Company Information [Board of Directors](index=3&type=section&id=Board%20of%20Directors) The company's Board of Directors comprises executive directors Lu Yao (Chairman), Zhang Zhiquan, Li Tian, Wang Heping, and independent non-executive directors Fang Qiaoling, Zhong Weiwen, Wu Xianqiao - Executive Directors include **Lu Yao (Chairman), Zhang Zhiquan, Li Tian, Wang Heping**[7](index=7&type=chunk) - Independent Non-Executive Directors include **Fang Qiaoling, Zhong Weiwen, Wu Xianqiao**[7](index=7&type=chunk) [Supervisors](index=3&type=section&id=Supervisors) The company's Board of Supervisors members include Zhu Rongwei, Wang Jiesi, and Wang Yangyang - Members of the Board of Supervisors are **Zhu Rongwei, Wang Jiesi, Wang Yangyang**[7](index=7&type=chunk) [Audit Committee](index=3&type=section&id=Audit%20Committee) The company's Audit Committee consists of Zhong Weiwen (Chairman), Fang Qiaoling, and Wu Xianqiao - The Audit Committee Chairman is **Zhong Weiwen**, with members including **Fang Qiaoling and Wu Xianqiao**[7](index=7&type=chunk) [Remuneration Committee](index=3&type=section&id=Remuneration%20Committee) The company's Remuneration Committee consists of Fang Qiaoling (Chairman), Zhong Weiwen, and Li Tian - The Remuneration Committee Chairman is **Fang Qiaoling**, with members including **Zhong Weiwen and Li Tian**[7](index=7&type=chunk) [Nomination Committee](index=3&type=section&id=Nomination%20Committee) The company's Nomination Committee consists of Lu Yao (Chairman), Wu Xianqiao, and Fang Qiaoling - The Nomination Committee Chairman is **Lu Yao**, with members including **Wu Xianqiao and Fang Qiaoling**[7](index=7&type=chunk) [Joint Company Secretaries](index=3&type=section&id=Joint%20Company%20Secretaries) The company's Joint Company Secretaries are Chen Xiuling and Sun Yanlu - The Joint Company Secretaries are **Chen Xiuling and Sun Yanlu**[7](index=7&type=chunk) [Authorized Representatives](index=3&type=section&id=Authorized%20Representatives) The company's Authorized Representatives are Lu Yao and Chen Xiuling - The Authorized Representatives are **Lu Yao and Chen Xiuling**[7](index=7&type=chunk) [Registered Office](index=3&type=section&id=Registered%20Office) The company's registered office is located at No. 187 Jinshui Road, Licang District, Qingdao City, Shandong Province, China - The registered office is located at **No. 187 Jinshui Road, Licang District, Qingdao City, Shandong Province, China**[7](index=7&type=chunk) [Headquarters](index=3&type=section&id=Headquarters) The company's headquarters is located at No. 1 Haier Road, Laoshan District, Qingdao City, Shandong Province, China - The headquarters is located at **No. 1 Haier Road, Laoshan District, Qingdao City, Shandong Province, China**[7](index=7&type=chunk) [Principal Place of Business in Hong Kong](index=4&type=section&id=Principal%20Place%20of%20Business%20in%20Hong%20Kong) The company's principal place of business in Hong Kong is located at Room 1917, 19th Floor, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong - The principal place of business in Hong Kong is located at **Room 1917, 19th Floor, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong**[8](index=8&type=chunk) [H Share Registrar](index=4&type=section&id=H%20Share%20Registrar) The company's H Share Registrar is Tricor Investor Services Limited - The H Share Registrar is **Tricor Investor Services Limited**[8](index=8&type=chunk) [Principal Bankers](index=4&type=section&id=Principal%20Bankers) The company's principal bankers include China Construction Bank Corporation, Qingdao Haier Road Branch - The principal bankers include **China Construction Bank Corporation, Qingdao Haier Road Branch**[8](index=8&type=chunk) [Stock Code](index=4&type=section&id=Stock%20Code) The company's stock code is 1471 - The stock code is **1471**[8](index=8&type=chunk) [Company Website](index=4&type=section&id=Company%20Website) The company's website is www.haierbx.net - The company website is **www.haierbx.net**[8](index=8&type=chunk) [Compliance Adviser](index=4&type=section&id=Compliance%20Adviser) The company's compliance adviser is China Ping An Capital (Hong Kong) Company Limited - The compliance adviser is **China Ping An Capital (Hong Kong) Company Limited**[8](index=8&type=chunk) [Auditor](index=4&type=section&id=Auditor) The company's auditor is KPMG - The auditor is **KPMG**[8](index=8&type=chunk) [Hong Kong Legal Adviser](index=4&type=section&id=Hong%20Kong%20Legal%20Adviser) The company's Hong Kong legal adviser is Norton Rose Fulbright Hong Kong - The Hong Kong legal adviser is **Norton Rose Fulbright Hong Kong**[8](index=8&type=chunk) Operational Highlights [Operational Highlights](index=5&type=section&id=Operational%20Highlights) The company's revenue increased by **28.4%** to **RMB 113.6 million** and net profit grew by **16.2%** to **RMB 25.1 million** in the first half of 2025, driven by significant growth in insurance agency business, especially property and casualty insurance products Operational Highlights Summary | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Growth | | :--- | :--- | :--- | :--- | | Operating Revenue | 113,580 | 88,456 | 28.4% | | Net Profit Attributable to Equity Holders of the Company | 25,063 | 21,588 | 16.2% | | Insurance Agency Business Revenue | 109,204 | 82,213 | 32.8% | | Property and Casualty Insurance Product Commission Income | 52,943 | 35,878 | 47.4% | | Total Premiums from Insurance Agency Business | 935,950 | 666,170 | 40.5% | | Total Premiums from Property and Casualty Insurance Products | 473,421 | 333,276 | 58.2% | Management Discussion and Analysis [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the company's business performance, strategic progress, and financial condition for the first half of 2025, highlighting significant growth driven by its "co-creation and win-win" ecosystem and AI technology, with future plans for ecosystem expansion, AI application, and strategic investments, while noting increased revenue and net profit despite a decline in gross margin and a slight decrease in cash and cash equivalents [Business Review](index=6&type=section&id=Business%20Review) The company is committed to building a one-stop intelligent insurance service platform, achieving significant growth in operating revenue and net profit through digital upgrades and increased investment in AI and big data technologies - The Group is dedicated to building and improving a one-stop intelligent insurance service platform, continuously advancing full-process digital upgrades, and increasing resource investment in cutting-edge technologies such as artificial intelligence, big data, and blockchain[18](index=18&type=chunk) - For the six months ended June 30, 2025, operating revenue reached approximately **RMB 113.6 million**, an increase of approximately **28.4%** year-on-year; net profit reached approximately **RMB 25.1 million**, an increase of approximately **16.2%** year-on-year[18](index=18&type=chunk) [Dual-Engine Drive of Co-creation and Win-win Philosophy and Technological Innovation for Business Development](index=6&type=section&id=Dual-Engine%20Drive%20of%20Co-creation%20and%20Win-win%20Philosophy%20and%20Technological%20Innovation%20for%20Business%20Development) The company adheres to a "co-creation and win-win" philosophy, building an ecosystem covering insurance product sales, claims services, and risk management, while increasing AI technology R&D investment, achieving significant progress in smart claims and smart customer service - A complete ecosystem covering multiple aspects such as insurance product sales, claims services, and risk management has been established, linking with **80 insurance companies** and **30 strategic channel partners**[19](index=19&type=chunk) - Professional insurance services are provided to over **32,000 enterprise insurance users** and **546,000 household insurance users**[19](index=19&type=chunk) - Through deep application of AI technology, the "Zhonghui Bao" claims service platform has been fully upgraded, improving average claims efficiency by nearly **30%** and supporting **24/7 online claims application and tracking**[20](index=20&type=chunk) - An enterprise-level smart customer service system based on large models has been built, achieving zero logical discontinuity and millisecond response times for customer service inquiries, with an answer accuracy rate of **99%** and a complex problem resolution rate increased to **92%**[22](index=22&type=chunk) [Our Business Development](index=7&type=section&id=Our%20Business%20Development) Technology-driven insurance agency business achieved rapid growth with significant increases in total premiums and commission income, though life and health insurance product commission income declined due to market and policy impacts, and IT service revenue decreased due to project acceptance timelines Insurance Agency and IT Services Performance | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Growth | | :--- | :--- | :--- | :--- | | Total Premiums from Insurance Agency Business | 936,000 | 666,200 | 40.5% | | Commission Income from Insurance Agency Business | 109,200 | 82,200 | 32.8% | | Commission Income from Property and Casualty Insurance Products | 52,900 | 35,900 | 47.4% | | Commission Income from Accident and Auto Insurance Premiums | 47,400 | 34,200 | 38.6% | | Commission Income from Life and Health Insurance Products | 8,900 | 12,100 | -26.4% | | IT Service Revenue | 4,300 | 5,500 | -21.8% | - Commission income from insurance agency business accounts for **96.1%** of total revenue[22](index=22&type=chunk) - The decrease in IT service revenue is primarily due to the timing of IT project acceptance, accounting for **3.8%** of total revenue[23](index=23&type=chunk) - Consulting services include human resource consulting and marketing promotion services[24](index=24&type=chunk) [Outlook](index=8&type=section&id=Outlook) The company's future strategic goals include deepening the "technology + scenario + ecosystem" model, continuously expanding its ecosystem, actively embracing AI technology for risk reduction and smart claims, and seeking strategic investment and acquisition opportunities in the insurance intermediary and fintech industries - The long-term strategic goal is to leverage a differentiated "technology + scenario + ecosystem" model to support user experience iteration and actively expand the fintech business ecosystem[25](index=25&type=chunk) - The "Zhongmiao Ecosystem Co-creation" model will be used to continuously expand the ecosystem, providing "more than insurance" ecological services and cultivating lifelong insurance users[25](index=25&type=chunk) - The "AI+" strategy will be deepened, focusing on AI+ risk reduction (achieving立体化 risk monitoring through large models and IoT technology) and smart claims (achieving automated claims review through large language models and business rule engines)[25](index=25&type=chunk)[29](index=29&type=chunk) - The company plans to actively seek strategic investment and acquisition opportunities in the insurance intermediary and fintech industries to accelerate business development and enhance competitiveness[29](index=29&type=chunk) [Financial Review](index=9&type=section&id=Financial%20Review) In the first half of 2025, the company's revenue and gross profit increased, but the overall gross margin declined due to a higher proportion of lower-margin property and casualty insurance products; R&D costs and general and administrative expenses increased, while sales and marketing costs and finance costs decreased, and income tax rose with increased profit, resulting in higher profit for the period but a lower net profit margin Financial Performance Summary | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Growth/Change | | :--- | :--- | :--- | :--- | | Revenue | 113,580 | 88,456 | 28.4% | | Gross Profit | 42,113 | 37,208 | 13.2% | | Overall Gross Margin | 37.1% | 42.0% | -4.9 percentage points | | Other Income | 4,260 | 4,389 | -3.0% | | R&D Costs | 4,714 | 4,385 | 7.5% | | General and Administrative Expenses | 8,139 | 6,874 | 18.4% | | Sales and Marketing Costs | 2,827 | 4,099 | -31.1% | | Finance Costs | 12 | 149 | -91.9% | | Income Tax | 5,598 | 4,844 | 15.6% | | Profit for the Period | 25,099 | 21,258 | 18.1% | | Net Profit Margin | 22.1% | 24.1% | -2.0 percentage points | - The decline in gross margin is primarily attributable to an increased proportion of commission income from property and casualty insurance products, which have relatively lower gross margins[30](index=30&type=chunk) - The decrease in sales and marketing costs is mainly due to business process optimization and improved organizational efficiency[34](index=34&type=chunk) [Financial Position](index=11&type=section&id=Financial%20Position) As of June 30, 2025, the company's net assets slightly increased, but total cash and cash equivalents and term deposits slightly decreased, mainly due to dividend payments and delayed collection of trade receivables; the company maintains ample liquidity, an extremely low capital-to-debt ratio, no bank borrowings, and no significant contingent liabilities Financial Position Summary | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Net Assets | 604,410 | 598,372 | 1.0% | | Total Cash and Cash Equivalents and Term Deposits in Other Financial Assets | 559,089 | 568,641 | -1.7% | | Net Current Assets | 500,300 | 452,400 | 10.6% | | Capital-to-Debt Ratio | 0.0035% | - | - | - The decrease in total cash and cash equivalents and term deposits in other financial assets was mainly due to **cash dividend payments** and **delayed collection of trade receivables**[40](index=40&type=chunk) - The company has sufficient liquidity to meet working capital requirements for the next year and financial flexibility for future strategic investment opportunities[41](index=41&type=chunk) - As of June 30, 2025, the company had **zero bank borrowings** and **no significant contingent liabilities**[43](index=43&type=chunk)[44](index=44&type=chunk) - For the six months ended June 30, 2025, the company incurred **no capital expenditure**[45](index=45&type=chunk) - The company manages idle cash by utilizing wealth management products and term deposits, and adopts comprehensive internal policies and guidelines to manage investment risks[46](index=46&type=chunk) - The company primarily operates in China, with the vast majority of transactions settled in RMB, and does not face any significant foreign exchange risk[47](index=47&type=chunk) [Human Resources](index=13&type=section&id=Human%20Resources) As of June 30, 2025, the company had 127 employees, with total staff costs of approximately RMB 14.7 million; the company values employee development, offering training courses and implementing evaluation programs to enhance skills and satisfaction - As of June 30, 2025, the Group had **127 employees**, with total staff costs of approximately **RMB 14.7 million**[49](index=49&type=chunk) - The company has established mandatory provident fund contribution schemes for all employees and purchased medical, work injury, unemployment, and maternity insurance, in addition to making contributions to housing provident funds[49](index=49&type=chunk) - The company provides continuing education and training courses to employees and adopts evaluation programs to enhance their skills and unleash their potential[49](index=49&type=chunk) [Pledge of Assets](index=13&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the company's assets were not subject to any pledge - As of June 30, 2025, the Group's assets were **not pledged**[50](index=50&type=chunk) [Material Investments, Acquisitions and Disposals](index=13&type=section&id=Material%20Investments,%20Acquisitions%20and%20Disposals) As of June 30, 2025, the company held no material investments and had not undertaken any material acquisitions or disposals of subsidiaries, associates, or joint ventures - As of June 30, 2025, the Group held **no material investments**[52](index=52&type=chunk) - For the six months ended June 30, 2025, the Group had **no material acquisitions or disposals** of subsidiaries, associates, or joint ventures[52](index=52&type=chunk) [Future Plans for Material Investments and Capital Assets](index=13&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) The company intends to use the net proceeds from the global offering as outlined in the "Future Plans and Use of Proceeds" section of the prospectus, with no other future material investments or new capital asset plans currently, apart from post-balance sheet events - The company intends to use the net proceeds from the global offering as planned in the "Future Plans and Use of Proceeds" section of the prospectus[53](index=53&type=chunk) - As of the date of this interim report, apart from post-balance sheet events, the company has **no other future material investments or new capital asset plans**[53](index=53&type=chunk) [Post Balance Sheet Events](index=16&type=section&id=Post%20Balance%20Sheet%20Events) On August 22, 2025, the company agreed to acquire a total of 55% equity interest in Beijing Kechuang Rongxin Technology Co., Ltd. for RMB 165 million in cash - On August 22, 2025, the company, Li Yanbai, and Chai Hong entered into a share transfer agreement, whereby the company conditionally agreed to acquire a total of **55% equity interest** in Beijing Kechuang Rongxin Technology Co., Ltd. for **RMB 165 million in cash**[65](index=65&type=chunk)[66](index=66&type=chunk) Corporate Governance and Other Information [Corporate Governance and Other Information](index=14&type=section&id=Corporate%20Governance%20and%20Other%20Information) The company complies with the Corporate Governance Code, though the roles of Chairman and CEO are combined, which the Board will continue to review; Directors and Supervisors adhere to the Standard Code for Securities Transactions; no interim dividend is recommended; net proceeds from the global offering are primarily for insurance agency business development and IT service enhancement, with a significant acquisition announced post-period [Corporate Governance Code](index=14&type=section&id=Corporate%20Governance%20Code) The company has adopted and complied with the Corporate Governance Code, but the roles of Chairman and Chief Executive Officer are combined by Mr. Lu Yao, an arrangement the Board believes ensures consistent internal leadership and will continue to review - The company has adopted the Corporate Governance Code and complied with all principles and code provisions during the reporting period[54](index=54&type=chunk)[55](index=55&type=chunk) - The roles of Chairman and Chief Executive Officer are combined by **Mr. Lu Yao**, an arrangement the Board believes ensures consistent internal leadership and enhances overall strategic planning efficiency[55](index=55&type=chunk) - The Board will continue to review and consider separating the roles of Chairman and Chief Executive Officer at an appropriate time[55](index=55&type=chunk) [Standard Code for Securities Transactions](index=14&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The company has adopted a code of conduct for securities transactions by Directors and Supervisors, and all Directors and Supervisors confirmed compliance with the required standards during the reporting period - The company has adopted a code of conduct for securities transactions by Directors and Supervisors, which is no less stringent than the Standard Code set out in Appendix C3 of the Listing Rules[56](index=56&type=chunk) - All Directors and Supervisors confirmed compliance with the required standards of the Standard Code throughout the six months ended June 30, 2025[56](index=56&type=chunk) [Interim Dividend](index=14&type=section&id=Interim%20Dividend) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[57](index=57&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=15&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and the company held no treasury shares - For the entire six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[59](index=59&type=chunk) - As of June 30, 2025, the company held **no treasury shares**[60](index=60&type=chunk) [Review of Interim Financial Information](index=15&type=section&id=Review%20of%20Interim%20Financial%20Information) The company's unaudited condensed consolidated interim results have been reviewed by KPMG, the company's auditor, in accordance with Hong Kong Standard on Review Engagements 2410, and also by the Board's Audit Committee - The company's unaudited condensed consolidated interim results have been reviewed by the company's auditor, **KPMG**, in accordance with Hong Kong Standard on Review Engagements 2410[61](index=61&type=chunk) - The interim results have also been reviewed by the Board's Audit Committee[61](index=61&type=chunk) [Use of Net Proceeds from Global Offering](index=15&type=section&id=Use%20of%20Net%20Proceeds%20from%20Global%20Offering) The net proceeds from the global offering amounted to approximately HKD 198.9 million; as of June 30, 2025, HKD 1.2 million was utilized for enhancing IT service products and R&D capabilities, with the remaining funds planned for developing insurance agency business, seeking prudent investments, and general working capital - The net proceeds from the global offering amounted to approximately **HKD 198.9 million**[62](index=62&type=chunk) Use of Net Proceeds from Global Offering | Primary Use | Approximate Percentage of Net Proceeds | Total Net Proceeds Allocated (HKD millions) | Amount Utilized (as of June 30, 2025) (HKD millions) | Unutilized Amount (as of June 30, 2025) (HKD millions) | Expected Timeline for Unutilized Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Developing insurance agency business | 53.8% | 107.0 | – | 107.0 | Before end of 2027 | | Enhancing IT service products and R&D capabilities | 26.2% | 52.1 | 1.2 | 50.9 | Before end of 2029 | | Seeking prudent investments and acquisitions | 10.0% | 19.9 | – | 19.9 | Before end of 2026 | | General working capital and general corporate purposes | 10.0% | 19.9 | – | 19.9 | Before end of 2027 | | **Total** | **100.0%** | **198.9** | **1.2** | **197.7** | | - Unutilized net proceeds will be deposited into short-term interest-bearing accounts with licensed commercial banks and/or other recognized financial institutions[63](index=63&type=chunk) [Changes in Information of Directors, Supervisors and Senior Management](index=16&type=section&id=Changes%20in%20Information%20of%20Directors,%20Supervisors%20and%20Senior%20Management) Since the publication of the 2024 annual report, Mr. Zhong Weiwen ceased to be an independent non-executive director of Shandong Fengxiang Co., Ltd. on August 22, 2025, with no other changes in the information of directors, supervisors, and senior management - Mr. Zhong Weiwen ceased to be an independent non-executive director of Shandong Fengxiang Co., Ltd. (a company formerly listed on the Stock Exchange) on **August 22, 2025**[64](index=64&type=chunk) - Apart from the above disclosure, there have been **no other changes** in the information of Directors, Supervisors, and Senior Management from the 2024 annual report to the date of this interim report[64](index=64&type=chunk) [Continuing Disclosure Obligations under Listing Rules](index=16&type=section&id=Continuing%20Disclosure%20Obligations%20under%20Listing%20Rules) The company has no other disclosure obligations under Listing Rules 13.20, 13.21, and 13.22 - The company has **no other disclosure obligations** under Listing Rules 13.20, 13.21, and 13.22[67](index=67&type=chunk) [Acknowledgement](index=16&type=section&id=Acknowledgement) The Chairman of the Board, Lu Yao, on behalf of the Board, expresses gratitude to all fellow Directors and employees for their dedicated service, contributions, and support during the period - The Chairman of the Board, **Lu Yao**, thanks all fellow Directors and employees for their dedicated service, contributions, and support during the period[68](index=68&type=chunk)[69](index=69&type=chunk) Disclosure of Interests [Disclosure of Interests](index=17&type=section&id=Disclosure%20of%20Interests) This section discloses the interests and short positions of Directors, Supervisors, Chief Executive, and substantial shareholders in the company's shares, with Lu Yao and Zhang Zhiquan holding domestic shares through controlled corporations, and Haier Group Corporation and its affiliates being the largest substantial shareholders [Interests and Short Positions of Directors, Supervisors and Chief Executive in Shares, Underlying Shares and Debentures](index=17&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors,%20Supervisors%20and%20Chief%20Executive%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, the company's Chairman and Executive Director Lu Yao, and Executive Director and Deputy General Manager Zhang Zhiquan, held domestic shares through controlled corporations, representing **19.48%** and **17.00%** respectively of the total issued shares Directors' and Chief Executive's Interests | Name | Position | Nature of Interest | Shares Held and Class | Approximate Percentage of Total Issued Shares (%) | | :--- | :--- | :--- | :--- | :--- | | Lu Yao | Chairman, Executive Director and General Manager | Interest in controlled corporation | 27,501,600 Domestic Shares (L) | 19.48 | | Zhang Zhiquan | Executive Director and Deputy General Manager | Interest in controlled corporation | 24,000,000 Domestic Shares (L) | 17.00 | - Lu Yao, through his wholly-owned Qingdao Haichuang Management Consulting Co., Ltd., is deemed to have an interest in the shares held by Shanghai Zhaoqi, Qingdao Haizhongjie, and Qingdao Haixinsheng, respectively[71](index=71&type=chunk) - Zhang Zhiquan, through his **31.40%** interest in Shanghai Zhaoqi and Beijing Quanzhanggui Internet Technology Co., Ltd. (in which Zhang Zhiquan holds a **70.00%** interest), is deemed to have an interest in the shares held by Shanghai Zhaoqi[71](index=71&type=chunk) [Interests and Short Positions of Substantial Shareholders in Shares and Underlying Shares](index=18&type=section&id=Interests%20and%20Short%20Positions%20of%20Substantial%20Shareholders%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, Haier Group Corporation and its affiliates, through interests in controlled corporations, held **64,000,000 domestic shares**, representing **45.33%** of the total issued shares, making them the largest substantial shareholders; additionally, Qingdao Haiyinghui Management Consulting Co., Ltd. directly held **56,000,000 domestic shares**, and Qu Pengcheng beneficially held **4,142,500 H shares** Substantial Shareholders' Interests | Shareholder Name | Nature of Interest | Shares Held and Class | Approximate Percentage of Total Issued Shares (%) | | :--- | :--- | :--- | :--- | | Haier Group Corporation | Interest in controlled corporation | 64,000,000 Domestic Shares (L) | 45.33 | | Qingdao Haichuangke Management Consulting Enterprise (Limited Partnership) | Interest in controlled corporation | 64,000,000 Domestic Shares (L) | 45.33 | | Qingdao Haichuanghui IoT Co., Ltd. | Interest in controlled corporation | 64,000,000 Domestic Shares (L) | 45.33 | | Qingdao Haichuanghui Investment Co., Ltd. | Interest in controlled corporation | 64,000,000 Domestic Shares (L) | 45.33 | | Haichuanghui Holdings Limited | Interest in controlled corporation | 8,000,000 Domestic Shares (L) | 5.67 | | Ningbo Meishan Bonded Port Area Haichuanghui Investment Management Co., Ltd. | Interest in controlled corporation | 8,000,000 Domestic Shares (L) | 5.67 | | Qingdao Haichuanghui Venture Capital Co., Ltd. | Interest in controlled corporation | 8,000,000 Domestic Shares (L) | 5.67 | | Qingdao Haichuanghui Ronghai Venture Capital Center (Limited Partnership) | Beneficial interest | 8,000,000 Domestic Shares (L) | 5.67 | | Qingdao Haiyinghui Management Consulting Co., Ltd. | Beneficial interest | 56,000,000 Domestic Shares (L) | 39.66 | | Qingdao Haichuang Management Consulting Co., Ltd. | Interest in controlled corporation | 27,501,600 Domestic Shares (L) | 19.48 | | Shanghai Zhaoqi | Beneficial interest | 24,000,000 Domestic Shares (L) | 17.00 | | Li Jia | Spouse's interest | 24,000,000 Domestic Shares (L) | 17.00 | | Qingdao Haizhihuiying Equity Investment Management Co., Ltd. | Interest in controlled corporation | 14,394,000 Domestic Shares (L) | 10.19 | | Qingdao Haichuangying Equity Investment Partnership (Limited Partnership) | Beneficial interest | 14,394,000 Domestic Shares (L) | 10.19 | | Qu Pengcheng | Beneficial interest | 4,142,500 H Shares (L) | 2.93 | - Haier Group Corporation, through a voting rights entrustment arrangement, is entitled to exercise **48.80%** of the voting rights held by Qingdao Haichuanghui IoT Co., Ltd. for Haichuangke Management Consulting Enterprise (Limited Partnership)[77](index=77&type=chunk) - Li Jia, as the spouse of Zhang Zhiquan, is deemed to have an interest in the shares in which Zhang Zhiquan has an interest, in accordance with the Securities and Futures Ordinance[75](index=75&type=chunk) Review Report [Review Report](index=21&type=section&id=Review%20Report) KPMG reviewed the interim financial information and found no matters leading them to believe that the