2025 (RMB K) | 2024 (RMB K) | | :--- | :--- | :--- | | China | 34,298 | 33,007 | | Taiwan | 626 | 962 | | Hong Kong | 499 | 414 | | Vietnam | 616 | – | | **Total** | **36,039** | **34,483** | [4. Other Income and Net Other Gains](index=19&type=section&id=4.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Net other income and gains significantly increased during the period, primarily due to higher gains from disposal of financial assets measured at fair value through profit or loss Details of Other Income and Net Other Gains | Item | 2025 (RMB K) | 2024 (RMB K) | | :--- | :--- | :--- | | Interest Income from Bank and Financial Institution Deposits | 216 | 144 | | Interest Income from Loans to Independent Companies | 54 | – | | Rental Income from Investment Properties | 559 | 574 | | Gain on Disposal of Financial Assets Measured at Fair Value Through Profit or Loss | 2,234 | 564 | | Miscellaneous Income | 294 | 38 | | **Total** | **3,395** | **1,321** | - Gain on disposal of financial assets measured at fair value through profit or loss significantly increased from **RMB 564 K** in 2024 to **RMB 2,234 K** in 2025[31](index=31&type=chunk) [5. Loss Before Tax](index=20&type=section&id=5.%20%E9%99%A4%E7%A8%85%E5%89%8D%E虧%E6%90%8D) The Group's loss before tax narrowed year-on-year, mainly due to reduced finance costs and relatively stable staff costs and depreciation and amortization Details of Finance Costs | Item | 2025 (RMB K) | 2024 (RMB K) | | :--- | :--- | :--- | | Interest on Lease Liabilities | 617 | 653 | | Interest on Bank Borrowings | 48 | 192 | | Interest on Convertible Bonds Designated at Fair Value Through Profit or Loss | 84 | 83 | | **Total** | **749** | **928** | - Staff costs (including directors' emoluments) were **RMB 14,679 K** (2024: **RMB 14,658 K**)[32](index=32&type=chunk) - Depreciation and amortization amounted to **RMB 3,613 K** (2024: **RMB 3,443 K**)[32](index=32&type=chunk) [6. Income Tax Expense](index=21&type=section&id=6.%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense for the period primarily stemmed from China corporate income tax, with no tax provisions made for Hong Kong, Cayman Islands, Samoa, BVI, Taiwan, and Vietnam due to absence of taxable profits - China corporate income tax expense was **RMB 1,241 K** (2024: **RMB 1,236 K**)[34](index=34&type=chunk) - The Group had no taxable profits in Hong Kong, Cayman Islands, Samoa, British Virgin Islands, Taiwan, and Vietnam, thus no tax provisions were made[34](index=34&type=chunk)[37](index=37&type=chunk) [7. Loss Per Share](index=22&type=section&id=7.%20%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) Both basic and diluted loss per share improved during the period, primarily due to a reduction in loss attributable to owners of the Company Basic Loss Per Share | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company (RMB K) | (4,803) | (8,665) | | Weighted Average Number of Ordinary Shares | 94,500,000 | 90,181,300 | | **Basic Loss Per Share (RMB cents)** | **(0.51)** | **(0.96)** | Diluted Loss Per Share | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company for Diluted Loss Per Share Calculation (RMB K) | (4,104) | (9,599) | | Weighted Average Number of Shares for Diluted Loss Per Share Calculation | 108,912,698 | 95,827,919 | | **Diluted Loss Per Share (RMB cents)** | **(0.38)** | **(1.00)** | [8. Dividends](index=24&type=section&id=8.%20%E8%82%A1%E6%81%AF) The Directors do not recommend payment of an interim dividend for the current or prior periods - The Directors do not recommend payment of an interim dividend for the current or prior periods[41](index=41&type=chunk) [9. Property, Plant and Equipment](index=24&type=section&id=9.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) Property, plant and equipment acquisitions increased during the period, alongside some disposals, with freehold land and buildings accounted for at fair value - Cost of property, plant and equipment acquired during the period was approximately **RMB 143 K** (prior period: **RMB 52 K**)[42](index=42&type=chunk) - Carrying amount of property, plant and equipment disposed of during the period was approximately **RMB 430 K** (prior period: **RMB 560 K**)[42](index=42&type=chunk) - The Group's freehold land and buildings held for own use are accounted for at fair value[43](index=43&type=chunk) [10. Investment Properties](index=25&type=section&id=10.%20%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD) The Group's investment properties are measured at fair value, determined by Directors with reference to recent market transactions - The Group's investment properties are measured at fair value[45](index=45&type=chunk) [11. Financial Assets Measured at Fair Value Through Profit or Loss](index=25&type=section&id=11.%20%E6%8C%89%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%E8%A8%88%E9%87%8F%E4%B9%8B%E8%B2%A1%E5%8B%99%E8%B3%87%E7%94%A2) The Group's financial assets, primarily Taiwan mutual funds/unit trusts and offshore-listed equity securities/ETFs, saw a slight decrease in total fair value but a significant increase in disposal gains Financial Assets Measured at Fair Value Through Profit or Loss | Item | June 30, 2025 (RMB K) | December 31, 2024 (RMB K) | | :--- | :--- | :--- | | Mutual Funds/Unit Trusts Established in Taiwan | 32,096 | 31,657 | | Equity Securities Listed Outside Hong Kong for Trading Purposes | 6,456 | 7,519 | | Exchange Traded Funds Listed Outside Hong Kong for Trading Purposes | 509 | 197 | | **Total** | **39,061** | **39,373** | - A net unrealized loss of approximately **RMB 80 K** was recognized during the period (prior period: net unrealized gain of approximately **RMB 79 K**)[48](index=48&type=chunk) [12. Trade and Other Receivables](index=27&type=section&id=12.%20%E8%B2%A3%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) The Group's total trade and other receivables slightly decreased, with net trade receivables from customer contracts falling, but amounts due from securities brokers remaining stable Details of Trade and Other Receivables | Item | June 30, 2025 (RMB K) | December 31, 2024 (RMB K) | | :--- | :--- | :--- | | Trade Receivables from Customer Contracts, Net | 332 | 527 | | Prepayments, Deposits Paid and Other Receivables | 30,105 | 31,101 | | Amounts Due from Securities Brokers | 12,634 | 12,695 | | **Total** | **43,071** | **44,323** | - For funeral arrangement services, the average credit period granted to non-funeral service contract customers is **45 days**[50](index=50&type=chunk) [13. Trade and Other Payables and Deposits Received](index=29&type=section&id=13.%20%E8%B2%A3%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E5%B7%B2%E6%94%B6%E6%8C%89%E9%87%91) The Group's total trade and other payables and deposits received increased, mainly driven by growth in other payables and accruals Details of Trade and Other Payables and Deposits Received | Item | June 30, 2025 (RMB K) | December 31, 2024 (RMB K) | | :--- | :--- | :--- | | Trade Payables | 1,945 | 2,256 | | Other Payables and Accruals | 15,541 | 10,249 | | Deposits Received | 338 | 338 | | **Total** | **17,824** | **12,843** | - The average credit period for purchases of goods is **30 days**[55](index=55&type=chunk) [14. Capital and Reserves](index=31&type=section&id=14.%20%E8%B3%87%E6%9C%AC%E5%8F%8A%E5%84%B2%E5%82%99) Share capital structure adjusted due to consolidation, changing par value from HKD0.1 to HKD1.0, reducing issued shares while maintaining capital amount; share option exercise price and shares issuable also adjusted Issued and Fully Paid Ordinary Shares | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of Shares | 94,500,000 | 94,500,000 | | Par Value Per Share | 1.0 HKD | 1.0 HKD | | Amount (RMB K) | 87,489 | 87,489 | - On October 14, 2024, every ten issued and unissued shares of **HKD0.1** par value were consolidated into one consolidated share of **HKD1.0** par value[57](index=57&type=chunk) - The exercise price of share options was adjusted from **HKD0.137** per option to **HKD1.37**, and the number of shares issuable was adjusted from **18,532,000** shares to **1,853,200** shares[66](index=66&type=chunk) - As of June 30, 2025, the total number of outstanding share options was **1,853,200**[64](index=64&type=chunk)[67](index=67&type=chunk) [15. Fair Value Measurement of Financial Instruments](index=36&type=section&id=15.%20%E8%B2%A1%E5%8B%99%E5%B7%A5%E5%85%B7%E4%B9%8B%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E9%87%8F) The Group's financial instruments are classified by fair value hierarchy, with financial assets measured at fair value through profit or loss in Level 1 and convertible bonds in Level 3 Financial Instruments Measured at Fair Value | Item | June 30, 2025 Fair Value (RMB K) | Fair Value Hierarchy Level | | :--- | :--- | :--- | | Financial Assets Measured at Fair Value Through Profit or Loss | 39,061 | Level 1 | | Convertible Bonds | 12,929 | Level 3 | - Level 1 fair value measurements are based solely on unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date[70](index=70&type=chunk) - Level 3 fair value measurements are based on significant unobservable inputs[70](index=70&type=chunk) [16. Capital Commitments](index=38&type=section&id=16.%20%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) The Group's capital commitments at period-end primarily involve investments in associates, financial assets measured at fair value through profit or loss, and intangible assets Contracted Capital Expenditure Not Provided For | Item | June 30, 2025 (RMB K) | December 31, 2024 (RMB K) | | :--- | :--- | :--- | | Investment in an Associate | 2,460 | 2,460 | | Financial Assets Measured at Fair Value Through Profit or Loss | 2,000 | 2,000 | | Intangible Assets | 225 | 225 | | **Total** | **4,685** | **4,685** | [17. Related Party Transactions](index=38&type=section&id=17.%20%E9%97%9C%E9%80%A3%E6%96%B9%E4%BA%A4%E6%98%93) The Group engages in various related party transactions with key management, their close relatives, and director-controlled entities, including remuneration, land trust deeds, trademark licenses, bank loan guarantees, and joint venture capital injections - Key management personnel emoluments were **RMB 3,680 K** (2024: **RMB 3,677 K**)[75](index=75&type=chunk) - Emoluments of close family members of key management personnel were **RMB 605 K** (2024: **RMB 579 K**)[76](index=76&type=chunk) - Mr. Liu provided guarantees for the Group's bank loans of approximately **RMB 629 K**[77](index=77&type=chunk) - Nanyue Tianche (ultimately owned approximately **71.25%** by Mr. Xu Jianchun and his associates) contributed **RMB 1,481 K** to the paid-up capital of Zhongke Zhenhui during the period[78](index=78&type=chunk) Amounts Due to Directors | Director Name | June 30, 2025 (RMB K) | December 31, 2024 (RMB K) | | :--- | :--- | :--- | | Mr. Liu | 2,190 | 2,390 | | Mr. Xu Jianchun | 477 | 517 | | Mr. Qi Zhongwei | 14 | 14 | | Ms. Hu Zhaohui | 14 | 14 | | **Total** | **2,695** | **2,935** | [18. Events After the Reporting Period](index=42&type=section&id=18.%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Post-reporting period, the Company completed the sale of 100% equity in Junqun Development Co., Ltd. to exit Vietnam operations, streamline business, and reallocate resources to other promising segments - On July 30, 2025, the Company entered into a sale and purchase agreement with Hao Shan Limited to dispose of the entire issued share capital of Junqun Development Co., Ltd. for **HKD 10,000,000**[82](index=82&type=chunk) - The disposal aims to terminate the Disposal Group's operations in Vietnam, streamline business, and reallocate resources more effectively to other business segments with better growth prospects[83](index=83&type=chunk) - As of the date of this report, the disposal has been completed[83](index=83&type=chunk) [Management Discussion and Analysis](index=44&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Economic Environment and Market Conditions](index=44&type=section&id=%E7%B6%93%E6%BF%9F%E7%92%B0%E5%A2%83%E5%8F%8A%E5%B8%82%E5%A0%B4%E7%8B%80%E6%B3%81) Global business faces volatility from geopolitical tensions, trade shifts, high rates, and property adjustments; China's H1 GDP grew 5.3% with resilience, while post-pandemic consumer shifts to value-oriented products prompt Group service adjustments - The global economy is deeply fragmented, with weakening growth momentum and increasing instability and uncertainty[86](index=86&type=chunk) - In the first half of 2025, China's GDP reached **RMB 66,053.6 billion**, growing **5.3%** year-on-year[86](index=86&type=chunk) - Post-pandemic consumer behavior is adjusting, with increasing focus on value-oriented products, and the Group is actively responding to market demand through customized services[86](index=86&type=chunk) [Group Performance Overview](index=45&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%BD) Despite China's economic shifts, the Group demonstrated resilience with continued growth in some regional segments, driven by strategic responses to market changes; China's consumer market shows robust long-term prospects, with digital and health consumption as new highlights aligning with the Group's strategy - The Group demonstrated resilience for the six months ended June 30, 2025, with sustained growth in some regional segments[87](index=87&type=chunk) - China's consumer market maintains robust long-term prospects, supported by continuous improvements in living standards and stable income growth, driving consumption structure upgrades[87](index=87&type=chunk) - Emerging consumption highlights like digital and health consumption underscore growing demand for quality, aligning closely with the Group's long-term strategic objectives[87](index=87&type=chunk) [Strategic Focus: Biotechnology Industry](index=45&type=section&id=%E6%88%B0%E7%95%A5%E9%87%8D%E9%BB%9E%EF%BC%9A%E7%94%9F%E7%89%A9%E7%A7%91%E6%8A%80%E8%A1%8C%E6%A5%AD) China's biotechnology sector is thriving with policy support, and the Group has established a specialized investment team to accelerate expansion in biomedicine, healthcare, and life science instruments - China's biotechnology industry is flourishing, driven by regulatory reforms and increased government funding[88](index=88&type=chunk) - Strategic initiatives like 'Healthy China 2030' and the '14th Five-Year Plan for Biotechnology Development' promote innovation and commercialization in biomedicine[88](index=88&type=chunk) - The Group has meticulously assembled a professional investment team, comprising biotechnology experts, seasoned investment and research professionals, and highly qualified specialists in management, finance, and law, to accelerate expansion in this sector[89](index=89&type=chunk) [Outlook and Future Strategies](index=46&type=section&id=%E5%B1%95%E6%9C%9B%E8%88%87%E6%9C%AA%E4%BE%86%E7%AD%96%E7%95%A5) The Group will continuously enhance operational efficiency, forge strategic partnerships, and closely monitor macroeconomic conditions and consumer confidence; its biotech investment platform, established in 2021, has generated synergies with existing businesses, balancing short-term recovery with long-term innovation investments - The Group will continue to focus on enhancing operational efficiency and forging strategic partnerships[90](index=90&type=chunk) - The Group's dedicated comprehensive investment platform, established in 2021 and focused on biotechnology development, has generated significant synergies with existing businesses through numerous strategic investments[90](index=90&type=chunk) - The Company will strategically balance short-term recovery measures with long-term investments in innovation and efficiency to enhance overall returns for the Company and its shareholders[90](index=90&type=chunk) [Segment Revenue Analysis](index=46&type=section&id=%E5%88%86%E9%83%A8%E6%94%B6%E7%9B%8A%E5%88%86%E6%9E%90) The Group's revenue primarily stems from China's funeral business, growing 3.9% year-on-year; Taiwan's performance declined, Hong Kong improved, and Vietnam operations were terminated and sold due to decreased market demand Revenue by Region | Region | 2025 (RMB K) | 2025 (%) | 2024 (RMB K) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | China | 34,298 | 95.2% | 33,007 | 96.0% | | Taiwan | 626 | 1.7% | 962 | 2.8% | | Hong Kong | 499 | 1.4% | 414 | 1.2% | | Socialist Republic of Vietnam | 616 | 1.7% | – | – | | **Total** | **36,039** | **100.0%** | **34,383** | **100.0%** | - China business revenue was approximately **RMB 34,298 K**, an increase of approximately **3.9%** from the prior period, primarily from funeral, cremation, and cemetery services[92](index=92&type=chunk) - Taiwan business revenue was approximately **RMB 626 K**, a decrease from **RMB 962 K** in the prior period; Hong Kong business revenue increased to **RMB 499 K**[93](index=93&type=chunk) - Vietnam operations strategically suspended sales activities due to a significant decline in market demand, and the decision to terminate this business has been made, with the related disposal completed[94](index=94&type=chunk) [Financial Review](index=48&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's revenue grew 4.8% year-on-year, gross profit increased 10.4%, and gross margin rose to 36.7%, driven by strategic adjustments in funeral services and effective cost management; sales expenses increased due to marketing, administrative expenses decreased, finance costs fell, and loss attributable to owners significantly narrowed - The Group's revenue increased by approximately **4.8%** from approximately **RMB 34,383 K** in the prior period to approximately **RMB 36,039 K** in the current period[96](index=96&type=chunk) - Gross profit was approximately **RMB 13,212 K**, a year-on-year increase of approximately **10.4%**; gross margin was approximately **36.7%**, expanding by **1.9 percentage points** from **34.8%** in the prior period[96](index=96&type=chunk) - Net other income and gains were approximately **RMB 3,395 K**, more than double the prior period, mainly due to increased gains from disposal of financial assets measured at fair value through profit or loss[97](index=97&type=chunk) - Administrative expenses decreased by approximately **1.3%** to approximately **RMB 19,225 K**, and finance costs decreased to approximately **RMB 749 K**[98](index=98&type=chunk) - Loss attributable to owners of the Company was approximately **RMB 4,803 K** (prior period: **RMB 8,665 K**)[99](index=99&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=51&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) Equity attributable to owners of the Company slightly decreased, but liquidity remains robust with strong cash and bank balances; surplus cash is invested in listed equity securities and ETFs to enhance shareholder value, with bank borrowing and convertible bond terms and conversion status also disclosed - Equity attributable to owners of the Company decreased by approximately **3.0%** to approximately **RMB 119,703 K**[100](index=100&type=chunk) - The Group maintained strong cash and bank balances of approximately **RMB 110,858 K**[100](index=100&type=chunk) - The Group's current bank borrowings were approximately **RMB 1,348 K**, and non-current bank borrowings were approximately **RMB 524 K**[101](index=101&type=chunk) - The principal amount of convertible bonds is **HKD 18,160,000**, bearing interest at **1%** per annum, with a conversion price adjusted to **HKD 1.26** per consolidated share[101](index=101&type=chunk)[103](index=103&type=chunk) - During the period, no convertible bonds were converted by holders, nor did the Company redeem any portion of the convertible bonds[102](index=102&type=chunk) [Financial Investments and Significant Holdings](index=53&type=section&id=%E8%B2%A1%E5%8B%99%E6%8A%95%E8%B3%87%E5%8F%8A%E6%89%80%E6%8C%81%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) The Group invested approximately RMB 6,965,000 in offshore-listed equity securities and ETFs; the portfolio value decreased, but new investments and disposals were active, recognizing net unrealized and realized gains; the Group collaborates with an investment company to mitigate risk and maximize shareholder returns - As of June 30, 2025, the Group invested approximately **RMB 6,965 K** in certain equity securities and exchange-traded funds listed outside Hong Kong for trading purposes[105](index=105&type=chunk) - During the period, the total investment portfolio value decreased by approximately **RMB 751 K**, with new investments totaling approximately **RMB 57,604 K** and disposals totaling approximately **RMB 60,509 K**[106](index=106&type=chunk) - Other changes in the investment portfolio during the period included net unrealized and realized gains of approximately **RMB 2,154 K** from financial assets measured at fair value through profit or loss[106](index=106&type=chunk) - The Group established a partnership with a reputable investment company specializing in venture capital and investment advisory, aiming to reduce concentration risk, effectively utilize idle financial resources, and enhance shareholder returns[107](index=107&type=chunk) [Treasury Policy](index=54&type=section&id=%E5%BA%AB%E5%8B%99%E6%94%BF%E7%AD%96) The Group maintains a prudent treasury policy, primarily transacting in RMB and HKD; surplus cash is strategically placed in bank deposits, equity securities, and ETFs, with no financial instruments used for hedging - The Group's ongoing operating business transactions are primarily conducted in RMB and HKD[108](index=108&type=chunk) - Any surplus cash is strategically placed in bank deposits, equity securities, and exchange-traded funds, primarily denominated in USD, NTD, HKD, or RMB[108](index=108&type=chunk) - During the period, the Group did not use any financial instruments for hedging purposes[108](index=108&type=chunk) [Gearing Ratio](index=54&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June 30, 2025, the Group's gearing ratio slightly increased to 60.3%, reflecting its financial leverage and capital structure - As of June 30, 2025, the Group's gearing ratio (calculated as total liabilities divided by total assets) was approximately **60.3%** (December 31, 2024: **58.7%**)[109](index=109&type=chunk) [Capital Commitments and Contingent Liabilities](index=55&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94%E5%8F%8A%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) The Group's capital commitments remained consistent with the prior period, primarily for investments in associates, financial assets, and intangible assets; a lawsuit was withdrawn during the period, with directors deeming its potential financial impact minor Contracted Capital Expenditure Not Provided For | Item | June 30, 2025 (RMB K) | December 31, 2024 (RMB K) | | :--- | :--- | :--- | | Investment in an Associate | 2,460 | 2,460 | | Financial Assets Measured at Fair Value Through Profit or Loss | 2,000 | 2,000 | | Intangible Assets | 225 | 225 | | **Total** | **4,685** | **4,685** | - In March 2025, the Group discovered certain Chinese subsidiaries were involved in a publicly recorded lawsuit; as of this report date, the lawsuit has been withdrawn, and directors consider the potential financial impact minor[110](index=110&type=chunk) [Exchange Rate Fluctuation Risk](index=56&type=section&id=%E5%8C%AF%E7%8E%87%E6%B3%A2%E5%8B%95%E9%A2%A8%E9%9A%AA) Operating across multiple regions, the Group's financial statements are presented in RMB, but some income and expenses are denominated in USD, NTD, and VND, posing exchange rate fluctuation risk; the Board actively monitors and considers hedging strategies when necessary - The Group operates across China, Taiwan, Hong Kong, and Vietnam, with financial statements presented in RMB, while certain income and expenses are denominated in USD, NTD, and VND[111](index=111&type=chunk) - Fluctuations in exchange rates may impact the Group's operating results and financial position[111](index=111&type=chunk) - The Company's directors actively monitor the Group's foreign currency exposure and will consider implementing hedging strategies for significant risks when necessary[111](index=111&type=chunk) [Significant Acquisitions and Disposals of Investments](index=56&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E6%8A%95%E8%B3%87) During