information was not prepared in all material respects in accordance with International Accounting Standard 34 – Interim Financial Reporting - KPMG reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[81](index=81&type=chunk) - Review conclusion: Nothing has come to our attention that causes us to believe that the interim financial information as of June 30, 2025, is not prepared, in all material respects, in accordance with International Accounting Standard 34 – Interim Financial Reporting[82](index=82&type=chunk) Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=22&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company achieved revenue of **RMB 113,580 thousand**, a **28.4%** year-on-year increase, and profit for the period of **RMB 25,099 thousand**, an **18.1%** year-on-year increase, with basic earnings per share of **RMB 0.18** Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Growth | | :--- | :--- | :--- | :--- | | Revenue | 113,580 | 88,456 | 28.4% | | Cost of Sales | (71,467) | (51,248) | 39.5% | | Gross Profit | 42,113 | 37,208 | 13.2% | | Operating Profit | 30,709 | 26,251 | 17.0% | | Profit Before Tax | 30,697 | 26,102 | 17.6% | | Income Tax | (5,598) | (4,844) | 15.6% | | Profit for the Period | 25,099 | 21,258 | 18.1% | | Net Profit Attributable to Equity Holders of the Company | 25,063 | 21,588 | 16.1% | | Basic and Diluted Earnings Per Share (RMB) | 0.18 | 0.20 | -10.0% | Interim Condensed Consolidated Statement of Financial Position [Interim Condensed Consolidated Statement of Financial Position](index=23&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets less current liabilities amounted to **RMB 604,410 thousand**, with net current assets of **RMB 500,332 thousand**; non-current assets decreased while current assets increased, primarily reflecting changes in cash and cash equivalents and trade receivables Interim Condensed Consolidated Statement of Financial Position Summary | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 104,078 | 145,953 | -28.7% | | Current Assets | 543,300 | 489,440 | 10.9% | | Current Liabilities | 42,968 | 37,021 | 16.1% | | Net Current Assets | 500,332 | 452,419 | 10.6% | | Total Assets Less Current Liabilities | 604,410 | 598,372 | 1.0% | | Net Assets | 604,410 | 598,372 | 1.0% | | Cash and Cash Equivalents | 286,923 | 169,721 | 69.1% | | Term Deposits (Current Portion) | 177,457 | 262,638 | -32.5% | | Term Deposits (Non-current Portion) | 94,709 | 136,282 | -30.5% | | Trade and Bills Receivables | 56,388 | 41,965 | 34.4% | Interim Condensed Consolidated Statement of Changes in Equity [Interim Condensed Consolidated Statement of Changes in Equity](index=25&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, the company's total equity increased to **RMB 604,410 thousand**, with a net profit for the period of **RMB 25,063 thousand** and cash dividends of **RMB 19,061 thousand** paid Interim Condensed Consolidated Statement of Changes in Equity Summary | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Share Capital | 141,196 | 141,196 | 0.0% | | Reserves | 465,001 | 458,999 | 1.3% | | Total Equity Attributable to Equity Holders of the Company | 606,197 | 600,195 | 1.0% | | Non-controlling Interests | (1,787) | (1,823) | -2.0% | | Total Equity | 604,410 | 598,372 | 1.0% | | Net Profit for the Period (Attributable to Equity Holders of the Company) | 25,063 | 46,657 (Full Year) | - | | Cash Dividends Declared and Paid for the Period | (19,061) | - | - | Interim Condensed Consolidated Statement of Cash Flows [Interim Condensed Consolidated Statement of Cash Flows](index=27&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash generated from operating activities was **RMB 7,141 thousand**, net cash generated from investing activities was **RMB 130,958 thousand**, and net cash used in financing activities was **RMB 20,038 thousand**, with cash and cash equivalents increasing to **RMB 286,923 thousand** at period-end Interim Condensed Consolidated Statement of Cash Flows Summary | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 7,141 | 19,306 | -63.0% | | Net Cash Generated from/(Used in) Investing Activities | 130,958 | (150,011) | 187.3% | | Net Cash (Used in)/Generated from Financing Activities | (20,038) | (7,335) | 173.2% | | Net Increase/(Decrease) in Cash and Cash Equivalents | 118,061 | (138,040) | 185.5% | | Cash and Cash Equivalents at End of Period | 286,923 | 65,598 | 337.4% | Notes to the Unaudited Interim Financial Report [Notes to the Unaudited Interim Financial Report](index=28&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) The financial report notes detail the basis of preparation, revenue and segment reporting, various expenses, taxes, earnings per share, balance sheet items, capital and reserves, capital commitments, and material related party transactions, also disclosing a significant post-period acquisition [1 Basis of Preparation](index=28&type=section&id=1%20Basis%20of%20Preparation) This interim financial report is prepared in accordance with applicable disclosure provisions of the Hong Kong Stock Exchange Listing Rules and International Accounting Standard 34 – Interim Financial Reporting, and has been reviewed by KPMG but is unaudited - The interim financial report is prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34 Interim Financial Reporting issued by the International Accounting Standards Board[97](index=97&type=chunk) - This interim financial report is unaudited but has been reviewed by KPMG, the company's auditor, in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[98](index=98&type=chunk) [2 Revenue and Segment Reporting](index=29&type=section&id=2%20Revenue%20and%20Segment%20Reporting) The company's revenue primarily derives from insurance agency services, IT services, and consulting services, with insurance agency business being the main source, showing significant growth from enterprise insurance users and strong performance in property and casualty products; the company reports by these three business lines, using gross profit as the segment performance measure - The Group's principal activities are the provision of insurance agency services, IT services, and consulting services in China[99](index=99&type=chunk) Revenue by Source | Revenue Source | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Growth | | :--- | :--- | :--- | :--- | | Insurance Agency Business | 109,204 | 82,213 | 32.8% | | IT Services | 4,340 | 5,486 | -21.0% | | Consulting Services | 36 | 757 | -95.2% | | **Total** | **113,580** | **88,456** | **28.4%** | Revenue by Insurance Product Purchaser | Insurance Product Purchaser | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Growth | | :--- | :--- | :--- | :--- | | Household Insurance Users | 51,181 | 45,500 | 12.5% | | Enterprise Insurance Users | 58,023 | 36,713 | 58.0% | | **Total** | **109,204** | **82,213** | **32.8%** | Revenue by Major Product | Major Product | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Growth | | :--- | :--- | :--- | :--- | | Property and Casualty Insurance Products | 52,943 | 35,878 | 47.6% | | Life and Health Insurance Products | 8,887 | 12,091 | -26.4% | | Accident Insurance Products | 18,543 | 15,328 | 21.0% | | Auto Insurance Products | 28,831 | 18,916 | 52.4% | | **Total** | **109,204** | **82,213** | **32.8%** | - The Group manages its business by business lines, presenting three reportable segments: insurance agency services, IT services, and consulting services[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) - The measure used to evaluate the performance of reportable segments is gross profit[107](index=107&type=chunk) Segment Gross Profit | Segment | H1 2025 Gross Profit (RMB thousands) | H1 2024 Gross Profit (RMB thousands) | YoY Growth | | :--- | :--- | :--- | :--- | | Insurance Agency Services | 39,627 | 33,260 | 19.1% | | IT Services | 2,450 | 3,413 | -28.2% | | Consulting Services | 36 | 535 | -93.3% | | **Total** | **42,113** | **37,208** | **13.2%** | [3 Other Income](index=32&type=section&id=3%20Other%20Income) The company's total other income was **RMB 4,260 thousand**, a slight decrease from the prior period, primarily due to increased exchange losses partially offset by higher interest income Other Income Items | Other Income Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Interest Income | 5,098 | 3,959 | 28.8% | | Government Grants | – | 400 | -100.0% | | Others | (838) | 30 | - | | **Total** | **4,260** | **4,389** | -3.0% | [4 Profit Before Tax](index=32&type=section&id=4%20Profit%20Before%20Tax) During the reporting period, the company's finance costs significantly decreased, staff costs slightly increased, and other major costs such as referral fees, commission fees, and service fees all experienced changes - Finance costs decreased from **RMB 149 thousand** to **RMB 12 thousand**, primarily due to reduced interest expense on lease liabilities[111](index=111&type=chunk) Staff Costs | Staff Cost Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Salaries, Wages and Other Benefits | 13,581 | 12,998 | | Contributions to Defined Contribution Retirement Plans | 1,110 | 1,287 | | **Total** | **14,691** | **14,285** | Other Items | Other Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Referral Fees | 62,051 | 40,228 | 54.2% | | Commission Fees | 2,990 | 4,855 | -38.4% | | Service Fees | 2,500 | 2,340 | 6.8% | | IT Subcontracting Fees | 1,015 | 376 | 169.9% | | Listing Expenses | – | 676 | -100.0% | | Depreciation and Amortisation Expenses | 930 | 713 | 30.4% | [5 Income Tax in the Consolidated Statement of Profit or Loss](index=34&type=section&id=5%20Income%20Tax%20in%20the%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The company's income tax expense increased due to higher profit before tax, but it benefits from a **15%** preferential tax rate as a high-tech enterprise, with some subsidiaries also enjoying tax incentives as small-profit enterprises Income Tax Expense | Tax Type | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Current Tax - PRC Enterprise Income Tax | 5,595 | 4,845 | 15.5% | | Deferred Tax - Temporary Differences | 3 | (1) | - | | **Total** | **5,598** | **4,844** | **15.6%** | - The company is entitled to a **15%** preferential income tax rate for the six months ended June 30, 2024 and 2025, due to its "High and New Technology Enterprise" qualification[115](index=115&type=chunk) - Small-profit enterprise subsidiaries enjoy a preferential tax rate where the portion of annual taxable income not exceeding **RMB 3 million** is reduced by **25%** and taxed at a **20%** enterprise income tax rate[116](index=116&type=chunk) [6 Earnings Per Share](index=35&type=section&id=6%20Earnings%20Per%20Share) For the six months ended June 30, 2025, the company's basic earnings per share were **RMB 0.18**, a decrease from **RMB 0.20** in the prior period; diluted earnings per share were equal to basic earnings per share due to the absence of potentially dilutive ordinary shares Earnings Per Share Data | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Profit Attributable to Equity Holders of the Company (RMB thousands) | 25,063 | 21,588 | | Weighted Average Number of Ordinary Shares in Issue (thousands of shares) | 141,196 | 105,896 | | Basic Earnings Per Share Attributable to Equity Holders of the Company (RMB) | 0.18 | 0.20 | - For the six months ended June 30, 2025 and 2024, there were **no potentially dilutive ordinary shares**, thus diluted earnings per share were equal to basic earnings per share[119](index=119&type=chunk) [7 Property, Plant and Equipment](index=36&type=section&id=7%20Property,%20Plant%20and%20Equipment) As of June 30, 2025, the company's net book value of property, plant and equipment was **RMB 138 thousand**, a decrease from **RMB 192 thousand** as of December 31, 2024 Property, Plant and Equipment Net Book Value | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Book Value of Electronic Equipment | 96 | 146 | | Net Book Value of Office and Other Equipment | 42 | 46 | | **Total Net Book Value** | **138** | **192** | [8 Right-of-Use Assets](index=37&type=section&id=8%20Right-of-Use%20Assets) As of June 30, 2025, the company's net book value of right-of-use assets was **RMB 894 thousand**, a decrease from **RMB 1,724 thousand** as of December 31, 2024 Right-of-Use Assets Net Book Value | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Book Value of Right-of-Use Assets | 894 | 1,724 | - The Group has obtained the right to use other properties as its operating premises through lease agreements[121](index=121&type=chunk) [9 Trade and Bills Receivables](index=37&type=section&id=9%20Trade%20and%20Bills%20Receivables) As of June 30, 2025, the company's net trade and bills receivables amounted to **RMB 56,388 thousand**, an increase of **34.4%** from December 31, 2024, with most amounts due within three months Trade and Bills Receivables Net Amount | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Net Trade and Bills Receivables | 56,388 | 41,965 | 34.4% | Ageing Analysis of Trade and Bills Receivables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months (inclusive) | 53,711 | 41,277 | | 3 to 6 months (inclusive) | 1,136 | 596 | | Over 6 months | 1,541 | 92 | | **Total** | **56,388** | **41,965** | [10 Contract Costs and Other Assets](index=38&type=section&id=10%20Contract%20Costs%20and%20Other%20Assets) As of June 30, 2025, the company's total contract costs and other assets amounted to **RMB 6,426 thousand**, a decrease from December 31, 2024, primarily comprising contract fulfillment costs Contract Costs and Other Assets | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Contract Fulfillment Costs | 5,352 | 2,508 | | Input VAT to be Deducted | 461 | 788 | | Prepayments to Suppliers | – | 4,319 | | Others | 613 | 129 | | **Total** | **6,426** | **7,744** | [11 Cash and Cash Equivalents, Restricted Cash and Term Deposits](index=38&type=section&id=11%20Cash%20and%20Cash%20Equivalents,%20Restricted%20Cash%20and%20Term%20Deposits) The company's cash and cash equivalents significantly increased, while both current and non-current term deposits decreased; restricted cash increased, primarily for insurance agency working capital reserves and funds collected on behalf of others Cash and Deposits | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 286,923 | 169,721 | 69.1% | | Current Term Deposits | 177,457 | 262,638 | -32.5% | | Non-current Term Deposits | 94,709 | 136,282 | -30.5% | | Restricted Cash | 24,427 | 15,108 | 61.7% | - Restricted cash includes **RMB 7,826 thousand** as working capital reserve deposits for insurance agencies and **RMB 16,601 thousand** for funds collected and paid on behalf of others[127](index=127&type=chunk) [12 Trade and Other Payables](index=40&type=section&id=12%20Trade%20and%20Other%20Payables) As of June 30, 2025, the company's total trade and other payables amounted to **RMB 33,375 thousand**, an increase of **24.1%** from December 31, 2024, primarily comprising amounts due to suppliers and premiums payable Trade and Other Payables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Amounts Due to Suppliers | 15,899 | 16,329 | -2.6% | | Premiums Payable | 12,429 | 2,474 | 402.4% | | Dividends Payable | 77 | – | - | | Accrued Listing Expenses | – | 1,029 | -100.0% | | Others | 4,970 | 7,064 | -29.6% | | **Total** | **33,375** | **26,896** | **24.1%** | - Premiums payable represent premiums collected on behalf of insurance companies but not yet remitted as of the balance sheet date[128](index=128&type=chunk) [13 Contract Liabilities](index=40&type=section&id=13%20Contract%20Liabilities) As of June 30, 2025, the company's total contract liabilities amounted to **RMB 2,536 thousand**, a significant increase of **123.8%** from December 31, 2024, driven by increased contract liabilities for insurance agency services and IT services Contract Liabilities | Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Insurance Agency Services | 1,325 | 781 | 69.7% | | IT Services | 1,211 | 352 | 244.0% | | **Total** | **2,536** | **1,133** | **123.8%** | - The increase in contract liabilities primarily resulted from an increase of **RMB 1,137 thousand** in insurance agency service contract liabilities and an increase of **RMB 1,351 thousand** in IT service contract liabilities[130](index=130&type=chunk) [14 Lease Liabilities](index=41&type=section&id=14%20Lease%20Liabilities) As of June 30, 2025, the company's lease liabilities amounted to **RMB 21 thousand**, all due within one year Lease Liabilities | Term | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 21 | – | [15 Accrued Expenses](index=41&type=section&id=15%20Accrued%20Expenses) As of June 30, 2025, the company's total accrued expenses amounted to **RMB 3,967 thousand**, a slight decrease from December 31, 2024, with accrued staff costs forming the major portion Accrued Expenses | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Accrued Staff Costs | 3,701 | 4,072 | | VAT and Surcharges Payable | 259 | 176 | | Others | 7 | 21 | | **Total** | **3,967** | **4,269** | [16 Income Tax in the Consolidated Statement of Financial Position](index=42&type=section&id=16%20Income%20Tax%20in%20the%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's current tax payable was **RMB 3,069 thousand**, a decrease from December 31, 2024, and net deferred tax assets were **RMB 16 thousand**, a slight decrease Income Tax Balances | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Current Tax Payable | 3,069 | 4,723 | -35.0% | | Net Deferred Tax Assets | 16 | 19 | -15.8% | [17 Capital and Reserves](index=43&type=section&id=17%20Capital%20and%20Reserves) The company's share capital and capital reserves remained stable, Chinese statutory reserves were appropriated in accordance with regulations, and a final dividend of **RMB 19,061 thousand** for 2024 was paid during the period - As of June 30, 2025, paid-in capital/share capital was **RMB 141,196 thousand**, and capital reserves were **RMB 280,009 thousand**[136](index=136&type=chunk) - In accordance with the PRC Company Law, the Group is required to appropriate **10%** of its after-tax profit, as determined under relevant PRC accounting standards, to the statutory reserve until the reserve reaches **50%** of its registered capital[137](index=137&type=chunk) - The final dividend of **RMB 0.135 per share** for the year ended December 31, 2024, totaling **RMB 19,061,406**, was paid before July 4, 2025[138](index=138&type=chunk) [18 Capital Commitments](index=43&type=section&id=18%20Capital%20Commitments) As of June 30, 2025, the company's capital commitments contracted but not provided for amounted to **RMB 52,000 thousand** Capital Commitments | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Contracted but not provided for | 52,000 | – | [19 Material Related Party Transactions](index=44&type=section&id=19%20Material%20Related%20Party%20Transactions) The company engaged in several material related party transactions with its controlling shareholder, Haier Group Corporation, and its affiliates, including IT and consulting service income, referral and service fees, and interest income, with related receivables, payables, and cash balances disclosed; key management personnel compensation increased - Key related parties include the controlling shareholder, **Haier Group Corporation**, and its subsidiaries and affiliates[140](index=140&type=chunk) Key Management Personnel Compensation | Key Management Personnel Compensation Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Salaries, Allowances and Benefits in Kind | 1,275 | 1,347 | | Discretionary Bonuses | 1,001 | 730 | | Contributions to Retirement Plans | 127 | 120 | | **Total** | **2,403** | **2,197** | Related Party Transactions (with Haier Group Corporation and its affiliates) | Transaction Type | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | IT and Consulting Service Income | 2,858 | 3,577 | | Referral and Service Fees | (1,305) | (396) | | Interest Income | 124 | 3 | | Finance Costs | – | (16) | | Sales and Marketing Expenses | – | (14) | | General and Administrative Expenses and Others | (1,094) | (680) | Related Party Balances (with Haier Group Corporation and its affiliates) | Balance Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade-related Trade and Bills Receivables | 3,797 | 7,249 | | Cash and Cash Equivalents and Restricted Cash Placed with Related Parties | 25,013 | 20,040 | | Trade and Other Payables | (660) | (1,937) | [20 Non-Adjusting Post Balance Sheet Events](index=45&type=section&id=20%20Non-Adjusting%20Post%20Balance%20Sheet%20Events) On August 22, 2025, the company agreed to acquire a total of 55% equity interest in Beijing Kechuang Rongxin Technology Co., Ltd. for RMB 165 million in cash - On August 22, 2025, the company, Li Yanbai, and Chai Hong entered into a share transfer agreement, whereby the company conditionally agreed to acquire a total of **55% equity interest** in Beijing Kechuang Rongxin Technology Co., Ltd. for **RMB 165 million in cash**[144](index=144&type=chunk) Definitions [Definitions](index=46&type=section&id=Definitions) This section provides definitions for terms used throughout the report

[Clarification Announcement for Interim Results for the Six Months Ended June 30, 2025](index=1&type=section&id=Clarification%20Announcement%20for%20Interim%20Results) This announcement provides clarifications to the interim results for the six months ended June 30, 2025, across key financial statements and metrics [Summary](index=1&type=section&id=1.%20Summary) This section clarifies the loss attributable to equity holders and perpetual convertible securities holders, basic and diluted loss per share, and net asset value per share as of June 30, 2025 Summary of Key Financial Metrics | Metric | For the six months ended June 30, 2025 (HKD) | For the six months ended June 30, 2024 (HKD) | As of December 31, 2024 (HKD) | | :--- | :--- | :--- | :--- | | Loss attributable to equity holders of the Company and holders of perpetual convertible securities | (625,500,000) | (539,200,000) | - | | Basic loss per share (HK cents) | (40.9) | (35.3) | - | | Diluted loss per share (HK cents) | (40.9) | (35.3) | - | | Net asset value per share (HKD) | 3.7 | - | 4.0 | [Consolidated Statement of Profit or Loss](index=2&type=section&id=2.%20Unaudited%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20for%20the%20Six%20Months%20Ended%20June%2030,%202025) This section presents the revised unaudited consolidated statement of profit or loss for the six months ended June 30, 2025, focusing on loss attributable to equity holders, non-controlling interests, and loss per share Unaudited Consolidated Statement of Profit or Loss | Metric | For the six months ended June 30, 2025 (HKD '000) | For the six months ended June 30, 2024 (HKD '000) | | :--- | :--- | :--- | | Loss attributable to equity holders of the Company and holders of perpetual convertible securities | (625,520) | (539,187) | | Non-controlling interests | (124,790) | (21,393) | | Loss for the period | (750,310) | (560,580) | | Basic loss per share (HK cents) | (40.9) | (35.3) | | Diluted loss per share (HK cents) | (40.9) | (35.3) | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=3.%20Unaudited%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income%20for%20the%20Six%20Months%20Ended%20June%2030,%202025) This section presents the revised consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2025, updating total comprehensive loss attributable to equity holders and non-controlling interests Unaudited Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | For the six months ended June 30, 2025 (HKD '000) | For the six months ended June 30, 2024 (HKD '000) | | :--- | :--- | :--- | | Total comprehensive loss attributable to equity holders of the Company and holders of perpetual convertible securities | (466,192) | (689,299) | | Non-controlling interests | (120,380) | (27,327) | | Total comprehensive loss for the period | (586,572) | (716,626) | [Consolidated Statement of Financial Position](index=2&type=section&id=4.%20Unaudited%20Consolidated%20Statement%20of%20Financial%20Position%20as%20of%20June%2030,%202025) This section provides revised unaudited consolidated statement of financial position data as of June 30, 2025, covering share capital, reserves, total equity attributable to equity holders, non-controlling interests, and total equity Unaudited Consolidated Statement of Financial Position | Metric | As of June 30, 2025 (HKD '000) | As of December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Share capital | 141,273 | 141,273 | | Reserves | 5,461,271 | 5,927,463 | | Total equity attributable to equity holders of the Company and holders of perpetual convertible securities | 5,602,544 | 6,068,736 | | Non-controlling interests | (164,272) | (43,892) | | Total equity | 5,438,272 | 6,024,844 | [Notes to Condensed Consolidated Interim Financial Statements Note 8 (Loss per Share)](index=3&type=section&id=5.%20Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Statements%20Note%208%20(Loss%20per%20Share)) This section details the calculation of basic loss per share and provides revised loss attributable to equity holders and perpetual convertible securities holders for the six months ended June 30, 2025 Loss Attributable to Equity Holders | Metric | For the six months ended June 30, 2025 (HKD '000) | For the six months ended June 30, 2024 (HKD '000) | | :--- | :--- | :--- | | Loss attributable to equity holders of the Company and holders of perpetual convertible securities | (625,520) | (539,187) | - The weighted average number of ordinary shares outstanding remained unchanged at **1,529,286,000 shares** for both reporting periods[5](index=5&type=chunk) [Financial Review](index=3&type=section&id=6.%20Financial%20Review) This section reiterates the revised loss attributable to equity holders and perpetual convertible securities holders for the six months ended June 30, 2025, and updates the net asset value per share Key Financial Review Metrics | Metric | For the six months ended June 30, 2025 (HKD) | For the six months ended June 30, 2024 (HKD) | As of December 31, 2024 (HKD) | | :--- | :--- | :--- | :--- | | Loss attributable to equity holders of the Company and holders of perpetual convertible securities | (625,500,000) | (539,200,000) | - | | Net asset value per share (HKD) | 3.7 | - | 4.0 | [Non-controlling Interests](index=3&type=section&id=7.%20Non-controlling%20Interests) This section clarifies the revised loss attributable to non-controlling interests for the six months ended June 30, 2025 Loss Attributable to Non-controlling Interests | Metric | For the six months ended June 30, 2025 (HKD) | For the six months ended June 30, 2024 (HKD) | | :--- | :--- | :--- | | Loss attributable to non-controlling interests | (124,800,000) | (21,400,000) | [Net Asset Value per Share](index=4&type=section&id=8.%20Net%20Asset%20Value%20per%20Share) This section details the calculation and revised data for net asset value per share as of June 30, 2025, and December 31, 2024, including attributable net asset value, ordinary shares, and perpetual convertible securities Calculation of Net Asset Value per Share | Metric | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Net asset value attributable to equity holders of the Company and holders of perpetual convertible securities (HKD '000) | 5,602,544 | 6,068,736 | | Number of ordinary shares in issue ('000 shares) | 1,412,733 | 1,412,733 | | Number of perpetual convertible securities outstanding ('000 shares) | 116,553 | 116,553 | | Number of shares used for calculating net asset value per share ('000 shares) | 1,529,286 | 1,529,286 | | Net asset value per share attributable to equity holders of the Company and holders of perpetual convertible securities (HKD) | 3.7 | 4.0 | - Net asset value per share is calculated assuming perpetual convertible securities holders have converted their securities into shares at the end of the reporting period[9](index=9&type=chunk) [Other Information](index=4&type=section&id=Other%20Information) This announcement supplements the interim results announcement, confirming that other financial information remains unchanged and disclosing board member details - This clarification does not affect the accuracy of other financial information contained in the interim results announcement[10](index=10&type=chunk) - This announcement serves as a supplement to the interim results announcement and should be read in conjunction with the original announcement[10](index=10&type=chunk) - The list of board members as of the announcement date, including executive, non-executive, and independent non-executive directors, is disclosed[11](index=11&type=chunk)[12](index=12&type=chunk)

目錄 | 1 | 公司基本情況 | 2 | | --- | --- | --- | | 2 | 財務摘要 | 4 | | 3 | 管理層討論和分析 | 7 | | | 3.1 總體經營情況 | 7 | | | 3.2 財務報表分析 | 9 | | | 業務綜述 3.3 | 48 | | | 3.4 風險管理 | 58 | | | 未來展望與發展戰略 3.5 | 64 | | 4 | 股本變動及股東情況 | 65 | | 5 | 董事、監事、高級管理人員及員工 | 73 | | 6 | 重要事項 | 76 | | 7 | 獨立核數師審閱報告 | 78 | | 8 | 未經審計的中期財務報表 | 80 | | 9 | 未經審計的中期財務報表附註 | 91 | | 10 | 未經審計的補充財務信息 | 233 | | 11 | 釋義 | 239 | * 盛京銀行股份有限公司根據香港銀行業條例（香港法例第155章）並非一家認可機構，並非受限於香港金融管理 局的監督，及不獲授權在香港經營銀行及╱或接受存款業務。 公司基本情況 | 法定中文名稱 | 盛京銀行股份有限公司 | | --- | --- | | 中文簡稱 | ...

[Company Information](index=4&type=section&id=Company%20Information) This chapter provides fundamental company information for Concord New Energy Group Limited, including its board members, company secretary, auditor, key financial partners, and registered office addresses - Board members include **Mr. Liu Shunxing** (Chairman), **Ms. Liu Jianhong** (Vice Chairman), **Mr. Gui Kai** (CEO) as executive directors, **Mr. Wang Feng** as non-executive director, and **Ms. Huang Jian**, **Mr. Fang Zhixi**, **Mr. Zhang Zhong**, **Ms. Li Yongli**, **Mr. Cai Bin** as independent non-executive directors[5](index=5&type=chunk) - Company Secretary is **Mr. Chan Kam Kwun**, and the auditor is **KPMG**[5](index=5&type=chunk) - Key financial institution partners include Industrial and Commercial Bank of China, China Construction Bank, Bank of China, DBS Bank, and Bank of East Asia[5](index=5&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This chapter reviews the Group's operating environment, business performance, strategic adjustments, ESG, human resources, and future outlook for the first half of 2025 [I. Operating Environment](index=5&type=section&id=I.%20Operating%20Environment) The global renewable energy sector saw rapid growth in H1 2025, driven by AI and easing financing, while China faced grid absorption issues and declining electricity prices - Global renewable energy investment is projected to increase by **2% to $2.2 trillion** year-on-year in the first half of 2025, with China, the US, and the EU as major investment regions[8](index=8&type=chunk) - Rapid development of artificial intelligence drives global AI data center investment growth, becoming a key driver for renewable energy power investment and grid construction[8](index=8&type=chunk) - As of June 30, 2025, China's cumulative wind and solar installed capacity reached **1.67 billion kW**, historically surpassing thermal power, but insufficient grid absorption in new energy-rich regions led to severe wind and solar curtailment and downward pressure on electricity prices[8](index=8&type=chunk) - The Chinese government accelerated electricity market reforms, promoting comprehensive market entry for new energy and improving the green certificate consumption system, leading to a rebound in green certificate prices[9](index=9&type=chunk) - The global financing environment is easing, with the Federal Reserve expected to cut interest rates in the second half of the year, the European Central Bank having cut rates four times, and the People's Bank of China lowering the five-year LPR, which is favorable for reducing renewable energy power plant financing costs[14](index=14&type=chunk) [II. Business Review](index=7&type=section&id=II.%20Business%20Review) The Group's revenue and profit declined in H1 2025 due to power curtailment and lower electricity prices, prompting strategic adjustments focused on quality, efficiency, and capital platform expansion 2025 H1 Key Financial Data (Consolidated Statement) | Indicator | 2025 H1 (thousand RMB) | 2024 H1 (thousand RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 1,400,319 | 1,498,857 | -6.6% | | Profit attributable to equity holders of the Company | 281,940 | 501,370 | -43.8% | | Basic earnings per share (RMB cents) | 3.58 | 6.24 | -42.6% | | Diluted earnings per share (RMB cents) | 3.58 | 6.23 | -42.6% | Asset-Liability Ratio and Net Asset Per Share | Indicator | June 30, 2025 | December 31, 2024 | Change Rate | | :--- | :--- | :--- | :--- | | Net Assets (thousand RMB) | 8,900,049 | 8,906,306 | -0.07% | | Net Assets Per Share attributable to equity holders of the Company (RMB) | 1.11 | 1.09 | +1.83% | | Asset-Liability Ratio | 73.20% | 72.28% | +0.92pp | - The Group adjusted its development strategy in response to environmental changes, aiming to enhance earnings certainty and strengthen the enterprise, emphasizing quality and prudent development[15](index=15&type=chunk) - The Group focused on consolidating and strengthening its power trading capabilities, vigorously promoting power marketing, and enhancing green power trading and green certificate sales[15](index=15&type=chunk) [(1) Stable Power Generation, Revenue and Profit Under Pressure](index=8&type=section&id=(1)%20Stable%20Power%20Generation%2C%20Revenue%20and%20Profit%20Under%20Pressure) Despite increased installed capacity, power generation remained flat, leading to a decline in revenue and net profit due to curtailment and lower electricity prices Attributable Installed Capacity (MW) | Technology Type | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Wind Power | 3,844 | 3,467 | 10.9% | | Solar Power | 934 | 583 | 60.2% | | Total | 4,778 | 4,050 | 18.0% | Attributable Power Generation (GWh) | Technology Type | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Wind Power | 4,155 | 4,266 | -2.6% | | Solar Power | 604 | 472 | 28.0% | | Total | 4,759 | 4,738 | 0.4% | Weighted Average Utilization Hours of Power Plants Invested by the Group (Hours) | Technology Type | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Wind Power | 1,142 | 1,220 | -6.4% | | Solar Power | 531 | 659 | -19.3% | - The Group's invested wind power plants had an average curtailment rate of **12.9%**, and solar power plants had an average curtailment rate of **32.6%**[21](index=21&type=chunk) Power Plant Revenue and Net Profit (RMB: Thousand) | | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Controlled subsidiary power plant revenue | 1,335,393 | 1,364,318 | -2.1% | | Of which: Wind Power | 1,115,501 | 1,176,495 | -5.2% | | Of which: Solar Power | 219,892 | 187,823 | 17.1% | | Controlled subsidiary power plant net profit | 350,200 | 490,557 | -28.6% | | Of which: Wind Power | 303,384 | 461,244 | -34.2% | | Of which: Solar Power | 46,816 | 29,313 | 59.7% | | Joint ventures and associates net profit | 87,606 | 94,978 | -7.8% | | Of which: Wind Power | 86,159 | 92,410 | -6.8% | | Of which: Solar Power | 1,447 | 2,568 | -43.7% | Average Comprehensive Electricity Price of Power Plants (RMB/kWh, including VAT) | Technology Type | 2025 H1 | 2024 H1 | Change Amount | | :--- | :--- | :--- | :--- | | Wind Power | 0.3653 | 0.3838 | -0.0185 | | Solar Power | 0.4278 | 0.4714 | -0.0436 | - The Group's power loss due to equipment failure decreased by **40%** year-on-year; green power trading volume increased by **26%** compared to the same period[23](index=23&type=chunk) [(2) Prioritizing Efficiency, Focusing on Development Quality, Projects Commissioned on Schedule](index=10&type=section&id=(2)%20Prioritizing%20Efficiency%2C%20Focusing%20on%20Development%20Quality%2C%20Projects%20Commissioned%20on%20Schedule) The Group pursued value-oriented development, acquiring new projects in key markets and commissioning 191 MW of capacity while optimizing costs - The Group acquired **600 MW** of new wind power investment projects (annual construction targets) in China[26](index=26&type=chunk) - Acquired **152.5 MW** of solar power projects and **300 MW** of energy storage projects outside China[26](index=26&type=chunk) - In the first half of 2025, the Group added **191 MW** of attributable installed capacity, including **140 MW** of wind power and **51 MW** of solar power[29](index=29&type=chunk) - Through optimized design and refined management, several projects won the "Beijing Survey, Design and Excellent Achievement Award," achieving reasonable cost reduction[29](index=29&type=chunk) [(3) Adapting to Change, Strengthening Management, Reducing Costs and Increasing Efficiency](index=11&type=section&id=(3)%20Adapting%20to%20Change%2C%20Strengthening%20Management%2C%20Reducing%20Costs%20and%20Increasing%20Efficiency) The Group adjusted strategies, enhanced AI capabilities in operations, reduced management expenses, lowered financing costs, and initiated a secondary listing in Singapore - The Group focused on strengthening AI research and capability building in areas such as power trading and power plant operations[30](index=30&type=chunk) - Management expenses decreased year-on-year through measures such as budget planning control and approval process management[31](index=31&type=chunk) - The average financing cost for the Group's new drawdowns decreased to **3.15%**, and the Group's overall financing cost decreased to **3.63%**, both at relatively low levels[32](index=32&type=chunk) - The Group initiated a secondary listing in Singapore in February 2025 to broaden its capital platform and enhance its global market image[33](index=33&type=chunk) [III. Environmental and Social Responsibility](index=12&type=section&id=III.%20Environmental%20and%20Social%20Responsibility) The Group integrates sustainable development into its strategy, providing green power and achieving "Top 5%" ESG recognition in S&P Global's 2025 Yearbook - The Group firmly integrates sustainable development concepts into strategic decision-making and daily operations, viewing them as a core driver for creating long-term value[34](index=34&type=chunk) Power Plant Emission Reductions | Emission Indicator | 2025 H1 | Cumulative | | :--- | :--- | :--- | | CO2 (thousand tons) | 4,534 | 66,249 | | SO2 (tons) | 1,131 | 32,870 | | NOx (tons) | 1,180 | 30,841 | | Standard Coal Saved (thousand tons) | 1,854 | 26,051 | | Water Saved (thousand tons) | 7,320 | 133,458 | - The Group was once again successfully selected for S&P Global's "Sustainability Yearbook (China Edition) 2025" and, based on its leading ESG performance, was awarded the "**Top 5%**" distinction[34](index=34&type=chunk) [IV. Human Resources](index=13&type=section&id=IV.%20Human%20Resources) The Group strengthened talent development, fostered university partnerships, optimized organizational structure, and increased revenue per employee by 10.4% - The Group deepened strategic cooperation and technical exchanges with the National University of Singapore and North China Electric Power University to jointly cultivate talent[37](index=37&type=chunk) - The Group's revenue per employee increased by **10.4%** year-on-year[37](index=37&type=chunk) - As of June 30, 2025, the Group had **736** full-time employees[37](index=37&type=chunk) [V. Outlook](index=13&type=section&id=V.%20Outlook) The Group anticipates continued AI-driven electricity demand and easing financing, focusing on operational optimization, market expansion, and cost efficiency - Artificial intelligence is expected to continue stimulating strong electricity demand growth, driving global energy transition[38](index=38&type=chunk) - Global inflation is falling, developed economies are expected to cut interest rates, and the People's Bank of China will continue to implement a moderately loose monetary policy, which is favorable for renewable energy investment[38](index=38&type=chunk) - The Group will adopt "**strengthening the Group and increasing assets with earnings certainty**" as its core philosophy for formulating and implementing new development strategies[39](index=39&type=chunk) - Key tasks include: meticulously optimizing power plant operations (e.g., "AI + Data Decision-making" model), vigorously building power trading and marketing capabilities (e.g., green power trading, green certificate sales), focusing on project quality and earnings certainty, anchoring milestone targets to advance project construction, actively expanding global business, exploring new business models such as power sales and virtual power plants, and continuously strengthening refined and specialized management to reduce costs and increase efficiency[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) [Directors' Report](index=16&type=section&id=Directors'%20Report) This chapter details directors' and major shareholders' interests, reviews the share award scheme, reports share repurchases, and confirms corporate governance compliance [Interests and/or Short Positions of Directors and Chief Executives in Shares, Underlying Shares and Debentures of the Company or any Associated Corporation](index=16&type=section&id=Interests%20and%2For%20Short%20Positions%20of%20Directors%20and%20Chief%20Executives%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20any%20Associated%20Corporation) As of June 30, 2025, the Company's directors and chief executives held long positions in the Company's shares, with Chairman Liu Shunxing holding 22.75% of issued capital Long Positions in the Company's Shares as at June 30, 2025 | Director Name | Personal (shares) | Corporate (shares) | Total (shares) | Approximate % of total issued share capital | | :--- | :--- | :--- | :--- | :--- | | Liu Shunxing | 37,500,000 | 1,754,714,242 | 1,792,214,242 | 22.75% | | Liu Jianhong | 29,710,000 | 150,000,000 | 179,710,000 | 2.28% | | Gui Kai | 15,600,000 | — | 15,600,000 | 0.20% | | Niu Wenhui | 16,000,000 | — | 16,000,000 | 0.20% | | Zhai Feng | 4,000,000 | — | 4,000,000 | 0.05% | | Shang Jia | 8,000,000 | — | 8,000,000 | 0.10% | | Chan Kam Kwun | 3,800,000 | — | 3,800,000 | 0.05% | | Huang Jian | 2,800,000 | — | 2,800,000 | 0.04% | | Fang Zhixi | 2,600,000 | — | 2,600,000 | 0.03% | | Zhang Zhong | 2,800,000 | — | 2,800,000 | 0.04% | [Share Award Scheme](index=17&type=section&id=Share%20Award%20Scheme) The 2015 share award scheme expired on June 15, 2025, with 17,250,000 unvested shares vesting in February 2025 and no new grants or cancellations - The share award scheme expired on **June 15, 2025**[52](index=52&type=chunk)[60](index=60&type=chunk) - For the six months ended June 30, 2025, no awarded shares were granted, cancelled, or lapsed[54](index=54&type=chunk)[61](index=61&type=chunk) - **17,250,000** unvested shares held by the trustee vested on **February 17, 2025**, and the trustee held no outstanding unvested shares at period-end[55](index=55&type=chunk)[61](index=61&type=chunk) [Directors' Rights to Acquire Shares](index=21&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares) The Company confirms no arrangements were made during the period for directors to profit from acquiring shares or related securities of the Company or its associates - During this period, neither the Company nor any of its subsidiaries or associated corporations entered into any arrangements enabling directors to benefit from acquiring shares, underlying shares, or debentures of the Company or any associated corporation[62](index=62&type=chunk) [Major Shareholders](index=21&type=section&id=Major%20Shareholders) As of June 30, 2025, CWPI, Huadian New Energy, and Splendor Power Limited were the Company's major shareholders, holding significant portions of its issued share capital Long Positions in the Company's Shares as at June 30, 2025 | Shareholder Name | Number of Shares held by the Company | Approximate % of total issued share capital | | :--- | :--- | :--- | | CWPI | 1,002,877,155 | 12.73% | | Huadian New Energy | 880,000,000 | 11.17% | | Splendor Power Limited | 751,837,087 | 9.54% | [Company's Purchase, Sale or Redemption of Listed Securities](index=22&type=section&id=Company's%20Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) The Company repurchased and cancelled 104,360,000 ordinary shares for HK$45,250,000 on the HKEX during H1 2025, holding no treasury shares Details of Share Repurchases | Month | Number | Highest Price (HK$) | Lowest Price (HK$) | Total Amount (HK$) | | :--- | :--- | :--- | :--- | :--- | | February 2025 | 8,970,000 | 0.480 | 0.470 | 4,259,600 | | April 2025 | 95,390,000 | 0.445 | 0.415 | 40,990,400 | | **Total** | **104,360,000** | | | **45,250,000** | - All repurchased shares were subsequently cancelled, resulting in a corresponding reduction in the par value of the Company's issued share capital[67](index=67&type=chunk) - For the six months ended June 30, 2025, the Company held no treasury shares[67](index=67&type=chunk) [Corporate Governance Code](index=22&type=section&id=Corporate%20Governance%20Code) The Board confirmed the Company's compliance with the Corporate Governance Code outlined in Appendix C1 of the Listing Rules for H1 2025 - The Board confirmed that the Company has complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules[68](index=68&type=chunk) [Model Code for Securities Transactions by Directors](index=22&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025 - All directors of the Company confirmed their compliance with the required standards set out in the Model Code for the six months ended June 30, 2025[70](index=70&type=chunk) [Audit Committee](index=23&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, reviewed the unaudited interim financial statements, which KPMG also reviewed per HKSRS 2410 - The Audit Committee comprises **Ms. Huang Jian** (Chairperson), **Mr. Zhang Zhong**, and **Ms. Li Yongli**, three independent non-executive directors[71](index=71&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025[71](index=71&type=chunk) - KPMG has performed a review of the interim financial statements in accordance with **Hong Kong Standard on Review Engagements 2410**[71](index=71&type=chunk) [Independent Auditor's Report](index=24&type=section&id=Independent%20Auditor's%20Report) KPMG reviewed the interim consolidated financial report for H1 2025, finding no material non-compliance with Hong Kong Accounting Standard 34 - KPMG reviewed the interim financial report in accordance with **Hong Kong Standard on Review Engagements 2410**[74](index=74&type=chunk) - The review concluded that no matters were found that caused the auditor to believe the interim financial report was not prepared, in all material respects, in accordance with **Hong Kong Accounting Standard 34**[75](index=75&type=chunk) [Consolidated Financial Statements](index=25&type=section&id=Consolidated%20Financial%20Statements) This chapter presents the Group's unaudited condensed consolidated financial statements for H1 2025, detailing financial performance, position, and cash flows [Consolidated Statement of Profit or Loss](index=25&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group's revenue and profit attributable to shareholders significantly declined in H1 2025, driven by lower gross profit, reduced other income, and a shift to income tax expense Consolidated Statement of Profit or Loss (thousand RMB) | Indicator | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 1,400,319 | 1,498,857 | -6.6% | | Cost of services and cost of sales | (731,290) | (646,764) | 13.1% | | Gross profit | 669,029 | 852,093 | -21.4% | | Other income | 53,960 | 76,577 | -29.6% | | Other gains and losses, net | 24,070 | (724) | N/A | | Finance costs | (315,461) | (340,563) | -7.4% | | Share of profits of joint ventures, net | 82,550 | 94,466 | -12.6% | | Share of profits of associates, net | (825) | 8,205 | N/A | | Profit before income tax | 346,511 | 521,361 | -33.5% | | Income tax (expense) / credit | (54,472) | 26,097 | N/A | | Profit for the period | 292,039 | 547,458 | -46.7% | | Attributable to equity holders of the Company | 281,940 | 501,370 | -43.8% | | Basic earnings per share (RMB cents) | 3.58 | 6.24 | -42.6% | | Diluted earnings per share (RMB cents) | 3.58 | 6.23 | -42.6% | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=26&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Total comprehensive income for H1 2025 decreased by 43.9% due to lower profit, partially offset by positive currency translation differences Consolidated Statement of Profit or Loss and Other Comprehensive Income (thousand RMB) | Indicator | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Profit for the period | 292,039 | 547,458 | -46.7% | | Currency translation differences | 11,721 | (6,475) | N/A | | Total comprehensive income for the period | 303,760 | 540,983 | -43.9% | | Attributable to equity holders of the Company | 293,675 | 495,141 | -40.7% | [Consolidated Statement of Financial Position](index=27&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) Total assets increased by 3.4% as of June 30, 2025, driven by property, plant and equipment, while liabilities rose due to increased borrowings, and net assets slightly decreased Consolidated Statement of Financial Position (thousand RMB) | Indicator | June 30, 2025 | December 31, 2024 | Change Rate | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Property, plant and equipment | 20,422,587 | 17,247,835 | 18.4% | | Interests in joint ventures | 2,019,489 | 2,147,270 | -5.9% | | Assets held for sale | 84,877 | 2,777,915 | -96.9% | | Total assets | 33,212,691 | 32,129,839 | 3.4% | | **Liabilities** | | | | | Bank borrowings (non-current) | 6,206,205 | 4,809,590 | 29.0% | | Other borrowings (non-current) | 11,515,808 | 9,296,012 | 23.9% | | Liabilities directly associated with assets held for sale | 40,530 | 2,541,816 | -98.4% | | Total liabilities | 24,312,642 | 23,223,533 | 4.7% | | **Equity** | | | | | Net assets | 8,900,049 | 8,906,306 | -0.07% | | Total equity attributable to equity holders of the Company | 8,712,572 | 8,714,950 | -0.03% | [Consolidated Statement of Changes in Equity](index=30&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity attributable to shareholders slightly decreased in H1 2025, influenced by profit, share repurchases, dividend payments, and currency translation effects Consolidated Statement of Changes in Equity (thousand RMB) | Indicator | As at Jan 1, 2025 | Profit for the period | Other comprehensive income | Cancellation of treasury shares | Repurchase of ordinary shares | Vesting of awarded shares | Share-based payments | 2024 dividend | Contribution from non-controlling interests | Acquisition of a subsidiary | Acquisition of partial equity interest in a subsidiary | Dividends declared to non-controlling interests | As at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Share capital | 68,390 | – | – | (968) | – | – | – | – | – | – | – | – | 67,422 | | Treasury shares | (30,037) | – | – | 47,956 | (42,051) | 1,656 | – | – | – | – | – | – | (22,476) | | Share premium | 173,992 | – | – | (46,988) | – | 9,245 | – | – | – | – | – | – | 136,249 | | Contributed surplus | 2,359,063 | – | – | – | – | – | – | – | – | – | – | – | 2,359,063 | | Premium arising from acquisition and disposal of non-controlling interests | (106,718) | – | – | – | – | – | – | – | – | – | (2,748) | – | (109,466) | | Exchange reserve | (10,998) | – | 11,735 | – | – | – | – | – | – | – | – | – | 737 | | Other reserves | 168,125 | – | – | – | – | (10,901) | 188 | – | – | – | – | – | 157,412 | | Retained profits | 6,093,133 | 281,940 | – | – | – | – | – | (251,442) | – | – | – | – | 6,123,631 | | **Attributable to equity holders of the Company** | **8,714,950** | **281,940** | **11,735** | **–** | **(42,051)** | **–** | **188** | **(251,442)** | **–** | **–** | **(2,748)** | **–** | **8,712,572** | | Non-controlling interests | 191,356 | 10,099 | (14) | – | – | – | – | – | 913 | 1,217 | (13,394) | (2,700) | 187,477 | | **Total equity** | **8,906,306** | **292,039** | **11,721** | **–** | **(42,051)** | **–** | **188** | **(251,442)** | **913** | **1,217** | **(13,394)** | **(2,700)** | **8,900,049** | [Condensed Consolidated Statement of Cash Flows](index=32&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Operating cash flow increased by 22.6% in H1 2025, while investing activities used significant cash, and financing cash flow decreased substantially Condensed Consolidated Statement of Cash Flows (thousand RMB) | Indicator | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Net cash generated from operating activities | 1,040,855 | 849,097 | 22.6% | | Net cash used in investing activities | (1,334,527) | (2,136,256) | -37.5% | | Net cash generated from financing activities | 527,487 | 1,184,739 | -55.5% | | Net increase / (decrease) in cash and cash equivalents | 233,815 | (102,420) | N/A | | Cash and cash equivalents at end of period | 1,983,208 | 2,337,058 | -15.2% | - Expenditure for purchase of property, plant and equipment was **RMB1,598,935 thousand**[94](index=94&type=chunk) - Proceeds from bank borrowings were **RMB1,293,020 thousand**, and proceeds from other borrowings were **RMB1,889,507 thousand**[97](index=97&type=chunk) [Notes to the Unaudited Interim Financial Report](index=34&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) This chapter provides detailed notes explaining the unaudited interim financial report, covering accounting policies, segment data, revenue, expenses, and financial instruments [1 Basis of Preparation and Presentation](index=34&type=section&id=1%20Basis%20of%20Preparation%20and%20Presentation) This interim financial report adheres to HKAS 34 and HKEX Listing Rules, is unaudited but reviewed by KPMG, and maintains consistent accounting policies with 2024 - This interim financial report is prepared in accordance with **Hong Kong Accounting Standard 34 – Interim Financial Reporting** and the HKEX Listing Rules[99](index=99&type=chunk) - The report is unaudited but has been reviewed by **KPMG** in accordance with **Hong Kong Standard on Review Engagements 2410**[100](index=100&type=chunk) - The accounting policies adopted are consistent with those used in the 2024 annual financial statements, except for changes expected to be reflected in the 2025 annual financial statements[99](index=99&type=chunk) [2 Changes in Accounting Policies and Disclosures](index=34&type=section&id=2%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) The Group applied HKAS 21 amendments with no material impact and no other new accounting standards were applied during the period - The Group applied **Hong Kong Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability (Amendments)**, but it had no material impact on this interim report[101](index=101&type=chunk) - No new accounting standards or interpretations not yet effective were applied during this accounting period[102](index=102&type=chunk) [3 Segment Information](index=35&type=section&id=3%20Segment%20Information) The Group operates in "Power Generation Business" and "Others" segments, with performance assessed based on adjusted earnings before interest and tax - The Group's operating segments are "**Power Generation Business**" (operating wind and solar power plants, investing in joint venture and associate power plants) and "**Others**" (providing design, technical, and consulting services, undertaking power engineering design and construction, and existing finance lease services)[107](index=107&type=chunk) Segment Revenue (thousand RMB) | | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Power Generation Business (sales to external customers) | 1,335,393 | 1,364,318 | -2.1% | | Others (sales to external customers) | 64,926 | 134,539 | -51.7% | | **Total (sales to external customers)** | **1,400,319** | **1,498,857** | **-6.6%** | Segment Results (thousand RMB) | | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Power Generation Business | 625,860 | 812,081 | -22.9% | | Others | (5,516) | (5,513) | 0.05% | | **Total** | **620,344** | **806,568** | **-23.1%** | [4 Revenue](index=38&type=section&id=4%20Revenue) Total revenue decreased by 6.6% in H1 2025, primarily due to lower electricity sales and a significant drop in green certificate income Revenue Analysis (thousand RMB) | Revenue Source | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Electricity sales revenue: benchmark and market prices | 1,170,425 | 1,188,558 | -1.5% | | Renewable energy subsidy income | 153,436 | 146,391 | 4.8% | | Green certificate income | 7,211 | 19,716 | -63.4% | | Design, procurement and construction income | 26,217 | 40,109 | -34.6% | | Design service income | 20,658 | 14,099 | 46.5% | | Technical and consulting service income | 6,763 | 12,409 | -45.5% | | Other income (customer contracts) | 6,470 | 59,751 | -89.2% | | Finance lease income | 9,139 | 17,824 | -48.7% | | **Total Revenue** | **1,400,319** | **1,498,857** | **-6.6%** | - Of revenue from customer contracts, revenue recognized at a point in time was **RMB1,364,963 thousand**, and revenue recognized over time was **RMB26,217 thousand**[113](index=113&type=chunk) [5 Other Income](index=40&type=section&id=5%20Other%20Income) Other income decreased by 29.6% in H1 2025, mainly due to reduced interest income and the cessation of booster station access usage income Other Income Analysis (thousand RMB) | Income Source | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Interest income | 8,043 | 25,585 | -68.6% | | Government grants: tax refunds | 30,141 | 17,366 | 73.6% | | Booster station access usage income | – | 18,868 | -100% | | Compensation | 3,726 | 3,822 | -2.5% | | Guarantee income | 1,980 | 4,014 | -50.7% | | Rental income | 5,003 | 2,766 | 80.9% | | Others | 3,097 | 2,695 | 14.9% | | **Total** | **53,960** | **76,577** | **-29.6%** | [6 Other Gains and Losses, Net](index=40&type=section&id=6%20Other%20Gains%20and%20Losses%2C%20Net) The Group reported net other gains of RMB24,070 thousand in H1 2025, a significant improvement driven by impairment reversal and a gain on joint venture disposal Other Gains and Losses, Net (thousand RMB) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Reversal of impairment loss on assets held for sale | 14,637 | – | | Gain on disposal of a joint venture, net | 11,461 | – | | Fair value gain on financial assets at fair value through profit or loss | 4,155 | 5,794 | | Loss on disposal/derecognition of subsidiaries, net | (3,215) | (33) | | Exchange loss, net | (1,307) | (4,061) | | Gain/(loss) on disposal of property, plant and equipment, net | 192 | (93) | | Others | (1,853) | (2,331) | | **Total** | **24,070** | **(724)** | [7 Finance Costs](index=41&type=section&id=7%20Finance%20Costs) Net finance costs decreased by 7.4% in H1 2025, despite a 41.8% increase in capitalized interest, reflecting overall lower borrowing expenses Finance Costs (thousand RMB) | Indicator | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Interest expense: bank borrowings | 99,192 | 97,974 | 1.2% | | Interest expense: other borrowings | 238,985 | 260,603 | -8.3% | | Interest expense: lease liabilities | 12,274 | 6,660 | 84.3% | | **Total** | **350,451** | **365,237** | **-4.1%** | | Less: capitalized interest | (34,990) | (24,674) | 41.8% | | **Net finance costs** | **315,461** | **340,563** | **-7.4%** | - Finance costs for qualifying assets were capitalized at varying applicable annual interest rates ranging from **2.45% to 3.95%** (2024: 2.45% to 5.19%) and