the period, the Group did not undertake any significant acquisitions or disposals of investments - During the period, the Group did not undertake any significant acquisitions or disposals of investments[112](index=112&type=chunk) [Subsequent Events](index=56&type=section&id=%E6%9C%9F%E5%BE%8C%E4%BA%8B%E4%BB%B6) Post-reporting period, the Company completed the sale of 100% equity in Junqun Development Co., Ltd. to exit Vietnam operations, streamline business, and reallocate resources to other promising segments - On July 30, 2025, the Company entered into a sale and purchase agreement with Hao Shan Limited to dispose of the entire issued share capital of Junqun Development Co., Ltd. for **HKD 10,000,000**[113](index=113&type=chunk) - The disposal will enable the Company to streamline its business operations, reallocate resources more effectively to other business segments with better growth prospects, and reserve additional capital for future business development opportunities[114](index=114&type=chunk) - As of the date of this report, the disposal has been completed[116](index=116&type=chunk) [Pledge of Group Assets](index=58&type=section&id=%E6%8A%B5%E6%8A%BC%E6%9C%AC%E9%9B%86%E5%9C%98%E8%B3%87%E7%94%A2) As of June 30, 2025, approximately RMB 27,186,000 of the Group's property, plant and equipment was pledged as collateral for bank borrowings - As of June 30, 2025, the carrying value of property, plant and equipment pledged as collateral for the Group's bank borrowings was approximately **RMB 27,186 K** (December 31, 2024: **RMB 26,192 K**)[117](index=117&type=chunk) [Dividends](index=58&type=section&id=%E8%82%A1%E6%81%AF) The Directors do not recommend payment of any final dividend for the period - The Directors do not recommend payment of any final dividend for the period (prior period: **RMB zero**)[118](index=118&type=chunk) [Number of Employees and Remuneration](index=58&type=section&id=%E5%83%B1%E5%93%A1%E6%95%B8%E7%9B%AE%E5%8F%8A%E8%96%AA%E9%85%AC) As of June 30, 2025, the Group's employee count increased to 212; remuneration packages are competitive and regularly reviewed, with the share option scheme designed to incentivize staff, leaving 1,853,200 options unexercised at period-end - As of June 30, 2025, the Group employed **212** employees (December 31, 2024: **173** employees)[119](index=119&type=chunk) - Remuneration packages (including performance bonuses and share option entitlements) are regularly reviewed to ensure competitiveness and incentivize high performance[119](index=119&type=chunk) - As of June 30, 2025, **1,853,200** share options remained unexercised, aligning employee interests with shareholder value[119](index=119&type=chunk) [Prospects](index=59&type=section&id=%E5%89%8D%E6%99%AF) The Group anticipates significant external uncertainties in 2025, but China's economy is expected to remain stable and positive; the Group is actively investing in strategic emerging industries, transforming into a high-tech enterprise with a biotech investment team and establishing Fusha Aviation for the low-altitude economy, showing positive progress, and will continue to control costs, enhance R&D, and foster collaborations - The Group anticipates significant external uncertainties in 2025, but China's economy is expected to maintain a stable and positive momentum, showing a moderate recovery overall[120](index=120&type=chunk) - China's economy is in a transition period, with new quality productive forces (such as low-altitude economy, biotechnology, artificial intelligence, digital economy, and other high-tech industries) experiencing vigorous development[120](index=120&type=chunk) - The Group is actively deploying in cutting-edge strategic emerging industries, driving its transformation from a traditional funeral service provider to a high-tech enterprise with independent R&D capabilities[121](index=121&type=chunk) - The Group has successfully assembled a professional investment team to advance its biotechnology business and established a controlling subsidiary, Fusha Aviation, to enter the low-altitude economy sector, having successfully developed and test-flown its first-generation new energy unmanned ground effect vehicle, FU1[121](index=121&type=chunk) - The Group will strictly control operating costs, establish comprehensive risk management mechanisms and countermeasures, accelerate new product R&D, and strengthen cooperation with industry partners and clients[122](index=122&type=chunk) [Corporate Governance and Other Information](index=61&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations](index=61&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%88%96%E5%85%B6%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E4%B9%8B%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, Mr. Xu Jianchun held 38.58% of the Company's shares and underlying share interests, primarily through his controlling stakes in Hong Kong Gaoqi and Nanyue Tianche Directors' Interests in Shares, Underlying Shares and Debentures | Director Name | Personal Interest | Corporate Interest (Number of Shares) | Corporate Interest (Number of Shares Related to Convertible Bonds) | Total | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Xu | – | 22,047,500 | 14,412,698 | 36,460,198 | 38.58% | - Mr. Xu holds an interest in **22,047,500** shares through his controlling interest in Hong Kong Gaoqi Biotechnology Co., Ltd[126](index=126&type=chunk) - Mr. Xu holds an interest in **14,412,698** conversion shares through his controlling interest in Shenzhen Nanyue Tianche Bio-Intelligent Equipment Investment Co., Ltd[126](index=126&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=63&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, Hong Kong Gaoqi, Ms. Qiu Qi, Mr. Ou Yafei, and Nanyue Tianche are the Company's substantial shareholders, holding 5% or more interest Substantial Shareholders' Interests in Shares and Underlying Shares | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Number of Underlying Shares Held Under Share Options | Number of Underlying Shares Held Under Convertible Bonds | Total | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Hong Kong Gaoqi | Beneficial Owner | 22,047,500 | – | – | 22,047,500 | 23.33% | | Ms. Qiu Qi | Interest of Controlled Corporation | 22,047,500 | – | – | 22,047,500 | 23.33% | | Mr. Ou Yafei | Beneficial Owner | 14,786,400 | 741,600 | – | 15,528,000 | 16.43% | | Nanyue Tianche | Beneficial Owner | – | – | 14,412,698 | 14,412,698 | 15.25% | - Ms. Qiu Qi, as Mr. Xu's spouse, is deemed to have an interest in all shares held by Mr. Xu under the Securities and Futures Ordinance[129](index=129&type=chunk) [Directors' Interests in Contracts](index=65&type=section&id=%E8%91%A3%E4%BA%8B%E6%96%BC%E5%90%88%E7%B4%84%E4%B8%AD%E7%9A%84%E6%AC%8A%E7%9B%8A) Mr. Xu Jianchun, through his controlled Nanyue Tianche, signed a capital increase agreement with the Company's indirect wholly-owned subsidiary, Zhongke Xunda, involving the acquisition of 20.25% equity in Zhongke Zhenhui, with convertible bonds as consideration - Zhongke Xunda, the Company's indirect wholly-owned subsidiary, entered into Sale and Purchase Agreement I with Nanyue Tianche (approximately **71.25%** controlled by Mr. Xu, the Company's Chairman and Executive Director)[131](index=131&type=chunk) - Zhongke Xunda acquired **20.25%** equity in Zhongke Zhenhui from Nanyue Tianche for **RMB 15,930 K**, to be paid by issuing convertible bonds with a principal amount of **HKD 18,160,000**[131](index=131&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=66&type=section&id=%E8%91%A3%E4%BA%8B%E8%AA%8D%E8%B3%BC%E8%82%A1%E4%BB%BD%E6%88%96%E5%82%B5%E6%AC%8A%E8%AD%89%E7%9A%84%E6%AC%8A%E5%88%A9) Aside from disclosed director share interests, during the period, neither the Company, its holding company, nor any subsidiaries participated in arrangements granting directors or chief executives rights to subscribe for securities of the Company or its associated corporations - Except as disclosed, at no time during the period did the Company, its holding company, or any of its subsidiaries or fellow subsidiaries participate in any arrangements enabling directors or chief executives of the Company or their respective associates to acquire rights to subscribe for securities of the Company or its associated corporations[133](index=133&type=chunk) [Management Contracts](index=66&type=section&id=%E7%AE%A1%E7%90%86%E5%90%88%E7%B4%84) During the period, no management and administration contracts were entered into or existed concerning the Company's overall business or any substantial part thereof - During the period, no management and administration contracts were entered into or existed concerning the Company's overall business or any substantial part thereof[134](index=134&type=chunk) [Directors' Interests in Competing Business](index=66&type=section&id=%E8%91%A3%E4%BA%8B%E6%96%BC%E7%AB%B6%E7%88%AD%E6%A5%AD%E5%8B%99%E7%9A%84%E6%AC%8A%E7%9B%8A) Mr. Xu Jianchun, through his controlled Nanyue Asset, engages in asset and investment management, potentially competing with the Group; however, the Company's independent management structure, diligent independent non-executive directors, and audit committee ensure the Group's independent operations - Mr. Xu is a director of Nanyue Asset and, with his associates, ultimately owns approximately **71.25%** equity in Nanyue Asset; thus, Mr. Xu may be deemed to have an interest in a business competing with the Group[136](index=136&type=chunk) - Given the Company's management and administrative structure is independent of Nanyue Asset, coupled with the diligence of the Company's independent non-executive directors and Audit Committee, the Group can operate its business independently on an arm's length basis[136](index=136&type=chunk) [Share Option Scheme](index=68&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The Company's 2021 share option scheme aims to attract, retain, and incentivize talent; following share consolidation, the exercise price and number of shares issuable under options were adjusted, with 1,853,200 options remaining unexercised at period-end - The Company adopted a new share option scheme on April 22, 2021, aiming to attract and retain key personnel, provide additional incentives to participants, and drive the Group's business success[137](index=137&type=chunk) - The subscription price for shares under the share option scheme is at the Directors' sole discretion, but shall in no event be less than the highest of the closing price on the Stock Exchange, the average closing price for the five preceding business days, and the nominal value of the shares[138](index=138&type=chunk) - Following the share consolidation effective October 14, 2024, the share option exercise price was adjusted to **HKD 1.37** per consolidated share, and the total number of shares issuable was adjusted to **1,853,200** consolidated shares[139](index=139&type=chunk)[145](index=145&type=chunk) Details of Outstanding Share Options | Name or Class of Grantee | Date of Grant | Adjusted Exercise Price (HKD) | Balance at January 1, 2025 | Lapsed During the Period | Balance at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Employees | May 19, 2022 | 1.37 | 370,000 | – | 370,000 | | Business Partners | May 19, 2022 | 1.37 | 1,483,200 | – | 1,483,200 | | **Total** | | | **1,853,200** | **–** | **1,853,200** | [Purchase, Sale or Redemption of Securities](index=71&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E8%AD%89%E5%88%B8) During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and the Company held no treasury shares - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[144](index=144&type=chunk) - As of June 30, 2025, the Company held no treasury shares[144](index=144&type=chunk) [Corporate Governance](index=72&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The Company is committed to high corporate governance standards, adhering to GEM Listing Rules Appendix C1 Corporate Governance Code; during the period, the Company complied with all code provisions, except for independent non-executive directors' absence from the AGM - The Company's corporate governance practices are based on the principles and code provisions outlined in Appendix C1 of the GEM Listing Rules Corporate Governance Code[146](index=146&type=chunk) - The Company complied with all code provisions during the period, except for deviations from Code Provisions C.1.2 and F.2.2 regarding independent non-executive directors' attendance at the Company's general meetings[146](index=146&type=chunk) [Changes in Directors' Information](index=72&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E8%AE%8A%E5%8B%95) Subsequent to the annual report date for the year ended December 31, 2024, there were no changes in directors' information requiring disclosure under GEM Listing Rule - Subsequent to the annual report date for the year ended December 31, 2024, there were no changes in directors' information requiring disclosure under GEM Listing Rule 17.50A(1)[147](index=147&type=chunk) [Directors' Securities Transactions](index=72&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) The Company adopted a code of conduct for directors' securities transactions, and all directors complied with it during the period - The Company adopted a code of conduct for directors' securities transactions, with terms no less exacting than the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules[148](index=148&type=chunk) - Following specific enquiries to all Directors, they confirmed compliance with the code of conduct throughout the period[148](index=148&type=chunk) [Audit Committee](index=73&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising three independent non-executive directors, reviews and monitors the Group's financial reporting and internal control systems; it has reviewed the unaudited condensed consolidated financial statements for the period, deeming them compliant with applicable accounting standards and adequately disclosed - The Audit Committee comprises three independent non-executive directors: Mr. Qi Zhongwei (Chairman), Ms. Hu Zhaohui, and Dr. Yang Jingjing[151](index=151&type=chunk) - The Audit Committee's primary responsibilities include reviewing and monitoring the Group's financial reporting process and internal control systems[151](index=151&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the period and believes they comply with applicable accounting standards and provide adequate disclosure of information[151](index=151&type=chunk)

[Company Information](index=2&type=section&id=Company%20Information) This section provides essential corporate details, including board composition, committee structures, and fundamental company information [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) Asia Financial Group (Holdings) Limited's Board of Directors comprises executive, non-executive, and independent non-executive directors, with established committees for audit, compliance, remuneration, nomination, and risk to ensure robust corporate governance - Board members include Executive Directors Chan Chi-shing (Chairman and CEO), Chan Chi-man, Wong Kok-ho; Non-Executive Directors Jian Shoujin, Morito Tetsuya; and Independent Non-Executive Directors Au Yeung Kai-chun, Ngan Man-ling, Lee Lut-yan[4](index=4&type=chunk) - The company has established Audit, Compliance, Remuneration, Nomination, and Risk Committees, with independent non-executive directors serving as chairpersons or members on each[4](index=4&type=chunk) [Company Basic Information](index=3&type=section&id=Company%20Basic%20Information) The report discloses the company's registered office, head office and principal place of business, contact details, auditor, principal share registrar and transfer office, principal bankers, legal advisors, and its stock code (662) on the Hong Kong Stock Exchange - The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited under stock code **662**[5](index=5&type=chunk) - The auditor is Ernst & Young, with the registered office in Bermuda and the head office and principal place of business in Central, Hong Kong[4](index=4&type=chunk) [Chairman's Report](index=4&type=section&id=Chairman%27s%20Report) This section provides an overview of the Group's performance, investment strategies, economic context, and management's future outlook [H1 2025 Performance Overview](index=4&type=section&id=H1%202025%20Performance%20Overview) Asia Financial Group's profit attributable to shareholders reached **HKD 423.4 million** in H1 2025, a **17.1% increase** from H1 2024, driven by significant growth in equity trading investments and robust insurance business performance | Metric | H1 2025 (HKD) | | :--- | :--- | | Profit Attributable to Shareholders | 423.4 million | | Year-on-Year Growth | +17.1% | - Strong performance was primarily driven by year-on-year growth in equity trading investments, robust insurance business results, and reliable contributions from joint ventures and associates[6](index=6&type=chunk) [Investment Strategy and Market Outlook](index=4&type=section&id=Investment%20Strategy%20and%20Market%20Outlook) The Group adjusted its investment portfolio, reducing reliance on the US market and diversifying into China, Japan, and Europe, while remaining optimistic about these markets' long-term potential, cautiously monitoring geopolitical conflicts, inflation, and policy changes in H2 - Investment portfolio strategy adjusted to reduce reliance on the US market, diversifying investments into China, Japan, and Europe[6](index=6&type=chunk) - Optimistic about the long-term potential of the China and Hong Kong markets, Japan is attractive due to improving economic fundamentals, and Europe benefits from Euro recovery and improved investor sentiment[6](index=6&type=chunk) - For H2 2025, the investment strategy will center on prudent and flexible equity trading, while remaining vigilant against key risks such as geopolitical conflicts, inflationary pressures, tariffs, and unpredictable policy changes[7](index=7&type=chunk) [Economic Background](index=4&type=section&id=Economic%20Background) The global economy resumed moderate growth, with a projected **2.8% global growth** in 2025; H1 saw strong stock market performance in the US, Japan, and Europe, with China and Hong Kong also achieving robust growth driven by government stimulus, as China's economy received targeted stimulus and Hong Kong actively built its international hub status - The International Monetary Fund forecasts **2.8% global growth** in 2025, with China's GDP projected at **4%**, Hong Kong at **1.5%**, the US at **1.8%**, and the EU at **1.2%**[8](index=8&type=chunk) | Market | H1 Stock Performance | | :--- | :--- | | Dow Jones Industrial Average | Rose 3.6% | | Nikkei 225 Stock Average | Increased 1.5% | | MSCI Europe Index | Climbed 6.5% | | Hang Seng China Enterprises (H-Share) Index | Climbed 19% | | Hang Seng Index | Soared 20% | - China's economy is supported by targeted government stimulus measures, focusing on key sectors such as innovation, green energy, and self-reliant semiconductors[10](index=10&type=chunk) - Hong Kong continues to actively build its international hub status by attracting multinational corporations, investments, and talent to strengthen its financial, technological, and trade sectors[10](index=10&type=chunk) [Management Approach and Outlook](index=5&type=section&id=Management%20Approach%20and%20Outlook) The Group's long-term strategy remains focused on maintaining a diversified investment portfolio in core markets to mitigate volatility, balance geopolitical risks, and capitalize on growth opportunities in transformative industries like generative AI, cybersecurity, and robotics, while confident in the insurance business's growth potential, emphasizing Hong Kong, Macau, mainland China, and international reinsurance markets - The long-term strategy emphasizes maintaining a diversified investment portfolio in core markets and seizing growth opportunities in transformative industries such as generative AI, cybersecurity, and robotics[11](index=11&type=chunk) - Confident in the insurance business's growth potential, achieved by refining strategies, adapting to changes, and seizing new opportunities[11](index=11&type=chunk) - The Group particularly focuses on the Hong Kong, Macau, mainland China, and international reinsurance markets, leveraging its extensive network and expertise[11](index=11&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed review of the Group's business segments, investment performance, capital structure, and risk management [Business Review](index=6&type=section&id=Business%20Review) The Group's insurance business achieved a **19.4% profit growth** in H1 2025, demonstrating resilience with only a slight decline in insurance service results despite lower premium income; other investment portfolios performed strongly, and the geographical diversification strategy proved effective; Bumrungrad Hospital's share price fell but remains a significant asset; pension and asset management businesses are stable, and Shanghai property development projects continue to advance [Insurance Business](index=6&type=section&id=Insurance%20Business) Asia Insurance's H1 2025 profit reached **HKD 297.4 million**, a **19.4% year-on-year increase**; despite a **11.6% decline** in premium income, insurance service results only slightly decreased by **3.2%**, attributed to geographical and product diversification, Greater Bay Area expansion, digital transformation, and stringent underwriting strategies; the Group holds a **5% stake** in PICC Life Insurance Company Limited, further solidifying its strategic position | Metric | H1 2025 (HKD) | | :--- | :--- | | Asia Insurance Profit | 297.4 million | | Year-on-Year Growth | +19.4% | | Metric | H1 2025 (HKD) | | :--- | :--- | | Insurance Revenue | Decreased 11.6% | | Insurance Service Results | Slightly Decreased 3.2% | - Asia Insurance achieved robust growth through geographical and product diversification, expansion of partnerships in the Greater Bay Area and Southeast Asia, digital insurance solutions, and specialized policies[13](index=13&type=chunk) - The Group holds a **5% stake** in PICC Life Insurance Company Limited, solidifying its strategic position[17](index=17&type=chunk) [Other Investment Portfolio](index=7&type=section&id=Other%20Investment%20Portfolio) H1 2025 saw strong performance in equity trading investments, with value stocks, investment-grade fixed income bonds, and alternative investments all achieving revenue growth; the Group adjusted its portfolio allocation, expanding its presence in China, Japan, and Europe, reducing reliance on the US market, and focusing on investments that generate stable cash flow - Equity trading investments performed strongly, with value stocks, investment-grade fixed income bonds, and alternative investments all achieving revenue growth[18](index=18&type=chunk) - Investment portfolio allocation was adjusted to expand presence in China, Japan, and Europe, reducing over-reliance on the US market[18](index=18&type=chunk) - The strategy focuses on investments that generate stable cash flow, such as high-credit-rated fixed income bonds, and selectively invests in hedge funds and private equity funds to enhance portfolio resilience[18](index=18&type=chunk) [Healthcare Services](index=7&type=section&id=Healthcare%20Services) The Group holds a **4.8% equity stake** in Bumrungrad Hospital, a global healthcare leader; in H1 2025, Bumrungrad Hospital's share price fell **30.1% in THB** and **25.5% in HKD**, primarily due to a significant decline in international patient admissions; despite challenges, Bumrungrad Hospital remains adaptable and is expected to resume growth with tourism recovery - The Group holds a **4.8% equity stake** in Bumrungrad Hospital, which is its most significant listed equity investment[19](index=19&type=chunk) | Metric | H1 2025 Change | | :--- | :--- | | Bumrungrad Hospital Share Price (THB) | Decreased 30.1% | | Bumrungrad Hospital Share Price (HKD) | Decreased 25.5% | - The share price decline primarily reflects a significant drop in international patient admissions due to global economic weakness[19](index=19&type=chunk) [Pension and Asset Management](index=8&type=section&id=Pension%20and%20Asset%20Management) Joint venture BCT Group and its wholly-owned subsidiary BCT Trust maintain a leading position in Hong Kong's Mandatory Provident Fund services market, consistently generating robust profits; the Group holds a **10% stake** in BBL Asset Management Company Limited, which consistently distributes substantial dividends due to its comprehensive services and stable earnings capability - Joint venture BCT Group and its wholly-owned subsidiary BCT Trust maintain a leading position in Hong Kong's Mandatory Provident Fund services market, consistently generating robust and reliable profits[20](index=20&type=chunk) - The Group holds a **10% stake** in BBL Asset Management Company Limited, which has consistently distributed substantial dividends over the years due to its comprehensive services and stable earnings capability[20](index=20&type=chunk) [Property Development Investments](index=8&type=section&id=Property%20Development%20Investments) The Group is committed to Shanghai real estate project development, accounting for **3.9% of total assets**; the Jiading district project saw no additional sales in H1 due to economic headwinds; six residential buildings in the Qingpu district project are accelerating completion, and an additional **21,000 square meter** plot was acquired, with initial sales planned for Q4; government stimulus policies are expected to alleviate market pressure - The Group is committed to Shanghai real estate project development, accounting for **3.9% of the Group's total assets**[21](index=21&type=chunk) - The Jiading district property project had no additional sales in H1 due to economic headwinds[21](index=21&type=chunk) - The Qingpu district project is accelerating completion, and an additional **21,000 square meter** plot was acquired, with **50 units** planned for initial sales in Q4 this year[21](index=21&type=chunk) - Increased government stimulus policies, relaxed credit conditions, and loosened housing policies in Shanghai are expected to alleviate market pressure[21](index=21&type=chunk) [Equity Investments Exceeding 5% of Total Assets](index=8&type=section&id=Equity%20Investments%20Exceeding%205%25%20of%20Total%20Assets) As of June 30, 2025, the Group had two equity investments exceeding **5% of total assets**: PICC Life Insurance (18.0%) and Bumrungrad Hospital (7.7%), both considered long-term strategic holdings | Holding | % of Group's Total Assets | Realized and Unrealized Profit/(Loss) as of June 30, 2025 (HKD millions) | | :--- | :--- | :--- | | PICC Life Insurance | 18.0% | 75 | | Bumrungrad Hospital | 7.7% | (437) | - These two investments are primarily long-term strategic holdings[23](index=23&type=chunk) [Capital Structure](index=9&type=section&id=Capital%20Structure) The Group uses internally generated funds for working capital, with **HKD 2.667 billion** in cash and bank balances as of June 30, 2025, no bank loans, a robust liquidity position, and no net outflow of liabilities, thus eliminating the need to calculate a debt-to-capital ratio | Metric | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Cash and Bank Balances | 2,666,962,000 | 2,522,379,000 | - As of June 30, 2025, the Group had **no bank loans**[27](index=27&type=chunk) - The Group has no net outflow of liabilities, thus eliminating the need to calculate a debt-to-capital ratio, and maintaining a robust liquidity position[27](index=27&type=chunk)[28](index=28&type=chunk) [Pledged Assets](index=9&type=section&id=Pledged%20Assets) As of June 30, 2025, Asia Insurance Company Limited pledged assets with a carrying value of **HKD 128.7 million** as security for its liabilities to an insurance company under certain ceded financial loss reinsurance contracts | Metric | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Asia Insurance Pledged Assets Carrying Value | 128,693,000 | 111,541,000 | - The pledged assets serve as security for Asia Insurance's liabilities to an insurance company under certain ceded financial loss reinsurance contracts[29](index=29&type=chunk) [Contingent Liabilities](index=9&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had **no significant contingent liabilities** - As of June 30, 2025, the Group had **no significant contingent liabilities**[30](index=30&type=chunk) [Employees and Remuneration Policy](index=9&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had **386 employees**; remuneration is determined by individual performance, experience, and industry practice, including salaries and discretionary bonuses; the Group provides comprehensive medical and retirement benefits and focuses on talent development and training | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Number of Employees | 386 | 374 | - Employee remuneration is determined by individual performance, experience level, and industry practice, including salaries and discretionary bonuses, along with comprehensive medical and retirement benefits[31](index=31&type=chunk) - The remuneration policy is formulated by the Remuneration Committee, recommended for Board approval, and reviews management's remuneration proposals[31](index=31&type=chunk) [Interim Results Summary](index=10&type=section&id=Interim%20Results%20Summary) This section highlights key financial performance indicators and dividend distribution details for the interim period [Key Financial Metrics](index=10&type=section&id=Key%20Financial%20Metrics) For the six months ended June 30, 2025, profit attributable to shareholders increased **17.1%** to **HKD 423.4 million**, earnings per share grew **17.7%** to **HKD 45.8 cents**, and interim dividend per share rose **18.2%** to **HKD 6.5 cents** | Metric | H1 2025 (HKD) | Year-on-Year Change | | :--- | :--- | :--- | | Profit Attributable to Shareholders | 423.4 million | +17.1% | | Earnings Per Share | 45.8 cents | +17.7% | | Interim Dividend Per Share | 6.5 cents | +18.2% | [Interim Dividend and Share Transfer Registration](index=10&type=section&id=Interim%20Dividend%20and%20Share%20Transfer%20Registration) The Board resolved to declare an interim dividend of **HKD 6.5 cents per ordinary share** and announced that share transfer registration will be suspended from September 24 to September 26, 2025, to determine eligibility for the interim dividend - The Board resolved to declare an interim dividend of **HKD 6.5 cents per ordinary share** for the six months ended June 30, 2025[34](index=34&type=chunk) - Share transfer registration will be suspended from September 24 to September 26, 2025, to ensure eligibility for the interim dividend[35](index=35&type=chunk) [Condensed Consolidated Statement of Profit or Loss (Unaudited)](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20(Unaudited)) This section presents the Group's unaudited financial performance, detailing revenues, expenses, and profit for the interim period [Profit or Loss Statement Overview](index=11&type=section&id=Profit%20or%20Loss%20Statement%20Overview) For the six months ended June 30, 2025, the Group's profit for the period was **HKD 423.4 million**, a **17.1% increase** from **HKD 361.4 million** in the same period of 2024; insurance revenue decreased, but realized and unrealized investment gains and dividend income significantly increased, offsetting some negative impacts | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Insurance Revenue | 1,451,755 | 1,642,356 | -11.6% | | Insurance Service Results | 161,070 | 166,233 | -3.1% | | Insurance Operating Results | 109,944 | 142,143 | -22.6% | | Dividend Income | 108,312 | 74,901 | +44.6% | | Realized Gains on Investments | 30,317 | 22,335 | +35.7% | | Unrealized Gains on Investments | 148,029 | 108,084 | +37.0% | | Profit Before Tax | 466,937 | 405,704 | +15.1% | | Profit for the Period | 423,351 | 361,387 | +17.1% | - Share of profit from joint ventures significantly increased from **HKD 9.511 million** in 2024 to **HKD 40.347 million** in 2025[38](index=38&type=chunk) - Share of profit from associates decreased from **HKD 57.000 million** in 2024 to **HKD 14.410 million** in 2025[38](index=38&type=chunk) [Condensed Consolidated Statement of Comprehensive Income (Unaudited)](index=13&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income%20(Unaudited)) This section outlines the Group's unaudited comprehensive income, including profit for the period and other comprehensive income items [Comprehensive Income Overview](index=13&type=section&id=Comprehensive%20Income%20Overview) For the six months ended June 30, 2025, the Group's total comprehensive income for the period was **HKD 148.9 million**, a significant improvement from a **HKD 188.3 million loss** in the same period of 2024, primarily due to a substantial narrowing of fair value change losses on equity investments designated at fair value through other comprehensive income | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Profit for the Period | 423,351 | 361,387 | | Share of Other Comprehensive Income of Associates | 18,923 | (39,243) | | Exchange Differences on Translation of Foreign Operations | 3,509 | (96) | | Equity Investments Designated at FVOCI: Fair Value Change | (289,448) | (558,850) | | Total Comprehensive Income for the Period | 148,949 | (188,291) | - The fair value change loss on equity investments designated at fair value through other comprehensive income narrowed from **HKD 558.9 million** in 2024 to **HKD 289.4 million** in 2025, which is the primary reason for the improvement in comprehensive income[42](index=42&type=chunk) [Condensed Consolidated Statement of Financial Position (Unaudited)](index=14&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position%20(Unaudited)) This section provides an unaudited snapshot of the Group's assets, liabilities, and equity at the end of the interim period [Assets Overview](index=14&type=section&id=Assets%20Overview) As of June 30, 2025, the Group's total assets increased to **HKD 16.732 billion**, a **2.4% rise** from December 31, 2024; financial assets at fair value through profit or loss and reinsurance contract assets significantly increased, while equity investments designated at fair value through other comprehensive income decreased | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 16,731,760 | 16,333,555 | +2.4% | | Equity Investments Designated at FVOCI | 5,194,569 | 5,482,070 | -5.3% | | Financial Assets at FVTPL | 3,058,654 | 2,746,119 | +11.4% | | Reinsurance Contract Assets | 1,432,306 | 1,225,147 | +16.9% | | Cash and Bank Balances | 2,666,962 | 2,522,379 | +5.7% | [Equity and Liabilities Overview](index=14&type=section&id=Equity%20and%20Liabilities%20Overview) As of June 30, 2025, the Group's total equity was **HKD 11.742 billion**, and total liabilities were **HKD 4.990 billion**; insurance contract liabilities significantly increased, while other liabilities decreased | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Equity | 11,741,773 | 11,677,999 | +0.5% | | Total Liabilities | 4,989,987 | 4,655,556 | +7.2% | | Insurance Contract Liabilities | 4,226,599 | 3,891,024 | +8.6% | | Other Liabilities | 266,798 | 309,920 | -13.9% | [Condensed Consolidated Statement of Changes in Equity (Unaudited)](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity%20(Unaudited)) This section details the unaudited changes in the Group's equity attributable to shareholders for the interim period [Equity Changes Overview](index=15&type=section&id=Equity%20Changes%20Overview) For the six months ended June 30, 2025, total equity attributable to shareholders increased from **HKD 11.678 billion** at the beginning of the period to **HKD 11.742 billion**, primarily driven by profit for the period and positive other comprehensive income from associates, partially offset by fair value change losses on equity investments | Metric | June 30, 2025 (HKD thousands) | January 1, 2024 (HKD thousands) | | :--- | :--- | :--- | | Total at Beginning of Period | 11,677,999 | 10,748,846 | | Profit for the Period | 423,351 | 361,387 | | Fair Value Change of Equity Investments (After Tax) | (296,834) | (510,339) | | Share of Other Comprehensive Income of Associates | 18,923 | (39,243) | | Exchange Differences on Translation of Foreign Operations | 3,509 | (96) | | Total at End of Period | 11,741,773 | 10,510,792 (June 30, 2024) | - In H1 2025, the fair value change loss on equity investments (after tax) was **HKD 296.8 million**, a narrowing from **HKD 510.3 million** in the same period of 2024[45](index=45&type=chunk)[47](index=47&type=chunk) [Condensed Consolidated Statement of Cash Flows (Unaudited)](index=17&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows%20(Unaudited)) This section presents the Group's unaudited cash flows from operating, investing, and financing activities for the interim period [Cash Flows from Operating Activities](index=17&type=section&id=Cash%20Flows%20from%20Operating%20Activities) For the six months ended June 30, 2025, net cash used in operating activities was **HKD 109.9 million**, an increase from **HKD 49.9 million** in the same period of 2024, primarily due to an increase in financial assets at fair value through profit or loss and a decrease in reinsurance contract assets | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Profit Before Tax | 466,937 | 405,704 | | Net Cash Used in Operating Activities | (109,899) | (49,898) | - An increase in financial assets at fair value through profit or loss resulted in a cash outflow of **HKD 312.5 million** (2024: **HKD 518.6 million**)[49](index=49&type=chunk) - A decrease in reinsurance contract assets resulted in a cash outflow of **HKD 207.2 million** (2024: cash inflow of **HKD 97.5 million**)[49](index=49&type=chunk) [Cash Flows from Investing Activities](index=17&type=section&id=Cash%20Flows%20from%20Investing%20Activities) For the six months ended June 30, 2025, net cash generated from investing activities was **HKD 88.84 million**, a significant improvement from net cash used of **HKD 44.51 million** in the same period of 2024, primarily due to interest income, dividend income, and redemption proceeds from debt securities measured at amortized cost and held to collect | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Net Cash Generated From/(Used In) Investing Activities | 88,840 | (44,510) | | Interest Income | 87,794 | 97,829 | | Dividend Income from Investments | 108,312 | 74,901 | | Proceeds from Redemption/Recovery of Debt Securities Measured at Amortized Cost and Held to Collect | 143,401 | 207,839 | [Cash Flows from Financing Activities](index=18&type=section&id=Cash%20Flows%20from%20Financing%20Activities) For the six months ended June 30, 2025, net cash used in financing activities was **HKD 86.41 million**, an increase from **HKD 51.06 million** in the same period of 2024, primarily due to increased dividends paid | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Net Cash Used in Financing Activities | (86,413) | (51,056) | | Dividends Paid | (83,194) | (46,406) | [Analysis of Cash and Cash Equivalents](index=18&type=section&id=Analysis%20of%20Cash%20and%20Cash%20Equivalents) As of June 30, 2025, cash and cash equivalents at the end of the period totaled **HKD 1.0713 billion**, a decrease from **HKD 1.1788 billion** at the beginning of the period; total cash and bank balances were **HKD 2.667 billion**, including significant fixed deposits with original maturities over three months and less than three months | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Cash and Cash Equivalents at End of Period | 1,071,301 | 1,178,773 (Beginning of Period) | | Cash and Bank Balances | 2,666,962 | 2,522,379 | | Fixed Deposits with Original Maturity Over Three Months | 1,595,661 | 1,445,758 | | Fixed Deposits with Original Maturity Less Than Three Months | 571,131 | 623,149 | [Notes to the Condensed Interim Financial Statements (Unaudited)](index=19&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Statements%20(Unaudited)) This section provides detailed notes on the accounting policies, operating segments, and specific financial instruments presented in the unaudited interim financial statements [1. Accounting Policies](index=19&type=section&id=1.%20Accounting%20Policies) The condensed interim consolidated financial statements are prepared in accordance with HKAS 34, with accounting policies and basis of preparation consistent with the 2024 annual report, except for the first-time adoption of amended HKAS 21 "Lack of Exchangeability," which has no significant impact on the Group - The condensed interim consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[52](index=52&type=chunk) - The amended HKAS 21 "Lack of Exchangeability" was adopted for the first time, but as the Group's transaction and functional currencies are both exchangeable, this amendment has no impact on the financial information[53](index=53&type=chunk) [2. Operating Segment Information](index=20&type=section&id=2.%20Operating%20Segment%20Information) The Group's operating segments primarily include insurance and corporate businesses; in H1 2025, insurance segment revenue was **HKD 1.634 billion**, corporate segment revenue was **HKD 157 million**; insurance segment results were **HKD 291.7 million**, and corporate segment results were **HKD 120.5 million**; over **90% of insurance revenue and results** originated from Hong Kong, Macau, and mainland China | Segment | H1 2025 Segment Revenue (HKD thousands) | H1 2025 Segment Results (HKD thousands) | | :--- | :--- | :--- | | Insurance | 1,634,447 | 291,671 | | Corporate | 157,333 | 120,509 | - Over **90% of the Group's insurance revenue and results** are derived from operations in Hong Kong, Macau, and mainland China[57](index=57&type=chunk) [3. Insurance Revenue](index=21&type=section&id=3.%20Insurance%20Revenue) Insurance revenue represents the expected premium income allocated over the service period of each insurance contract - Insurance revenue is the expected premium income amount allocated over the service period of each insurance contract[58](index=58&type=chunk) [4. Finance Costs](index=21&type=section&id=4.%20Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs primarily consisted of interest on lease liabilities, amounting to **HKD 71 thousand**, largely consistent with the prior year | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Interest on Lease Liabilities | 71 | 75 | [5. Profit Before Tax](index=22&type=section&id=5.%20Profit%20Before%20Tax) For the six months ended June 30, 2025, the Group's profit before tax was **HKD 466.9 million**, including auditor's remuneration, depreciation, staff welfare expenses, realized and unrealized investment gains, interest income, and dividend income; staff welfare expenses increased, and realized and unrealized investment gains grew significantly | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Auditor's Remuneration | (3,850) | (2,548) | | Staff Welfare Expenses | (111,705) | (102,703) | | Total Realized Gains on Investments | 30,317 | 22,335 | | Net Unrealized Gains on Financial Assets at FVTPL | 148,029 | 108,084 | | Total Dividend Income | 108,312 | 74,901 | - Staff welfare expenses increased from **HKD 102.7 million** in 2024 to **HKD 111.7 million** in 2025[60](index=60&type=chunk) - Net exchange gains turned from a **HKD 7.282 million loss** in 2024 to a **HKD 19.572 million gain** in 2025[60](index=60&type=chunk) [6. Income Tax Expense](index=23&type=section&id=6.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's total income tax expense was **HKD 43.586 million**, slightly lower than **HKD 44.317 million** in the same period of 2024; Hong Kong profits tax is calculated at a **16.5% rate**, while other regions are taxed at applicable rates | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Total Tax Expense for the Period | 43,586 | 44,317 | | Current - Hong Kong Expense for the Period | 25,017 | 1,929 | | Current - Other Regions Expense for the Period | 15,378 | 13,874 | | Deferred Tax | 3,179 | 28,404 | - Hong Kong profits tax is calculated at a **16.5% rate** based on the estimated assessable profits generated in Hong Kong during the period[62](index=62&type=chunk) [7. Dividends](index=23&type=section&id=7.%20Dividends) The Board resolved to declare an interim dividend of **HKD 6.5 cents per ordinary share**, totaling **HKD 60.069 million**, higher than **HKD 5.5 cents per share** in the same period of 2024 | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Proposed Interim Dividend (Per Share) | 6.5 cents | 5.5 cents | | Proposed Interim Dividend (Total) | 60,069 | 51,038 | [8. Earnings Per Share Attributable to Ordinary Equity Holders of the Company](index=23&type=section&id=8.%20Earnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Company) For the six months ended June 30, 2025, basic earnings per share were **HKD 45.8 cents**, higher than **HKD 38.9 cents** in the same period of 2024; no dilution adjustment to basic earnings per share is required as the Group has no potentially dilutive ordinary shares outstanding | Metric | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Basic and Diluted Earnings Per Share | 45.8 cents | 38.9 cents | - Basic earnings per share are calculated based on profit for the period attributable to ordinary equity holders of the Company of **HKD 423.4 million** and the weighted average number of **924.5 million ordinary shares** outstanding during the period[64](index=64&type=chunk) [9. Debt Securities Measured at Amortized Cost and Held to Collect](index=24&type=section&id=9.%20Debt%20Securities%20Measured%20at%20Amortized%20Cost%20and%20Held%20to%20Collect) As of June 30, 2025, total debt securities measured at amortized cost and held to collect amounted to **HKD 1.7004 billion**, or **HKD 1.6776 billion** after impairment provisions; debt securities issued by banks and other financial institutions constituted the largest portion, with maturity analysis indicating most debt securities have remaining maturities of five years or less but over one year | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Debt Securities Measured at Amortized Cost and Held to Collect | 1,677,622 | 1,586,577 | | Impairment Provisions | (22,751) | (22,981) | | Issuer Sector | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Banks and Other Financial Institutions | 1,243,152 | 1,088,549 | | Corporate Entities | 333,919 | 375,426 | | Public Sector Entities | 100,551 | 122,602 | - As of June 30, 2025, the Group pledged **HKD 111.5 million** in listed debt securities and **HKD 17.214 million** in bank balances[68](index=68&type=chunk) [10. Equity Investments Designated at Fair Value Through Other Comprehensive Income](index=25&type=section&id=10.%20Equity%20Investments%20Designated%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) As of June 30, 2025, equity investments designated at fair value through other comprehensive income totaled **HKD 5.1946 billion**, a decrease from December 31, 2024; PICC Life Insurance Company Limited was the largest unlisted equity investment, and a **HKD 289.4 million loss** was recorded during the period | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Total | 5,194,569 | 5,482,070 | | PICC Life Insurance Company Limited (Unlisted) | 3,005,000 | 2,930,000 | | Bumrungrad Hospital Public Company Limited (Listed) | 1,118,954 | 1,500,953 | - The Group's total loss on these equity investments during the period was **HKD 289.4 million**, a narrowing from **HKD 558.9 million** in the same period of 2024[70](index=70&type=chunk) - These investments were irrevocably designated at fair value through other comprehensive income upon initial recognition for strategic reasons[70](index=70&type=chunk) [11. Other Assets](index=26&type=section&id=11.%20Other%20Assets) As of June 30, 2025, total other assets amounted to **HKD 255.4 million**, primarily comprising accrued interest and other assets, all of which are current in nature, with extremely low expected credit losses | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Accrued Interest and Other Assets | 255,371 | 398,799 | | Total | 255,412 | 398,840 | - The expected credit losses associated with other receivables are extremely low, given that these balances are not yet overdue[71](index=71&type=chunk) [12. Financial Assets at Fair Value Through Profit or Loss](index=27&type=section&id=12.