included in construction in progress under property, plant and equipment[117](index=117&type=chunk) [8 Profit Before Income Tax](index=41&type=section&id=8%20Profit%20Before%20Income%20Tax) Profit before income tax decreased by 33.5% in H1 2025, while total depreciation and amortization increased by 21.8% - Profit before income tax was **RMB346,511 thousand** (2024 H1: RMB521,361 thousand), a **33.5%** year-on-year decrease[79](index=79&type=chunk) - Total depreciation and amortization charged to profit or loss was **RMB545,600 thousand** (2024 H1: RMB447,995 thousand), an increase of **21.8%** year-on-year[118](index=118&type=chunk) [9 Income Tax Expense / (Credit)](index=42&type=section&id=9%20Income%20Tax%20Expense%20%2F%20(Credit)) The Group recorded an income tax expense in H1 2025, a shift from a credit in the prior year, due to increased current tax and non-recurring exemptions Income Tax Expense / (Credit) (thousand RMB) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Current tax: China corporate income tax | 65,422 | 49,294 | | Current tax: China withholding tax | 16,842 | 53,982 | | Under/(over) provision in prior years: China corporate income tax | 9,812 | 3,618 | | Under/(over) provision in prior years: China withholding tax | – | (90,000) | | Deferred tax | (37,604) | (42,991) | | **Total** | **54,472** | **(26,097)** | - In 2024, the Company, having obtained Hong Kong resident status, reversed **RMB90,000 thousand** of China dividend withholding tax related to dividend distributions declared from the surpluses of its PRC subsidiaries in 2022 and 2023[122](index=122&type=chunk) - The Group's current applicable withholding income tax rate ranges from **5% to 10%**[120](index=120&type=chunk) [10 Earnings Per Share](index=43&type=section&id=10%20Earnings%20Per%20Share) Basic and diluted earnings per share both decreased by approximately 42.6% in H1 2025, reflecting reduced profit attributable to ordinary equity holders Earnings Per Share (RMB cents) | Indicator | 2025 H1 | 2024 H1 | Change Rate | | :--- | :--- | :--- | :--- | | Basic earnings per share | 3.58 | 6.24 | -42.6% | | Diluted earnings per share | 3.58 | 6.23 | -42.6% | - Profit attributable to ordinary equity holders was **RMB281,940 thousand** (2024 H1: RMB501,370 thousand)[124](index=124&type=chunk) Weighted Average Number of Ordinary Shares (thousand shares) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Ordinary shares in issue at January 1 | 7,982,039 | 8,444,719 | | Effect of treasury shares | (113,005) | (412,745) | | **Weighted average number of ordinary shares in issue** | **7,869,034** | **8,031,974** | Weighted Average Number of Ordinary Shares (Diluted) (thousand shares) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Weighted average number of ordinary shares | 7,869,034 | 8,031,974 | | Effect of share award scheme | 4,184 | 15,426 | | **Weighted average number of ordinary shares (diluted) in issue** | **7,873,218** | **8,047,400** | [11 Dividends](index=45&type=section&id=11%20Dividends) The Company declared and paid a 2024 annual dividend of HK$0.035 per share in July 2025 but decided against an interim dividend for H1 2025 - A dividend of **HK$0.035** per ordinary share for the year ended December 31, 2024, totaling **RMB251,442 thousand**, was declared and paid on **July 4, 2025**[131](index=131&type=chunk) - The Company's directors decided not to declare an interim dividend for the six months ended June 30, 2025[132](index=132&type=chunk) [12 Property, Plant and Equipment](index=45&type=section&id=12%20Property%2C%20Plant%20and%20Equipment) The Group added RMB1,418,708 thousand in property, plant and equipment in H1 2025, with significant reclassification from assets held for sale due to terminated agreements - The Group added **RMB1,418,708 thousand** in property, plant and equipment (2024 H1: RMB1,148,351 thousand)[133](index=133&type=chunk) - Property, plant and equipment with a carrying amount of **RMB2,230,187 thousand** from asset groups classified as held for sale were reclassified back to non-current assets due to the termination of disposal agreements[133](index=133&type=chunk) [13 Trade and Bills Receivables](index=45&type=section&id=13%20Trade%20and%20Bills%20Receivables) Total trade and bills receivables increased by 5.8% as of June 30, 2025, driven by higher electricity price adjustment receivables, despite a significant drop in bills receivables Trade and Bills Receivables (thousand RMB) | Indicator | June 30, 2025 | December 31, 2024 | Change Rate | | :--- | :--- | :--- | :--- | | Trade receivables, at amortized cost | 352,354 | 348,152 | 1.2% | | Receivables for electricity price adjustments, at amortized cost | 1,352,241 | 1,178,858 | 14.7% | | Bills receivables, at fair value through profit or loss | 43,508 | 126,546 | -65.6% | | Impairment of trade receivables | (4,270) | (4,764) | -10.4% | | **Total** | **1,743,833** | **1,648,792** | **5.8%** | Ageing Analysis of Trade Receivables (thousand RMB) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 217,482 | 238,011 | | 3 to 6 months | 45,760 | 14,224 | | 6 to 12 months | 1,734 | 19,396 | | 1 to 2 years | 12,489 | 66,658 | | Over 2 years | 70,619 | 5,099 | | **Total** | **348,084** | **343,388** | Ageing Analysis of Receivables for Electricity Price Adjustments (thousand RMB) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 83,391 | 100,254 | | 3 to 6 months | 89,992 | 77,453 | | 6 to 12 months | 177,707 | 164,713 | | Over 1 year | 1,001,151 | 836,438 | | **Total** | **1,352,241** | **1,178,858** | - As of June 30, 2025, the Group endorsed bills receivables totaling **RMB263,412 thousand** (2024: RMB159,039 thousand) from PRC banks to suppliers for settlement of trade payables[139](index=139&type=chunk) [14 Prepayments, Deposits and Other Receivables](index=48&type=section&id=14%20Prepayments%2C%20Deposits%20and%20Other%20Receivables) Total prepayments, deposits, and other receivables increased by 11.3% as of June 30, 2025, primarily due to higher recoverable VAT and other deposits Prepayments, Deposits and Other Receivables (thousand RMB) | Indicator | June 30, 2025 | December 31, 2024 | Change Rate | | :--- | :--- | :--- | :--- | | Prepayments for property, plant and equipment purchases | 181,417 | 165,621 | 9.5% | | Other prepayments | 248,769 | 261,845 | -5.0% | | Other borrowing deposits | 109,608 | 144,807 | -24.3% | | Other deposits | 239,017 | 114,869 | 108.1% | | Receivables from disposal of subsidiaries | 151,427 | 100,882 | 50.1% | | Receivables from former subsidiaries | 11,323 | 16,402 | -31.0% | | Other receivables | 77,870 | 124,812 | -37.6% | | Recoverable VAT | 1,581,080 | 1,398,546 | 13.0% | | Receivables from financial guarantee contracts | – | 8,546 | -100% | | Less: impairment allowance | (15,353) | (13,590) | 13.0% | | **Total** | **2,585,158** | **2,322,740** | **11.3%** | [15 Balances with Associates and Joint Ventures](index=48&type=section&id=15%20Balances%20with%20Associates%20and%20Joint%20Ventures) Receivables from associates and joint ventures included trade receivables, dividends, and finance lease receivables, generally unsecured and interest-free - Receivables from associates included trade receivables of **RMB1,042 thousand** (December 31, 2024: RMB1,778 thousand)[142](index=142&type=chunk) - Receivables from joint ventures included trade receivables of **RMB3,605 thousand** (December 31, 2024: RMB2,756 thousand)[142](index=142&type=chunk) - Receivables from associates and joint ventures included dividends receivable, finance lease receivables (with interest rates ranging from **4.75% to 6.55%**), and other unsecured, interest-free balances with no fixed repayment terms[142](index=142&type=chunk) [16 Cash and Cash Equivalents](index=49&type=section&id=16%20Cash%20and%20Cash%20Equivalents) Cash and cash equivalents increased by 17.1% as of June 30, 2025, driven by higher cash and bank balances despite a decrease in restricted deposits Cash and Cash Equivalents (thousand RMB) | Indicator | June 30, 2025 | December 31, 2024 | Change Rate | | :--- | :--- | :--- | :--- | | Cash and bank balances | 2,321,693 | 2,229,188 | 4.2% | | Less: restricted deposits | (338,597) | (535,354) | -36.7% | | **Cash and cash equivalents** | **1,983,096** | **1,693,834** | **17.1%** | [17 Assets / Liabilities Classified as Held for Sale](index=49&type=section&id=17%20Assets%20%2F%20Liabilities%20Classified%20as%20Held%20for%20Sale) Assets held for sale were reclassified to assets held for use due to terminated agreements, while a new subsidiary was classified as held for sale in April 2025 - Property, plant and equipment with a carrying amount of **RMB2,230,187 thousand** from asset groups classified as held for sale were reclassified back to non-current assets due to the termination of disposal agreements[146](index=146&type=chunk) - A reversal of impairment loss on assets held for sale of **RMB14,637 thousand** was recognized in other gains and losses, net[146](index=146&type=chunk) - In April 2025, the Group entered into an agreement with a third party to dispose of its entire equity interest in a subsidiary within its power generation business segment, which was classified as held for sale[146](index=146&type=chunk) Assets / Liabilities Classified as Held for Sale (thousand RMB) | Indicator | June 30, 2025 | | :--- | :--- | | Property, plant and equipment | 66,126 | | Intangible assets | 845 | | Prepayments, deposits and other receivables | 17,794 | | Cash and cash equivalents | 112 | | **Assets held for sale** | **84,877** | | Payables for project construction, other payables and accrued expenses | 40,530 | | **Liabilities held for sale** | **40,530** | [18 Trade and Bills Payables](index=51&type=section&id=18%20Trade%20and%20Bills%20Payables) Total trade and bills payables decreased by 20.4% as of June 30, 2025, primarily due to a significant reduction in bills payables Trade and Bills Payables (thousand RMB) | Indicator | June 30, 2025 | December 31, 2024 | Change Rate | | :--- | :--- | :--- | :--- | | Trade payables | 267,541 | 276,796 | -3.3% | | Bills payables | 201,134 | 312,218 | -35.6% | | **Total** | **468,675** | **589,014** | **-20.4%** | Ageing Analysis of Trade Payables (thousand RMB) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 8,451 | 19,131 | | 3 to 6 months | 5,204 | 6,947 | | 6 to 12 months | 13,636 | 19,127 | | 1 to 2 years | 26,533 | 15,796 | | Over 2 years | 213,717 | 215,795 | | **Total** | **267,541** | **276,796** | [19 Bank Borrowings](index=52&type=section&id=19%20Bank%20Borrowings) Total bank borrowings increased by 25.9% as of June 30, 2025, with floating-rate borrowings dominating and overall financing costs decreasing Bank Borrowings (thousand RMB) | Indicator | June 30, 2025 | December 31, 2024 | Change Rate | | :--- | :--- | :--- | :--- | | Fixed-rate bank borrowings | 220,801 | 195,396 | 13.0% | | Floating-rate bank borrowings | 6,998,028 | 5,539,161 | 26.3% | | **Total** | **7,218,829** | **5,734,557** | **25.9%** | Effective Interest Rate Range for Bank Borrowings | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Floating-rate bank borrowings | 1.60%-4.35% | 2.20%-5.00% | | Fixed-rate bank borrowings | 2.45%-3.95% | 2.60%-3.95% | [20 Other Borrowings](index=52&type=section&id=20%20Other%20Borrowings) The Group secured RMB2,256,290 thousand in new borrowings in H1 2025, with lower annual interest rates and repayment terms extending to 2040 - For the six months ended June 30, 2025, the Group's new drawdowns totaled **RMB2,256,290 thousand** (2024 H1: RMB1,721,104 thousand)[155](index=155&type=chunk) - The annual interest rates for borrowings ranged from **3.00% to 3.95%** (2024 H1: 3.75% to 4.30%) and are repayable between **2025 and 2040**[155](index=155&type=chunk) [21 Payables for Project Construction, Other Payables and Accrued Expenses](index=53&type=section&id=21%20Payables%20for%20Project%20Construction%2C%20Other%20Payables%20and%20Accrued%20Expenses) Total payables for project construction, other payables, and accrued expenses decreased by 2.1% as of June 30, 2025, despite a new dividend payable Payables for Project Construction, Other Payables and Accrued Expenses (thousand RMB) | Indicator | June 30, 2025 | December 31, 2024 | Change Rate | | :--- | :--- | :--- | :--- | | Payables for project construction | 2,193,370 | 2,350,537 | -6.7% | | Payables for warranty deposits | 629,662 | 726,168 | -13.2% | | Dividends payable | 251,442 | – | N/A | | Payables for acquisition of a subsidiary | – | 12,200 | -100% | | Other payables and accrued expenses | 138,276 | 193,366 | -28.5% | | **Total** | **3,212,750** | **3,282,271** | **-2.1%** | - As of June 30, 2025, the Group accrued dividends payable of **RMB251,442 thousand**[156](index=156&type=chunk) [22 Share Capital](index=53&type=section&id=22%20Share%20Capital) Issued ordinary share capital decreased due to the repurchase and cancellation of 104,360,000 shares, with 58,400,000 shares held as treasury shares Share Capital (thousand RMB) | Indicator | Number of Shares (thousand shares) | Par Value (thousand RMB) | | :--- | :--- | :--- | | As at January 1, 2025 | 7,982,039 | 68,390 | | Cancellation of ordinary shares | (104,360) | (968) | | **As at June 30, 2025** | **7,877,679** | **67,422** | - For the six months ended June 30, 2025, the Group repurchased a total of **104,360,000** ordinary shares of the Company on the Stock Exchange, involving a total consideration of **RMB42,051 thousand**, which were subsequently cancelled[157](index=157&type=chunk) - As of June 30, 2025, the Company held **58,400,000** ordinary shares as treasury shares (December 31, 2024: 75,650,000 shares)[158](index=158&type=chunk) [23 Share Award Scheme](index=54&type=section&id=23%20Share%20Award%20Scheme) The Group recognized a significantly reduced expense of RMB188 thousand for the share award scheme in H1 2025, following the vesting of 17,250,000 shares - Under the share award scheme, **17,250,000** shares vested on **February 15, 2025**[159](index=159&type=chunk) - For the six months ended June 30, 2025, the Group recognized a total expense of **RMB188 thousand** (2024 H1: RMB4,074 thousand) for the share award scheme[159](index=159&type=chunk) [24 Commitments](index=54&type=section&id=24%20Commitments) Capital commitments for property, plant and equipment decreased to RMB2,374,672 thousand as of June 30, 2025, with no investment commitments Capital Commitments (thousand RMB) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted but not provided for in the consolidated financial statements: property, plant and equipment | 2,374,672 | 2,680,010 | - As of June 30, 2025, and December 31, 2024, the Group had no investment commitments[161](index=161&type=chunk) [25 Related Party Transactions](index=55&type=section&id=25%20Related%20Party%20Transactions) The Group engaged in various related party transactions in H1 2025, including providing and recovering loans, and receiving finance and guarantee income Related Party Transactions (thousand RMB) | Transaction Type | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Provision of services and sales of goods to associates and joint ventures | 4,807 | 3,994 | | Guarantee income and interest income from associates and joint ventures | 2,346 | 5,889 | | Finance income from associates and joint ventures | 1,441 | 2,319 | | Purchase of services from joint ventures | 69,489 | 95,893 | | Loans provided to associates and joint ventures | 182,500 | – | | Recovery of loans provided to associates and joint ventures | 227,036 | – | | Recovery of finance lease receivables from associates and joint ventures | 30,111 | 11,585 | - Finance income from associates and a joint venture had annual interest rates ranging from **4.75% to 6.55%** during this period[163](index=163&type=chunk) [26 Fair Value Measurement of Financial Instruments on a Recurring Basis](index=55&type=section&id=26%20Fair%20Value%20Measurement%20of%20Financial%20Instruments%20on%20a%20Recurring%20Basis) The Group continuously measures fair values of financial instruments across three levels, with Level 3 including unlisted equity and contingent consideration, and no significant transfers between levels Fair Value Measurement of Financial Instruments on a Recurring Basis (thousand RMB) | Financial Instrument | Fair Value Level | June 30, 2025 | | :--- | :--- | :--- | | Unlisted equity securities | Level 3 | 180,659 | | Listed funds at fair value | Level 2 | 18,239 | | Money market wealth management products | Level 3 | 10,000 | | Contingent consideration for disposal of subsidiaries | Level 3 | 30,048 | | Bills receivables at fair value through profit or loss | Level 2 | 43,508 | - Level 3 fair value measurements primarily use the income approach (discounted cash flow method), considering long-term pre-tax operating profit margins and discount rates[168](index=168&type=chunk) - For the six months ended June 30, 2025, and the year ended December 31, 2024, there were no transfers between Level 1 and Level 2, and no transfers into or out of Level 3[167](index=167&type=chunk) [27 Comparative Figures](index=58&type=section&id=27%20Comparative%20Figures) Comparative figures for H1 2024 revenue and costs were adjusted from gross to net basis, with no impact on profit or retained earnings - The Group adjusted comparative figures for revenue and cost of sales and services for the six months ended June 30, 2024, by reclassifying certain transactions from a gross basis to a net basis[171](index=171&type=chunk) - These adjustments had no impact on the Group's profit for the six months ended June 30, 2024, or retained earnings as of January 1, 2025[171](index=171&type=chunk)

[2024 Annual Report Supplementary Announcement](index=1&type=section&id=2024%E5%B9%B4%E5%BA%A6%E5%A0%B1%E5%91%8A%E4%B9%8B%E8%A3%9C%E5%85%85%E5%85%AC%E5%91%8A) This announcement supplements the 2024 annual report with additional information on significant continuing connected transactions [Supplementary Disclosure of Significant Continuing Connected Transactions](index=1&type=section&id=%E9%87%8D%E5%A4%A7%E9%97%9C%E8%81%AF%E4%BA%A4%E6%98%93%E8%A3%9C%E5%85%85%E8%B3%87%E6%96%99) This section provides additional details on significant continuing connected transactions in the 2024 annual report, covering product sales, service provision, and financial service agreements with China Baowu and Baowu Finance - This announcement supplements the 2024 annual report, primarily providing additional information on connected transactions as required by Chapter 14A of the Listing Rules[4](index=4&type=chunk) [Definition and Relationship of Connected Parties](index=1&type=section&id=%E9%97%9C%E8%81%AF%E6%96%B9%E8%AD%98%E5%88%A5) This section defines China Baowu as the ultimate controlling shareholder, the parent company as the controlling shareholder, and Baowu Finance as a subsidiary of China Baowu, all identified as connected persons - China Baowu, the Parent Company, and Baowu Finance are all defined as connected persons of the Company[5](index=5&type=chunk) [Product Purchase and Sale Agreement with China Baowu (2022-2024)](index=1&type=section&id=%E8%88%87%E4%B8%AD%E5%9C%8B%E5%AF%B6%E6%AD%A6%E7%9A%84%E7%94%A2%E5%93%81%E8%B3%BC%E9%8A%B7%E5%8D%94%E8%AD%B0) This section details the 2022-2024 Product Purchase and Sale Agreement between the Group and China Baowu, covering pricing principles and payment terms for product sales and purchases - The Company and China Baowu entered into the 2022-2024 Product Purchase and Sale Agreement, under which the Group will continue to sell products to China Baowu Group, and China Baowu Group will also continue to sell products to the Group[4](index=4&type=chunk) [Product Purchase and Sale Pricing Principles](index=2&type=section&id=%E7%94%A2%E5%93%81%E8%B3%BC%E9%8A%B7%E5%AE%9A%E5%83%B9%E5%8E%9F%E5%88%99) This section outlines the pricing principles for product purchases and sales, based on national prices, market prices, or fair negotiation - Pricing principles are based on national prices where applicable, otherwise market prices, determined through public tender, comparison, and fair negotiation under normal commercial terms[6](index=6&type=chunk) - The selling price of products by the Group to China Baowu Group shall not be lower than the price for selling similar products to independent third parties[6](index=6&type=chunk) - The purchasing price of products by the Group from China Baowu Group shall not exceed the price for purchasing similar products from independent third parties[6](index=6&type=chunk) [Product Purchase and Sale Payment Terms](index=2&type=section&id=%E7%94%A2%E5%93%81%E8%B3%BC%E9%8A%B7%E4%BB%98%E6%AC%BE%E6%A2%9D%E6%AC%BE) This section specifies the payment terms for product sales to and purchases from China Baowu Group - For sales, China Baowu Group pays monthly at the beginning of each month for the previous month's sales (electricity, water, gas, slag, etc.); monthly at the end of each month for the next month's estimated sales (steel, ingots, coke powder, etc.); and monthly for the previous month's sales (metallurgical auxiliaries, materials, etc.)[7](index=7&type=chunk) - For purchases, the Group must pay for goods within **30 working days** after receiving and verifying product quality[7](index=7&type=chunk) [Service Provision and Acceptance Agreement with China Baowu (2022-2024)](index=2&type=section&id=%E8%88%87%E4%B8%AD%E5%9C%8B%E5%AF%B6%E6%AD%A6%E7%9A%84%E6%8F%90%E4%BE%9B%E5%8F%8A%E6%8E%A5%E5%8F%97%E6%9C%8D%E5%8B%99%E5%8D%94%E8%AD%B0) This section details the 2022-2024 Service Provision and Acceptance Agreement between the Group and China Baowu, outlining service pricing principles and payment arrangements - The Company and China Baowu entered into the 2022-2024 Service Provision and Acceptance Agreement, under which the Group will continue to provide services to China Baowu Group, and China Baowu Group will also continue to provide services to the Group[7](index=7&type=chunk) [Service Provision Pricing Principles](index=3&type=section&id=%E6%9C%8D%E5%8B%99%E6%8F%90%E4%BE%9B%E5%AE%9A%E5%83%B9%E5%8E%9F%E5%88%99) This section outlines the pricing principles for services provided and accepted, based on national prices, market prices, or fair negotiation - Pricing principles are based on national prices where applicable, otherwise market prices, determined through public tender, comparison, and fair negotiation under normal commercial terms[8](index=8&type=chunk) - The price for services provided by the Group to China Baowu Group shall not be lower than the price for providing similar services to independent third parties[8](index=8&type=chunk) - The price for services provided by China Baowu Group to the Group shall not exceed the price for similar services from independent third parties[8](index=8&type=chunk) [Service Provision Payment Terms](index=3&type=section&id=%E6%9C%8D%E5%8B%99%E6%8F%90%E4%BE%9B%E4%BB%98%E6%AC%BE%E6%A2%9D%E6%AC%BE) This section specifies the payment terms for services provided to and accepted from China Baowu Group - For services provided, China Baowu Group pays the Group monthly for the previous month's services (steel billet processing, measurement, testing, etc.)[9](index=9&type=chunk) - For services accepted, the Group pays China Baowu Group within **30 working days** after confirmation by the management department based on project progress (infrastructure and technical renovation engineering services); and within **30 working days** based on service progress after quality verification (water and land transportation and related services)[9](index=9&type=chunk) [Financial Services Agreement with Baowu Finance (2023-2024)](index=3&type=section&id=%E8%88%87%E5%AF%B6%E6%AD%A6%E8%B2%A1%E5%8B%99%E5%85%AC%E5%8F%B8%E7%9A%84%E9%87%91%E8%9E%8D%E6%9C%8D%E5%8B%99) This section outlines the 2023-2024 Financial Services Agreement between the Group and Baowu Finance, detailing terms, interest rates, fee standards, and transaction caps for various financial services - The Company and Baowu Finance entered into the 2023-2024 Financial Services Agreement, under which Baowu Finance will provide settlement, deposit, credit, and other financial services to the Group[9](index=9&type=chunk) [Deposit Services](index=3&type=section&id=%E5%AD%98%E6%AC%BE%E6%9C%8D%E5%8B%99) This section describes the terms and interest rate principles for deposit services provided by Baowu Finance - Deposit interest rates are determined based on the People's Bank of China's prevailing rates for similar deposits, generally not lower than those offered by major independent commercial banks in China for similar deposits[11](index=11&type=chunk) Key Deposit Service Metrics | Indicator | Amount/Standard | | :--- | :--- | | **Maximum Daily Deposit Balance** | RMB 10 billion | | **Maximum Annual Total Interest Expense** | RMB 190 million | [Credit Services](index=4&type=section&id=%E4%BF%A1%E8%B2%B8%E6%9C%8D%E5%8B%99) This section details the comprehensive credit services provided by Baowu Finance, including loans and bill acceptance, along with their preferential interest rates - Baowu Finance provides comprehensive credit facilities, including loans, bill acceptance, and bill discounting[12](index=12&type=chunk) - Credit interest rates and fees are preferential, generally not exceeding those for similar credit facilities obtained by the Group from major independent commercial banks in China for the same period and category[12](index=12&type=chunk) Key Credit Service Metrics | Indicator | Amount | | :--- | :--- | | **Maximum Comprehensive Credit Limit** | RMB 10 billion | [Settlement and Other Financial Services](index=4&type=section&id=%E7%B5%90%E7%AE%97%E6%9C%8D%E5%8B%99%E5%8F%8A%E5%85%B6%E4%BB%96%E9%87%91%E8%9E%8D%E6%9C%8D%E5%8B%99) This section describes the settlement services and other financial services provided by Baowu Finance, including collection and payment services, and their fee standards - Baowu Finance provides collection services, payment services, and other related auxiliary services[14](index=14&type=chunk) - Settlement service fees generally do not exceed the fee standards charged by major independent commercial banks in China for similar services during the same period[15](index=15&type=chunk) Financial Service Fee Cap | Indicator | Amount | | :--- | :--- | | **Maximum Annual Service Fee** | RMB 210 million | [Board's Opinion on Continuing Connected Transactions](index=5&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%B0%8D%E6%8C%81%E7%BA%8C%E9%97%9C%E8%81%AF%E4%BA%A4%E6%98%93%E7%9A%84%E6%84%8F%E8%A6%8B) The Board believes all continuing connected transactions were conducted according to the pricing policies in relevant agreements, and the company's internal control procedures are sufficiently effective - The Board believes that the continuing connected transactions were conducted in accordance with the pricing policies under the relevant agreements, and the Company's internal control procedures are sufficiently effective[17](index=17&type=chunk) [Review and Confirmation by Independent Non-Executive Directors](index=5&type=section&id=%E7%8D%A8%E7%AB%8B%E9%9D%9E%E5%9F%B7%E8%A1%8C%E8%91%A3%E4%BA%8B%E7%9A%84%E5%AF%A9%E9%96%B1%E8%88%87%E7%A2%BA%E8%AA%8D) Independent Non-Executive Directors reviewed and confirmed the continuing connected transactions for the year ended December 31, 2024, finding them to be in the ordinary course of business, on normal commercial terms, fair, reasonable, and in the overall interest of shareholders - Independent Non-Executive Directors confirmed that the continuing connected transactions were conducted in the ordinary and usual course of business of the Group, on normal commercial terms, in accordance with the agreements governing such transactions, on terms that are fair and reasonable, and in the overall interests of the Company's shareholders[18](index=18&type=chunk) [Auditor's Opinion on Continuing Connected Transactions](index=6&type=section&id=%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%B0%8D%E6%8C%81%E7%BA%8C%E9%97%9C%E8%81%AF%E4%BA%A4%E6%98%93%E7%9A%84%E5%AF%A9%E6%A0%B8%E6%84%8F%E8%A6%8B) The Company's auditor conducted a limited review and issued an unqualified opinion letter, confirming the continuing connected transactions were approved, followed pricing policies and agreement terms, and did not exceed annual caps - The auditor conducted a limited review and issued an unqualified opinion letter, confirming that the continuing connected transactions were: approved by the Board; for goods or services provided by the Group, in all material respects, conducted in accordance with the Group's pricing policies; in all material respects, conducted in accordance with the terms of the relevant agreements; and did not exceed the annual caps set by the Company[22](index=22&type=chunk) [Disclosure Compliance of Other Connected Party Transactions](index=6&type=section&id=%E5%85%B6%E4%BB%96%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93%E6%8A%AB%E9%9C%B2) All other connected party transactions in the financial statements' notes, while constituting connected transactions, are not "connected transactions" or "continuing connected transactions" as defined by the Listing Rules, and the company has complied with Chapter 14A disclosure requirements for them - All other connected party transactions listed in the financial statements' notes, apart from the aforementioned continuing connected transactions, do not fall under the definition of 'connected transactions' or 'continuing connected transactions' as defined by the Listing Rules[19](index=19&type=chunk) - The Company has complied with the disclosure requirements of Chapter 14A of the Listing Rules for these connected transactions[19](index=19&type=chunk)

(A joint stock company incorporated in the People's Republic of China with limited liability) （於中華人民共和國註冊成立的股份有限公司） Stock code 股份代號 : 1847 INTERIM REPORT 中期報告 2025 雲 南 建 投 綠 色 高 性 能 混 凝 土 股 份 有 限 公 司 YCIH Green High-Performance Concrete Company Limited Interim Report 2025 中期報告 Contents 目錄 | Definitions | 2 | | --- | --- | | 釋義 | | | Company Information | 9 | | 公司資料 | | | Financial Highlights | 12 | | 財務摘要 | | | Management Discussion and Analysis | 13 | | 管理層討論與分析 | | | Milestone Events from 2025 to Date | 3 ...

[Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) [Overview](index=4&type=section&id=Overview) ZhongAn Online, China's first internet insurance tech company, uses an "insurance + technology" dual-engine strategy to innovate services, export tech, and lead digital banking in Hong Kong - ZhongAn Online is China's first internet insurance technology company, with a **"Insurance + Technology" dual-engine strategy** aiming to redefine the insurance industry[8](index=8&type=chunk) - The company offers innovative, inclusive, and diverse insurance products and services by entering user internet lifestyle scenarios through proprietary channels and ecosystem partner platforms[8](index=8&type=chunk) - The company productizes insurance technology systems and functional modules, exporting them to global insurance companies and industry chain clients to facilitate digital transformation[8](index=8&type=chunk) [2025 Interim Performance Review](index=4&type=section&id=2025%20Interim%20Performance%20Review) In H1 2025, total gross written premiums grew 9.3% to RMB 16.66 billion, underwriting combined ratio improved to 95.6%, and ZA Bank achieved a net profit of HKD 49 million, turning profitable H1 2025 Key Performance Indicators | Metric | H1 2025 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | | Gross Written Premiums | 16,661,251 | 9.3% | | Insurance Service Revenue | 15,041,419 | -0.3% | | Underwriting Profit | 656,398 | 109.1% | | Underwriting Combined Ratio | 95.6% | Improved by 2.3 percentage points | | Combined Loss Ratio | 54.7% | Improved by 6.0 percentage points | | Combined Expense Ratio | 40.9% | Increased by 3.7 percentage points | | Total Technology Export Revenue | 496,000 | 12.2% | | Net Loss from Technology Export | (55,990) | Loss reduced by 32.2% | | ZA Bank Net Profit (HKD) | 49,000 | Turned profitable | | ZA Bank Net Income (HKD) | 457,000 | 82.1% | - The company was again listed on Fortune's "2025 China 500 Ranking," rising **50 places to 410th**[9](index=9&type=chunk) - ZA Bank has become one of Hong Kong's most feature-rich digital banks, offering 24-hour services including deposits, loans, transfers, card spending, foreign exchange, insurance, investment, and corporate banking[10](index=10&type=chunk) [Segment Financial Overview](index=5&type=section&id=Segment%20Financial%20Overview) The Group's segment results show insurance net profit grew 387.7% to RMB 673 million, technology net loss improved by 32.2%, and ZA Bank turned profitable with HKD 49 million net profit H1 2025 Segment Net Profit/(Loss) | Segment | H1 2025 Net Profit/(Loss) (RMB thousands) | H1 2024 Net Profit/(Loss) (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Insurance | 673,045 | 138,371 | 387.7% | | Technology | (55,988) | (82,602) | Improved by 32.2% | | Banking | 18,341 | (46,002) | Turned profitable | | Others | 4,977 | 32,498 | -84.7% | | Total | 667,568 | 55,467 | 1103.5% | - The insurance segment's combined ratio was **95.6%**, an improvement of **2.3 percentage points** year-on-year, with underwriting profit reaching **RMB 627 million**, an increase of **RMB 346 million** year-on-year[16](index=16&type=chunk) - ZA Bank's net interest margin increased to **2.38%**, and its cost-to-income ratio significantly improved to **67%** (119% in the same period last year)[16](index=16&type=chunk) [Our Ecosystem Layout](index=7&type=section&id=Our%20Ecosystem%20Layout) The Group's total gross written premiums grew 9.3% in H1 2025, driven by strong growth in health and auto ecosystems, stable consumer finance, and innovative digital lifestyle businesses H1 2025 Gross Written Premiums by Ecosystem | Ecosystem | H1 2025 Gross Written Premiums (RMB thousands) | Share (%) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Health | 6,274,783 | 37.7% | 38.3% | | Digital Lifestyle | 6,209,428 | 37.3% | -16.3% | | Consumer Finance | 2,698,781 | 16.2% | 23.6% | | Auto | 1,478,259 | 8.8% | 34.2% | | Total | 16,661,251 | 100% | 9.3% | [Health Ecosystem](index=8&type=section&id=Health%20Ecosystem) Health ecosystem gross written premiums grew 38.3% to RMB 6.27 billion, with insurance service revenue up 17.8%, and combined ratio improved to 92.9% due to AI-driven efficiency H1 2025 Health Ecosystem Performance | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Written Premiums | 6,274,783 thousands | 4,538,314 thousands | +38.3% | | Insurance Service Revenue | 5,733,148 thousands | 4,867,244 thousands | +17.8% | | Combined Ratio | 92.9% | 95.7% | Improved by 2.8 percentage points | | Combined Loss Ratio | 42.5% | 38.1% | Increased by 4.4 percentage points | | Combined Expense Ratio | 50.4% | 57.6% | Decreased by 7.2 percentage points | - The "Zunxiang e-sheng" series generated approximately **RMB 4.25 billion** in gross written premiums, with an average user age of **39**, having undergone **25 iterations**[19](index=19&type=chunk) - The "Zhongminbao" series products achieved approximately **RMB 1.03 billion** in gross written premiums, a **638.8% year-on-year increase**, covering non-standard body user groups[19](index=19&type=chunk) [Digital Lifestyle Ecosystem](index=9&type=section&id=Digital%20Lifestyle%20Ecosystem) Digital lifestyle ecosystem gross written premiums were RMB 6.21 billion, with innovative businesses growing 40.0% to RMB 2.49 billion, and pet insurance leading the market with over 51.3% growth H1 2025 Digital Lifestyle Ecosystem Performance | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Written Premiums | 6,209,428 thousands | 7,414,475 thousands | -16.3% | | Insurance Service Revenue | 5,791,048 thousands | 7,078,130 thousands | -18.2% | | Combined Ratio | 99.9% | 99.9% | Flat | | Combined Loss Ratio | 62.9% | 71.7% | Improved by 8.8 percentage points | | Combined Expense Ratio | 37.0% | 28.2% | Increased by 8.8 percentage points | - Gross written premiums from innovative businesses reached **RMB 2.49 billion**, accounting for **40.1%**, a **40.0% year-on-year increase**[23](index=23&type=chunk) - Pet insurance gross written premiums approached **RMB 563 million**, growing over **51.3% year-on-year**, serving over **1.11 million pet owners**[23](index=23&type=chunk) - Gross written premiums for the low-altitude economy grew over **20%**, cumulatively serving over **one million drone owners**[25](index=25&type=chunk) [Consumer Finance Ecosystem](index=10&type=section&id=Consumer%20Finance%20Ecosystem) Consumer finance ecosystem insurance service revenue rose 6.7% to RMB 2.43 billion, with outstanding loan balance up 14.6% to RMB 27.73 billion, and combined ratio improved to 94.0% H1 2025 Consumer Finance Ecosystem Performance | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Written Premiums | 2,698,781 thousands | 2,183,636 thousands | +23.6% | | Insurance Service Revenue | 2,432,634 thousands | 2,279,677 thousands | +6.7% | | Combined Ratio | 94.0% | 99.1% | Improved by 5.1 percentage points | | Combined Loss Ratio | 59.9% | 73.8% | Improved by 13.9 percentage points | | Combined Expense Ratio | 34.1% | 25.3% | Increased by 8.8 percentage points | - The outstanding loan balance was **RMB 27.73 billion**, an increase of **14.6%** from the end of last year[33](index=33&type=chunk) - The average term of underlying assets is approximately **10 months**, with an average loan amount of approximately **RMB 7,700**[32](index=32&type=chunk) [Auto Ecosystem](index=10&type=section&id=Auto%20Ecosystem) Auto ecosystem gross written premiums grew 34.2% to RMB 1.48 billion, with insurance service revenue up 25.7%, and combined ratio improved to 91.2% due to better business quality H1 2025 Auto Ecosystem Performance | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Written Premiums | 1,478,259 thousands | 1,101,927 thousands | +34.2% | | Insurance Service Revenue | 1,084,589 thousands | 862,866 thousands | +25.7% | | Combined Ratio | 91.2% | 94.2% | Improved by 3 percentage points | | Combined Loss Ratio | 65.1% | 66.7% | Improved by 1.6 percentage points | | Combined Expense Ratio | 26.1% | 27.5% | Decreased by 1.4 percentage points | - Gross written premiums for new energy vehicle insurance grew approximately **125.4% year-on-year**, now accounting for over **18%** of the company's total auto insurance premiums[29](index=29&type=chunk) - The company obtained independent operating qualifications for compulsory traffic accident liability insurance in Shanghai and Zhejiang, and achieved independent operation of commercial auto insurance in Shanghai[28](index=28&type=chunk) [Brand Building and Proprietary Channels](index=11&type=section&id=Brand%20Building%20and%20Proprietary%20Channels) In H1 2025, proprietary channels' gross written premiums grew 16.9% to RMB 3.70 billion, increasing their share to 22.2%, with customer renewal rate at 89.7% and average policies per paying user at 1.7 - Proprietary channels achieved **RMB 3.70 billion** in gross written premiums, increasing their share of total premiums to **22.2%**, a **16.9% year-on-year increase**[35](index=35&type=chunk) - Renewal premiums were **RMB 1.03 billion**, with an average premium per policy of **RMB 525**, and a customer renewal rate of **89.7%**[35](index=35&type=chunk) - The average number of policies per paying user increased to **1.7**, indicating enhanced user loyalty and cross-selling potential[35](index=35&type=chunk) [Artificial Intelligence](index=12&type=section&id=Artificial%20Intelligence) The company invested RMB 398 million in R&D in H1 2025, integrating AI across the insurance value chain, achieving 99% underwriting automation and over 40% higher AI customer service efficiency - R&D investment reached **RMB 398 million** in H1 2025[36](index=36&type=chunk) - The cloud-based insurance core system "Wujieshan" issued **6.70 billion policies** in H1, achieving an underwriting automation rate of **99%**[36](index=36&type=chunk) - The self-developed AI middleware "Lingxi Platform" accumulated **450 million robot calls** in the production environment in H1, with AI customer service efficiency significantly exceeding human customer service by over **40%**[36](index=36&type=chunk)[38](index=38&type=chunk) [Technology Export](index=13&type=section&id=Technology%20Export) The Group expanded its insurance technology export through ZhongAn Tech, ZhongAn Xinke, and Peak3, focusing on AI product commercialization domestically and international market expansion, with ZA Bank turning profitable - The technology export business segment achieved total technology export revenue of **RMB 496 million**, a **12.2% year-on-year increase**[12](index=12&type=chunk) - Domestic technology export business is conducted through ZhongAn Tech and ZhongAn Xinke, while international technology export business is conducted through Peak3[40](index=40&type=chunk) [Domestic Technology Export](index=13&type=section&id=Domestic%20Technology%20Export) Domestic technology export focused on AI product R&D and commercialization, successfully implementing intelligent agent platforms and expanding AI capabilities to cross-industry applications like consumer finance - The company continued to drive AI product R&D in H1 2025, achieving iteration and sales of intelligent agent platforms, smart outbound calling systems, and industry-agnostic solutions[41](index=41&type=chunk) - Commercial application of AI products successfully landed multiple projects, including core intelligent agents for agent sales assistance and online/tele-sales seat assistance in collaboration with several insurance companies[41](index=41&type=chunk) - AI capabilities successfully achieved "cross-domain" application, exported to areas including consumer finance, demonstrating cross-industry versatility[41](index=41&type=chunk) [International Business](index=13&type=section&id=International%20Business) International business, including Peak3 and ZA Bank, saw Peak3 update its Graphene platform and ZA Bank achieve a net profit of HKD 49 million, becoming Asia's first licensed bank for crypto trading - Peak3 completed a major update to its Graphene core platform, expanding its business scope to commercial property & casualty insurance and group medical insurance, and releasing several new AI features[43](index=43&type=chunk) - Peak3 initiated the construction of a new technology center in Madrid to support its European growth plans and future expansion into Latin America[44](index=44&type=chunk) - ZA Bank achieved a historic turnaround to profitability in H1 2025, with a net profit of **HKD 49 million** and net income of approximately **HKD 457 million**, a **82.1% year-on-year increase**[46](index=46&type=chunk) - ZA Bank became Asia's first licensed bank to offer cryptocurrency trading services to Hong Kong retail investors, with Invest client assets growing **125.3% year-on-year**[47](index=47&type=chunk) [Investment Business](index=15&type=section&id=Investment%20Business) The Group's domestic insurance fund investment assets totaled RMB 37.07 billion, with fixed-income investments accounting for 72.4%, and total investment income growing 3.1% to RMB 639 million in H1 2025 H1 2025 Investment Performance | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Investment Income | 639 | 620 | 3.1% | | Total Investment Yield (Annualized) | 3.3% | 3.3% | Flat | | Net Investment Yield (Annualized) | 2.1% | 2.3% | -0.2 percentage points | - Total domestic insurance fund investment assets amounted to approximately **RMB 37.07 billion**[50](index=50&type=chunk) [Domestic Insurance Fund Asset Management](index=15&type=section&id=Domestic%20Insurance%20Fund%20Asset%20Management) As of June 30, 2025, domestic insurance fund investment assets totaled RMB 37.07 billion, with fixed-income investments at 72.4% and stocks/equity funds at 9.7%, reflecting a prudent investment strategy Investment Assets Composition as of June 30, 2025 | Investment Type | Balance as of June 30, 2025 (RMB billions) | Share of Total (%) | | :--- | :--- | :--- | | Cash, deposits with banks and other financial institutions | 0.801 | 2.2% | | Fixed-income investments | 26.830 | 72.4% | | Stocks and equity funds | 3.616 | 9.7% | | Equity in unlisted companies | 5.822 | 15.7% | | Total investment assets | 37.069 | 100.0% | - Among the invested bonds, **98.9%** received external credit ratings of AA or above, with **82.1%** rated AAA[51](index=51&type=chunk) - The proportion of secondary market stocks and equity funds increased by **3.7 percentage points** to **9.7%** as of June 30, 2025, compared to the end of last year[52](index=52&type=chunk) [Insurance Fund Investment Portfolio (by Investment Type)](index=16&type=section&id=Insurance%20Fund%20Investment%20Portfolio%20%28by%20Investment%20Type%29) As of June 30, 2025, the insurance fund investment portfolio comprised 72.4% fixed-income and 25.4% equity/equity funds, showing a shift from fixed-income to equity compared to year-end 2024 Insurance Fund Investment Portfolio Comparison | Investment Type | Share as of June 30, 2025 (%) | Share as of Dec 31, 2024 (%) | | :--- | :--- | :--- | | Cash, deposits with banks and other financial institutions | 2.2% | 2.7% | | Fixed-income investments | 72.4% | 76.6% | | Equity and equity funds | 25.4% | 20.7% | | Total investment assets | 37,068,745 thousands | 39,775,659 thousands | [Investment Income](index=16&type=section&id=Investment%20Income) Total investment income in H1 2025 was RMB 639 million, a 3.1% year-on-year increase, with RMB 470 million from cash and fixed-income, and RMB 169 million from equity and equity funds H1 2025 Investment Income Breakdown | Source of Investment Income | H1 2025 (RMB millions) | H1 2024 (RMB millions) | | :--- | :--- | :--- | | From cash and fixed-income investments | 470 | 721 | | From equity and equity funds | 169 | (101) | | Total Investment Income | 639 | 620 | | Total Investment Yield (Annualized) | 3.3% | 3.3% | | Net Investment Yield (Annualized) | 2.1% | 2.3% | [Outlook](index=16&type=section&id=Outlook) The company will continue its 'insurance + technology' dual-engine strategy, focusing on quality growth, enhancing brand, applying tech to insurance processes, and exporting fintech capabilities domestically and internationally - Continue to adhere to the **"Insurance + Technology" dual-engine strategy**, pursuing "quality and sustainable growth"[55](index=55&type=chunk) - Apply technological development and innovation across the entire insurance process, continuously optimizing underwriting efficiency and user experience[55](index=55&type=chunk) - Continue to export insurance technology capabilities to domestic and international markets, deeply cultivate the Hong Kong financial market, and drive fintech innovation with technology[55](index=55&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) In H1 2025, the company's net profit surged 1,103.5% to RMB 668 million, driven by improved underwriting, stable investment income, banking turnaround, and reduced tech losses, enhancing asset and equity returns H1 2025 Key Financial Performance | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 16,183,150 | 16,035,401 | 0.9% | | Net Profit | 667,568 | 55,467 | 1103.5% | | Total Comprehensive Income | 623,473 | 163,231 | 281.3% | | Basic Earnings Per Share (RMB) | 0.45 | 0.04 | 1025.0% | | Diluted Earnings Per Share (RMB) | 0.45 | 0.04 | 1025.0% | H1 2025 Financial Ratios | Financial Ratios | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Return on Assets | 1.5% | 0.1% | | Return on Equity | 3.1% | 0.3% | | Gearing Ratio | 50.4% | 53.0% | | Net Investment Yield (Annualized) | 2.0% | 1.8% | | Total Investment Yield (Annualized) | 3.4% | 2.8% | [Domestic P&C Underwriting Business](index=18&type=section&id=Domestic%20P%26C%20Underwriting%20Business) In H1 2025, domestic P&C underwriting profit grew 109.1% to RMB 656 million, with combined ratio improving to 95.6%, despite a slight decrease in insurance service revenue, driven by growth in health and auto insurance H1 2025 Domestic P&C Underwriting Performance | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Insurance Service Revenue | 15,041,419 | 15,087,916 | -0.3% | | Insurance Service Expenses | (14,362,546) | (14,767,552) | -2.7% | | Net Income from Reinsurance Contracts Held | 2,575 | 26,122 | -90.1% | | Underwriting Profit | 656,398 | 313,865 | 109.1% | | Underwriting Combined Ratio | 95.6% | 97.9% | Improved by 2.3 percentage points | [Insurance Service Revenue](index=18&type=section&id=Insurance%20Service%20Revenue) The company's insurance service revenue in H1 2025 was RMB 15.04 billion, a 0.3% decrease, with health, auto, home property, and credit insurance showing significant growth, while return freight insurance declined H1 2025 Insurance Service Revenue by Product Category | Insurance Product Category | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Health Insurance | 5,998,100 | 5,002,211 | 19.9% | | Guarantee Insurance | 1,846,936 | 2,016,139 | -8.4% | | Auto Insurance | 1,084,589 | 862,866 | 25.7% | | Accident Insurance | 908,199 | 1,022,186 | -11.2% | | Home Property Insurance | 736,959 | 429,481 | 71.6% | | Credit Insurance | 682,607 | 423,729 | 61.1% | | Liability Insurance | 578,414 | 511,969 | 13.0% | | Cargo Insurance | 77,056 | 51,957 | 48.3% | | Others (mainly Return Freight Insurance) | 3,128,559 | 4,767,378 | -34.4% | | Return Freight Insurance | 2,420,191 | 3,994,967 | -39.4% | | Total | 15,041,419 | 15,087,916 | -0.3% | [Insurance Service Expenses](index=19&type=section&id=Insurance%20Service%20Expenses) The company's insurance service expenses decreased by 2.7% to RMB 14.36 billion in H1 2025, primarily due to changes in incurred claims and other directly attributable costs - Insurance service expenses decreased by approximately **2.7%** from approximately **RMB 14.77 billion** in H1 2024 to approximately **RMB 14.36 billion** in H1 2025[62](index=62&type=chunk) [Net Income/Loss from Reinsurance Contracts Held](index=19&type=section&id=Net%20Income%2FLoss%20from%20Reinsurance%20Contracts%20Held) Net income from reinsurance contracts held decreased by 90.1% to RMB 2.58 million in H1 2025, reflecting a reduction in ceded premiums less recovered insurance service expenses - Net income from reinsurance contracts held decreased by approximately **90.1%** from approximately **RMB 26.12 million** in H1 2024 to approximately **RMB 2.58 million** in H1 2025[63](index=63&type=chunk) [Insurance Finance Income/Loss](index=19&type=section&id=Insurance%20Finance%20Income%2FLoss) Underwriting finance loss decreased from RMB 33 million in H1 2024 to RMB 25 million in H1 2025, while ceded reinsurance finance income also saw a significant reduction - Underwriting finance loss decreased from approximately **RMB 33 million** in H1 2024 to approximately **RMB 25 million** in H1 2025[64](index=64&type=chunk) - Ceded reinsurance finance income decreased from approximately **RMB 0.45 million** in H1 2024 to approximately **RMB 0.01 million** in H1 2025[64](index=64&type=chunk) [Investment Business Details](index=20&type=section&id=Investment%20Business%20Details) The Group's investment assets totaled RMB 38.36 billion as of June 30, 2025, with cash, bank deposits, and fixed-income investments comprising 74.3%, and net investment income significantly improving to RMB 698 million - As of June 30, 2025, total investment assets amounted to approximately **RMB 38.36 billion**, representing approximately **88.3%** of total assets[67](index=67&type=chunk) - As of June 30, 2025, cash, deposits with banks and other financial institutions, and fixed-income investments collectively accounted for approximately **74.3%** of total investment assets[67](index=67&type=chunk) [Composition of Investment Assets](index=20&type=section&id=Composition%20of%20Investment%20Assets) As of June 30, 2025, fixed-income investments constituted 71.4% of total investment assets, while equity and equity funds accounted for 25.7%, indicating a shift from fixed-income to equity compared to year-end 2024 Investment Assets Composition | Investment Type | Balance as of June 30, 2025 (RMB thousands) | Share of Total (%) | Balance as of Dec 31, 2024 (RMB thousands) | Share of Total (%) | | :--- | :--- | :--- | :--- | :--- | | Cash, deposits with banks and other financial institutions | 1,120,689 | 2.9% | 1,466,741 | 3.6% | | Fixed-income investments | 27,381,090 | 71.4% | 30,945,296 | 75.4% | | Equity and equity funds | 9,855,272 | 25.7% | 8,595,112 | 21.0% | | Total investment assets | 38,357,051 | 100.0% | 41,007,150 | 100.0% | [Cash, Deposits with Banks and Other Financial Institutions](index=21&type=section&id=Cash%2C%20Deposits%20with%20Banks%20and%20Other%20Financial%20Institutions) As of June 30, 2025, cash, deposits with banks, and other financial institutions amounted to RMB 1.12 billion, a decrease from RMB 1.47 billion at year-end 2024 - As of June 30, 2025, cash, deposits with banks and other financial institutions amounted to approximately **RMB 1.12 billion**, a decrease from approximately **RMB 1.47 billion** as of December 31, 2024[68](index=68&type=chunk) [Bonds](index=21&type=section&id=Bonds) As of June 30, 2025, bond investments decreased to RMB 19.04 billion from RMB 21.60 billion at year-end 2024, with 98.9% of bonds rated AA or above externally - As of June 30, 2025, bond investments amounted to approximately **RMB 19.04 billion**, a decrease from approximately **RMB 21.60 billion** as of December 31, 2024[69](index=69&type=chunk) - **98.9%** of the company's bond holdings received external ratings of AA (domestic) or above, or BBB- (international) or above[69](index=69&type=chunk) [Stocks and Equity Funds](index=21&type=section&id=Stocks%20and%20Equity%20Funds) As of June 30, 2025, investments in stocks and equity funds increased to RMB 3.63 billion from RMB 2.41 billion at year-end 2024, reflecting a prudent and dynamic adjustment strategy - As of June 30, 2025, investments in stocks and equity funds amounted to approximately **RMB 3.63 billion**, an increase from approximately **RMB 2.41 billion** as of December 31, 2024[70](index=70&type=chunk) [Net Investment Income](index=21&type=section&id=Net%20Investment%20Income) Net investment income significantly improved to RMB 698 million in H1 2025 from a loss of RMB 171 million in H1 2024, primarily due to a turnaround from realized losses to gains H1 2025 Net Investment Income | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Interest income | 323,777 | 334,860 | -3.3% | | Dividend income | 84,968 | 103,518 | -17.9% | | Net realized (losses)/gains | 288,775 | (608,894) | -147.4% | | Net investment income | 697,520 | (170,516) | -509.1% | [Net Fair Value Changes in Profit or Loss](index=22&type=section&id=Net%20Fair%20Value%20Changes%20in%20Profit%20or%20Loss) In H1 2025, a net loss of RMB 28 million from fair value changes was recorded, a significant shift from a net gain of RMB 789 million in H1 2024, mainly due to debt investment fair value changes - In H1 2025, a net loss from fair value changes of **RMB 28 million** was recorded, compared to a net gain of approximately **RMB 789 million** in H1 2024[73](index=73&type=chunk) [Overall Performance](index=22&type=section&id=Overall%20Performance) In H1 2025, the Group's total revenue increased 0.9% to RMB 16.18 billion, with net profit surging 1,103.5% to RMB 668 million, reflecting significant overall performance improvement H1 2025 Overall Financial Performance | Metric | H1 2025 (RMB billions) | H1 2024 (RMB billions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 16.183 | 16.035 | 0.9% | | Profit Before Tax | 0.740 | 0.039 | 1797.4% | | Net Profit | 0.668 | 0.055 | 1103.5% | - Income tax expense was approximately **RMB 73 million**, compared to an income tax credit of approximately **RMB 16 million** in the same period last year[76](index=76&type=chunk) [Cash Flow](index=23&type=section&id=Cash%20Flow) In H1 2025, net cash from operating activities was RMB 2.14 billion, from investing activities RMB 1.95 billion, while financing activities used RMB 4.47 billion, primarily due to bond repayments H1 2025 Cash Flow Summary | Cash Flow Category | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 2,143,410 | 850,742 | | Net cash generated from investing activities | 1,952,310 | 948,532 | | Net cash used in financing activities | (4,468,767) | (1,453,127) | | Net increase/(decrease) in cash and cash equivalents | (327,838) | 346,577 | - Net cash used in financing activities was primarily due to cash outflow of approximately **RMB 4.28 billion** from bond repayments[79](index=79&type=chunk) [Debts](index=23&type=section&id=Debts) As of June 30, 2025, the company's outstanding bonds totaled USD 360.1 million, with ZhongAn Tech holding RMB 60 million and RMB 8 million in liquid loans, and no other significant debts - As of June 30, 2025, the company's outstanding bonds payable principal balance was **USD 360.1 million**[80](index=80&type=chunk) - As of June 30, 2025, ZhongAn Tech had outstanding loan principal balances of **RMB 60 million** from China Merchants Bank and **RMB 8 million** from China CITIC Bank[80](index=80&type=chunk) [Material Investments](index=24&type=section&id=Material%20Investments) For the six months ended June 30, 2025, the Group held no material investments valued at 5% or more of its total assets - For the six months ended June 30, 2025, the Group held no material investments[81](index=81&type=chunk) [Material Acquisitions and Disposals](index=24&type=section&id=Material%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the Group made no material acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the Group made no material acquisitions or disposals of subsidiaries, associates, or joint ventures[82](index=82&type=chunk) [Future Plans for Material Investments and Capital Assets](index=24&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of June 30, 2025, the Group had no future plans for material investments or capital assets - As of June 30, 2025, the Group had no future plans for material investments and capital assets[83](index=83&type=chunk) [Asset Pledges](index=24&type=section&id=Asset%20Pledges) As of June 30, 2025, the Group had not pledged any assets, except as disclosed in this interim report - As of June 30, 2025, the Group had not pledged any assets[84](index=84&type=chunk) [Gearing Ratio](index=24&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was approximately 50.4%, a 3.4 percentage point decrease from approximately 53.8% as of December 31, 2024 - As of June 30, 2025, the gearing ratio was approximately **50.4%**, a **3.4 percentage point decrease** from approximately **53.8%** as of December 31, 2024[85](index=85&type=chunk) [Foreign Exchange Risk](index=24&type=section&id=Foreign%20Exchange%20Risk) Operating primarily in China with RMB as its functional currency, the Group faces foreign exchange risk from foreign currency-denominated assets and liabilities of certain joint ventures - The Group primarily operates in China, with RMB as its functional and financial reporting currency[86](index=86&type=chunk) - The business of some subsidiaries of the Group's joint ventures is denominated in foreign currencies (including HKD, USD, JPY, SGD, EUR, etc.), exposing the Group to foreign exchange risk[86](index=86&type=chunk) [Contingent Liabilities](index=24&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities[87](index=87&type=chunk) [Off-Balance Sheet Commitments and Arrangements](index=24&type=section&id=Off-Balance%20Sheet%20Commitments%20and%20Arrangements) As of June 30, 2025, the Group had not entered into any off-balance sheet arrangements - As of June 30, 2025, the Group had not entered into any off-balance sheet arrangements[88](index=88&type=chunk) [Events After Reporting Period](index=24&type=section&id=Events%20After%20Reporting%20Period) After the reporting period, the company completed a placement of 215 million new H shares on July 4, 2025, raising approximately HKD 3.896 billion for capital and business development - On July 4, 2025, the company completed the placement of **215 million new H shares** at a price of **HKD 18.25 per H share**[89](index=89&type=chunk) - The net proceeds from the placement totaled approximately **HKD 3,895.8 million**[89](index=89&type=chunk) - The net proceeds are intended to supplement the Group's capital to support business development (**60%** for insurance underwriting and asset management, **30%** for fintech innovation, and **10%** for general corporate purposes)[89](index=89&type=chunk) [Disclosure of Interests](index=25&type=section&id=Disclosure%20of%20Interests) [Interests and Short Positions of Directors, Supervisors and Chief Executive in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=25&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%2C%20Supervisors%20and%20Chief%20Executive%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, directors, supervisors, and chief executives held interests in the company's shares, with Mr. Ou Yaping holding 81 million H shares through controlled corporations, representing 5.51% of total issued share capital Interests of Directors in Shares as of June 30, 2025 | Name of Director | Share Class | Nature of Interest | Number of Shares | Approximate