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, financial assets at fair value through profit or loss totaled **HKD 3.0587 billion**, an increase from December 31, 2024; equity securities and investment funds were the main components, with financial assets issued by corporate entities accounting for the largest proportion | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Total | 3,058,654 | 2,746,119 | | Equity Securities | 1,698,145 | 1,609,710 | | Investment Funds | 1,201,443 | 969,874 | | Issuer Sector | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Corporate Entities | 2,512,396 | 2,282,666 | | Banks and Other Financial Institutions | 533,038 | 448,903 | - These securities and investment funds are classified as held for trading, and thus measured at fair value through profit or loss[74](index=74&type=chunk) [13. Cash and Bank Balances and Pledged Deposits](index=28&type=section&id=13.%20Cash%20and%20Bank%20Balances%20and%20Pledged%20Deposits) As of June 30, 2025, total cash and bank balances were **HKD 2.667 billion**, and pledged deposits amounted to **HKD 365.5 million**; during the period, the Group pledged **HKD 17.214 million** in bank deposits as security for reinsurance contracts | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Cash and Bank Balances | 2,666,962 | 2,522,379 | | Pledged Deposits | 365,450 | 344,352 | - As of June 30, 2025, the Group had pledged **HKD 17.214 million** in bank deposits[75](index=75&type=chunk) [14. Share Capital](index=28&type=section&id=14.%20Share%20Capital) As of June 30, 2025, issued share capital was **HKD 924.4 million**, with **924.4 million total shares** outstanding, a decrease from December 31, 2024, primarily due to share repurchases and cancellations during the period | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Issued Share Capital (HKD thousands) | 924,370 | 924,750 | | Number of Shares Issued | 924,370,000 | 924,750,000 | - During the period, a subsidiary of the Company repurchased **508,000 ordinary shares** for a total consideration of **HKD 2.04 million**, of which **280,000 shares** were cancelled[77](index=77&type=chunk) [15. Commitments](index=29&type=section&id=15.%20Commitments) As of June 30, 2025, the Group's contracted but unprovided capital commitments primarily related to the purchase of computer hardware and software, amounting to **HKD 4.3 million** | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Contracted but Not Provided For: Purchase of Computer Hardware and Software | 4,300 | 5,586 | [16. Operating Lease Arrangements](index=29&type=section&id=16.%20Operating%20Lease%20Arrangements) As of June 30, 2025, the Group, as lessor, had total future minimum lease receivables under non-cancellable operating leases amounting to **HKD 3.823 million**, with lease terms ranging from two to three years | Remaining Term | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within one year | 3,512 | 6,674 | | After one year but within two years | 227 | 427 | | After two years but within three years | 84 | – | | Total | 3,823 | 7,101 | [17. Related Party Transactions](index=30&type=section&id=17.%20Related%20Party%20Transactions) The Group engages in various related party transactions with entities associated with directors and key management personnel, joint ventures, and associates, including interbank deposits, interest income, premium income, commission expenses, and loan advances | Transaction Type | Related Party | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | :--- | | Interbank Deposits (Period-end Balance) | Entities Associated with Directors and Key Management Personnel | 709,360 | 439,781 | | Interbank Interest Income | Entities Associated with Directors and Key Management Personnel | 8,645 | 16,969 | | Ceded Premiums | Joint Ventures | 223,302 | 92,502 | | Commission Income Received | Joint Ventures | 123,788 | 42,038 | | Loans and Advances to Associates (Period-end Balance) | Associates | 259,803 | 259,390 | [18. Fair Value Hierarchy of Financial Instruments](index=32&type=section&id=18.%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) The Group's financial instruments are measured at fair value across three levels; as of June 30, 2025, equity investments designated at fair value through other comprehensive income and financial assets at fair value through profit or loss totaled **HKD 8.2532 billion**; unlisted equity and fund investments are valued using valuation multiples, considering unobservable inputs such as discounts for lack of marketability | Fair Value Level | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Level 1 (Quoted Prices in Active Markets) | 2,671,833 | 2,532,968 | | Level 2 (Significant Observable Inputs) | 1,647,320 | 1,993,524 | | Level 3 (Significant Unobservable Inputs) | 3,934,070 | 3,701,697 | | Total | 8,253,223 | 8,228,189 | - Valuation methods for unlisted equity and fund investments include valuation multiples, with significant unobservable inputs such as discounts for lack of marketability (**0%-30%**), price-to-book ratios (**0.21-2.61**), and price-to-earnings ratios (**6.44-31.00**)[88](index=88&type=chunk) - An increase/decrease of **20%** in the discount for lack of marketability would result in a decrease/increase in fair value of **HKD 302.1 million**[88](index=88&type=chunk) [Supplementary Financial Information](index=37&type=section&id=Supplementary%20Financial%20Information) This section details the Group's comprehensive financial risk management objectives and policies across various risk categories [Financial Risk Management Objectives and Policies](index=37&type=section&id=Financial%20Risk%20Management%20Objectives%20and%20Policies) The Group has established comprehensive policies and procedures to identify, assess, monitor, and control various financial risks, including credit, liquidity, capital management, interest rate, foreign exchange, insurance, operational, and equity price risks, with regular internal audits to ensure compliance [Internal Control System](index=37&type=section&id=Internal%20Control%20System) The Group's internal control system includes comprehensive control systems and standards, with clearly defined responsibilities for each business unit; the internal audit department collaborates with external professionals to monitor the effectiveness of internal control procedures, ensure compliance, and reports directly to the Audit Committee - The internal control system includes comprehensive control systems and standards, with clearly defined responsibilities for each business and operating unit[95](index=95&type=chunk) - The internal audit department, in conjunction with outsourced internal audit professionals, monitors the effectiveness of internal control procedures and reports directly to the Board's Audit Committee[95](index=95&type=chunk) [Credit Risk Management](index=37&type=section&id=Credit%20Risk%20Management) The Group manages credit risk, primarily from customers, intermediaries, and reinsurers, by considering relevant collateral and long-term business relationships; there is no significant concentration of credit risk within the Group due to a widely distributed customer base - Credit risk arises from customers, intermediaries, and reinsurers, managed by considering relevant collateral and long-term business relationships with counterparties[96](index=96&type=chunk) - There is **no significant concentration of credit risk** within the Group, as the customer base is widely distributed across various industries[96](index=96&type=chunk) [Liquidity Risk Management](index=37&type=section&id=Liquidity%20Risk%20Management) The Group monitors the risk of funding shortfalls and ensures its ability to meet current liabilities by establishing business unit-specific liquidity management policies and recurring liquidity planning tools - The Group has established business unit-specific liquidity management policies and employs recurring liquidity planning tools to monitor its risk of funding shortfalls[97](index=97&type=chunk) [Capital Management](index=38&type=section&id=Capital%20Management) The Group implemented a risk-based capital regime on July 1, 2024, ensuring its capital base is no less than the required capital amount, minimum capital amount, and **HKD 20 million**; the Group manages capital requirements by regularly assessing the gap between its capital base and required capital amount, fully complying with the capital provisions of the Hong Kong Insurance Ordinance - The Group implemented a risk-based capital regime on July 1, 2024, aimed at ensuring capital requirements, supporting business objectives, and enhancing shareholder interests[98](index=98&type=chunk) - The Group ensures its capital base is at all times no less than the required capital amount, minimum capital amount, and **HKD 20,000,000**[98](index=98&type=chunk) - During the reported financial period, the Group fully complied with the externally imposed capital requirements under Section 10 of the Hong Kong Insurance Ordinance[100](index=100&type=chunk) [Interest Rate Risk Management](index=38&type=section&id=Interest%20Rate%20Risk%20Management) The Group manages interest rate risk by maintaining an appropriate mix of fixed and floating rate instruments and managing the maturities of interest-bearing financial assets, addressing the risk of fluctuations in financial instrument values or future cash flows due to market interest rate changes - The Group's interest rate risk policy mandates maintaining an appropriate mix of fixed and floating rate instruments to manage interest rate risk[102](index=102&type=chunk) - Interest on floating rate instruments is generally re-priced within one year, while interest on fixed rate instruments is priced at inception and remains fixed until maturity[102](index=102&type=chunk) [Foreign Exchange Risk Management](index=39&type=section&id=Foreign%20Exchange%20Risk%20Management) The Group's foreign exchange risk primarily stems from overseas operations, reinsurance business, and investment activities; currently, there is no foreign exchange hedging policy, but management monitors foreign exchange positions and considers hedging significant foreign exchange risks when necessary - The Group's foreign exchange risk primarily arises from overseas operations, reinsurance business, and investment activities[104](index=104&type=chunk) - The Group currently has no foreign exchange hedging policy, but management monitors foreign exchange positions and will consider hedging significant foreign exchange risks when necessary[105](index=105&type=chunk) [Insurance Risk Management](index=39&type=section&id=Insurance%20Risk%20Management) The Group manages insurance risk by diversifying risks, employing prudent underwriting strategies, strict claims policies, active claims management, and reinsurance arrangements, addressing the risk that actual claims and benefit payments may exceed the carrying value of insurance liabilities - The Group improves risk variability by diversifying risk losses across a larger portfolio of insurance contracts and carefully selecting and implementing underwriting strategies[106](index=106&type=chunk) - The Group implements a policy of active management and prompt claims handling to reduce the risk of unpredictable future developments[106](index=106&type=chunk) - Most reinsurance business is ceded on a proportional and excess-of-loss basis to reduce the Group's net exposure to catastrophic losses[107](index=107&type=chunk) - The Group limits the risk of catastrophic events to predetermined maximum amounts by imposing maximum claim amounts on certain contracts and utilizing reinsurance arrangements[108](index=108&type=chunk) [Operational Risk Management](index=40&type=section&id=Operational%20Risk%20Management) The Group manages operational risk by maintaining appropriate operational procedure documentation, establishing sound internal control systems, implementing backup systems, and emergency business recovery plans, thereby reducing the risk of procedural errors, system failures, fraud, and other incidents - The Group manages operational risk by maintaining appropriate operational procedure documentation, establishing sound internal control systems, implementing backup systems, and emergency business recovery plans[109](index=109&type=chunk) [Equity Price Risk Management](index=40&type=section&id=Equity%20Price%20Risk%20Management) The Group faces equity price risk arising from individual equity investments, primarily monitoring market risk through established trading, open position, and loss limit parameters, which are regularly reviewed and approved by the Investment Committee - The Group faces equity price risk arising from individual equity investments classified as financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income[110](index=110&type=chunk) - The Group monitors market risk by establishing trading, open position, and loss limit parameters, which are regularly reviewed and approved by the Investment Committee[110](index=110&type=chunk) [Other Information](index=41&type=section&id=Other%20Information) This section covers corporate governance, directors' and major shareholders' interests, share transactions, and changes in director information [Code for Securities Transactions by Directors](index=41&type=section&id=Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted a code for securities transactions by directors no less stringent than the Model Code set out in the Listing Rules, and all directors have confirmed compliance with this code during H1 2025 - The Company has adopted a code for securities transactions by directors no less stringent than the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules[112](index=112&type=chunk) - All directors have confirmed compliance with the required standards set out in the Securities Code and the Model Code during the six months ended June 30, 2025[112](index=112&type=chunk) [Directors' and Chief Executive's Interests in Shares](index=41&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20in%20Shares) As of June 30, 2025, Mr. Chan Chi-shing held a total of **580.7 million shares** in the Company, representing approximately **62.83% of the issued share capital**, making him the largest beneficial owner; Mr. Chan Chi-man and Mr. Wong Kok-ho also held minor share interests | Director's Name | Total Number of Ordinary Shares Held | Approximate Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | | Chan Chi-shing | 580,742,392 | 62.83% | | Chan Chi-man | 8,830,000 | 0.96% | | Wong Kok-ho | 1,240,000 | 0.13% | - Mr. Chan Chi-shing is deemed to have an interest in **569.9 million shares**, primarily held through Claremont Capital Holdings Ltd, Asia Panich Investment Company (Hong Kong) Limited, and Man Tung Company Limited[115](index=115&type=chunk) [Major Shareholders' and Other Persons' Interests in Shares](index=42&type=section&id=Major%20Shareholders%27%20and%20Other%20Persons%27%20Interests%20in%20Shares) As of June 30, 2025, Cosmos Investments Inc. was the largest major shareholder, holding approximately **61.66%** of the Company's shares; other major shareholders included Claremont Capital Holdings Ltd, Bangkok Bank Public Company Limited, Sompo Holdings, Inc. and its wholly-owned subsidiary Sompo Japan Insurance Inc., and Aioi Nissay Dowa Insurance Company, Limited | Shareholder Name | Number of Ordinary Shares Held | Approximate Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | | Cosmos Investments Inc. | 569,999,712 | 61.66% | | Claremont Capital Holdings Ltd | 566,069,712 | 61.24% | | Bangkok Bank Public Company Limited | 89,988,236 | 9.74% | | Sompo Holdings, Inc. | 91,759,753 | 9.93% | | Sompo Japan Insurance Inc. | 91,759,753 | 9.93% | | Aioi Nissay Dowa Insurance Company, Limited | 52,550,175 | 5.68% | - Cosmos Investments Inc. is deemed to have an interest in **569.9 million shares**, primarily held through Claremont Capital, Asia Panich, and Man Tung[118](index=118&type=chunk) [Purchase, Sale or Redemption of the Company's Shares](index=43&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Shares) For the six months ended June 30, 2025, a subsidiary of the Company repurchased a total of **508,000 ordinary shares** for an aggregate consideration of approximately **HKD 2.036 million**, with some shares subsequently cancelled; the Directors believe the share repurchases are in the best interests of the Company and its shareholders, potentially enhancing net asset value per share and/or earnings per share | Month of Repurchase | Number of Ordinary Shares Repurchased | Total Purchase Price (HKD thousands) | | :--- | :--- | :--- | | April 2025 | 214,000 | 855 | | May 2025 | 66,000 | 268 | | June 2025 | 228,000 | 913 | | Total | 508,000 | 2,036 | - Repurchased shares were cancelled during and after the reporting period, resulting in a reduction of issued share capital[119](index=119&type=chunk) - The Directors believe the share repurchases are in the best interests of the Company and its shareholders, potentially enhancing the Company's net asset value per share and/or earnings per share[120](index=120&type=chunk) [Changes in Directors' Information](index=44&type=section&id=Changes%20in%20Directors%27%20Information) Since the publication of the 2024 Annual Report, directors' emoluments/fees have been adjusted, and directors have been appointed to the Asia Insurance Remuneration Committee and other working groups | Director's Emoluments/Fees Item | 2025 (HKD per annum) | 2024 (HKD per annum) | | :--- | :--- | :--- | | Company Board Chairman's Fee | 80,000 | 100,000 | | Company Compliance Committee Chairman's Fee | 30,000 | 40,000 | | Asia Insurance Board Chairman's Fee | 80,000 | 60,000 | | Asia Insurance Audit Committee Chairman's Fee | 40,000 | 20,000 | | Asia Insurance Remuneration Committee Chairman's Fee | 30,000 | N/A | - Mr. Chan Chi-shing, Mr. Wong Kok-ho, Mr. Au Yeung Kai-chun, Ms. Ngan Man-ling, and Mr. Lee Lut-yan were all appointed as members of the Asia Insurance Remuneration Committee, with Mr. Lee Lut-yan serving as Chairman[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) [Corporate Governance Code](index=47&type=section&id=Corporate%20Governance%20Code) The Group complied with all applicable provisions of the Corporate Governance Code during H1 2025, with a deviation from Code Provision C.2.1 (roles of Chairman and Chief Executive should be separate); the Board believes that Mr. Chan Chi-shing's dual role as Chairman and Chief Executive, based on his experience and qualifications, provides stable and consistent leadership for the Group and is in the best interests of the Company and its shareholders - The Company has consistently complied with all applicable provisions of the Corporate Governance Code, with a deviation from Code Provision C.2.1 (roles of Chairman and Chief Executive should be separate)[130](index=130&type=chunk) - The Board believes that Mr. Chan Chi-shing's dual role as Chairman and Chief Executive, based on his experience and qualifications, provides stable and consistent leadership for the Group and is in the best interests of the Company and its shareholders[131](index=131&type=chunk)

Financial Performance - For the first half of 2025, the company reported revenue of RMB 672.9 million, a decrease of 17.1% compared to the same period in 2024, and a profit of RMB 48.7 million, down 29.5% year-on-year[9]. - The decline in revenue was primarily due to a weak consumer market and the overall economic conditions influenced by multiple global factors[9]. - The company's revenue decreased by 17.1% from RMB 811.3 million in the six months ended June 30, 2024, to RMB 672.9 million in the six months ended June 30, 2025[20]. - Revenue from tea sales dropped by 19.1% from RMB 571.8 million to RMB 462.7 million during the same period[22]. - The gross profit decreased by 16.5% from RMB 424.1 million to RMB 354.2 million, while the gross margin slightly increased from 52.3% to 52.6% due to cost control measures[24]. - Net profit decreased by RMB 20.3 million or 29.5% from RMB 69.1 million to RMB 48.7 million, with a drop in net profit margin from 8.5% to 7.2%[34]. - Cash generated from operating activities increased significantly to RMB 322,750 thousand, compared to RMB 172,208 thousand in 2024, marking an increase of 87.6%[76]. - Other income fell by 36.6% from RMB 14.7 million to RMB 9.3 million, primarily due to a reduction in government subsidies from RMB 6.6 million to RMB 2.9 million[28]. - Financing costs rose by 4.3% from RMB 12.0 million to RMB 12.5 million, reflecting an increase in foreign exchange losses[31]. - Income tax expenses decreased by 24.8% from RMB 30.7 million to RMB 23.1 million, linked to a decline in pre-tax profit from RMB 99.8 million to RMB 71.8 million[33]. Operational Strategy - The company plans to continue optimizing its retail network, focusing on high-traffic areas in selected cities and expanding into third- and fourth-tier cities[14]. - The company aims to enhance its operational efficiency by expanding its customer loyalty programs and improving employee training and welfare while controlling expenses[9]. - The company is actively promoting online sales through its subsidiary to attract customers who prefer purchasing tea products online[14]. - The company plans to enhance its product line by diversifying tea products and developing traditional delicacies, with a focus on packaging improvements by the first half of 2025[15]. - The company aims to expand its market presence through strategic marketing activities during traditional Chinese festivals and by promoting its brand through tea exhibitions and tasting events[17]. - The company has established a food research and development department to create diverse traditional foods, including pork crisps and instant bird's nest[15]. Market Conditions - The macroeconomic environment remains challenging, with risks such as rising inflation and geopolitical tensions affecting consumer behavior[9]. - The company anticipates a gradual recovery in the consumer market, driven by government policies aimed at boosting domestic consumption[9]. Financial Position - As of June 30, 2025, the total assets of the company amounted to RMB 2,951,453,000, a slight decrease from RMB 2,973,619,000 as of December 31, 2024[68]. - Cash and cash equivalents increased by 59.3% from RMB 340.5 million to RMB 542.4 million, primarily due to cash generated from operating activities[35]. - The capital debt ratio improved from 22.3% to 12.2%, mainly due to an increase in cash and cash equivalents[38]. - Trade and other receivables decreased from RMB 245.5 million to RMB 149.4 million, while trade and other payables increased from RMB 250.5 million to RMB 256.0 million[41]. - Total liabilities as of June 30, 2025, were RMB 1,219,554 thousand, a slight increase from RMB 1,208,193 thousand at the end of 2024[71]. - Total equity as of June 30, 2025, was RMB 1,731,899 thousand, down from RMB 1,765,426 thousand at the end of 2024[71]. Shareholder Information - The interim dividend declared on August 18, 2025, is HKD 0.02 per share (equivalent to RMB 0.018), which is 33.3% lower than the interim dividend of HKD 0.03 per share (equivalent to RMB 0.027) in 2024[46]. - The total amount of dividends to be distributed is approximately 50% of the group's after-tax consolidated net profit for the six months ended June 30, 2025, similar to the amount paid in the same period last year[46]. - The group has 3,302 employees as of June 30, 2025, with 3,297 located in China and 5 in Hong Kong[44]. - Major shareholders include Discerning Group Limited with 17.42% and UBS TC (Jersey) Ltd. with 34.91% of the shares[53]. Compliance and Governance - The company has complied with the corporate governance code as of June 30, 2025, with no deviations reported[56]. - The company has established an audit committee to oversee financial reporting and risk management, consisting of four members, including three independent non-executive directors[64]. Risk Management - The group does not currently engage in any hedging activities to manage foreign exchange risks, which primarily arise from transactions denominated in USD and JPY[42]. - The group has no significant foreign exchange risk exposure due to its operations primarily being conducted in RMB[42]. - The group’s financial risk management policies have not changed since the end of 2024[84].