Percentage of Total Issued Share Capital of the Company | | :--- | :--- | :--- | :--- | :--- | | Ou Yaping | H Shares | Interest in controlled corporation | 81,000,000 (Long Position) | 5.51% | [Interests and Short Positions of Substantial Shareholders and Other Persons in Shares and Underlying Shares of the Company](index=26&type=section&id=Interests%20and%20Short%20Positions%20of%20Substantial%20Shareholders%20and%20Other%20Persons%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, substantial shareholders held significant interests in the company's shares, including Ping An Insurance (10.21%), Shenzhen Jiadexin Investment (9.09%), Tencent (7.72%), and Ant Group (7.37%) Interests of Substantial Shareholders as of June 30, 2025 | Name of Shareholder/Entity | Share Class | Nature of Interest | Number of Shares (L/S) | Approximate Percentage of Total Issued Share Capital of the Company | | :--- | :--- | :--- | :--- | :--- | | Ping An Insurance | H Shares | Beneficial Interest | 150,000,000 (L) | 10.21% | | Shenzhen Jiadexin Investment Co., Ltd. | H Shares | Beneficial Interest | 133,615,251 (L) | 9.09% | | Tencent Computer System | H Shares | Beneficial Interest | 113,443,012 (L) | 7.72% | | Ant Group | H Shares | Beneficial Interest | 108,368,552 (L) | 7.37% | | Shenzhen Rixun Network Technology Co., Ltd. | H Shares | Beneficial Interest | 81,000,000 (L) | 5.51% | | UBS Group AG | H Shares | Interest in controlled corporation | 106,918,423 (L) / 51,786,628 (S) | 7.27% (L) / 3.52% (S) | | Morgan Stanley | H Shares | Interest in controlled corporation | 80,452,089 (L) / 35,167,972 (S) | 5.47% (L) / 2.39% (S) | | Shanghai Yuanqiang Investment Co., Ltd. | Domestic Shares | Beneficial Interest | 50,000,000 (L) | 3.40% | [Other Information](index=29&type=section&id=Other%20Information) [Employees and Remuneration Policy](index=29&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 2,193 full-time employees, with total employee benefit costs of RMB 738 million in H1 2025, based on industry practices and performance - As of June 30, 2025, the Group had **2,193 full-time employees**[96](index=96&type=chunk) - Total employee benefit costs (including directors' and supervisors' remuneration) incurred by the Group for the six months ended June 30, 2025, amounted to approximately **RMB 738 million**[96](index=96&type=chunk) [Corporate Governance](index=29&type=section&id=Corporate%20Governance) The company is committed to maintaining strict corporate governance, adhering to listing rules and its articles of association, and complying with the Corporate Governance Code principles and code provisions - The company is committed to maintaining and implementing strict corporate governance, having adopted the principles and code provisions of the Corporate Governance Code as the benchmark for its corporate governance practices[97](index=97&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=29&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted the Model Code for Securities Transactions by Directors, and all directors confirmed compliance throughout the reporting period [Review by Audit and Consumer Rights Protection Committee](index=29&type=section&id=Review%20by%20Audit%20and%20Consumer%20Rights%20Protection%20Committee) The Audit and Consumer Rights Protection Committee reviewed the Group's H1 2025 interim report and unaudited interim results, discussing accounting policies and internal controls with management and external auditors - The Audit and Consumer Rights Protection Committee has reviewed the Group's interim report and unaudited interim results for the six months ended June 30, 2025[99](index=99&type=chunk) - The committee's main responsibilities include overseeing risk management, strengthening internal control and compliance management, reviewing financial reports, supervising financial reporting procedures, and protecting consumer rights[99](index=99&type=chunk) [Other Board Committees](index=29&type=section&id=Other%20Board%20Committees) In addition to the Audit and Consumer Rights Protection Committee, the company has established the Nomination and Remuneration Management Committee, Strategy and Investment Decision Committee, and Risk Management and Connected Transactions Control Committee - The company has established the Nomination and Remuneration Management Committee, the Strategy and Investment Decision Committee, and the Risk Management and Connected Transactions Control Committee[100](index=100&type=chunk) [Changes in Directors, Supervisors and Chief Executive](index=30&type=section&id=Changes%20in%20Directors%2C%20Supervisors%20and%20Chief%20Executive) Ms. Zheng Hui'en was re-designated as Chairperson of the Audit Committee of the Council of The Hong Kong Polytechnic University on March 1, 2025, with no other material changes during the reporting period - Ms. Zheng Hui'en was re-designated from a member to the Chairperson of the Audit Committee of the Council of The Hong Kong Polytechnic University on March 1, 2025[101](index=101&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=30&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the reporting period, and no treasury shares were held as of June 30, 2025 - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[102](index=102&type=chunk) [Use of Proceeds](index=30&type=section&id=Use%20of%20Proceeds) The company issued USD 1 billion in notes in 2020, with approximately RMB 6.79 billion (USD 989 million) used for working capital and general corporate purposes as of June 30, 2025, and USD 360.1 million in outstanding bonds - The company issued 2025 notes, 2026 notes, and additional notes, with a total principal amount of **USD 1 billion**[103](index=103&type=chunk)[104](index=104&type=chunk) - As of June 30, 2025, approximately **RMB 6.79 billion** (equivalent to approximately **USD 989 million**) had been used for working capital and general corporate purposes[104](index=104&type=chunk) - The outstanding principal balance of bonds payable was **USD 360.1 million**[104](index=104&type=chunk) [Litigation](index=30&type=section&id=Litigation) As of June 30, 2025, the company was not involved in any material litigation or arbitration, and directors were unaware of any pending or potential material claims - As of June 30, 2025, the company was not involved in any material litigation or arbitration[105](index=105&type=chunk) [Interim Dividend](index=30&type=section&id=Interim%20Dividend) To retain resources for business development, the Board resolved not to declare an interim dividend for the six months ended June 30, 2025 (H1 2024: nil) - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025[106](index=106&type=chunk) [Review Report on Interim Financial Information](index=31&type=section&id=Review%20Report%20on%20Interim%20Financial%20Information) PricewaterhouseCoopers reviewed ZhongAn Online's H1 2025 interim financial information, concluding no material issues in preparation according to HKAS 34, without expressing an audit opinion - PricewaterhouseCoopers has reviewed the Group's interim financial information for the six months ended June 30, 2025[108](index=108&type=chunk) - The scope of the review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, and therefore no audit opinion is expressed[109](index=109&type=chunk) - Review conclusion: Nothing has come to the auditor's attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[110](index=110&type=chunk) [Condensed Consolidated Interim Statement of Profit or Loss](index=32&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Profit%20or%20Loss) In H1 2025, the Group's net profit surged to RMB 668 million from RMB 55 million year-on-year, driven by improved insurance service results and a turnaround in net investment income, despite a loss from fair value changes H1 2025 Condensed Consolidated Interim Statement of Profit or Loss | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Insurance Service Revenue | 15,041,419 | 15,087,916 | | Insurance Service Results | 681,448 | 346,486 | | Net Investment Income | 697,520 | (170,516) | | Net Fair Value Changes in Profit or Loss | (28,056) | 789,161 | | Profit Before Tax | 740,244 | 39,145 | | Net Profit | 667,568 | 55,467 | | Basic Earnings Per Share (RMB) | 0.45 | 0.04 | [Condensed Consolidated Interim Statement of Comprehensive Income](index=33&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) In H1 2025, total comprehensive income significantly increased to RMB 623 million from RMB 163 million year-on-year, driven by higher net profit, despite a shift to loss in fair value changes of debt instruments in other comprehensive income H1 2025 Condensed Consolidated Interim Statement of Comprehensive Income | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Profit | 667,568 | 55,467 | | Other Comprehensive Income (after tax) | (44,095) | 107,764 | | Total Comprehensive Income | 623,473 | 163,231 | - Fair value changes of debt instruments at fair value through other comprehensive income shifted from a gain of **RMB 81.02 million** in H1 2024 to a loss of **RMB 38.33 million** in H1 2025[114](index=114&type=chunk) [Condensed Consolidated Interim Statement of Financial Position](index=34&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets decreased to RMB 43.45 billion from RMB 45.28 billion at year-end 2024, while total equity increased to RMB 21.56 billion and total liabilities decreased to RMB 21.89 billion, optimizing the capital structure Condensed Consolidated Interim Statement of Financial Position | Item | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Assets | 43,448,479 | 45,284,579 | | Total Equity | 21,559,177 | 20,926,401 | | Total Liabilities | 21,889,302 | 24,358,178 | | Financial assets at fair value through profit or loss | 19,947,600 | 20,706,284 | | Debt instruments at fair value through other comprehensive income | 8,920,381 | 10,528,854 | | Bonds payable | 2,604,974 | 6,912,317 | - Bonds payable significantly decreased from approximately **RMB 6.91 billion** at year-end 2024 to approximately **RMB 2.61 billion** as of June 30, 2025[115](index=115&type=chunk) [Condensed Consolidated Interim Statement of Changes in Equity](index=35&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, total equity increased to RMB 21.56 billion, driven by a net profit of RMB 668 million, partially offset by a RMB 47.55 million decrease in financial asset revaluation reserve within other comprehensive income Condensed Consolidated Interim Statement of Changes in Equity | Item | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Equity | 21,559,177 | 20,926,401 | | Retained Earnings | 3,014,749 | 2,460,726 | | Total Comprehensive Income | 623,473 | 163,231 (H1 2024) | - In H1 2025, total comprehensive income was **RMB 623 million**, attributable to equity holders of the parent company[116](index=116&type=chunk) [Condensed Consolidated Interim Statement of Cash Flows](index=36&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Cash%20Flows) In H1 2025, net cash from operating activities was RMB 2.14 billion, from investing activities RMB 1.95 billion, while financing activities used RMB 4.47 billion, resulting in a net decrease of RMB 373 million in cash and cash equivalents H1 2025 Condensed Consolidated Interim Statement of Cash Flows | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 2,143,410 | 850,742 | | Net cash generated from investing activities | 1,952,310 | 948,532 | | Net cash used in financing activities | (4,468,767) | (1,453,127) | | Net (decrease)/increase in cash and cash equivalents | (372,838) | 346,577 | | Cash and cash equivalents at end of period | 1,634,696 | 2,022,907 | - Net cash used in financing activities was primarily due to bond payments of approximately **RMB 4.28 billion**[117](index=117&type=chunk) [Notes to the Condensed Consolidated Interim Financial Information](index=37&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) [General Information](index=37&type=section&id=General%20Information) ZhongAn Online Property and Casualty Insurance Co., Ltd., established on October 9, 2013, focuses on fintech, internet insurance, and IT services, and was listed on the HKEX Main Board on September 28, 2017 - The company was established on **October 9, 2013**, primarily engaged in fintech business, providing internet insurance services and insurance information technology services[118](index=118&type=chunk)[119](index=119&type=chunk) - The company was listed on the Main Board of The Stock Exchange of Hong Kong Limited on **September 28, 2017**, with stock code **6060**[120](index=120&type=chunk) [Basis of Preparation](index=37&type=section&id=Basis%20of%20Preparation) This condensed consolidated interim financial information is prepared in accordance with HKAS 34 and HKEX Listing Rules, with accounting policies consistent with the 2024 annual financial statements, except for new amendments and interpretations - This condensed consolidated interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[121](index=121&type=chunk) [Significant Accounting Policies](index=37&type=section&id=Significant%20Accounting%20Policies) The Group applied HKFRS 21 amendments in this interim period without material impact and is currently assessing the effects of adopting HKFRS 18 and amendments to HKFRS 9 and HKFRS 7 - In this interim period, the Group has applied the amendments to HKFRS 21 "Lack of Exchangeability," which did not have a material impact on this condensed consolidated interim financial information[122](index=122&type=chunk) - The Group is currently assessing the impact of adopting HKFRS 18 and amendments to HKFRS 9 and HKFRS 7[123](index=123&type=chunk) [Segment Information](index=38&type=section&id=Segment%20Information) The Group's operating segments include insurance, technology, banking, and others, with insurance net profit at RMB 673 million, technology net loss at RMB 56 million, and banking net profit at RMB 18 million in H1 2025 - The Group's operating segments include insurance, technology, banking, and others[125](index=125&type=chunk) H1 2025 Segment Net Profit/(Loss) | Segment | H1 2025 Net Profit/(Loss) (RMB thousands) | H1 2024 Net Profit/(Loss) (RMB thousands) | | :--- | :--- | :--- | | Insurance | 673,045 | 138,371 | | Technology | (55,988) | (82,602) | | Banking | 18,341 | (46,002) | | Others | 4,977 | 32,498 | | Total | 667,568 | 55,467 | Segment Assets | Segment | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Insurance | 41,749,113 | 43,726,537 | | Technology | 1,783,352 | 1,822,043 | | Banking | 9,756,757 | 8,982,043 | | Others | 4,549,711 | 4,655,248 | | Total | 43,448,479 | 45,284,579 | [Subsidiaries](index=41&type=section&id=Subsidiaries) As of June 30, 2025, the company owned 13 wholly-owned subsidiaries, including ZhongAn Tech and ZhongAn Insurance Brokerage, engaged in tech development, insurance brokerage, and healthcare services, and consolidated 5 structured entities - As of June 30, 2025, the company owned **13 wholly-owned subsidiaries**, including ZhongAn Tech, ZhongAn Insurance Brokerage, and Shanghai Lianmo[130](index=130&type=chunk) - Consolidated structured entities include 5 asset management products or equity investment entities such as ZhongAn Taikang Asset Management Plan and ZhongAn Lexiang No. 1 Asset Management Plan[131](index=131&type=chunk) [Insurance Service Results](index=42&type=section&id=Insurance%20Service%20Results) In H1 2025, insurance service revenue was RMB 15.04 billion, with expenses at RMB 14.36 billion, resulting in insurance service results of RMB 681 million, a significant increase from RMB 346 million year-on-year H1 2025 Insurance Service Results | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Total insurance service revenue | 15,041,419 | 15,087,916 | | Total insurance service expenses | (14,362,546) | (14,767,552) | | Total net income from reinsurance contracts held | 2,575 | 26,122 | | Insurance service results | 681,448 | 346,486 | [Net Investment Income](index=43&type=section&id=Net%20Investment%20Income) Net investment income significantly improved to RMB 698 million in H1 2025 from a loss of RMB 171 million in H1 2024, primarily due to a shift from realized losses to gains, despite lower interest and dividend income H1 2025 Net Investment Income | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest income | 323,777 | 334,860 | | Dividend income | 84,968 | 103,518 | | Net realized gains/(losses) | 288,775 | (608,894) | | Net investment income | 697,520 | (170,516) | - Net realized gains shifted from a loss of **RMB 609 million** in H1 2024 to a gain of **RMB 289 million** in H1 2025[136](index=136&type=chunk) [Net Fair Value Changes in Profit or Loss](index=44&type=section&id=Net%20Fair%20Value%20Changes%20in%20Profit%20or%20Loss) In H1 2025, a net loss of RMB 28 million from fair value changes was recorded, a significant shift from a net gain of RMB 789 million in H1 2024, mainly due to debt investment fair value changes H1 2025 Net Fair Value Changes in Profit or Loss | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Financial assets at fair value through profit or loss | (28,056) | 789,161 | [Other Income](index=44&type=section&id=Other%20Income) Other income increased to RMB 479 million in H1 2025 from RMB 407 million in H1 2024, primarily driven by a significant increase in government grants H1 2025 Other Income | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Service income | 333,443 | 399,558 | | Government grants | 144,183 | 3,685 | | Others | 1,264 | 3,781 | | Total | 478,890 | 407,024 | - Government grants significantly increased from **RMB 3.69 million** in H1 2024 to **RMB 144.18 million** in H1 2025[138](index=138&type=chunk)[139](index=139&type=chunk) [Other Operating Expenses](index=45&type=section&id=Other%20Operating%20Expenses) Other operating expenses slightly decreased to RMB 512 million in H1 2025 from RMB 520 million in H1 2024, despite increases in promotion, marketing, handling fees, commissions, consulting, and technology fees H1 2025 Other Operating Expenses | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Promotion and marketing expenses | 2,305,438 | 1,879,834 | | Handling fees and commissions | 2,172,805 | 1,601,203 | | Consulting and technology fees | 1,570,692 | 1,357,914 | | Employee benefit expenses | 601,776 | 621,202 | | Depreciation and amortization | 150,554 | 141,403 | | Others | 457,048 | 412,468 | | Less: Expenses attributable to insurance acquisition cash flows and other directly attributable costs | (6,746,660) | (5,494,192) | | Total | 511,653 | 519,832 | [Other Expenses](index=45&type=section&id=Other%20Expenses) Other expenses decreased to RMB 316 million in H1 2025 from RMB 421 million in H1 2024, primarily due to lower costs and expenses for providing services H1 2025 Other Expenses | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of providing services | 270,232 | 343,302 | | Expenses of providing services | 31,904 | 59,719 | | Others | 14,236 | 17,557 | | Total | 316,372 | 420,578 | [Income Tax](index=45&type=section&id=Income%20Tax) Income tax expense was RMB 73 million in H1 2025, a shift from an income tax credit of RMB 16 million in H1 2024, influenced by current and deferred tax impacts H1 2025 Income Tax | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax | 249,652 | (10,682) | | Deferred income tax | (176,976) | (5,640) | | Total | 72,676 | (16,322) | - The income tax reconciliation table shows that tax calculated at the applicable rate was **RMB 178 million**, but due to factors such as non-taxable income and R&D expense super deduction, the actual income tax was **RMB 73 million**[143](index=143&type=chunk) [Earnings Per Share](index=46&type=section&id=Earnings%20Per%20Share) Basic and diluted earnings per share both significantly increased to RMB 0.45 in H1 2025 from RMB 0.04 in H1 2024, with no dilutive potential shares during the period H1 2025 Earnings Per Share | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net profit attributable to equity holders of the parent company for the period (RMB thousands) | 667,568 | 55,467 | | Weighted average number of ordinary shares in issue (thousands of shares) | 1,469,813 | 1,469,813 | | Basic earnings per share (RMB) | 0.45 | 0.04 | | Diluted earnings per share (RMB) | 0.45 | 0.04 | [Other Comprehensive Income](index=47&type=section&id=Other%20Comprehensive%20Income) Other comprehensive income was a tax-effected loss of RMB 44.10 million in H1 2025, a shift from a gain of RMB 108 million in H1 2024, primarily due to fair value changes in debt instruments H1 2025 Other Comprehensive Income | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair value changes of debt instruments at fair value through other comprehensive income | (38,332) | 81,016 | | Fair value changes of equity instruments at fair value through other comprehensive income | (5,501) | (6,228) | | Share of other comprehensive income of associates and joint ventures accounted for using the equity method | 3,456 | 34,691 | | Other comprehensive income after tax | (44,095) | 107,764 | [Cash, Deposits with Banks and Other Financial Institutions](index=47&type=section&id=Cash%2C%20Deposits%20with%20Banks%20and%20Other%20Financial%20Institutions) As of June 30, 2025, cash, deposits with banks, and other financial institutions decreased to RMB 1.12 billion from RMB 1.47 billion at year-end 2024, mainly comprising short-term deposits and other monetary funds Cash, Deposits with Banks and Other Financial Institutions | Item | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Deposits with original maturity not exceeding three months | 758,526 | 760,365 | | Other monetary funds | 362,154 | 706,337 | | Total | 1,120,689 | 1,466,741 | [Financial Assets Held Under Resale Agreements](index=48&type=section&id=Financial%20Assets%20Held%20Under%20Resale%20Agreements) As of June 30, 2025, financial assets held under resale agreements slightly decreased to RMB 514 million from RMB 541 million at year-end 2024, primarily consisting of bonds in interbank and stock exchange markets Financial Assets Held Under Resale Agreements | Item | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Securities - bonds (interbank market) | 344,000 | 288,250 | | Securities - bonds (stock exchange) | 170,016 | 252,582 | | Total | 514,047 | 540,883 | [Financial Assets at Fair Value Through Profit or Loss](index=48&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, financial assets at fair value through profit or loss decreased to RMB 19.95 billion from RMB 20.71 billion at year-end 2024, comprising debt, fund, equity investments, and wealth management products Financial Assets at Fair Value Through Profit or Loss | Item | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Debt investments | 9,669,879 | 10,540,326 | | Fund investments | 5,696,548 | 6,512,880 | | Equity investments | 2,426,422 | 1,521,556 | | Wealth management products | 2,134,137 | 2,111,237 | | Total | 19,947,600 | 20,706,284 | - Of these, listed financial assets amounted to **RMB 3.92 billion**, and unlisted financial assets amounted to **RMB 16.02 billion**[149](index=149&type=chunk) [Financial Assets Measured at Amortized Cost](index=48&type=section&id=Financial%20Assets%20Measured%20at%20Amortized%20Cost) As of June 30, 2025, financial assets measured at amortized cost were RMB 1.05 billion, largely stable compared to RMB 1.05 billion at year-end 2024, primarily including trust investment plans and debt investments Financial Assets Measured at Amortized Cost | Item | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trust investment plans | 619,247 | 524,310 | | Debt investments | 430,374 | 527,120 | | Total | 1,049,110 | 1,051,049 | [Debt Instruments at Fair Value Through Other Comprehensive Income](index=49&type=section&id=Debt%20Instruments%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) As of June 30, 2025, debt instruments at fair value through other comprehensive income decreased to RMB 8.92 billion from RMB 10.53 billion at year-end 2024, comprising corporate, financial, and government bonds Debt Instruments at Fair Value Through Other Comprehensive Income | Item | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Corporate bonds | 5,273,325 | 6,326,093 | | Financial bonds | 2,549,975 | 2,823,182 | | Government bonds | 1,066,422 | 1,348,979 | | Total | 8,920,381 | 10,528,854 | - Of these, listed debt instruments amounted to **RMB 639 million**, and unlisted debt instruments amounted to **RMB 8.28 billion**[151](index=151&type=chunk) [Equity Instruments at Fair Value Through Other Comprehensive Income](index=49&type=section&id=Equity%20Instruments%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) As of June 30, 2025, equity instruments at fair value through other comprehensive income increased to RMB 846 million from RMB 790 million at year-end 2024, primarily equity investments with a larger proportion of listed ones Equity Instruments at Fair Value Through Other Comprehensive Income | Item | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Equity investments | 845,692 | 789,783 | | Of which: listed | 810,006 | 754,097 | | Of which: unlisted | 35,686 | 35,686 | - In H1 2025, dividend income recognized from these equity investments was **RMB 20.59 million**[153](index=153&type=chunk) [Investments in Associates and Joint Ventures](index=50&type=section&id=Investments%20in%20Associates%20and%20Joint%20Ventures) As of June 30, 2025, total investments in associates and joint ventures slightly increased to RMB 5.62 billion from RMB 5.59 billion at year-end 2024, including investments in ZhongAn Microfinance, ZhongAn Xinke, ZhongAn International, and Nova Technology Investments in Associates and Joint Ventures | Associates and Joint Ventures | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Chongqing ZhongAn Microfinance Co., Ltd. | 446,899 | 440,585 | | ZhongAn Xinke (Shenzhen) Co., Ltd. | 240,515 | 218,824 | | ZhongAn Technology (International) Group Co., Ltd. | 4,861,698 | 4,870,675 | | Nova Technology Ltd. | 73,832 | 61,332 | | Total | 5,622,944 | 5,591,416 | - In H1 2025, the share of net loss from associates and joint ventures was **RMB 6.62 million**[154](index=154&type=chunk) [Time Deposits](index=50&type=section&id=Time%20Deposits) As of June 30, 2025, time deposits slightly increased to RMB 31.17 million from RMB 30.83 million at year-end 2024, primarily comprising deposits with maturities of less than three months and three months to one year Time Deposits by Maturity | Maturity Period | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Less than 3 months | 10,000 | — | | 3 months to 1 year (inclusive) | 20,000 | 30,000 | | Total | 31,169 | 30,827 | [Capital Deposit](index=51&type=section&id=Capital%20Deposit) As of June 30, 2025, capital deposit slightly increased to RMB 305 million from RMB 301 million at year-end 2024, representing 20% of the company's share capital as required by the PRC Insurance Law Capital Deposit | Item | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Capital deposit | 295,000 | 295,000 | | Total | 305,419 | 301,313 | - In accordance with relevant provisions of the "Insurance Law of the People's Republic of China," the company is required to set aside **20%** of its share capital as a capital deposit[156](index=156&type=chunk) [Property and Equipment](index=52&type=section&id=Property%20and%20Equipment) As of June 30, 2025, the net book value of property and equipment decreased to RMB 632 million from RMB 654 million on January 1, 2025, with depreciation expenses of RMB 28.37 million in H1 2025 Property and Equipment Net Book Value | Item | As of June 30, 2025 (RMB thousands) | As of Jan 1, 2025 (RMB thousands) | | :--- | :--- | :--- | | Buildings | 571,660 | 580,104 | | Motor vehicles | 1,385 | 1,686 | | Electrical equipment | 21,231 | 21,109 | | Office furniture and equipment | 2,588 | 2,901 | | Leasehold improvements | 35,029 | 47,977 | | Total | 631,893 | 653,777 | - Depreciation expenses for H1 2025 amounted to **RMB 28.37 million**[158](index=158&type=chunk) [Leases](index=52&type=section&id=Leases) As of June 30, 2025, right-of-use assets (buildings) were RMB 116 million and lease liabilities were RMB 94 million, with depreciation expenses of RMB 63.51 million and total cash outflows of RMB 67.88 million in H1 2025 Right-of-Use Assets and Lease Liabilities | Item | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Right-of-use assets (buildings) | 115,879 | 143,774 | | Lease liabilities | 93,987 | 122,896 | H1 2025 Lease-Related Expenses and Cash Flow | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation expense for right-of-use assets | (63,506) | (79,908) | | Interest expense | 2,518 | 7,650 | | Total cash outflow relating to leases | 67,883 | 77,740 | [Intangible Assets](index=53&type=section&id=Intangible%20Assets) As of June 30, 2025, the net book value of intangible assets slightly increased to RMB 626 million from RMB 619 million on January 1, 2025, with amortization expenses of RMB 58.40 million and impairment of RMB 24.40 million in H1 2025 Intangible Assets Net Book Value | Item | As of June 30, 2025 (RMB thousands) | As of Jan 1, 2025 (RMB thousands) | | :--- | :--- | :--- | | Software | 625,122 | 618,180 | | Others | 449 | 539 | | Total | 625,571 | 618,719 | - Amortization expenses for H1 2025 were **RMB 58.40 million**, and impairment was **RMB 24.40 million**[161](index=161&type=chunk) [Deferred Tax Assets and Liabilities](index=54&type=section&id=Deferred%20Tax%20Assets%20and%20Liabilities) As of June 30, 2025, net deferred tax liabilities significantly decreased to RMB 77.31 million from RMB 270.14 million at year-end 2024, influenced by insurance contract liabilities, impairment provisions, and financial asset fair value changes Deferred Tax

[Report Overview](index=2&type=section&id=%E6%8A%A5%E5%91%8A%E6%A6%82%E8%A7%88) [GEM Market Features and Disclaimer](index=2&type=section&id=GEM%E5%B8%82%E5%9C%BA%E7%89%B9%E8%89%B2%E4%B8%8E%E5%85%8D%E8%B4%A3%E5%A3%B0%E6%98%8E) This section outlines the GEM market's high-risk platform for SMEs, emphasizing investor caution and the directors' responsibility for report accuracy - GEM market positions itself as a listing platform for high-investment-risk small and medium-sized companies, requiring investors to understand potential risks[2](index=2&type=chunk) - Hong Kong Exchanges and Clearing Limited and the Stock Exchange disclaim responsibility for this report's content, with company directors fully accountable for its accuracy and completeness[2](index=2&type=chunk) [Summary](index=3&type=section&id=%E6%91%98%E8%A6%81) This summary highlights the Group's key financial performance for the six months ended June 30, 2025, including turnover, gross profit, loss attributable to owners, and loss per share, with no dividend recommended 2025 H1 Key Financial Indicators | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Consolidated Turnover | 226,407,014 | 211,568,049 | 7.01% Increase | | Consolidated Gross Profit | 13,820,662 | 12,115,570 | 14.07% Increase | | Loss Attributable to Owners of the Company | (6,426,384) | (4,123,183) | 55.86% Loss Widening | | Loss Per Share | 0.317 cents | 0.218 cents | 45.41% Loss Widening | | Dividend | Not Recommended | Not Recommended | No Change | [Financial Statements](index=4&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss](index=4&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E8%B4%A6) This section presents the unaudited condensed consolidated statement of profit or loss for the six months ended June 30, 2025, detailing key financial figures and comparative data Condensed Consolidated Statement of Profit or Loss (For the Six Months Ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Turnover | 226,407,014 | 211,568,049 | | Cost of Sales | (212,586,352) | (199,452,479) | | Gross Profit | 13,820,662 | 12,115,570 | | Other Income and Gains/Losses, Net | 235,587 | (50,195) | | Selling and Distribution Costs | (3,960,302) | (7,053,114) | | Research and Development and Administrative Expenses | (16,551,751) | (8,559,614) | | Finance Costs | (1,973,895) | (1,977,660) | | (Loss)/Profit Before Tax | (8,429,699) | (5,525,013) | | Income Tax | – | – | | (Loss)/Profit for the Period | (8,429,699) | (5,525,013) | | (Loss)/Profit for the Period Attributable to Owners of the Company | (6,426,384) | (4,123,183) | | (Loss)/Profit for the Period Attributable to Non-controlling Interests | (2,003,313) | (1,401,830) | | Loss Per Share – Basic (RMB) | 0.317 cents | 0.218 cents | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) This section presents the unaudited condensed consolidated statement of financial position as of June 30, 2025, detailing assets, liabilities, and equity, with comparative audited data Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Total Non-current Assets | 98,078,794 | 98,533,260 | | Total Current Assets | 317,084,756 | 233,993,789 | | Total Assets | 415,163,551 | 332,527,049 | | Total Current Liabilities | 287,372,895 | 279,065,167 | | Net Current Assets | 29,711,861 | (45,071,379) | | Total Non-current Liabilities | 26,884,872 | 25,021,945 | | Net Assets | 100,905,783 | 28,439,937 | | Equity Attributable to Owners of the Company | 96,618,228 | 22,149,069 | | Total Equity | 100,905,783 | 28,439,937 | [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) This section presents the unaudited condensed consolidated statement of cash flows for the six months ended June 30, 2025, detailing cash flows from operating, investing, and financing activities Condensed Consolidated Statement of Cash Flows (For the Six Months Ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (98,397,585) | 8,044,015 | | Net Cash Used in Investing Activities | 6,718,101 | (748,742) | | Net Cash Used in Financing Activities | 78,550,043 | 4,970,000 | | Net Decrease in Cash and Bank Balances | (13,129,441) | 12,265,273 | | Cash and Bank Balances at End of Period | 52,270,511 | 18,199,595 | [Condensed Consolidated Statement of Changes in Equity](index=14&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%9D%83%E7%9B%8A%E5%8F%98%E5%8A%A8%E8%A1%A8) This section details the condensed consolidated statement of changes in equity for the six months ended June 30, 2025, showing movements in equity components and profit attributable to owners Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended June 30) | Indicator | June 30, 2025 (RMB) | June 30, 2024 (RMB) | | :--- | :--- | :--- | | Share Capital | 213,390,000 | 189,450,000 | | Share Premium | 332,272,982 | 275,317,438 | | Accumulated Losses | (435,921,450) | (405,816,010) | | Total Equity Attributable to Owners of the Company | 96,618,228 | 45,828,125 | | Profit Attributable to Owners of the Company for the Period | (6,426,384) | (4,123,183) | | Impact of Share Issuance | 80,895,544 | 0 | [Notes to the Financial Statements](index=8&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) [Basis of Presentation and Accounting Policies](index=8&type=section&id=%E5%91%88%E6%8A%A5%E5%9F%BA%E6%BA%96%E5%8F%8A%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96) This section explains the financial statements' preparation under historical cost, HKFRSs, and GEM Listing Rules, noting no significant impact from new standards and a going concern basis - Financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, Hong Kong Generally Accepted Accounting Principles, Hong Kong Companies Ordinance, and GEM Listing Rules[8](index=8&type=chunk) - The Group's adoption of new and revised HKFRSs has no significant impact on its unaudited operating results and financial position[8](index=8&type=chunk) - Financial statements are prepared on a going concern basis, assuming the Group will continue its operations indefinitely[8](index=8&type=chunk) [Revenue Analysis](index=8&type=section&id=%E6%94%B6%E7%9B%8A%E5%88%86%E6%9E%90) This section details the Group's revenue composition for the six months ended June 30, 2025, primarily from fertilizer products and elderly care and health, with comparative data Revenue Composition (For the Six Months Ended June 30) | Business Segment | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Fertilizer Products | 182,987,005 | 211,314,827 | | Elderly Care and Health | 43,420,010 | 253,222 | | **Total** | **226,407,014** | **211,568,049** | - Elderly care and health business revenue significantly increased from **RMB 253,222** in H1 2024 to **RMB 43,420,010** in H1 2025, driving group revenue growth[9](index=9&type=chunk) - Fertilizer product revenue decreased year-on-year from **RMB 211,314,827** to **RMB 182,987,005**[9](index=9&type=chunk) [Finance Costs](index=8&type=section&id=%E8%9E%8D%E8%B5%84%E6%88%90%E6%9C%AC) This section discloses finance costs for the six months ended June 30, 2025, primarily bank loan interest and charges, showing a slight year-on-year decrease Finance Costs (For the Six Months Ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Interest Expense on Bank Loans and Bank Charges | 1,973,895 | 1,977,660 | | **Total** | **1,973,895** | **1,977,660** | - Finance costs decreased by **0.19%** year-on-year, indicating stable cost control in financing[10](index=10&type=chunk) [Taxation Policy and Expenses](index=9&type=section&id=%E7%A8%85%E9%A1%B9%E6%94%BF%E7%AD%96%E4%B8%8E%E5%BC%80%E6%94%AF) This section details the Group's income tax policies, including statutory rates, preferential rates for high-tech and small enterprises, and tax situations in various jurisdictions, reporting zero income tax expense for the period - China's statutory income tax rate is **25%**[11](index=11&type=chunk) - Guangdong Fulilong Compound Fertilizer Co., Ltd., as a high-tech enterprise, enjoys a **15%** preferential tax rate, with its qualification extended for three years[11](index=11&type=chunk) - Certain Chinese subsidiaries qualify as small enterprises, benefiting from a **5%** preferential income tax rate[11](index=11&type=chunk) - For the half-year ended June 30, 2025, the Group had no taxable income in Hong Kong and China, resulting in zero income tax expense[11](index=11&type=chunk)[12](index=12&type=chunk) [Loss Per Share Calculation](index=10&type=section&id=%E6%AF%8F%E8%82%A1%E4%BA%8F%E6%8D%9F%E8%AE%A1%E7%AE%97) This section provides the basis for calculating basic loss per share for the six months ended June 30, 2025, including loss attributable to owners and the weighted average number of ordinary shares Basic Loss Per Share Calculation (For the Six Months Ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Loss for Calculation of Basic Loss Per Share | (6,426,384) | (4,123,183) | | Weighted Average Number of Ordinary Shares | 2,024,487,845 | 1,894,500,000 | | Basic Loss Per Share | 0.317 cents | 0.218 cents | [Additions to Property, Plant and Equipment](index=10&type=section&id=%E7%89%A9%E4%B8%9A%E3%80%81%E5%8E%82%E6%88%BF%E5%8F%8A%E8%AE%BE%E5%A4%87%E6%B7%BB%E7%BD%AE) This section discloses the Group's capital expenditure on additions to property, plant and equipment for the six months ended June 30, 2025, indicating an increase in investment Additions to Property, Plant and Equipment (For the Six Months Ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Additions to Property, Plant and Equipment | 834,918 | 613,742 | - Capital expenditure on property, plant, and equipment increased by approximately **36%** year-on-year[14](index=14&type=chunk) [Trade and Bills Receivables](index=11&type=section&id=%E5%BA%94%E6%94%B6%E8%B4%B8%E6%98%93%E8%B4%A6%E6%AC%BE%E5%8F%8A%E7%A5%A8%E6%AC%BE) This section provides a detailed analysis of trade and bills receivables as of June 30, 2025, including aging distribution and provision for doubtful debts, showing a significant increase in net trade receivables Trade and Bills Receivables (As of June 30) | Indicator | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Trade Receivables | 129,353,680 | 105,971,674 | | Less: Provision for Doubtful Debts | (95,136,104) | (95,153,154) | | **Trade Receivables, Net** | **34,217,576** | **10,818,520** | | Bills Receivable | – | – | Aging Analysis of Trade Receivables (As of June 30) | Aging | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Within 3 Months | 29,372,239 | 1,257,380 | | Over 3 Months but Within 6 Months | 62,237 | 3,717,203 | | Over 6 Months | 4,783,099 | 5,843,937 | - Net trade receivables significantly increased from **RMB 10,818,520** at the end of 2024 to **RMB 34,217,576** as of June 30, 2025, primarily driven by an increase in receivables within three months[16](index=16&type=chunk) [Prepayments and Other Receivables](index=12&type=section&id=%E9%A2%84%E4%BB%98%E6%AC%BE%E9%A1%B9%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) This section lists the composition of prepayments and other receivables as of June 30, 2025, including other receivables (net of provision for doubtful debts) and deposits and prepayments, showing a significant increase in the total amount Prepayments and Other Receivables (As of June 30) | Indicator | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Other Receivables (Net) | 12,749,745 | 3,490,539 | | Deposits and Prepayments | 133,859,849 | 78,976,908 | | **Total** | **146,609,595** | **82,467,447** | - Total prepayments and other receivables increased by approximately **77.8%** from **RMB 82,467,447** at the end of 2024 to **RMB 146,609,595** as of June 30, 2025[17](index=17&type=chunk) [Trade Payables](index=12&type=section&id=%E5%BA%94%E4%BB%98%E8%B4%B8%E6%AC%BE) This section provides an aging analysis of trade payables as of June 30, 2025, indicating a substantial increase in trade payables within three months Aging Analysis of Trade Payables (As of June 30) | Aging | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Within 3 Months | 27,782,169 | 2,180,601 | | Over 3 Months but Within 6 Months | 20,467 | 166,500 | | Over 6 Months | 5,281,368 | 6,584,577 | | **Total** | **33,084,003** | **8,931,678** | - Total trade payables increased from **RMB 8,931,678** at the end of 2024 to **RMB 33,084,003** as of June 30, 2025, with the primary increase in payables within three months[18](index=18&type=chunk) [Other Payables, Accruals and Contract Liabilities](index=13&type=section&id=%E5%85%B6%E4%BB%96%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9%E3%80%81%E5%BA%94%E8%AE%A1%E6%AC%BE%E9%A1%B9%E5%8F%8A%E5%90%88%E7%B4%84%E8%B4%9F%E5%80%BA) This section details the composition of other payables, accruals, and contract liabilities as of June 30, 2025, showing a significant increase in total other payables Other Payables, Accruals and Contract Liabilities (As of June 30) | Indicator | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Other Payables | 58,578,315 | 31,008,970 | | Consideration for Acquisition of a Subsidiary | 2,206,900 | 2,206,900 | | Accruals | 4,141,108 | 6,278,834 | | Advances Received | 13,379,852 | 13,379,852 | | Amounts Due to Directors | 322,381 | 315,000 | | Social Welfare Funds Payable | 2,965,152 | 2,965,152 | | **Total** | **81,593,708** | **56,154,708** | - Total other payables, accruals, and contract liabilities increased by approximately **45.3%** from **RMB 56,154,708** at the end of 2024 to **RMB 81,593,708** as of June 30, 2025[19](index=19&type=chunk) [Share Capital Structure](index=13&type=section&id=%E8%82%A1%E6%9C%AC%E7%BB%93%E6%9E%84) This section discloses the Group's share capital structure as of June 30, 2025, including authorized and issued share capital, showing a significant increase in domestic shares Share Capital Structure (As of June 30) | Indicator | June 30, 2025 (Number of Shares/RMB Thousand) | December 31, 2024 (Number of Shares/RMB Thousand) | | :--- | :--- | :--- | | Authorized Share Capital (Number of Shares) | 2,133,900,000 | 1,894,500,000 | | Authorized Share Capital (Par Value) | 213,390 | 189,450 | | Issued Domestic Shares (Number of Shares) | 1,436,400,000 | 697,500,000 | | Issued Domestic Shares (Par Value) | 143,640 | 69,750 | | Issued H Shares (Number of Shares) | 697,500,000 | 1,197,000,000 | | Issued H Shares (Par Value) | 69,750 | 119,700 | | **Total Issued and Fully Paid Share Capital (Number of Shares)** | **2,133,900,000** | **1,894,500,000** | | **Total Issued and Fully Paid Share Capital (Par Value)** | **213,390** | **189,450** | - The number of domestic shares significantly increased from **697,500,000** at the end of 2024 to **1,436,400,000** as of June 30, 2025, while H shares decreased accordingly[20](index=20&type=chunk) [Capital Commitments and Contingent Liabilities](index=13&type=section&id=%E8%B5%84%E6%9C%AC%E6%89%BF%E6%8B%85%E4%B8%8E%E6%88%96%E7%84%B6%E8%B4%9F%E5%80%BA) This section states that as of June 30, 2025, the Group had no significant unprovided capital commitments and zero contingent liabilities - As of June 30, 2025, the Group had no significant capital commitments not provided for in the condensed consolidated financial statements[21](index=21&type=chunk) - The Company's contingent liabilities for guarantees on bank facilities granted to certain subsidiaries were **RMB 0** (June 2024: RMB 0)[22](index=22&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E5%8F%8A%E5%88%86%E6%9E%90) [Business Review](index=15&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%A7) This section reviews the Group's operations, market performance, strategic layout, and key collaborations across its bio-compound fertilizer, AI medical elderly care, and data businesses - The Group currently operates in three main business areas: bio-compound fertilizer, AI medical elderly care, and data services[25](index=25&type=chunk) [Bio-Compound Fertilizer Business](index=15&type=section&id=%E7%94%9F%E7%89%A9%E5%A4%8D%E5%90%88%E8%82%A5%E4%B8%9A%E5%8A%A1) The Group's bio-compound fertilizer business encompasses R&D, production, and sales, featuring a diverse product range and an integrated information-based management model, with an analysis of H1 2025 market trends - The Group's compound fertilizer products include high-tower compound fertilizer, sulfur-based compound fertilizer, chlorine-based compound fertilizer, and nitro-based compound fertilizer, suitable for both field crops and cash crops[28](index=28&type=chunk) - The company has established a comprehensive operational management model covering procurement, production, marketing, logistics, and finance through information technology development[28](index=28&type=chunk) [Industry Overview and Market Trends](index=16&type=section&id=%E8%A1%8C%E4%B8%9A%E6%A6%82%E5%86%B5%E4%B8%8E%E5%B8%82%E5%9C%BA%E8%B6%8B%E5%8A%BF) In H1 2025, the compound fertilizer market saw potash prices rise 15-20%, with overall prices fluctuating, while downstream demand remained steady, highlighting market upgrade potential - In H1 2025, potash fertilizer prices increased by **15%-20%**, becoming a key driver of rising compound fertilizer costs[26](index=26&type=chunk) - Compound fertilizer prices exhibited a differentiated trend of "rising in Q1 and high-level fluctuations in Q2"[26](index=26&type=chunk) - Downstream demand showed steady growth, with structural optimization and regional vitality highlighting market upgrade potential, particularly strong resilience in economic crops[26](index=26&type=chunk) - Market trends necessitate fertilizer enterprises to continuously develop new products, enhance quality and efficacy, and strengthen environmental protection facilities[29](index=29&type=chunk) [The Group's Operating Model](index=17&type=section&id=%E6%9C%AC%E9%9B%86%E5%9B%A2%E8%BF%90%E8%90%A5%E6%A8%A1%E5%BC%8F) The Group's compound fertilizer business employs strategic and order-based procurement, operates two production bases, utilizes a dealer-centric marketing model with e-commerce, and manages logistics through external partnerships - Procurement combines strategic and order-based approaches, maintaining long-term partnerships with major raw material suppliers[30](index=30&type=chunk) - Production is sales-driven, with facilities in Weifang, Shandong, and Dongguan, Guangdong, and new products like liquid and water-soluble compound fertilizers introduced[31](index=31&type=chunk) - Marketing primarily relies on dealer distribution, establishing the well-known "Fulilong" brand, and developing an e-commerce sales platform[31](index=31&type=chunk) - The logistics department collaborates with external transport providers to manage raw material and finished product warehousing and distribution, reducing costs[32](index=32&type=chunk) [AI Medical Elderly Care Business](index=19&type=section&id=AI%E5%8C%BB%E7%96%97%E5%85%BB%E8%80%81%E4%B8%9A%E5%8A%A1) The Group integrates traditional elderly care with AI medical large model technology, raising capital to establish Boya Quan Jian, and collaborating with top hospitals and computing power providers to develop the "Xihe-1" medical large model and a pre-diagnosis and triage integrated machine - The Group's core elderly care team has operated since 1999, introducing Japanese "personalized, quality-oriented" concepts to establish "Ruifu Elderly Care" in Shanghai, managing 50 institutions[33](index=33&type=chunk) - To support the AI medical large model strategy, two share placements in H1 2025 raised approximately **HKD 88.8 million** net, for AI medical health software platform acquisition and development[34](index=34&type=chunk) - Beijing Boya Quan Jian Smart Computing Technology Co., Ltd. was established in collaboration with a Peking University Health Science Center affiliated hospital, focusing on deep integration of AI and medical health technology[35](index=35&type=chunk) [Elderly Care Service Foundation](index=19&type=section&id=%E9%A4%8A%E8%80%81%E6%9C%8D%E5%8A%A1%E5%9F%BA%E7%A1%80) The Group's "Ruifu Elderly Care" brand manages 50 Shanghai elderly care institutions, leveraging extensive operational experience and actively expanding rehabilitation aid rental services - "Ruifu Elderly Care" manages **50** elderly care institutions in Shanghai, including nursing homes, day care centers, elder care homes, and integrated elderly service centers[33](index=33&type=chunk) - "Ruifu Elderly Care" managed nursing homes received the first batch of Shanghai's Grade III elderly care institution titles and actively engage in rehabilitation aid rental services[33](index=33&type=chunk) [AI Medical Strategy and "Xihe-1" Large Model](index=19&type=section&id=AI%E5%8C%BB%E7%96%97%E6%88%98%E7%95%A5%E4%B8%8E%E2%80%9C%E7%BE%B2%E5%92%8C%E4%B8%80%E5%8F%B7%E2%80%9D%E5%A4%A7%E6%A8%A1%E5%9E%8B) The Group, through Boya Quan Jian, collaborated with a Peking University Health Science Center affiliated hospital to develop the bilingual "Xihe-1" medical large model, trained on millions of real closed-source medical cases, driving decisions with pathological evidence and combining natural language interaction with traceable knowledge reasoning to enhance clinical intelligence and rigor; concurrently, it partnered with Suihong Huachuang to develop a pre-diagnosis and triage integrated machine for grassroots medical areas - Boya Quan Jian, in collaboration with Peking University Third Hospital, developed the bilingual Chinese-English "Xihe-1" medical large model over ten years, featuring hundreds of billions of parameters[36](index=36&type=chunk) - "Xihe-1" is trained on millions of real closed-source patient cases from Peking University Third Hospital, achieving extremely low hallucination rates, over **90%** accuracy, **98%** medical student knowledge coverage, and over **90%** precision[36](index=36&type=chunk) - The model uses pathological images and reports as core evidence to establish causal links, ensuring traceable and evidence-based diagnostic reasoning, significantly reducing "hallucination" issues[37](index=37&type=chunk) - "Xihe-1" employs a "natural language interaction + traceable knowledge reasoning" dual engine to enhance the intelligence and rigor of doctors' clinical decisions[38](index=38&type=chunk) - A "Xihe-1" pre-diagnosis and triage integrated machine was jointly developed with Suihong Huachuang, targeting promotion in grassroots medical areas[38](index=38&type=chunk) [Data Business](index=22&type=section&id=%E6%95%B0%E6%8D%AE%E4%B8%9A%E5%8A%A1) To support AI medical elderly care, the Group established Yishu Jingcheng, a Deep Computing Institute core partner, offering data governance services and forming strategic alliances with Peking University Third Hospital, the Deep Computing Institute, and China Telecom Digital Intelligence Technology Co., Ltd. Ningxia Branch to build an AI medical health ecosystem - High-quality, secure, and available medical big data is essential for training, application, and personalized services of medical large models[39](index=39&type=chunk) - The Group established Shenzhen Yishu Jingcheng Technology Co., Ltd., a controlling subsidiary, to engage in data governance, providing high-quality data for AI medical large models and full-process data services for medical institutions and government departments[40](index=40&type=chunk) [Data Governance and Ecosystem Collaboration](index=23&type=section&id=%E6%95%B0%E6%8D%AE%E6%B2%BB%E7%90%86%E4%B8%8E%E7%94%9F%E6%80%81%E5%90%88%E4%BD%9C) Yishu Jingcheng, a Deep Computing Institute core partner, provides data governance services, collaborating with Peking University Third Hospital for "Xihe-1" training data, signing an ecosystem agreement with the Deep Computing Institute, and partnering with China Telecom Digital Intelligence Technology Co., Ltd. Ningxia Branch to build an AI medical health ecosystem and industrial park - Yishu Jingcheng, as an officially certified core ecological partner of the Deep Computing Institute, integrates its Yasan database, Caishiji data quality system, and Diaoyucheng data analysis system to provide data governance services[40](index=40&type=chunk)[41](index=41&type=chunk) - Boya Quan Jian and Peking University Third Hospital formed a strategic partnership, with the hospital providing millions of ethically reviewed and de-identified real patient case data for "Xihe-1" training[40](index=40&type=chunk) - Yishu Jingcheng signed an ecological cooperation agreement with the Deep Computing Institute, establishing a "market-side + technology-side" collaborative mechanism, with the Institute providing technical support and training[41](index=41&type=chunk) - Boya Quan Jian and China Telecom Digital Intelligence Technology Co., Ltd. Ningxia Branch signed a strategic cooperation agreement to jointly build a medical health ecosystem platform and the Ningxia "AI + Medical Health" Industrial Park[42](index=42&type=chunk) [Financial Review](index=25&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%A7) This section reviews the Group's H1 2025 financial performance, including turnover growth, gross profit improvement, cost changes, expanded loss, and an analysis of liquidity, financial resources, and capital structure [Operating Results Analysis](index=25&type=section&id=%E7%BB%8F%E8%90%A5%E4%B8%9A%E7%BB%A9%E5%88%86%E6%9E%90) The Group's H1 2025 turnover increased by 7.01%, driven by elderly care and health, with consolidated gross profit up 14.07% and gross profit margin rising to 6.10%, reflecting revenue growth and cost optimization Turnover, Gross Profit and Gross Profit Margin (For the Six Months Ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Total Turnover | 226,407,014 | 211,568,049 | 7.01% Increase | | Consolidated Gross Profit | 13,820,662 | 12,115,570 | 14.07% Increase | | Operating Consolidated Gross Profit Margin | 6.10% | 5.73% | 0.37 Percentage Point Increase | - Revenue growth primarily stemmed from the rapid development of the elderly care and health business segment[43](index=43&type=chunk) - The company continuously strengthened cost control, effectively managing cost growth, leading to increased gross profit and gross profit margin[43](index=43&type=chunk) [Cost and Expense Analysis](index=25&type=section&id=%E6%88%90%E6%9C%AC%E4%B8%8E%E5%BC%80%E6%94%AF%E5%88%86%E6%9E%90) In H1 2025, the Group's selling and distribution costs decreased by 43.85% due to expense control, while R&D and administrative expenses surged by 93.37% reflecting AI medical and data business investments, and finance costs slightly declined by 0.19% Costs and Expenses (For the Six Months Ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Selling and Distribution Costs | 3,960,302 | 7,053,114 | 43.85% Decrease | | Research and Development and Administrative Expenses | 16,551,751 | 8,559,614 | 93.37% Increase | | Finance Costs | 1,973,895 | 1,977,660 | 0.19% Decrease | - The decrease in selling and distribution costs was primarily due to the Group's enhanced expense control, achieving cost reduction and efficiency improvement through travel reimbursement system reforms and refined channel management[44](index=44&type=chunk) - The significant increase in R&D and administrative expenses is likely related to the Group's investments in AI medical large models and data business[45](index=45&type=chunk) [Financial Position and Liquidity](index=25&type=section&id=%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E4%B8%8E%E6%B5%81%E5%8A%A8%E6%80%A7) As of June 30, 2025, loss attributable to owners expanded to RMB 6,426,384, with loss per share at 0.317 cents; total assets and shareholders' equity significantly increased, and an improved current ratio of 1.10, along with reduced asset-liability and capital-to-debt ratios, indicates an optimized financial structure Loss for the Period and Loss Per Share (For the Six Months Ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Loss Attributable to Owners of the Company | 6,426,384 | 4,123,183 | 55.86% Loss Widening | | Loss Per Share | 0.317 cents | 0.218 cents | 45.41% Loss Widening | Liquidity and Capital Structure (As of June 30) | Indicator | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Bank and Cash Balances | 52,270,511 | 65,399,950 | | Short-term Borrowings | 83,830,000 | 134,670,000 | | Total Assets | 415,163,551 | 332,527,049 | | Total Current Liabilities | 287,372,895 | 279,065,167 | | Shareholders' Equity | 100,905,783 | 28,439,937 | | Consolidated Asset-Liability Ratio | 0.76 | 0.91 | | Capital-to-Debt Ratio | 0.24 | 0.45 | | Current Ratio | 1.10 | 0.84 | - The Group's primary funding sources are bank financing and funds raised through share placements[48](index=48&type=chunk) - The current ratio improved from **0.84** to **1.10**, indicating enhanced short-term solvency[49](index=49&type=chunk) - Both the asset-liability ratio and capital-to-debt ratio decreased, signifying reduced financial leverage and an optimized financial structure[49](index=49&type=chunk) [Risk Management and Treasury Policy](index=26&type=section&id=%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86%E4%B8%8E%E5%BA%93%E5%8A%A1%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had no pledged assets or contingent liabilities, minimal foreign currency risk due to RMB settlements, and a treasury policy of RMB-denominated bank borrowings and cash deposits in China - As of June 30, 2025, the Group and the Company had contingent liabilities of **RMB 0** for guarantees provided on bank loans granted to its subsidiaries[50](index=50&type=chunk) - The Group faces minimal foreign currency risk as all sales and payments are settled in RMB[51](index=51&type=chunk) - The Group's treasury policy involves settling bank borrowings in RMB and renewing them annually, with any cash balances deposited in licensed banks in China[52](index=52&type=chunk) [Future Outlook](index=27&type=section&id=%E6%9C%AA%E6%9D%A5%E5%B1%95%E6%9C%9B) The company will prioritize AI medical large model and data business R&D and commercialization, deepening collaborations to advance AI vertical medical large models and data services, and integrating them into existing elderly care to enhance medical efficiency and quality - The company will continue collaborating with top-tier hospitals like Peking University Third Hospital and Peking University People's Hospital, utilizing real patient case data for AI medical large model training[53](index=53&type=chunk) - By building an open and collaborative ecosystem platform, the company will partner with research institutions, medical organizations, local governments, and upstream/downstream industry players to advance AI vertical medical large model R&D and commercialization[53](index=53&type=chunk) - Cooperation with the Deep Computing Institute will be deepened to provide full-process data services, including automated data cleaning, database construction, and intelligent data analysis, for medical institutions, enterprises, government departments, and industry AI applications[53](index=53&type=chunk) - AI medical will be deeply integrated into existing elderly care services to enhance efficiency and quality, providing a better living experience for the elderly[53](index=53&type=chunk) [Corporate Governance and Other Information](index=14&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E5%8F%8A%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) [Dividend Policy](index=14&type=section&id=%E8%82%A1%E6%81%AF%E6%94%BF%E7%AD%96) The Board does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (June 2024: nil)[23](index=23&type=chunk) [Directors' and Major Shareholders' Interests](index=27&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%82%A1%E4%B8%9C%E6%9D%83%E7%9B%8A) As of June 30, 2025, no directors, supervisors, or senior executives held disclosable interests in the company's securities; the report lists four major shareholders, with Tianjin Economic-Technological Development Area State-owned Assets Management Co., Ltd. holding 9.63% - As of June 30, 2025, none of the Company's directors, supervisors, or other senior executives held any interests or short positions in the securities, relevant shares, and debentures of the Company or any of its associated corporations that required notification to the Company and the Stock Exchange[54](index=54&type=chunk) - At no time during the review period did the Company, its subsidiaries, or its holding company enter into any arrangements enabling the Company's directors and supervisors, or their respective spouses or children under 18, to acquire benefits by purchasing the Company's shares[55](index=55&type=chunk) Major Shareholder Holdings (As of June 30, 2025) | Shareholder Name | Capacity | Number of Ordinary Shares | Percentage of Share Capital | | :--- | :--- | :--- | :--- | | Tianjin Economic-Technological Development Area State-owned Assets Management Co., Ltd. | Beneficial Owner | 182,500,000 | 9.63% | | Shenzhen Xiangyong Investment Co., Ltd. | Beneficial Owner | 180,000,000 | 9.50% | | Shenzhen Aopai Technology Co., Ltd. | Beneficial Owner | 180,000,000 | 9.50% | | Dongguan Luye Fertilizer Co., Ltd. | Beneficial Owner | 120,000,000 | 6.33% | [Audit Committee and Corporate Governance](index=29&type=section&id=%E5%AE%A1%E6%A0%B8%E5%A7%94%E5%91%98%E4%BC%9A%E4%B8%8E%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) The company's audit committee, comprising three independent non-executive directors, oversees financial reporting, external audit, internal control, and risk assessment; while committed to the Corporate Governance Code, the dual role of chairman and CEO does not fully comply, and the company aims for early compliance to enhance transparency and independence - The Company's Audit Committee comprises three independent non-executive directors, chaired by Ms. Gao Chun, primarily responsible for reviewing and overseeing the Group's financial reporting procedures, external audit, internal control, and risk assessment[59](index=59&type=chunk) - The Audit Committee has reviewed the Group's interim results and interim report for the six months ended June 30, 2025[60](index=60&type=chunk) - The Company has complied with all provisions of the Corporate Governance Code, except for the dual role of Chairman and Chief Executive Officer held by Ms. Sun Li[65](index=65&type=chunk) - The Board believes Ms. Sun Li's dual role is currently in the Company's best interest, but the Company will comply with the Code as soon as possible to enhance corporate governance transparency and independence[65](index=65&type=chunk) [Securities Transactions and Share Capital Changes](index=29&type=section&id=%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93%E4%B8%8E%E8%82%A1%E6%9C%AC%E5%8F%98%E5%8A%A8) During the period ended June 30, 2025, the company approved no new share option schemes or management contracts, adopted a code of conduct for directors' securities transactions, and completed two share placements raising approximately HKD 88.8 million net for AI medical health software platform development and working capital - No new share option schemes were approved by the Company during the period ended June 30, 2025[61](index=61&type=chunk) - No contracts concerning the management or administration of the overall business or any principal business of the Company existed or were entered into during the period ended H1 2025[62](index=62&type=chunk) - The Company has adopted a code of conduct for directors' securities transactions, with no instances of non-compliance found[63](index=63&type=chunk) - On February 19, 2025, a share placement of **135,900,000** shares was completed, raising approximately **HKD 50.5 million** net for AI medical health software platform acquisition and development, and working capital[64](index=64&type=chunk) - On May 8, 2025, a new share placement of **103,500,000** shares was completed, raising approximately **HKD 38.3 million** net for medical health software platform development and working capital[64](index=64&type=chunk) [Board Information](index=31&type=section&id=%E8%91%A3%E4%BA%8B%E4%BC%9A%E4%BF%A1%E6%81%AF) This section lists the company's board members as of the report date, including executive, non-executive, and independent non-executive directors, and provides the report's publication date and access details - The Company's executive director is Ms. Sun Li; non-executive directors are Mr. He Xin, Ms. Li Xueying, and Mr. Li Ximing; independent non-executive directors are Ms. Tu Xiangzhen, Mr. Wang Yongkang, and Ms. Gao Chun[67](index=67&type=chunk) - The report was published on August 29, 2025, and is available on the GEM website and the company's website[67](index=67&type=chunk)