Revenue and Sales Performance - Revenue increased by approximately 12.4% to approximately RMB1,269,510,000 for the Review Period from approximately RMB1,129,916,000 for the Previous Period[12] - The Group sold 11,606 tonnes of linen yarn during the Review Period, which was 61.7% more than the 7,179 tonnes sold during the Previous Period[15] - Domestic sales amounted to RMB674,368,000, contributing approximately 53.1% of total revenue, with a year-on-year increase of approximately 25.1%[16] - Overseas sales reached RMB595,142,000, contributing approximately 46.9% of total revenue, with modest growth of approximately 0.7% year-on-year[16] - Revenue from Mainland China was RMB 674,368,000, up 24.9% from RMB 538,944,000 in 2024[181] - Sales of linen yarn, hemp yarn, and scraps contributed RMB 1,152,231,000, up from RMB 1,056,673,000, reflecting a growth of 9.0%[192] - Sales of other products increased significantly to RMB 100,450,000 from RMB 50,072,000, marking a growth of 100.8%[192] Profitability and Loss - The Group recorded a loss for the Review Period of approximately RMB121,517,000, compared to a profit of approximately RMB78,508,000 in the Previous Period[12] - The average linen yarn price dropped by approximately 30% for the Review Period compared to the same period last year, contributing to a gross loss of approximately RMB45,467,000[15] - The gross loss for the Review Period was approximately RMB45,467,000, compared to a gross profit of approximately RMB198,845,000 in the previous period, resulting in a gross loss margin of 3.6%[35] - Loss per share was RMB0.19 for the Review Period, compared to earnings per share of RMB0.12 in the Previous Period[12] - Loss before tax for the period was RMB 144,174, compared to a profit of RMB 108,260 in the same period last year[159] - The net loss for the period attributable to owners of the parent was RMB 118,553, compared to a profit of RMB 73,961 in 2024[159] - Total comprehensive income for the period was a loss of RMB 116,639, compared to a profit of RMB 70,786 in the same period last year[161] Expenses and Costs - Selling and distribution expenses amounted to approximately RMB18,402,000, accounting for 1.4% of total revenue, consistent with the previous period[37] - Administrative expenses decreased by approximately 5.9% to RMB50,131,000, primarily due to a reduction in research and development expenses[41] - Total staff costs incurred for the Review Period amounted to approximately RMB 110,318,000, an increase from RMB 79,101,000 in the previous period[79] - The cost of inventories sold rose to RMB 1,298,148,000, compared to RMB 907,900,000, indicating an increase of 42.9%[195] - Employee benefit expenses, including directors' remuneration, increased to RMB 110,318,000 from RMB 79,101,000, reflecting a rise of 39.4%[195] - Research and development expenses decreased to RMB 4,747,000 from RMB 8,746,000, a reduction of 45.6%[195] Assets and Liabilities - As of June 30, 2025, the Group had net current assets of approximately RMB394,916,000, down from RMB477,487,000 as of December 31, 2024[58] - Cash and cash equivalents increased to approximately RMB534,742,000 from RMB230,871,000 as of December 31, 2024[59] - The total assets of the Group were approximately RMB 2,881,974,000, a decrease from RMB 3,115,009,000 as of December 31, 2024[64] - The total equity of the Group as of June 30, 2025, was approximately RMB 1,332,539,000, down from RMB 1,474,829,000 as of December 31, 2024[64] - Total current assets decreased to RMB 1,850,590 from RMB 2,073,606 as of December 31, 2024, reflecting a decline of 10.7%[162] - Total current liabilities decreased to RMB 1,455,674 from RMB 1,596,119, a reduction of 8.8%[162] Corporate Governance and Management - The Audit Committee comprises three independent non-executive Directors, ensuring compliance with financial reporting and internal control systems[153] - The Company is committed to good corporate governance practices to maintain investor confidence[146] - The roles of the chairman and chief executive officer are not separated, as the Company does not have a chief executive officer[152] - The Company has established a code of conduct for Directors' securities transactions, confirming compliance with required standards[145] Future Plans and Market Outlook - The Group plans to construct a new factory in Egypt in the second half of 2025, benefiting from a golden permit that offers tax-saving opportunities[27] - The Group is optimistic about the long-term prospects of the linen yarn market[93] - The Company aims to become one of the largest linen yarn manufacturers globally by implementing a strategic global production layout and focusing on sustainable development and technical innovation[122] - A new factory in Egypt will commence construction in the second half of 2025 to diversify production bases[94] Risks and Challenges - The principal risks facing the Group include demand for linen yarn, protectionism, and potential tariffs, as well as supply chain disruptions and currency fluctuations[89] - The main risks include demand for linen yarn, trade protectionism, and potential punitive tariffs on Chinese products[92] - The Group's operations are affected by the stability of raw material supply and transportation costs[92]

[Supplementary Announcement Regarding the 2024 Annual Report](index=1&type=section&id=Supplementary%20Announcement%20Regarding%20the%202024%20Annual%20Report) [Introduction to the Supplementary Announcement](index=1&type=section&id=Introduction%20to%20the%20Supplementary%20Announcement) This announcement provides supplementary details for China Hongguang Holdings Limited's 2024 annual report, specifically on the share option scheme adopted on June 30, 2023, per GEM Listing Rules Chapter 23 - This announcement supplements China Hongguang Holdings Limited's 2024 annual report, providing additional details on the share option scheme adopted on June 30, 2023[2](index=2&type=chunk)[3](index=3&type=chunk) - The supplementary information is provided in accordance with Chapter 23 of the GEM Listing Rules[3](index=3&type=chunk) [1. Maximum Number of Shares Available for Grant](index=1&type=section&id=1.%20Maximum%20Number%20of%20Shares%20Available%20for%20Grant) The share option scheme's authorized limit is 10% of shares issued on the adoption date, with 39,900,000 shares currently available, representing approximately 8.69% of issued shares, and no options granted, exercised, cancelled, or lapsed since adoption Share Option Scheme Authorization Limit and Current Status | Indicator | Value | | :--- | :--- | | Scheme Authorization Limit | 10% of issued shares on adoption date | | Total Shares Available for Grant | 39,900,000 shares | | Percentage of Issued Shares | Approximately 8.69% | | Share Option Activity | No grants, exercises, cancellations, or lapses | [2. Maximum Entitlement for Each Eligible Participant](index=1&type=section&id=2.%20Maximum%20Entitlement%20for%20Each%20Eligible%20Participant) A single eligible participant's total share options and awarded shares within 12 months must not exceed 1% of issued shares; exceeding this requires shareholder approval, with the participant and close associates abstaining from voting - The total number of share options and awarded shares granted to a single eligible participant within any 12-month period must not exceed **1% of the issued shares**[5](index=5&type=chunk) - Exceeding this limit requires separate approval by shareholders in a general meeting, with the relevant eligible participant and their close associates (or associates) abstaining from voting[5](index=5&type=chunk)[6](index=6&type=chunk) [3. Exercise of Share Options](index=2&type=section&id=3.%20Exercise%20of%20Share%20Options) Share options can be exercised at any time within ten years from their offer date, with the Board having discretion to set additional exercise conditions - Share options may be exercised in whole or in part at any time during the option period, provided that such period does not exceed the day immediately preceding the tenth anniversary of the offer date of the relevant share option[7](index=7&type=chunk) - The Board may, at its discretion, stipulate any conditions for the exercise of share options in the offer letter[7](index=7&type=chunk) [4. Vesting Period](index=2&type=section&id=4.%20Vesting%20Period) Grantees typically must hold options for a minimum period before exercise, but the Board may determine shorter or accelerated vesting periods under specific circumstances - Grantees must hold the share options for a period no less than the minimum vesting period before exercising them[8](index=8&type=chunk) - The Board may, at its discretion, determine a vesting period shorter than the minimum period under specific circumstances (e.g., granting "compensatory" options to new hires, termination of employment due to death or uncontrollable events, phased grants for administrative and compliance reasons, blended or accelerated vesting schedules, or performance-linked vesting conditions)[8](index=8&type=chunk) [5. Amount Payable Upon Application or Acceptance of Share Options, and Payment/Loan Repayment Period](index=2&type=section&id=5.%20Amount%20Payable%20Upon%20Application%20or%20Acceptance%20of%20Share%20Options,%20and%20Payment/Loan%20Repayment%20Period) Eligible participants must submit a signed acceptance letter and pay HK$1.00 as consideration for the grant of share options within 30 days from the offer date - The offer acceptance period is **thirty (30) days** from the offer date[8](index=8&type=chunk) - Acceptance of share options requires submitting a duly signed duplicate letter of acceptance of the offer, together with a payment of **HK$1.00** payable to the Company[8](index=8&type=chunk) [6. Subscription Price of Shares](index=2&type=section&id=6.%20Subscription%20Price%20of%20Shares) The share option subscription price is determined at the Board's discretion but must not be less than the highest of the closing price on the offer date, the average closing price over the five preceding trading days, and the shares' nominal value - The share subscription price is determined at the Board's sole discretion[9](index=9&type=chunk) - The subscription price must not be less than the highest of: (1) the closing price of the shares as stated in the daily quotation sheet of the Stock Exchange on the offer date; (2) the average closing price of the shares as stated in the daily quotation sheets of the Stock Exchange for the five (5) consecutive trading days immediately preceding the offer date; and (3) the nominal value of the shares on the offer date[9](index=9&type=chunk) [7. Duration of the Share Option Scheme](index=2&type=section&id=7.%20Duration%20of%20the%20Share%20Option%20Scheme) The share option scheme is valid until June 29, 2033, the day preceding the tenth anniversary of its adoption date; no new options will be granted thereafter, but existing options remain exercisable - The share option scheme is valid and effective until the day immediately preceding the tenth anniversary of June 30, 2023 (the adoption date), which is **June 29, 2033**[10](index=10&type=chunk)[11](index=11&type=chunk) - No further share options will be granted after this period, but the provisions of the share option scheme will remain in full force and effect to ensure the exercise of any share options granted on or before the termination date[11](index=11&type=chunk) [Other Important Information](index=3&type=section&id=Other%20Important%20Information) This announcement confirms all other annual report information remains unchanged and effective, providing the announcement date, Board member list, and publication channels - Except as disclosed in this announcement, all other information contained in the annual report remains unchanged and continues to be effective[12](index=12&type=chunk) - The date of this announcement is **September 8, 2025**, and lists the executive and independent non-executive directors[13](index=13&type=chunk)[14](index=14&type=chunk) - This announcement will be published on the Stock Exchange's website www.hkexnews.hk and the Company's website www.hongguang.hk[14](index=14&type=chunk)

[Company Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides an overview of the company's governance structure, board composition, and fundamental listing details [Board of Directors and Committees](index=3&type=section&id=%E7%9B%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E5%A7%94%E5%93%A1%E6%9C%83) The company's sixth board of directors, comprising executive, non-executive, and independent non-executive members, operates with established committees to ensure robust corporate governance - Board members include **Dr. Hou Yongtai** (Chairman), **Mr. Wu Jianying** (General Manager), **Ms. Chen Yiyi**, **Mr. Tang Minjie** (CFO) as executive directors; **Ms. You Jie**, **Mr. Huang Ming**, **Mr. Wei Changzheng** (Employee Representative) as non-executive directors; and **Mr. Shen Hongbo**, **Mr. Jiang Zhihong**, **Mr. Su Zhi**, **Mr. Yang Yushe** as independent non-executive directors[4](index=4&type=chunk) - The company has an Audit Committee (Chairman: **Mr. Shen Hongbo**), Remuneration and Appraisal Committee (Chairman: **Mr. Su Zhi**), Nomination Committee (Chairman: **Mr. Jiang Zhihong**), and Strategy and Sustainable Development Committee (Chairman: **Ms. You Jie**)[4](index=4&type=chunk) [Company Basic Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) The company maintains headquarters in Shanghai and a Hong Kong office, with its H-shares and A-shares listed on the HKEX and SSE STAR Market respectively - The company's headquarters and principal place of business in China are located at 23rd Floor, Guangdian Building, 1386 Hongqiao Road, Changning District, Shanghai, China; the principal place of business in Hong Kong is at Room 1901, 19th Floor, Lee Garden One, 33 Hysan Road, Causeway Bay, Hong Kong[5](index=5&type=chunk) Company Share Listing Information (As of June 30, 2025) | Indicator | H-shares | A-shares | | :--- | :--- | :--- | | Stock Code | 6826 | 688366 | | Listing Venue | Main Board of The Stock Exchange of Hong Kong Limited | STAR Market of Shanghai Stock Exchange | | Shares Issued | 39,141,840 shares | 194,051,855 shares | | Par Value | RMB 1.00 per share | RMB 1.00 per share | - The company's main banks are Industrial and Commercial Bank of China Limited (Shanghai Xinhua Road Branch) and Bank of Shanghai Co., Ltd. (Shanghai Changning District Branch); investors can inquire via hotline **(86) 021-52293555**, and the company website is **www.3healthcare.com**[5](index=5&type=chunk) [Interim Results Summary](index=5&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E6%91%98%E8%A6%81) For H1 2025, the Group experienced a decline in operating revenue, profit attributable to ordinary equity holders, and basic earnings per share, while maintaining stable interim dividends Interim Results Summary for H1 2025 | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,292.64 | 1,397.11 | -7.48% | | R&D Expenses | 98.40 | 125.40 | -21.53% | | R&D Expenses as % of Revenue | 7.61% | 8.98% | -1.37pp | | Profit Attributable to Ordinary Equity Holders | 211.07 | 235.28 | -10.29% | | Basic Earnings Per Share | RMB 0.91 | RMB 1.01 | -9.90% | | Interim Dividend (per share, tax inclusive) | RMB 0.40 | RMB 0.40 | 0% | [Management Discussion and Analysis](index=6&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) This section analyzes the Group's operational performance, future development strategies, and financial results for the reporting period [Business Overview](index=6&type=section&id=%E7%B6%93%E7%87%9F%E6%A6%82%E8%A6%BD) In H1 2025, the Group sustained steady development across its core business segments, despite revenue and net profit declines influenced by tax adjustments and centralized procurement - The Group maintained steady development in its four core business segments: medical aesthetics, ophthalmology, orthopedics, and anti-adhesion & hemostasis, by continuously deepening product innovation, market expansion, and lean management[8](index=8&type=chunk) Key Financial Overview for H1 2025 | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,292.64 | 1,397.11 | -7.48% | | R&D Expenses | 98.40 | 125.40 | -21.53% | | R&D Expenses as % of Revenue | 7.61% | 8.98% | -1.37pp | | Net Profit Attributable to Shareholders of Listed Company | 211.07 | 235.28 | -10.29% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Gains and Losses) | 204.21 | 230.35 | -11.35% | | Total Assets (Period-end) | 7,185.80 | 7,121.70 (2024 year-end) | +0.90% | | Net Assets Attributable to Shareholders of Listed Company (Period-end) | 5,611.60 | 5,575.26 (2024 year-end) | +0.65% | | Overall Gross Profit Margin | 70.11% | 70.38% | -0.27pp | - The decrease in operating revenue was mainly due to the adjustment of VAT rate for subsidiary Shanghai Qisheng from **3% to 13%**, leading to a decrease in sales unit price and revenue after tax for related products[9](index=9&type=chunk) - The decrease in R&D expenses was primarily due to several core R&D projects entering late-stage clinical trials or registration review, resulting in a phased decrease in direct R&D labor costs and direct material expenses for trials[13](index=13&type=chunk) [Discussion and Analysis of Operating Performance by Product Line](index=7&type=section&id=%E5%88%86%E7%94%A2%E5%93%81%E7%B7%9A%E7%B6%93%E7%87%9F%E6%83%85%E6%B3%81%E8%A8%8E%E8%AB%96%E5%92%8C%E5%88%86%E6%9E%90) The Group's four core product lines exhibited varied performance in H1 2025, with some facing market challenges and others achieving significant growth H1 2025 Revenue Details by Product Line | Product Line | H1 2025 (RMB thousand) | Share (%) | H1 2024 (RMB thousand) | Share (%) | YoY Growth (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Medical Aesthetics and Wound Care Products | 573,270 | 44.35 | 631,817 | 45.22 | -9.27% | | Ophthalmology Products | 366,148 | 28.33 | 449,659 | 32.18 | -18.57% | | Orthopedic Products | 225,948 | 17.48 | 231,822 | 16.59 | -2.53% | | Anti-adhesion and Hemostasis Products | 109,976 | 8.51 | 68,874 | 4.93 | 59.68% | | Other Products | 17,294 | 1.33 | 14,940 | 1.08 | 15.76% | | Total | 1,292,636 | 100.00 | 1,397,112 | 100.00 | -7.48% | [Medical Aesthetics and Wound Care Products](index=7&type=section&id=%E9%86%AB%E7%99%82%E7%BE%8E%E5%AE%B9%E8%88%87%E5%89%B5%E9%9D%A2%E8%AD%B7%E7%90%86%E7%94%A2%E5%93%81) Revenue for medical aesthetics and wound care products decreased, primarily due to lower demand for entry-level hyaluronic acid, though high-end products and domestic radiofrequency equipment showed resilience - The Group has formed a business matrix of four categories in medical aesthetics and wound care: hyaluronic acid, epidermal repair gene engineering preparations, radiofrequency and laser equipment, to meet customers' comprehensive medical aesthetic consumption needs[15](index=15&type=chunk) Medical Aesthetics and Wound Care Product Line Revenue Details | Item | Jan-Jun 2025 (RMB thousand) | Share (%) | Jan-Jun 2024 (RMB thousand) | Share (%) | YoY Growth (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Hyaluronic Acid | 345,822 | 60.32 | 415,479 | 65.76 | -16.77 | | Radiofrequency and Laser Equipment | 135,418 | 23.63 | 135,455 | 21.44 | -0.03 | | Human Epidermal Growth Factor | 92,030 | 16.05 | 80,883 | 12.80 | 13.78 | | Total | 573,270 | 100.00 | 631,817 | 100.00 | -9.27 | - Hyaluronic acid product revenue decreased by **16.77%**, mainly due to a phased reduction in demand for mass-market entry-level first and second-generation products, but "Haimei Yuebai" performed well, and "Haimei" hyaluronic acid products continued to grow[21](index=21&type=chunk) - Radiofrequency and laser equipment revenue remained largely flat, with overseas markets declining by approximately **RMB 16.41 million** due to multiple factors, but domestic "EndyMed Pro" high-frequency skin treatment devices and Intensif treatment heads sales revenue increased by **53.15%** and **76.37%** respectively[23](index=23&type=chunk) - Human epidermal growth factor product "Kanghesu" revenue increased by **13.78%**, with a market share of **26.96%**, ranking second in the domestic market, and plans to expand application departments to pediatrics, oncology, and other multi-disciplinary areas[25](index=25&type=chunk) [Ophthalmology Products](index=11&type=section&id=%E7%9C%BC%E7%A7%91%E7%94%A2%E5%93%81) Ophthalmology product revenue significantly declined due to centralized procurement and market competition, prompting the company to focus on product structure optimization and high-end R&D - The Group is the largest domestic producer of ophthalmic viscoelastic devices, with its market share growing to **51.42%** in 2024, ranking first in the Chinese market for eighteen consecutive years[27](index=27&type=chunk) Ophthalmology Product Line Revenue Details | Item | Jan-Jun 2025 (RMB thousand) | Share (%) | Jan-Jun 2024 (RMB thousand) | Share (%) | YoY Growth (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Cataract Surgery Product Line | 164,549 | 44.94 | 230,874 | 51.35 | -28.73 | | Intraocular Lenses | 126,812 | 34.63 | 180,667 | 40.18 | -29.81 | | Ophthalmic Viscoelastic Devices | 37,737 | 10.31 | 50,207 | 11.17 | -24.84 | | Myopia Control and Refractive Correction Product Line | 184,826 | 50.48 | 200,187 | 44.52 | -7.67 | | Optometry Materials | 106,613 | 29.12 | 107,056 | 23.81 | -0.41 | | Optometry Terminal Products | 78,213 | 21.36 | 93,131 | 20.71 | -16.02 | | Other Ophthalmology Products | 16,773 | 4.58 | 18,598 | 4.13 | -9.81 | | Total | 366,148 | 100.00 | 449,659 | 100.00 | -18.57 | - Cataract product line revenue decreased by **28.73%**, mainly due to a significant reduction in intraocular lens sales unit prices caused by national centralized procurement, and the implementation of DRG/DIP payment models affecting sales of ordinary spherical and aspherical intraocular lenses[29](index=29&type=chunk) - Myopia control and refractive correction product line revenue decreased by **7.76%**, with intensified market competition for orthokeratology lenses, but sales of "MyOK" and "Tongxiang" brand orthokeratology lenses increased by **18.39%** and **86.01%** respectively[30](index=30&type=chunk)[31](index=31&type=chunk) - Several high-end intraocular lens products (such as hydrophobic molded toric aspheric IOLs, hydrophilic aspheric multifocal IOLs, hydrophobic molded aspheric trifocal IOLs) have been approved or entered the registration application stage[13](index=13&type=chunk)[35](index=35&type=chunk) - The second-generation aqueous humor permeable PRL product has entered the innovative approval channel and product registration application stage, which will provide a wider range of vision correction[37](index=37&type=chunk) [Orthopedic Products](index=14&type=section&id=%E9%AA%A8%E7%A7%91%E7%94%A2%E5%93%81) Orthopedic product revenue saw a slight decrease, as sodium hyaluronate injections faced price reductions from centralized procurement, while medical chitin was affected by tax and sales model changes - The Group is the largest domestic producer of orthopedic intra-articular viscoelastic supplements, with its market share growing from **41.61%** to **44.43%** in 2024, ranking first for eleven consecutive years[39](index=39&type=chunk) Orthopedic Product Line Revenue Details | Item | Jan-Jun 2025 (RMB thousand) | Share (%) | Jan-Jun 2024 (RMB thousand) | Share (%) | YoY Growth (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Sodium Hyaluronate Injection | 158,616 | 70.20 | 149,217 | 64.37 | 6.30 | | Medical Chitin (for intra-articular injection) | 67,332 | 29.80 | 82,605 | 35.63 | -18.49 | | Total | 225,948 | 100.00 | 231,822 | 100.00 | -2.53 | - Sodium hyaluronate injection product sales prices decreased due to provincial volume-based procurement, but achieved steady development through expanded sales channels and outsourced processing services[43](index=43&type=chunk) - Medical chitin (for intra-articular injection) product revenue decreased, mainly due to the adjustment of Shanghai Qisheng's VAT rate and a shift towards a distribution-based sales model[43](index=43&type=chunk) [Anti-adhesion and Hemostasis Products](index=16&type=section&id=%E9%98%B2%E9%BB%8F%E9%80%A3%E5%8F%8A%E6%AD%A2%E8%A1%80%E7%94%A2%E5%93%81) Anti-adhesion and hemostasis product revenue grew substantially, driven by successful market entry of new products and favorable centralized procurement outcomes for collagen sponge - The Group is the largest supplier of anti-adhesion materials in China, with a market share of **25.87%** in 2024[44](index=44&type=chunk) Anti-adhesion and Hemostasis Product Line Revenue Details | Item | Jan-Jun 2025 (RMB thousand) | Share (%) | Jan-Jun 2024 (RMB thousand) | Share (%) | YoY Growth (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Medical Chitin (for anti-adhesion) | 26,721 | 24.30 | 30,492 | 44.27 | -12.37 | | Medical Sodium Hyaluronate Gel | 25,454 | 23.15 | 27,474 | 39.89 | -7.35 | | Collagen Sponge | 13,955 | 12.68 | 10,908 | 15.84 | 27.93 | | Porcine Fibrin Sealant | 43,846 | 39.87 | – | – | N/A | | Total | 109,976 | 100.00 | 68,874 | 100.00 | 59.68 | - Medical chitin and medical sodium hyaluronate gel product revenues decreased, mainly due to control over high-value consumables and centralized procurement policies in some provinces[45](index=45&type=chunk) - Collagen sponge product revenue increased by **27.93%**, benefiting from being selected in the "3+N" alliance centralized volume-based procurement[46](index=46&type=chunk) - Porcine fibrin sealant product "Kangrui Glue" achieved revenue of **RMB 43.85 million** and was included in the "Shanghai Biomedical 'New Excellent Medical Devices' Product Catalog" in December 2024, accelerating market access and marketing layout[46](index=46&type=chunk) [Discussion and Analysis of Future Development](index=17&type=section&id=%E6%9C%AA%E4%BE%86%E7%99%BC%E5%B1%95%E7%9A%84%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) The Group plans to advance its four key therapeutic areas through innovation, strategic partnerships, and M&A, aiming for market leadership and enhanced brand value [Development Strategy](index=17&type=section&id=%E7%99%BC%E5%B1%95%E6%88%B0%E7%95%A5) The Group's strategy focuses on achieving domestic leadership and international recognition in biomaterials by concentrating on four rapidly growing therapeutic areas through innovation, technology, and strategic growth - The Group will continue to focus on four rapidly developing therapeutic areas: medical aesthetics and wound care, ophthalmology, orthopedics, and surgery[47](index=47&type=chunk) - The strategy includes emphasizing R&D innovation and achievement transformation, strengthening professional services, and maintaining technological leadership through collaboration with domestic and international R&D institutions, independent R&D, and technology introduction[47](index=47&type=chunk) - Through a combination of organic growth and M&A, the company will continuously expand and improve its product lines, integrate the industry chain, and strengthen its brand building to enhance brand value[47](index=47&type=chunk) [Operating Plan](index=17&type=section&id=%E7%B6%93%E7%91%AA%E8%A8%88%E5%8A%83) The H2 2025 operating plan emphasizes internal resource integration, promoting high-end medical aesthetics, accelerating ophthalmic R&D, and strategically navigating centralized procurement policies - In H2 2025, the Group will continue to deepen internal resource allocation, strengthen the integration of acquired enterprises to maximize synergy, improve operational efficiency, develop innovative technologies, and expand market space[48](index=48&type=chunk) - In the medical aesthetics and wound care segment, the focus will be on building the "Haimei Series" high-end hyaluronic acid product brand image, strengthening market promotion for the new "Jiaolan Lip" indication, and accelerating clinical trials for important R&D projects such as painless cross-linked hyaluronic acid[49](index=49&type=chunk) - In the ophthalmology segment, several high-end intraocular lens products are expected to be approved within the year, and clinical trials and registration applications for important R&D projects such as the second-generation aqueous humor permeable PRL product and new ultra-high oxygen permeable orthokeratology lenses will continue to be promoted[50](index=50&type=chunk) - In the orthopedics segment, the company will continue to monitor provincial and provincial alliance centralized volume-based procurement policies and actively bid to increase market share; in the surgery segment, the focus will be on promoting the entry of collagen sponge and "Kangrui Glue" products into hospitals to increase market share[51](index=51&type=chunk) [Financial Review](index=19&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section provides a comprehensive review of the Group's H1 2025 financial performance, detailing key income statement and balance sheet items and their drivers [Revenue, Costs and Gross Profit Margin](index=19&type=section&id=%E6%94%B6%E5%85%A5%E3%80%81%E6%88%90%E6%9C%AC%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Operating revenue decreased by 7.48% due to centralized procurement, a soft consumer market, and VAT rate adjustments, while the overall gross profit margin remained stable Revenue and Gross Profit Margin Overview | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,292.64 | 1,397.11 | -7.48% | | Overall Gross Profit Margin | 70.11% | 70.38% | -0.27pp | - The decrease in revenue was mainly due to: national centralized procurement policies (ophthalmology product line revenue decreased by **18.57%**), a weak domestic consumer market (medical aesthetics product line revenue decreased by **9.27%**), and the adjustment of VAT rate for subsidiary Shanghai Qisheng from **3% to 13%**, leading to a decrease in sales unit price and revenue after tax for related products[52](index=52&type=chunk) - Anti-adhesion and hemostasis product line revenue grew against the trend by **59.68%**, mainly benefiting from the inclusion of "Kangrui Glue" product in the "Shanghai Biomedical 'New Excellent Medical Devices' Product Catalog," accelerating market access[52](index=52&type=chunk) [R&D Expenses](index=19&type=section&id=%E7%A0%94%E7%99%BC%E9%96%8B%E6%94%AF) R&D expenses decreased by 21.53%, primarily because several core projects transitioned to late-stage clinical trials or registration review, leading to a phased reduction in related costs R&D Expenses Overview | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | R&D Expenses | 98.40 | 125.40 | -21.53% | | R&D Expenses as % of Revenue | 7.61% | 8.98% | -1.37pp | - The decrease in R&D expenses was mainly due to several core R&D projects successively entering late-stage clinical trials or registration review during the reporting period, resulting in a phased decrease in direct R&D labor costs and direct material expenses for trials[54](index=54&type=chunk) [Income Tax Expense](index=20&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense decreased by 24.22%, resulting in a lower effective tax rate, mainly due to reduced pre-tax profit and improved performance of previously loss-making entities Income Tax Expense Overview | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Income Tax Expense | 33.97 | 44.83 | -24.22% | | Effective Tax Rate | 14.41% | 17.08% | -2.67pp | - The decrease in income tax expense was mainly due to the Group's overall decrease in pre-tax profit during the reporting period, and some previously loss-making companies becoming profitable or significantly reducing losses during the reporting period[55](index=55&type=chunk) [Performance for the Current Reporting Period](index=20&type=section&id=%E6%9C%AC%E5%A0%B1%E5%91%8A%E6%9C%9F%E6%A5%AD%E7%B8%BE) Profit attributable to ordinary equity holders decreased by 10.29%, leading to lower basic earnings per share, primarily due to a reduction in gross profit from decreased operating revenue Performance Overview for the Current Reporting Period | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Profit Attributable to Ordinary Equity Holders | 211.07 | 235.28 | -10.29% | | Basic Earnings Per Share | RMB 0.91 | RMB 1.01 | -9.90% | - The decrease in profit was mainly due to lower gross profit resulting from decreased operating revenue[56](index=56&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E9%87%91%E4%BE%86%E6%BA%90) The Group maintained a stable current ratio of 3.73 as of June 30, 2025, despite an increase in current liabilities primarily from unpaid dividends and accrued expenses Liquidity Overview (As of June 30, 2025) | Indicator | Jun 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Total Current Assets | 3,702.72 | 3,658.27 | +1.22% | | Total Current Liabilities | 993.96 | 865.89 | +14.79% | | Current Ratio | 3.73 | 4.22 | Slight decrease | - The increase in current liabilities was mainly due to unpaid 2024 cash dividends, an increase in accrued expenses, and an increase in the current portion of bank and other borrowings[58](index=58&type=chunk) [Employees and Remuneration Policy](index=21&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group employed 2,156 individuals, with total compensation slightly increasing under a stable remuneration policy focused on attracting and retaining talent Number of Employees by Function (As of June 30, 2025) | Function | Number | | :--- | :--- | | Production | 849 | | R&D | 371 | | Sales and Marketing | 634 | | Finance | 75 | | Administration | 227 | | **Total** | **2,156** | Total Employee Remuneration | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Total Employee Remuneration | 344.08 | 337.30 | +6.78 | - The employee remuneration policy has not undergone significant changes and is determined based on work experience, daily performance, company operating conditions, and external market competition[60](index=60&type=chunk) [Treasury Policy](index=21&type=section&id=%E5%BA%AB%E5%8B%99%E6%94%BF%E7%AD%96) The Group adheres to a centralized, principal-protected treasury policy, placing cash surpluses in short-term bank deposits and prohibiting high-risk financial product investments - The Group adopts a centralized finance and treasury policy, placing cash surpluses in banks as short-term deposits in RMB, USD, and HKD[62](index=62&type=chunk) - The policy is to only engage in principal-protected and prudent deposit transactions, prohibiting investment in high-risk financial products[62](index=62&type=chunk) [Pledged Assets](index=21&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group had approximately RMB 0.90 million in bank deposits pledged as guarantees for performance bonds Pledged Assets | Indicator | Jun 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | | :--- | :--- | :--- | | Bank deposits pledged as performance bond guarantees | 0.90 | 0.90 | [Gearing Ratio](index=21&type=section&id=%E8%B3%87%E6%9C%AC%E8%B2%A0%E5%82%B5%E7%9A%84%E6%AF%94%E7%8E%87) The gearing ratio increased to 18.14% as of June 30, 2025, primarily due to higher dividends payable and other payables Gearing Ratio Overview (As of June 30, 2025) | Indicator | Jun 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Total Liabilities | 1,303.54 | 1,204.35 | +99.19 | | Gearing Ratio | 18.14% | 16.91% | +1.23pp | - The increase in the gearing ratio was mainly due to an increase in dividends payable and other payables at the end of the reporting period[64](index=64&type=chunk) [Cash and Cash Equivalents](index=22&type=section&id=%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9) Cash and cash equivalents decreased by RMB 498.62 million, primarily due to significant net cash outflows from investment and financing activities Cash and Cash Equivalents Overview | Indicator | Jun 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 614.29 | 1,112.91 | -498.62 | - The decrease in cash and cash equivalents was mainly due to: continuous investment in the Shanghai Haohai Biological Technology International Pharmaceutical R&D and Industrialization project, new large-denomination bank deposits with maturities over three months of approximately **RMB 430.63 million**, and a cash reduction of approximately **RMB 249.44 million** due to share repurchases and acquisition of non-controlling interests[65](index=65&type=chunk) [Bank Borrowings](index=22&type=section&id=%E9%8A%80%E8%A1%8C%E5%80%9F%E6%AC%BE) As of June 30, 2025, the Group's total interest-bearing bank borrowings were approximately RMB 393.42 million, of which approximately RMB 305.16 million will mature within one year Bank Borrowings Overview (As of June 30, 2025) | Indicator | Jun 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | | :--- | :--- | :--- | | Total Interest-Bearing Bank Borrowings | 393.42 | 395.74 | | Due within one year | 305.16 | 285.96 | | Due in two to five years | 88.26 | 109.78 | [Exchange Rate Fluctuation Risk](index=22&type=section&id=%E5%BD%99%E7%8E%87%E6%B3%A2%E5%8B%95%E9%A2%A8%E9%9A%AA) The Board anticipates no severe impact from foreign currency exchange rate fluctuations on the Group, as sales and costs are primarily RMB-denominated, and no hedging was undertaken - The Group's sales, costs, and expenses are primarily denominated in RMB, with the majority in RMB[67](index=67&type=chunk) - The Board expects that fluctuations in foreign currency exchange rates held will not severely impact the Group in the future, and no hedging transactions were entered into during the reporting period[67](index=67&type=chunk) [Future Plans for Major Investments and Capital Assets](index=22&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E4%B9%8B%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) The Group has no other major investment or capital asset plans beyond those disclosed in this report - Except as disclosed in this report, the Group has no other major investment plans or capital asset plans as of the date of this report[68](index=68&type=chunk) [Major Investments, Acquisitions or Disposals of Subsidiaries, Associates and Joint Ventures](index=22&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E6%94%B6%E8%B3%BC%E6%88%96%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%90%88%E7%87%9F%E5%85%AC%E5%8F%B8) During the reporting period, the Group did not undertake any other major investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group had no other major investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures[69](index=69&type=chunk) [Contingent Liabilities](index=22&type=section&id=%E6%88%96%E6%9C%89%E8%B2%A0%E5%82%B5) The Group reported no significant contingent liabilities as of June 30, 2025 - As of June 30, 2025, the Group had no significant contingent liabilities[70](index=70&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=23&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group's H1 2025 revenue was RMB 1,292.64 million, with profit for the period decreasing, while exchange differences and fair value changes in equity investments significantly impacted other comprehensive income Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Summary) | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 1,292,636 | 1,397,112 | | Gross Profit | 906,275 | 983,295 | | Profit Before Tax | 235,630 | 262,492 | | Income Tax Expense | (33,965) | (44,834) | | Profit for the Period | 201,665 | 217,658 | | Exchange differences arising on translation of overseas operations | 40,669 | 1,821 | | Fair value changes of equity investments designated at fair value through other comprehensive income (net of tax) | 9,479 | (22,742) | | Total Comprehensive Income for the Period | 251,813 | 196,737 | | Profit Attributable to Owners of the Parent | 211,065 | 235,283 | | Basic and Diluted Earnings Per Share Attributable to Ordinary Equity Holders of the Parent | 0.91 | 1.01 | [Interim Condensed Consolidated Statement of Financial Position](index=25&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, total assets slightly increased, driven by property, plant and equipment and other receivables, while net current assets decreased due to higher current liabilities Interim Condensed Consolidated Statement of Financial Position (Summary) | Indicator | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 1,740,253 | 1,700,688 | | Other Intangible Assets | 543,188 | 559,880 | | Total Non-current Assets | 3,483,079 | 3,463,124 | | **Current Assets** | | | | Inventories | 495,704 | 490,651 | | Trade and Bills Receivables | 339,174 | 324,280 | | Prepayments, Other Receivables and Other Assets | 202,015 | 125,286 | | Cash and Bank Balances | 2,561,316 | 2,629,306 | | Total Current Assets | 3,702,717 | 3,658,268 | | **Current Liabilities** | | | | Trade Payables | 70,002 | 62,099 | | Other Payables and Accrued Expenses | 588,035 | 480,711 | | Interest-bearing Bank and Other Borrowings | 322,747 | 305,683 | | Total Current Liabilities | 993,957 | 865,893 | | Net Current Assets | 2,708,760 | 2,792,375 | | Total Assets Less Current Liabilities | 6,191,839 | 6,255,499 | | **Non-current Liabilities** | | | | Interest-bearing Bank and Other Borrowings | 117,018 | 142,744 | | Total Non-current Liabilities | 309,581 | 338,458 | | Net Assets | 5,882,258 | 5,917,041 | | **Equity** | | | | Equity Attributable to Ordinary Equity Holders of the Parent | 5,611,598 | 5,575,259 | | Non-controlling Interests | 270,660 | 341,782 | | Total Equity | 5,882,258 | 5,917,041 | [Interim Condensed Consolidated Statement of Changes in Equity](index=27&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) Total equity slightly decreased as of June 30, 2025, influenced by profit for the period, other comprehensive income, share repurchases, and dividend declarations Interim Condensed Consolidated Statement of Changes in Equity (Summary) | Indicator | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Equity | 5,882,258 | 5,917,041 | | Profit for the Period | 211,065 | 211,065 (Current Period) | | Total Other Comprehensive Income for the Period | 50,148 | 50,148 (Current Period) | | Repurchase of A-shares and H-shares | (82,780) | (82,780) (Current Period) | | Acquisition of Non-controlling Interests | (47,947) | (47,947) (Current Period) | | Dividends Declared | (137,240) | (137,240) (Current Period) | - Equity attributable to ordinary equity holders of the parent increased from **RMB 5,575,259 thousand** as of December 31, 2024, to **RMB 5,611,598 thousand** as of June 30, 2025[78](index=78&type=chunk) - Non-controlling interests decreased from **RMB 341,782 thousand** as of December 31, 2024, to **RMB 270,660 thousand** as of June 30, 2025, mainly due to the acquisition of non-controlling interests and dividends paid to non-controlling shareholders[78](index=78&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=29&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) H1 2025 saw net cash inflow from operating activities, but significant net cash outflows from investing and financing activities led to a substantial decrease in cash and cash equivalents Interim Condensed Consolidated Statement of Cash Flows (Summary) | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 302,878 | 328,494 | | Net Cash Flow (Used in)/Generated from Investing Activities | (564,036) | 158,688 | | Net Cash Flow Used in Financing Activities | (249,440) | (133,055) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (510,598) | 354,127 | | Cash and Cash Equivalents at End of Period | 614,288 | 924,211 | - Net cash outflow from investing activities significantly increased, mainly due to the acquisition of property, plant and equipment, loans to third parties, purchase of financial assets at fair value through profit or loss, and new large-denomination bank deposits with maturities over three months[80](index=80&type=chunk) - Net cash outflow from financing activities increased, mainly due to repayment of bank and other borrowings, repurchase of A-shares and H-shares, acquisition of non-controlling interests, and dividends paid[82](index=82&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=31&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes on the company's and Group's information, accounting policies, segment data, revenue, expenses, and financial position [1. Company and Group Information](index=31&type=section&id=1.%20%E5%85%AC%E5%8F%B8%E5%8F%8A%E9%9B%86%E5%9C%98%E8%B3%87%E6%96%99) The company, established in 2007 and dual-listed, continued share repurchases and primarily engages in manufacturing and sales of biological preparations, medical hyaluronic acid, and ophthalmic products - The company was established in China on January 24, 2007, with H-shares listed on the HKEX in 2015 and A-shares listed on the SSE STAR Market in 2019[83](index=83&type=chunk) - During the reporting period, the company repurchased **416,700 H-shares** and **1,339,675 A-shares**, none of which had been cancelled as of June 30, 2025[84](index=84&type=chunk)[85](index=85&type=chunk) - The Group is primarily engaged in the manufacturing and sales of biological preparations, medical hyaluronic acid, and ophthalmic products, as well as research and development of bioengineering, manufacturing and sales of pharmaceutical and ophthalmic products, and provision of related services[85](index=85&type=chunk) - The ultimate controlling shareholders of the company are **Mr. Jiang Wei** and his spouse **Ms. You Jie**[86](index=86&type=chunk) [2. Basis of Preparation and Significant Accounting Policies](index=32&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The interim financial statements are prepared under IAS 34 using historical cost, consistent with annual policies, and the new IAS 21 amendment had no material impact [2.1 Basis of Preparation](index=32&type=section&id=2.1%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim condensed consolidated financial statements are prepared in accordance with IAS 34, using the historical cost convention and presented in RMB, to be read with the 2024 annual financial statements - The interim condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 Interim Financial Reporting, using the historical cost convention and presented in RMB[87](index=87&type=chunk) - The interim condensed consolidated financial statements do not include all information and disclosures required for annual financial statements and should be read in conjunction with the Group's annual financial statements for the year ended December 31, 2024[87](index=87&type=chunk) [2.2 Changes in Accounting Policies and Disclosures](index=32&type=section&id=2.2%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95%E5%8F%8A%E6%8A%AB%E9%9C%B2) Accounting policies for the interim financial statements align with the 2024 annual report, with no material impact from the first-time adoption of IAS 21 (Amendment) Lack of Exchangeability - The accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those adopted in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024[88](index=88&type=chunk) - The first-time adoption of IAS 21 (Amendment) Lack of Exchangeability had no impact on the interim condensed consolidated financial information, as all the Group's transaction currencies are exchangeable[89](index=89&type=chunk) [3. Operating Segment Information](index=32&type=section&id=3.%20%E7%B6%93%E7%91%A3%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group operates as a single segment, focusing on biological products, medical hyaluronic acid, and intraocular lenses, with mainland China as its primary market for revenue and assets - The Group's operating activities relate to a single operating segment, which is the production and sale of biological products, medical hyaluronic acid, and intraocular lenses, R&D of bioengineering and pharmaceuticals, and provision of related services[90](index=90&type=chunk) [3. (a) Revenue from External Customers](index=33&type=section&id=3.%20(a)%20%E4%BE%86%E8%87%AA%E5%A4%96%E9%83%A8%E5%AE%A2%E6%88%B6%E7%9A%84%E6%94%B6%E5%85%A5) In H1 2025, the Group's revenue from external customers was predominantly from mainland China, with additional contributions from Europe, the US, and other regions Revenue from External Customers (by Geographical Area) | Region | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 1,075,292 | 1,179,576 | | Europe | 83,036 | 74,918 | | United States | 59,117 | 66,171 | | Other Regions and Countries | 75,191 | 76,447 | | **Total** | **1,292,636** | **1,397,112** | [3. (b) Non-current Assets](index=33&type=section&id=3.%20(b)%20%E9%9D%9E%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2) As of June 30, 2025, the Group's non-current assets were primarily concentrated in mainland China, with distribution also in the UK, US, and other regions Non-current Assets (by Geographical Area) | Region | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 2,466,018 | 2,471,771 | | United Kingdom | 303,818 | 286,531 | | United States | 37,566 | 38,982 | | Other Regions and Countries | 110,253 | 109,979 | | **Total** | **2,917,655** | **2,907,263** | [3. Information about Major Customers](index=33&type=section&id=3.%20%E6%9C%89%E9%97%9C%E4%B8%BB%E8%A6%81%E5%AE%A2%E6%88%B6%E7%9A%84%E8%B3%87%E6%96%99) During the reporting period, no single customer accounted for 10% or more of the Group's total revenue - During the reporting period, no single customer contributed **10%** or more of the Group's revenue[93](index=93&type=chunk) [4. Revenue, Other Income and Gains](index=34&type=section&id=4.%20%E6%94%B6%E5%85%A5%E3%80%81%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) H1 2025 customer contract revenue was RMB 1,292.64 million, mainly from medical aesthetics, recognized at the point of goods transfer, supplemented by bank interest, government grants, and fair value gains [4. (a) Disaggregated Revenue Information](index=34&type=section&id=4.%20(a)%20%E5%88%86%E9%A1%9E%E6%94%B6%E5%85%A5%E8%B3%87%E6%96%99) H1 2025 customer contract revenue totaled RMB 1,292.64 million, with medical aesthetics and wound care products being the largest contributor, primarily recognized at the point of goods transfer Revenue from Contracts with Customers (by Type of Goods Sold) | Type of Goods Sold | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Medical Aesthetics and Wound Care Products | 573,270 | 631,817 | | Ophthalmology Products | 366,148 | 449,659 | | Orthopedic Products | 225,948 | 231,822 | | Anti-adhesion and Hemostasis Products | 109,976 | 68,874 | | Other Products | 17,294 | 14,940 | | **Total** | **1,292,636** | **1,397,112** | Revenue Recognition Timing | Revenue Recognition Timing | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Goods transferred at a point in time | 1,292,636 | 1,396,280 | | Services transferred over time | – | 832 | | **Total** | **1,292,636** | **1,397,112** | [4. (b) Performance Obligations](index=35&type=section&id=4.%20(b)%20%E5%B1%A5%E7%B4%84%E8%B2%AC%E4%BB%BB) Performance obligations for product sales are fulfilled upon delivery, typically with six-month payment terms, while equipment technical services are satisfied over time - Performance obligations for product sales are fulfilled upon delivery, with payment typically due within six months after delivery, while distributors generally pay in advance[95](index=95&type=chunk) - Performance obligations for equipment technical services are satisfied over time as services are provided, with service contracts billed when incurred or monthly[96](index=96&type=chunk) [4. Other Income and Gains](index=35&type=section&id=4.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) H1 2025 other income and gains totaled RMB 53.71 million, primarily from bank interest, government grants, fair value gains on financial assets, and net exchange differences Analysis of Other Income and Gains | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank interest income | 33,091 | 36,759 | | Government grants | 7,907 | 6,963 | | Fair value gains on financial assets at fair value through profit or loss | 641 | – | | Exchange differences, net | 4,663 | – | | Others | 6,911 | 1,440 | | **Total** | **53,710** | **45,584** | - Government grants primarily originate from local government authorities in various regions of China for R&D activities, with no unfulfilled conditions or contingencies[97](index=97&type=chunk) [5. Profit Before Tax](index=36&type=section&id=5.%20%E9%99%A4%E7%A8%85%E5%89%8D%E5%88%A9%E6%BD%A4) H1 2025 profit before tax was RMB 235.63 million, a decrease from the prior period, after accounting for cost of sales, depreciation, amortization, R&D, and employee benefits Major Deductions/Additions to Profit Before Tax | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories sold | 386,361 | 413,817 | | Depreciation of property, plant and equipment | 57,853 | 57,336 | | Depreciation of right-of-use assets | 13,181 | 11,398 | | Amortization of other intangible assets | 32,305 | 29,838 | | R&D costs | 98,401 | 125,400 | | Employee benefit expenses (wages and salaries, contributions to pension schemes) | 344,075 | 334,921 | | Bank interest income | (33,091) | (36,759) | | Impairment/(reversal of impairment) of financial assets, net | 2,166 | (473) | [6. Income Tax](index=36&type=section&id=6.%20%E6%89%80%E5%BE%97%E7%A8%85) The company and several subsidiaries benefit from a 15% preferential income tax rate as high-tech enterprises, while others are taxed at 25% or local rates, resulting in a total tax expense of RMB 33.97 million - The company and several subsidiaries (e.g., Shanghai Qisheng, Shanghai Jianhua, Henan Yuzhou, Qingdao Huayuan, New Industry, Hangzhou Aijinglun, Leike, Henan Saimeishi) are recognized as high-tech enterprises and were subject to a preferential income tax rate of **15%** during the reporting period[99](index=99&type=chunk)[100](index=100&type=chunk) - Other subsidiaries in mainland China are subject to a **25%** tax rate; subsidiaries in Hong Kong, the United States, the United Kingdom, France, and Israel are subject to profit tax rates of **16.5%**, **21%**, **25%**, **25%**, and **23%** respectively[101](index=101&type=chunk) Total Income Tax Expense | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax expense | 40,054 | 53,676 | | Under/(over) provision in prior periods | 1,184 | (2,280) | | Deferred tax expense | (7,273) | (6,562) | | **Total tax expense for the period** | **33,965** | **44,834** | [7. Dividends](index=38&type=section&id=7.%20%E8%82%A1%E6%81%AF) The Board proposed an interim dividend of RMB 0.40 per share (tax inclusive) for the six months ended June 30, 2025, totaling RMB 91.49 million, following the declaration of the 2024 final dividend Dividend Declaration Status | Dividend Type | Amount Per Share (RMB) | Total Amount (RMB thousand) | | :--- | :--- | :--- | | Proposed Interim Dividend (H1 2025) | 0.40 | 91,493 | | Proposed Interim Dividend (H1 2024) | 0.40 | 93,192 | | Proposed Final Dividend (FY 2024) | 0.60 | N/A | - The proposed final dividend for 2024 of **RMB 0.60** per ordinary share (tax inclusive) was declared by the company's shareholders at the annual general meeting on June 10, 2025[104](index=104&type=chunk) [8. Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=38&type=section&id=8.%20%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%99%AE%E9%80%9A%E8%82%A1%E6%AC%8A%E7%9B%8A%E6%8C%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%B5%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Basic earnings per share for H1 2025 decreased to RMB 0.91, calculated based on the weighted average number of ordinary shares outstanding, with no potential dilutive shares Earnings Per Share Overview | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the parent for basic and diluted EPS calculation (RMB thousand) | 211,065 | 235,283 | | Weighted average number of ordinary shares outstanding for basic and diluted EPS calculation (shares) | 232,526,846 | 233,870,378 | | Basic and Diluted Earnings Per Share (RMB) | 0.91 | 1.01 | - During the reporting period, the Group had no outstanding potential dilutive ordinary shares[106](index=106&type=chunk) [9. Property, Plant and Equipment](index=39&type=section&id=9.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) The carrying amount of property, plant and equipment increased to RMB 1,740.25 million due to additions, offset by depreciation, with no assets pledged at period-end Changes in Property, Plant and Equipment | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Carrying amount at beginning of period | 1,700,688 | 1,407,916 | | Additions | 85,585 | 190,317 | | Depreciation provision for the period | (57,853) | (57,336) | | Exchange adjustments | 12,078 | 431 | | **Carrying amount at end of period** | **1,740,253** | **1,540,826** | - As of June 30, 2025, and December 31, 2024, no property, plant and equipment were pledged[109](index=109&type=chunk) [10. Other Intangible Assets](index=39&type=section&id=10.%20%E5%85%B6%E4%BB%96%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2) The carrying amount of other intangible assets slightly decreased to RMB 543.19 million, primarily due to amortization provisions during the period Changes in Other Intangible Assets | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Carrying amount at beginning of period | 559,880 | 574,876 | | Additions | 494 | 508 | | Amortization provision for the period | (32,305) | (29,838) | | Exchange adjustments | 15,140 | (660) | | **Carrying amount at end of period** | **543,188** | **591,386** | [11. Equity Investments Designated at Fair Value Through Other Comprehensive Income](index=40&type=section&id=11.%20%E6%8C%87%E5%AE%9A%E4%BB%A5%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E9%87%8F%E4%B8%94%E5%85%B6%E8%AE%8A%E5%8B%95%E8%A8%88%E5%85%A5%E5%85%B6%E4%BB%96%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E7%9A%84%E8%82%A1%E6%AC%8A%E6%8A%95%E8%B3%87) Total equity investments designated at fair value through other comprehensive income amounted to RMB 507.18 million, comprising strategic listed and unlisted investments Equity Investments Designated at Fair Value Through Other Comprehensive Income | Investment Type | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Listed equity investments | 3,711 | 4,100 | | Unlisted equity investments | 503,470 | 492,461 | | **Total** | **507,181** | **496,561** | - Unlisted equity investments primarily include Shenwu No. 1 investment product, Eirion Therapeutics, Inc., Shanghai Samei Cell Technology Co., Ltd., and others[111](index=111&type=chunk) - The Group considers these investments to be strategic in nature and thus irrevocably designated them as fair value through other comprehensive income[111](index=111&type=chunk) [12. Other Non-current Assets](index=41&type=section&id=12.%20%E5%85%B6%E4%BB%96%E9%9D%9E%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2) Other non-current assets primarily consisted of prepayments for property, plant and equipment, totaling RMB 21.32 million Other Non-current Assets | Item | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Prepayments for property, plant and equipment | 21,318 | 25,340 | [13. Inventories](index=41&type=section&id=13.%20%E5%AD%98%E8%B2%A8) Total inventories amounted to RMB 495.70 million, including raw materials, work-in-progress, finished goods, and merchandise, with a provision for inventory impairment Inventory Composition | Item | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Raw materials | 173,437 | 174,793 | | Work-in-progress | 78,030 | 63,849 | | Finished goods | 229,406 | 232,211 | | Merchandise | 76,421 | 67,376 | | Inventory provision | (61,590) | (47,578) | | **Total** | **495,704** | **490,651** | [14. Trade and Bills Receivables](index=41&type=section&id=14.%20%E8%B2%A3%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A) Total trade and bills receivables were RMB 339.17 million, mostly due within one year, with the Group maintaining strict credit risk control Trade and Bills Receivables | Item | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bills receivable | 6,069 | 8,170 | | Trade receivables | 366,686 | 347,533 | | Impairment | (33,581) | (31,423) | | **Total** | **339,174** | **324,280** | Ageing Analysis of Trade and Bills Receivables | Ageing | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within one year | 327,642 | 313,591 | | One to two years | 9,113 | 8,665 | | Two to three years | 2,419 | 2,024 | | **Total** | **339,174** | **324,280** | - The Group's trade terms with customers primarily involve credit, with a credit period generally ranging from one to twelve months, and strict control is maintained over outstanding receivables to minimize credit risk[116](index=116&type=chunk) [15. Prepayments, Other Receivables and Other Assets](index=42&type=section&id=15.%20%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85%E3%80%81%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E7%94%A2) Total prepayments, other receivables, and other assets significantly increased to RMB 202.02 million, mainly driven by higher deposits and other receivables Composition of Prepayments, Other Receivables and Other Assets | Item | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Prepayments | 60,576 | 52,792 | | Input VAT to be deducted | 35,168 | 27,432 | | Deposits and other receivables | 108,432 | 46,939 | | Compensation for relocation of abandoned factory | 2,000 | 2,000 | | Impairment provision | (4,161) | (3,877) | | **Total** | **202,015** | **125,286** | [16. Financial Assets at Fair Value Through Profit or Loss](index=43&type=section&id=16.%20%E4%BB%A5%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E9%87%8F%E4%B8%94%E5%85%B6%E8%AE%8A%E5%8B%95%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%E7%9A%84%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) Total financial assets at fair value through profit or loss amounted to RMB 103.61 million, primarily comprising unlisted investments and consideration receivable for acquisition of non-controlling interests Financial Assets at Fair Value Through Profit or Loss | Item | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Other unlisted investments | 77,148 | 61,386 | | Consideration receivable for acquisition of non-controlling interests | 26,460 | 26,460 | | **Total** | **103,608** | **87,846** | [17. Cash and Bank Balances and Pledged Deposits](index=43&type=section&id=17.%20%E7%8F%BE%E9%87%91%E5%8F%8A%E9%8A%80%E8%A1%8C%E7%B5%90%E9%A4%98%E5%8F%8A%E5%B7%B2%E8%B3%AA%E6%8A%BC%E5%AD%98%E6%AC%BE) Cash and cash equivalents were RMB 614.29 million, with total cash and bank balances of RMB 2,562.22 million, including substantial fixed deposits with maturities over three months Analysis of Cash and Bank Balances and Pledged Deposits | Item | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash and bank balances and pledged deposits | 2,562,216 | 2,630,205 | | Fixed deposits with original maturity over three months at acquisition | (1,947,028) | (1,516,401) | | Pledged fixed deposits (guarantee deposits) | (900) | (899) | | **Cash and cash equivalents** | **614,288** | **1,112,905** | [18. Trade Payables](index=43&type=section&id=18.%20%E8%B2%A3%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) Total trade payables were RMB 70.00 million, with the majority due within three months Ageing Analysis of Trade Payables | Ageing | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within three months | 64,931 | 52,489 | | Three months to one year | 1,271 | 8,902 | | Over one year | 3,800 | 708 | | **Total** | **70,002** | **62,099** | [19. Other Payables and Accrued Expenses](index=44&type=section&id=19.%20%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8) Total other payables and accrued expenses significantly increased to RMB 588.04 million, mainly due to higher wages, accrued expenses, and dividends payable Composition of Other Payables and Accrued Expenses | Item | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Wages and benefits payable | 90,573 | 120,763 | | Government grants received | 85,600 | 85,400 | | Contract liabilities – short-term advances from customers for goods | 125,774 | 110,691 | | Accrued expenses | 100,590 | 56,523 | | Dividends payable | 54,605 | – | | **Total** | **588,035** | **480,711** | - **RMB 4.5 million** will be paid to the original shareholders of Hangzhou Aijinglun, conditional on Hangzhou Aijinglun obtaining registration certificates for certain new products within five years after the acquisition date[124](index=124&type=chunk) [20. Interest-bearing Bank and Other Borrowings](index=45&type=section&id=20.%20%E8%A8%88%E6%81%AF%E9%8A%80%E8%A1%8C%E5%8F%8A%E5%85%B6%E4%BB%96%E5%80%9F%E6%AC%BE) Total interest-bearing bank and other borrowings were RMB 439.77 million, with a significant portion classified as current liabilities, and most bank loans are unsecured Analysis of Interest-bearing Bank and Other Borrowings | Item | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Current Portion** | | | | Lease liabilities | 16,118 | 18,595 | | Bank loans (unsecured) | 236,394 | 211,500 | | Current portion of long-term bank loans | 68,765 | 74,459 | | Current portion of long-term other loans | 1,470 | 1,129 | | **Total Current Liabilities** | **322,747** | **305,683** | | **Non-current Portion** | | | | Lease liabilities | 28,550 | 32,023 | | Bank loans (unsecured) | 88,082 | 109,082 | | Other loans | 386 | 1,639 | | **Total Non-current Liabilities** | **117,018** | **142,744** | | **Total** | **439,765** | **448,427** | Analysis of Bank Loan Repayment Terms | Repayment Term | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within one year or on demand | 305,159 | 285,959 | | Second year | 88,258 | 76,680 | | Third to fifth year | – | 33,100 | | **Total Bank Loans** | **393,417** | **395,739** | - Short-term unsecured bank loans carry annual interest rates ranging from **2.08%** to **2.40%**, while long-term unsecured bank loans carry annual interest rates ranging from **1.80%** to **2.25%**[128](index=128&type=chunk) [21. Share Capital](index=46&type=section&id=21.%20%E8%82%A1%E6%9C%AC) The company's share capital remained unchanged, with 233,193,695 issued shares, while treasury shares increased to RMB 311.12 million due to ongoing repurchases [21. Share Capital (Details)](index=46&type=section&id=21.%20%E8%82%A1%E6%9C%AC%20(Share%20Capital)) The company's issued and fully paid ordinary share capital remained unchanged at 233,193,695 shares, each with a par value of RMB 1.00 Issued and Fully Paid Share Capital | Item | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Ordinary shares of RMB 1.00 par value each | 233,194 | 233,194 | - The company's share capital remained unchanged during the reporting period[126](index=126&type=chunk) [21. Treasury Shares](index=46&type=section&id=21.%20%E5%BA%AB%E5%AD%98%E8%82%A1%E4%BB%BD) The company repurchased H-shares and A-shares totaling RMB 82.79 million, increasing treasury shares to RMB 311.12 million for future incentive plans or cancellation - During the reporting period, the company repurchased **416,700 H-shares** for a total consideration of approximately **RMB 9.45 million**, representing approximately **0.1787%** of the total share capital[127](index=127&type=chunk) - During the reporting period, the company repurchased **1,339,675 A-shares** for a total consideration of approximately **RMB 73.34 million**, representing approximately **0.5745%** of the total share capital[127](index=127&type=chunk) Treasury Shares Overview | Item | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Treasury Shares | 311,121 | 228,341 | | Number of H-shares included | 612,600 | 195,900 | | Number of A-shares included | 3,848,095 | 2,508,420 | [22. Contingent Liabilities](index=47&type=section&id=22.%20%E6%88%96%E6%9C%89%E8%B2%A0%E5%82%B5) The Group reported no significant contingent liabilities as of June 30, 2025 - As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities[129](index=129&type=chunk) [23. Commitments](index=47&type=section&id=23.%20%E6%89%BF%E8%AB%BE) As of June 30, 2025, the Group's contractual commitments primarily related to plant and machinery, totaling RMB 371.85 million Contractual Commitments | Item | Jun 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Plant and machinery | 371,846 | 439,126 | | Investments | – | 46,059 | | **Total** | **371,846** | **485,185** | [24. Related Party Transactions](index=47&type=section&id=24.%20%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) The Group engaged in various related party transactions, including purchases, sales, and property leases, with key management personnel compensation totaling RMB 4.24 million [24. (a) Transactions](index=47&type=section&id=24.%20(a)%20%E4%BA%A4%E6%98%93) The Group conducted transactions with related parties, including purchasing production components from Haohai Technology and selling semi-finished products to Lifeline Medical Devices Related Party Transactions (Purchases and Sales) | Transaction Type | Related Party | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | :--- | | Purchases | Haohai Technology (Changxing) Co., Ltd. | 4,071 | 2,475 | | Sales | Lifeline Medical Devices Private Limited | 1,502 | 2,574 | - These transactions were conducted at prices agreed upon by the contracting parties with reference to market prices[131](index=131&type=chunk) [24. (b) Other Transactions with Related Parties](index=48&type=section&id=24.%20(b)%20%E8%88%87%E9%97%9C%E9%80%A3%E6%96%B9%E7%9A%84%E5%85%B6%E4%BB%96%E4%BA%A4%E6%98%93) The company leased properties from Shanghai Haohai Chemical Co., Ltd. and Ms. You Jie, incurring an annual rent of RMB 350,000 - During the reporting period, the company leased properties from Shanghai Haohai Chemical Co., Ltd. and Ms. You Jie, respectively, with an annual rent of **RMB 350,000**[132](index=132&type=chunk) [24. (c) Compensation of Key Management Personnel of the Group](index=48&type=section&id=24.%20(c)%20%E6%9C%AC%E9%9B%86%E5%9C%98%E4%B8%BB%E8%A6%81%E7%AE%A1%E7%90%86%E5%B1%A4%E4%BA%BA%E5%93%A1%E7%9A%84%E8%96%AA%E9%85%AC) Total compensation for the Group's key management personnel amounted to RMB 4.24 million, covering short-term benefits and pension contributions Compensation of Key Management Personnel | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Short-term employee benefits | 3,713 | 3,902 | | Contributions to pension schemes | 526 | 545 | | **Total compensation paid to key management personnel** | **4,239** | **4,447** | [25. Fair Value and Fair Value Hierarchy](index=48&type=section&id=25.%20%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E5%8F%8A%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E7%AD%89%E7%B4%9A) The Group's financial instruments are measured using a three-level fair value hierarchy, with significant assets and liabilities measured at fair value, primarily using unobservable inputs Carrying Amounts and Fair Values of Financial Liabilities (Summary) | Item | Jun 30, 2025 Carrying Amount (RMB thousand) | Dec 31, 2024 Carrying Amount (RMB thousand) | Jun 30, 2025 Fair Value (RMB thousand) | Dec 31, 2024 Fair Value (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Interest-bearing bank and other borrowings (excluding lease liabilities) | 88,468 | 110,721 | 89,365 | 106,738 | | Financial liabilities included in other payables and accrued expenses – contingent consideration | 4,500 | 4,500 | 4,500 | 4,500 | - Management has assessed that the fair values of cash and bank balances, trade and bills receivables, prepayments, other receivables and other assets, trade and bills payables, and financial liabilities included in other payables and accrued expenses are approximate to their carrying amounts, mainly due to the short-term maturity of these instruments[135](index=135&type=chunk) [25. Assets Measured at Fair Value](index=49&type=section&id=25.%20%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E9%87%8F%E4%B9%8B%E8%B3%87%E7%94%A2) Total assets measured at fair value amounted to RMB 616.86 million, including financial assets at fair value through profit or loss and equity investments, mostly using Level 3 inputs Assets Measured at Fair Value (June 30, 2025) | Item | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Level 3 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss | – | – | 103,608 | 103,608 | | Trade and bills receivables | – | 6,069 | – | 6,069 | | Equity investments designated at fair value through other comprehensive income | 3,711 | 258,669 | 244,801 | 507,181 | | **Total** | **3,711** | **264,738** | **348,409** | **616,858** | [25. Liabilities Measured at Fair Value](index=50&type=section&id=25.%20%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E9%87%8F%E4%B9%8B%E8%B2%A0%E5%82%B5) Total liabilities measured at fair value were RMB 4.50 million, consisting of contingent consideration within other payables and accrued expenses, measured using Level 3 inputs Liabilities Measured at Fair Value (June 30, 2025) | Item | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Level 3 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Financial liabilities included in other payables and accrued expenses – contingent consideration | – | – | 4,500 | 4,500 | | **Total** | **–** | **–** | **4,500** | **4,500** | [25. Liabilities for Which Fair Value is Disclosed](index=51&type=section&id=25.%20%E6%8A%AB%E9%9C%B2%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E4%B9%8B%E8%B2%A0%E5%82%B5) Liabilities for which fair value is disclos

Financial Performance - Revenue for the six months ended June 30, 2025, was $15,138,000, a decrease of 22.4% compared to $19,539,000 in the same period of 2024[4] - Gross profit for the same period was $5,653,000, down 18.8% from $6,963,000 in 2024[4] - The company reported a loss before tax of $946,000 for the six months ended June 30, 2025, compared to a profit of $74,000 in 2024[4] - The loss attributable to owners of the company for the period was $920,000, compared to a profit of $24,000 in the previous year[4] - Total comprehensive income for the period was $(908,000), compared to $14,000 in the same period of 2024[5] - The company reported a loss for the period of $920,000 for the six months ended June 30, 2025, compared to a profit of $24,000 in the same period of 2024[32] - The Group's revenue declined by approximately 22.5% from approximately US$19.5 million in the same period last year to approximately US$15.1 million for the six months ended 30 June 2025[83] Assets and Liabilities - Total current assets decreased to $25,666,000 as of June 30, 2025, from $28,649,000 at the end of 2024, reflecting a decline of 10.5%[6] - Cash and cash equivalents increased to $18,050,000 as of June 30, 2025, up from $15,354,000 at the end of 2024, representing a growth of 11.0%[6] - Total non-current assets rose to $2,320,000 as of June 30, 2025, compared to $1,360,000 at the end of 2024, an increase of 70.6%[6] - The company’s net assets decreased to $15,014,000 as of June 30, 2025, down from $15,922,000 at the end of 2024, a decline of 5.7%[7] - Total liabilities as of June 30, 2025, were $12,972,000, down from $14,087,000 at the end of 2024[37] Cash Flow - For the six months ended June 30, 2025, the net cash generated from operating activities was $246,000, compared to a net cash used of $531,000 in the same period of 2024[13] - The cash and cash equivalents increased to $18,050,000 as of June 30, 2025, up from $15,373,000 at the end of the previous period[13] - The operating loss before working capital changes for the six months ended June 30, 2025, was $(591,000), compared to a profit of $393,000 in 2024[13] - Cash generated from operations was $327,000 for the six months ended June 30, 2025, compared to cash used of $(445,000) in the same period of 2024[13] - The net cash generated from investing activities was $2,874,000 for the six months ended June 30, 2025, compared to $149,000 in 2024[13] Segment Performance - Segment revenue from trading and supply chain management services was $6,976,000, down 18.2% from $8,530,000 in the prior year[32] - Segment results for trading and supply chain management services showed a loss of $635,000 compared to a profit of $129,000 in the same period last year[32] - The culture and entertainment business experienced a revenue drop of approximately 25.9% to approximately $8.2 million from approximately $11.0 million in the same period last year[85] - Revenue from the trading and supply chain management services segment recorded approximately US$7.0 million, representing approximately 46.1% of the Group's total revenue[99] - Revenue from the culture and entertainment segment fell by approximately 25.9% from approximately US$11.0 million to approximately US$8.2 million[101] Employee and Operational Costs - Employee benefit expenses totaled $5,284,000 for the six months ended June 30, 2025, compared to $5,221,000 in the same period of 2024[32] - Operating expenses for the six months ended 30 June 2025 amounted to approximately US$7.0 million, reflecting a drop of approximately 1.8% from approximately US$7.2 million for the corresponding period last year[87] - Adjusted operating expenses, excluding a one-time restructuring cost of approximately US$0.4 million, would be approximately US$6.6 million, representing a decrease of approximately 7.4% from the same period last year[87] VIE Contracts and Corporate Governance - The VIE Contracts include an Exclusive Technology Consulting and Services Agreement, allowing WFOE to receive 100% of the net profit of OPCO after deducting taxes, costs, and expenses[142] - The Exclusive Call Option Agreement grants WFOE the option to purchase 100% of OPCO's equity interests for a total purchase price of RMB 10,000, or 1% of the evaluation price as permitted by PRC laws[143] - The Equity Interest Pledge Agreement requires VIE Equity Owners to pledge all their equity interests in OPCO to WFOE to guarantee performance under the contractual arrangements[144] - The Powers of Attorney allow WFOE to act on behalf of VIE Equity Owners in all matters related to OPCO for an initial term of 10 years[143] - The VIE Contracts are designed to mitigate risks associated with the contractual arrangements, as detailed in the company's circular dated April 28, 2017[148] Shareholder Information - The company has not declared any interim dividend for the six months ended June 30, 2025, consistent with the previous year[197] - Sino Remittance Holding Limited holds 512,250,000 shares, representing approximately 33.93% of the issued share capital as of June 30, 2025[194] - Daohe Global Investment holds 664,121,427 shares, accounting for approximately 43.99% of the issued share capital as of June 30, 2025[194] - Oceanic Force Limited owns 92,042,892 shares, which is about 6.10% of the issued share capital as of June 30, 2025[194] - Leqian Investment Limited has a holding of 178,875,000 shares, representing approximately 11.85% of the issued share capital as of June 30, 2025[194] Market Conditions and Strategic Initiatives - The Group is facing challenging market conditions due to increased tariffs on Chinese imports, which are dampening domestic growth and consumer sentiment[121] - The online claw crane business is under pressure due to promotional restrictions and competition from physical store expansions[121] - The Group plans to expand its online presence through new media platforms and partnerships with key opinion leaders[121] - The Group will introduce new and trending products regularly and enhance operational plans to boost user engagement[121] - The Group is actively pursuing a diversified procurement model and expanding its supply chain network to mitigate adverse economic factors[120]

Financial Performance - Revenue for the six months ended June 30, 2025, reached RMB 38,544 million, representing a 14.3% increase compared to RMB 33,735 million in 2024[20] - Operating profit increased by 17.0% to RMB 10,131 million in 2025 from RMB 8,660 million in 2024[20] - Shareholders' profit attributable rose to RMB 7,031 million, a 14.5% increase from RMB 6,142 million in 2024[11] - The company achieved record revenue in the first half of 2025, exceeding market expectations and maintaining a 12-year consecutive growth streak[27] - Anta Sports' revenue increased by 14.3% year-on-year to RMB 38.54 billion in the current fiscal period[45] - The operating profit margin rose by 0.6% to 26.3%, demonstrating strong execution capabilities[45] - The overall gross profit margin decreased by 0.7 percentage points to 63.4% due to increased contributions from lower-margin e-commerce and footwear products[45] - The company reported a total comprehensive income of RMB 6,668 million, compared to RMB 9,475 million in the previous year, reflecting a decrease of 30%[179] - The company reported a total comprehensive income of RMB 5,592 million for the six months ended June 30, 2025, compared to RMB 8,774 million for the same period in 2024, a decrease of 36.8%[186] Revenue Breakdown - The number of offline stores exceeded 13,000 globally, with e-commerce contributing 34.8% to total revenue, up from 33.8% in the first half of 2024[18] - Footwear revenue reached RMB 16,390 million, accounting for 42.5% of total revenue, with a growth of 12.0% from RMB 14,635 million in 2024[114] - Apparel revenue grew by 15.5% to RMB 20,886 million, representing 54.2% of total revenue, up from RMB 18,082 million in 2024[114] - Accessories revenue increased by 24.6% to RMB 1,268 million, making up 3.3% of total revenue, compared to RMB 1,018 million in 2024[114] - Anta's segment revenue grew by 5.4% to RMB 16.95 billion, with an operating profit margin increase of 1.5% to 23.3%[48] - FILA's segment revenue achieved an 8.6% year-on-year growth to RMB 14.18 billion, although the operating profit margin decreased by 0.9% to 27.7%[49] - Other brands saw a significant revenue surge of 61.1% to RMB 7.41 billion, with an operating profit margin increase of 3.3% to 33.2%[50] Strategic Initiatives - The company aims to enhance its multi-brand strategy to capture both mass and premium sports goods markets[3] - The strategic focus remains on a multi-brand approach, enhancing brand differentiation and complementarity as a core growth engine[33] - The company emphasizes investment in existing businesses, particularly in innovation, digitalization, and retail transformation to improve profitability[35] - The company aims to become a leading global multi-brand sports goods group, focusing on high-quality development and globalization[31] - The company is expanding its presence in Southeast Asia and has successfully established retail networks in the UAE, Saudi Arabia, Qatar, Egypt, and Kenya[58] - The company aims to have 7,000 to 7,100 Anta stores and 2,100 to 2,200 FILA stores by the end of 2025[63] Acquisitions and Investments - The acquisition of JACK WOLFSKIN was completed, focusing on outdoor market positioning and a three to five-year revitalization plan[33] - The company completed the acquisition of German outdoor brand JACK WOLFSKIN in May 2025, enhancing its global presence and operational efficiency[52] - The company holds a 40% stake in MUSINSA China, aiming to integrate fashion and sports industries to attract younger consumers[33] - The company issued EUR 1.5 billion zero-coupon convertible bonds due December 2029, with a listing on the Singapore Stock Exchange[160] - The net proceeds from the convertible bond issuance amounted to approximately EUR 1.487 billion after deducting commissions and expenses[161] Market and Economic Conditions - The consumer confidence index showed a recovery compared to the second half of 2024, but remained below long-term averages, indicating cautious consumer spending[43] - The global economic growth forecast for 2025 is 2.3%, with developed countries experiencing significant slowdowns[42] - The company faces risks from economic fluctuations that may impact consumer demand, particularly in the sports footwear and apparel industry[95] - The competitive landscape in the domestic sports footwear and apparel industry is intensifying, with a shift towards competition based on new technologies and high-value-added products[99] Operational Efficiency - The average inventory turnover days increased to 136 days in 2025 from 114 days in 2024[21] - Employee costs increased by 15.6% to RMB 6,043 million, reflecting continued investment in human resources and talent development[127] - The effective tax rate for the period was 28.4%, up from 26.8% in the first half of 2024[140] - The company recorded net financing income of RMB 596 million, down from RMB 710 million in the previous year[179] Future Outlook - The company plans to continue expanding its market presence and investing in new product development to drive future growth[179] - The company plans to accelerate the development of sustainable products and materials, aiming for a balance between economic benefits and social responsibility[61] - The company is focusing on integrating AI technology across its operations to enhance decision-making and consumer experience[55]