[Company Information](index=3&type=section&id=Company%20Information) [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) The company's board comprises executive, non-executive, and independent non-executive directors, supported by various committees to ensure robust and efficient corporate governance - Board members include Li Jie (Chairman and CEO), Zheng Yufen, Liao Qinghua, Zhang Yuan (Non-executive Directors), Liu Erfei, Shen Peng, and Lai Xueming (Independent Non-executive Directors)[5](index=5&type=chunk) - Committees include the Audit Committee (Chairman: Lai Xueming), Remuneration Committee (Chairman: Liu Erfei), Nomination Committee (Chairman: Liu Erfei), and Corporate Governance Committee (Chairman: Shen Peng)[5](index=5&type=chunk) [Principal Offices and Advisors](index=3&type=section&id=Principal%20Offices%20and%20Advisors) The company is registered in the Cayman Islands with principal places of business in Shanghai, China, and Hong Kong, engaging legal advisors and PwC as its auditor - Cayman Islands registered office: Harneys Fiduciary (Cayman) Limited[5](index=5&type=chunk) - Principal place of business in China: Room 1001, Building A, No. 5, Hualong Road 1777, Huaxin Town, Qingpu District, Shanghai[5](index=5&type=chunk) - Principal place of business in Hong Kong: 40/F, Dah Sing Financial Centre, 248 Queen's Road East, Wanchai, Hong Kong[5](index=5&type=chunk) - Auditor: PricewaterhouseCoopers[5](index=5&type=chunk) [Listing Information](index=4&type=section&id=Listing%20Information) The company's shares, stock code 1519, were listed on the Hong Kong Stock Exchange on October 27, 2023, and it maintains an official website - Stock code: **1519**[6](index=6&type=chunk) - Listing date: **October 27, 2023**[6](index=6&type=chunk) - Company website: www.jtexpress.com[6](index=6&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) [Consolidated Financial Performance](index=5&type=section&id=Consolidated%20Financial%20Performance) For the six months ended June 30, 2025, the company's revenue grew by 13.1% to $5.499 billion, profit for the period surged by 186.6% to $88.932 million, and adjusted net profit increased by 147.1% to $156 million, demonstrating strong profitability improvement Six Months Ended June 30 Consolidated Financial Summary | Indicator | 2025 ($ thousand) | 2024 ($ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 5,498,732 | 4,861,696 | 13.1 | | Express delivery service revenue | 5,341,408 | 4,739,965 | 12.7 | | Gross profit | 538,604 | 535,732 | 0.5 | | Operating profit | 125,398 | 115,025 | 9.0 | | Profit for the period | 88,932 | 31,026 | 186.6 | | Adjusted net profit | 156,279 | 63,248 | 147.1 | | Adjusted EBITDA | 435,581 | 350,782 | 24.2 | | Adjusted EBIT | 195,616 | 118,243 | 65.4 | | Net cash flows from operating activities | 421,112 | 345,631 | 21.8 | [Segment Financial Performance](index=6&type=section&id=Segment%20Financial%20Performance) Southeast Asia market revenue and adjusted EBITDA both achieved significant growth, China market revenue slightly increased but adjusted EBITDA decreased, New Markets achieved positive adjusted EBITDA for the first time, and cross-border business turned profitable in both gross profit and adjusted EBITDA Six Months Ended June 30 Segment Financial Summary (2025 vs 2024) | Indicator | 2025 ($ thousand) | 2024 ($ thousand) | 2025 vs 2024 Change | | :--- | :--- | :--- | :--- | | **Segment Revenue** | | | | | Southeast Asia | 1,970,355 | 1,519,987 | Growth 29.6% | | China | 3,136,520 | 2,998,260 | Growth 4.6% | | New Markets | 362,374 | 291,592 | Growth 24.3% | | Cross-border | 29,483 | 51,857 | Decline 43.1% | | **Segment Gross Profit** | | | | | Southeast Asia | 350,972 | 287,285 | Growth 22.0% | | China | 139,619 | 213,889 | Decline 34.7% | | New Markets | 43,537 | 35,022 | Growth 24.3% | | Cross-border | 4,476 | (464) | Turned profitable | | **Adjusted EBITDA** | | | | | Southeast Asia | 312,796 | 207,770 | Growth 50.5% | | China | 155,052 | 198,926 | Decline 22.1% | | New Markets | 1,569 | (7,841) | Turned profitable | | Cross-border | 2,878 | (7,233) | Turned profitable | [Operating Data](index=6&type=section&id=Operating%20Data) The company achieved parcel volume growth across Southeast Asia, China, and New Markets, with Southeast Asia showing the fastest growth and expanding market share, while China's market share slightly increased Six Months Ended June 30 Operating Data (2025 vs 2024) | Region | 2025 Parcel Volume (million pieces) | 2024 Parcel Volume (million pieces) | YoY Change (%) | 2025 Market Share (%) | 2024 Market Share (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Southeast Asia | 3,226.2 | 2,042.9 | 57.9 | 32.8 | 27.4 | | China | 10,598.9 | 8,835.7 | 20.0 | 11.1 | 11.0 | | New Markets | 165.9 | 136.3 | 21.7 | 6.2 | 6.1 | [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=7&type=section&id=Business%20Review) The company's parcel volume grew by 27.0% year-on-year in the first half, revenue increased by 13.1%, and adjusted net profit surged by 147.1%, with Southeast Asia achieving both volume and profitability growth, China maintaining resilience amidst fierce competition, and New Markets turning EBITDA positive for the first time - In the first half of 2025, the company processed **13.99 billion parcels**, a **27.0% year-on-year increase**[13](index=13&type=chunk)[14](index=14&type=chunk) - Revenue reached **$54.98 billion**, up **13.1% year-on-year**; adjusted net profit was **$156.3 million**, a **147.1% year-on-year increase**[14](index=14&type=chunk) - As of June 30, 2025, the company operated approximately **19,200 outlets**, **239 transit centers**, **337 automated sorting equipment sets**, and over **12,100 line-haul vehicles**[14](index=14&type=chunk) [Group Overview](index=7&type=section&id=Group%20Overview) The company's express delivery business spans 13 countries, including seven in Southeast Asia, China, and five new markets, achieving significant growth in parcel volume and revenue, with substantial improvement in adjusted net profit across all markets - The company's express delivery business operates across **13 countries**, including Indonesia, Vietnam, Malaysia, the Philippines, Thailand, Cambodia, Singapore, China, Saudi Arabia, UAE, Mexico, Brazil, and Egypt[13](index=13&type=chunk) 2025 H1 Parcel Volume and Market Share | Region | 2025 Parcel Volume (million pieces) | 2024 Parcel Volume (million pieces) | YoY Change (%) | 2025 Market Share (%) | 2024 Market Share (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Southeast Asia | 3,226.2 | 2,042.9 | 57.9 | 32.8 | 27.4 | | China | 10,598.9 | 8,835.7 | 20.0 | 11.1 | 11.0 | | New Markets | 165.9 | 136.3 | 21.7 | 6.2 | 6.1 | [Southeast Asia Market](index=8&type=section&id=Southeast%20Asia%20Market) Southeast Asia parcel volume grew by 57.9% year-on-year, expanding market share to 32.8% and maintaining the industry's top position for six consecutive years, with adjusted EBIT increasing by 74.0% and unit adjusted EBIT remaining at $0.07 - In the first half of 2025, Southeast Asia parcel volume reached **3.23 billion pieces**, a **57.9% year-on-year increase**, with market share expanding to **32.8%**, up **5.4 percentage points year-on-year**, maintaining the industry's top position for six consecutive years[15](index=15&type=chunk) - Adjusted EBIT reached **$234.6 million**, a **74.0% year-on-year increase**, with unit adjusted EBIT remaining at **$0.07**[15](index=15&type=chunk) - The Southeast Asia e-commerce retail market is projected to reach **$326.26 billion** in transaction value in 2025, a **28.5% year-on-year increase**, with e-commerce penetration rising to **24.9%**[18](index=18&type=chunk) - The company's unit cost in Southeast Asia decreased from **$0.60** in the first half of 2024 to **$0.50** in the first half of 2025, a significant **16.7% year-on-year decrease**[27](index=27&type=chunk) [Southeast Asia Macroeconomic Environment, E-commerce, and Express Delivery Market Growth](index=8&type=section&id=Southeast%20Asia%20Macroeconomic%20Environment%2C%20E-commerce%2C%20and%20Express%20Delivery%20Market%20Growth) Southeast Asia's macroeconomic environment is favorable, with increasing e-commerce penetration and social commerce driving market shifts; the express delivery market is rapidly growing, but average prices remain high, necessitating continued cost reduction for competitive advantage - Major Southeast Asian countries are expected to remain among the fastest-growing economies globally in 2025, with GDP growth rates exceeding the world average[17](index=17&type=chunk) - The Southeast Asia e-commerce retail market transaction value is projected to reach approximately **$326.26 billion** in 2025, a **28.5% year-on-year increase** from 2024, with e-commerce penetration further increasing to **24.9%**[18](index=18&type=chunk) - In the first half of 2025, Southeast Asia's express delivery market parcel volume reached **9.84 billion pieces**, a **32.2% year-on-year increase**[19](index=19&type=chunk) [Southeast Asia Express Delivery Industry Competitive Landscape](index=9&type=section&id=Southeast%20Asia%20Express%20Delivery%20Industry%20Competitive%20Landscape) The company leads the Southeast Asia market with a 32.8% share in the first half of 2025, consolidating its top position by integrating multi-platform order resources and leveraging Chinese operational expertise to reduce logistics costs and enhance e-commerce platform competitiveness - The company has been the top-ranked express delivery operator in the Southeast Asia market by parcel volume since 2020, holding a **32.8% market share** in the first half of 2025[20](index=20&type=chunk) 2025 H1 Top Five Express Delivery Operators in Southeast Asia (by parcel volume) | Rank | Express Service Provider | 2025 H1 Parcel Volume (billion pieces) | 2025 H1 Market Share | 2024 H1 Parcel Volume (billion pieces) | 2024 H1 Market Share | Market Share Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | J&T | 3.23 | 32.8% | 2.04 | 27.4% | +5.4% | | 2 | Company A | 2.72 | 27.7% | 1.81 | 24.3% | +3.4% | | 3 | Company B | 0.58 | 5.8% | 0.53 | 7.2% | -1.4% | | 4 | Company C | 0.54 | 5.5% | 0.50 | 6.7% | -1.2% | | 5 | Company D | 0.44 | 4.4% | 0.40 | 5.3% | -0.9% | [Parcel Volume Growth and Drivers](index=10&type=section&id=Parcel%20Volume%20Growth%20and%20Drivers) Southeast Asia parcel volume grew by 57.9% year-on-year, driven by capitalizing on e-commerce market growth, actively expanding non-platform clients, competitive pricing from continuous cost reductions, and consistently improving service quality - In the first half of 2025, the company processed **3.23 billion parcels** in Southeast Asia, a **57.9% year-on-year increase**[23](index=23&type=chunk) - The company continues to provide core infrastructure support for the e-commerce industry, deepening cooperation with existing e-commerce platforms, actively collaborating with new market entrants, and expanding to non-e-commerce clients such as social commerce sellers and online businesses of chain retailers[24](index=24&type=chunk) - In the first half of 2025, the unit cost in Southeast Asia significantly decreased by **16.7% year-on-year**, forming a virtuous cycle of "cost optimization – price reduction – business growth – further cost reduction"[24](index=24&type=chunk)[25](index=25&type=chunk) - The company's average delivery time in Southeast Asia is less than 2 days, with continuously optimized loss and damage rates, and extensive cash-on-delivery services provided[26](index=26&type=chunk) [Continuous Operational Optimization Across All Segments](index=12&type=section&id=Continuous%20Operational%20Optimization%20Across%20All%20Segments) The company achieved a significant reduction in unit cost from $0.60 to $0.50 in Southeast Asia, driven by economies of scale from substantial parcel volume growth and the application of Chinese express delivery operational expertise, thereby enhancing operational efficiency - In the first half of 2025, Southeast Asia parcel volume increased by **57.9% year-on-year**, with average daily parcel volume reaching **17.8 million pieces**, improving infrastructure utilization efficiency[27](index=27&type=chunk) - The average unit cost in Southeast Asia decreased from **$0.60** in the first half of 2024 to **$0.50** in the first half of 2025[27](index=27&type=chunk) [Maintaining Healthy Profitability](index=12&type=section&id=Maintaining%20Healthy%20Profitability) The Southeast Asia market achieved both growth and profitability, with adjusted EBIT increasing by 74.0% to $234.6 million, an adjusted EBIT margin of 11.9%, and unit adjusted EBIT maintained at $0.07, indicating healthy and sustainable profitability - In the first half of 2025, Southeast Asia's adjusted EBIT was **$234.6 million**, a **74.0% year-on-year increase**[28](index=28&type=chunk) - Adjusted EBIT margin reached **11.9%**, an increase of **3.0 percentage points year-on-year**, with unit adjusted EBIT maintained at **$0.07**[28](index=28&type=chunk) - Adjusted EBITDA reached **$312.8 million**, a **50.5% year-on-year increase**[28](index=28&type=chunk) [China Market](index=12&type=section&id=China%20Market) China market parcel volume grew by 20.0% year-on-year, with market share increasing to 11.1% and ranking rising to 5th; despite intense price competition, the company maintained profit resilience through refined operational management and cost optimization, making progress in brand client development, network automation, unmanned logistics vehicles, and cloud warehouse services - In the first half of 2025, China's parcel volume reached **10.60 billion pieces**, a **20.0% year-on-year increase**, with market share expanding to **11.1%** and market ranking improving to **5th**[15](index=15&type=chunk)[31](index=31&type=chunk) - Adjusted EBIT was **$12.9 million**, with an adjusted EBIT margin of **0.4%**; adjusted EBITDA was **$155.1 million**, with an adjusted EBITDA margin of **4.9%**[36](index=36&type=chunk) - Unit express delivery cost decreased from **$0.32** in the first half of 2024 to **$0.28** in the first half of 2025, a **10.3% year-on-year decrease**[37](index=37&type=chunk) [China Macroeconomic Environment, E-commerce, and Express Delivery Market Growth](index=12&type=section&id=China%20Macroeconomic%20Environment%2C%20E-commerce%2C%20and%20Express%20Delivery%20Market%20Growth) China's economy maintained stable growth, with robust e-commerce consumption, projecting $2.2 trillion in e-commerce retail market transactions for 2025; the express delivery industry achieved rapid growth, with 95.64 billion parcels completed in the first half, a 19.3% year-on-year increase, and steady service quality improvement - In the first half of 2025, China's GDP grew by **5.3% year-on-year**, with overall stable economic performance[29](index=29&type=chunk) - The e-commerce retail market transaction value is projected to reach **$2.2 trillion** in 2025, a **7.4% year-on-year increase**[29](index=29&type=chunk) - In the first half of 2025, the express delivery industry completed a cumulative **95.64 billion parcels**, a **19.3% year-on-year increase**; express delivery business revenue reached a cumulative **RMB 718.78 billion**, a **10.1% year-on-year increase**[29](index=29&type=chunk) [China Express Delivery Industry Competitive Landscape](index=13&type=section&id=China%20Express%20Delivery%20Industry%20Competitive%20Landscape) In the first half of 2025, China's express delivery industry faced intense price competition, with average prices declining by 7.7% year-on-year; the company's market share continued to climb, rising to 5th place, and anticipates that the National Post Bureau's "anti-involution" policy will promote rational competition - In the first half of 2025, industry parcel volume grew by **19.3%**, but the industry's average price decreased by **7.7% year-on-year**, a significant decline[30](index=30&type=chunk) - The company's market share in China was **11.1%**, an increase of **0.1 percentage points year-on-year**, ranking **5th**[31](index=31&type=chunk) 2025 H1 Top Five Express Delivery Operators in China (by parcel volume) | Rank | Express Operator | 2025 H1 Parcel Volume (billion pieces) | 2025 H1 Market Share | 2024 H1 Parcel Volume (billion pieces) | 2024 H1 Market Share | Market Share Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | Company E | 18.39 | 19.2% | 15.90 | 19.8% | -0.6% | | 2 | Company F | 14.86 | 15.5% | 12.20 | 15.2% | +0.3% | | 3 | Company G | 12.73 | 13.3% | 10.92 | 13.6% | -0.3% | | 4 | Company H | 12.35 | 12.9% | 10.23 | 12.8% | +0.1% | | 5 | J&T | 10.60 | 11.1% | 8.84 | 11.0% | +0.1% | [Parcel Volume Growth and Drivers](index=14&type=section&id=Parcel%20Volume%20Growth%20and%20Drivers) China's parcel volume grew by 20.0% year-on-year, exceeding the industry average, driven by seizing high-growth industry and social e-commerce opportunities, continuously improving service quality and customer acquisition capabilities, and expanding the depth and breadth of express delivery service coverage to support rural express development - In the first half of 2025, the company processed **10.60 billion parcels** in China, a **20.0% year-on-year increase**, exceeding the industry growth rate[32](index=32&type=chunk) - The company deepened cooperation with e-commerce clients across all platforms, targeted breakthroughs for underserved client types and products, and expanded cloud warehouse services to achieve synergy between warehousing and distribution[33](index=33&type=chunk) - The company continuously expanded the breadth and depth of its service coverage, collaborating with multiple e-commerce platforms to transport consolidated shipments to remote areas, and extending consolidated shipment services to Hong Kong and delivery services to rural areas[34](index=34&type=chunk) [Continuous Operational Optimization Across All Segments](index=14&type=section&id=Continuous%20Operational%20Optimization%20Across%20All%20Segments) Through refined management and operations in China, combined with economies of scale from business volume growth, the company reduced its unit cost from $0.32 to $0.28, achieving significant cost reduction - The company's unit cost decreased from **$0.32** in the first half of 2024 to **$0.28** in the first half of 2025, a **10.3% year-on-year decrease**[35](index=35&type=chunk) [Maintaining Profit Resilience Amidst Fierce Competition](index=15&type=section&id=Maintaining%20Profit%20Resilience%20Amidst%20Fierce%20Competition) Despite pressure on unit revenue in the China market due to intense competition, the company maintained profit resilience by continuously optimizing costs, which offset the downward pressure on revenue; the rapid decline in unit cost was primarily due to economies of scale and refined operational management - In the first half of 2025, the company's unit revenue was **$0.30**, a decrease from **$0.34** in the first half of 2024[36](index=36&type=chunk) - The company mitigated the impact of price competition on revenue by optimizing client structure, promoting network-wide sales capability building, improving cargo category structure, and developing reverse logistics and scattered orders[36](index=36&type=chunk) - Unit express delivery cost decreased from **$0.32** in the first half of 2024 to **$0.28** in the first half of 2025, a **10.3% year-on-year decrease**, primarily due to economies of scale from increased business volume and refined operational management[37](index=37&type=chunk) [Key Initiatives](index=15&type=section&id=Key%20Initiatives) The company actively developed brand clients in the China market to enhance brand value, promoted automation equipment investment in outlets to improve operational efficiency, encouraged the application of unmanned logistics vehicles for intelligent last-mile delivery, and expanded cloud warehouse services to increase client stickiness - In the first half of 2025, the company deepened cooperation with renowned brand clients such as Watsons, Mercury Home Textiles, Blue Moon, Zunshi Sports, Yili, Fuanna, Baicaowei, and Erke, with significant growth in both brand client numbers and parcel volume[38](index=38&type=chunk) - The number of automated equipment deployed in outlets increased by **25%** compared to the end of 2024, and the proportion of parcels handled by automated equipment at last-mile outlets significantly increased[38](index=38&type=chunk) - As of June 30, 2025, the company had deployed a total of **600 unmanned logistics vehicles** across its network, with rapid growth ongoing[39](index=39&type=chunk) - As of the end of June 2025, the company had established **179 warehouses** globally across 12 countries, totaling over **670,000 square meters**, with **152 warehouses** in China covering **490,000 square meters**[39](index=39&type=chunk) [New Markets](index=16&type=section&id=New%20Markets) New Markets experienced stable economic growth, with significant room for e-commerce penetration, and a rapidly growing but fragmented express delivery industry; the company's parcel volume grew by 21.7% year-on-year, market share increased to 6.2%, and adjusted EBITDA turned profitable for the first time - In the first half of 2025, New Markets parcel volume reached **170 million pieces**, a **21.7% year-on-year increase**, with market share expanding to **6.2%**[16](index=16&type=chunk)[42](index=42&type=chunk) - New Markets achieved positive adjusted EBITDA for the first time, with a significant reduction in adjusted EBIT losses[16](index=16&type=chunk) - The New Markets e-commerce retail market transaction value is projected to reach **$163.55 billion** in 2025, a **23.6% year-on-year increase**[40](index=40&type=chunk) - In the first half of 2025, New Markets express delivery industry parcel volume reached **2.65 billion pieces**, a **18.6% year-on-year increase**[41](index=41&type=chunk) [New Markets Macroeconomic Environment, E-commerce, and Express Delivery Market Growth](index=16&type=section&id=New%20Markets%20Macroeconomic%20Environment%2C%20E-commerce%2C%20and%20Express%20Delivery%20Market%20Growth) New Markets experienced stable economic growth, with increasing e-commerce penetration and active expansion by platforms like TikTok; the express delivery industry is growing rapidly but remains in early stages with a fragmented competitive landscape and significantly higher unit prices than China and Southeast Asia - New Markets GDP is projected to reach **$5.8 trillion** in 2025, with e-commerce retail market transaction value reaching **$163.55 billion**, a **23.6% year-on-year increase**[40](index=40&type=chunk) - TikTok successively entered the Mexican and Brazilian markets in the first half of 2025, driving the development of cross-border e-commerce in New Markets[40](index=40&type=chunk) - In the first half of 2025, New Markets express delivery industry parcel volume reached **2.65 billion pieces**, a **18.6% year-on-year increase**[41](index=41&type=chunk) [Parcel Volume Growth and Drivers](index=17&type=section&id=Parcel%20Volume%20Growth%20and%20Drivers) New Markets parcel volume growth was primarily driven by capitalizing on e-commerce industry growth, continuous investment in infrastructure, and deepening partnerships with cross-border e-commerce platforms (e.g., Temu, Shein, TikTok) and local e-commerce platforms (e.g., Mercado Libre) - In the first half of 2025, the company processed **165.9 million parcels** in New Markets, a **21.7% year-on-year increase**[42](index=42&type=chunk) - The company established close partnerships with international e-commerce platforms such as Temu, Shein, TikTok, AliExpress, Kwai, and Shopee in New Markets[43](index=43&type=chunk) - In 2025, the company partnered with Mercado Libre, the largest e-commerce platform in Latin America, in Mexico and Brazil[43](index=43&type=chunk) [Continued Investment in Infrastructure to Enhance Network Capacity](index=17&type=section&id=Continued%20Investment%20in%20Infrastructure%20to%20Enhance%20Network%20Capacity) As of June 30, 2025, the company in New Markets operated 35 transit centers, over 200 line-haul vehicles, and more than 2,000 outlets, adding 8 new automated sorting equipment sets to continuously enhance network coverage density and capacity - As of June 30, 2025, the company in New Markets had **35 transit centers**, operated over **200 line-haul vehicles** and numerous feeder vehicles, and had over **2,000 outlets**[44](index=44&type=chunk) - The company invested in **10 sets of automated sorting equipment** in transit centers, with **8 new sets** added in the first half of 2025[44](index=44&type=chunk) [Future Outlook](index=17&type=section&id=Future%20Outlook) The company will focus on solidifying its market position in Southeast Asia and China, steadily enhancing its presence in new markets, implementing refined management for continuous cost reduction, leveraging Chinese expertise overseas, seizing global e-commerce opportunities, strengthening its brand, and expanding non-platform parcels to improve profitability - Future strategies include focusing on Southeast Asia and China markets to solidify market positions[45](index=45&type=chunk) - Steadily enhancing market positions in New Markets, implementing refined management, continuously reducing costs, and leveraging Chinese experience overseas[45](index=45&type=chunk) - Capitalizing on new business flow changes brought by e-commerce globalization, strengthening the brand, continuously expanding non-platform parcels, and improving profitability[45](index=45&type=chunk) [Financial Performance Review](index=18&type=section&id=Financial%20Performance%20Review) The company's first-half revenue grew by 13.1% to $5.499 billion, with profit for the period surging by 186.6% to $88.932 million; Southeast Asia saw strong revenue and adjusted EBITDA growth, New Markets' adjusted EBITDA turned profitable, and China's unit revenue faced pressure but costs declined Six Months Ended June 30 Consolidated Statement of Profit or Loss Summary | Indicator | 2025 ($ thousand) | 2024 ($ thousand) | | :--- | :--- | :--- | | Revenue | 5,498,732 | 4,861,696 | | Operating costs | (4,960,128) | (4,325,964) | | Gross profit | 538,604 | 535,732 | | Operating profit | 125,398 | 115,025 | | Profit for the period | 88,932 | 31,026 | | Adjusted net profit | 156,279 | 63,248 | | Adjusted EBIT | 195,616 | 118,243 | | Adjusted EBITDA | 435,581 | 350,782 | [Revenue](index=20&type=section&id=Revenue) Total company revenue increased by 13.1% to $5.499 billion, primarily driven by a 12.7% growth in express delivery service revenue and a 27.0% increase in total parcel volume; Southeast Asia revenue grew by 29.6%, China revenue by 4.6%, New Markets revenue by 24.3%, while cross-border revenue decreased by 43.1% due to business transformation - Revenue increased by **13.1%** from **$4,861.7 million** in the first half of 2024 to **$5,498.7 million** in the first half of 2025[50](index=50&type=chunk) - Express delivery service revenue grew by **12.7%** to **$5,341.4 million**, primarily due to a **27.0% increase** in total parcel volume from **11.01 billion pieces** to **13.99 billion pieces**[51](index=51&type=chunk) Revenue by Geographical Segment (2025 vs 2024) | Region | 2025 ($ thousand) | Share (%) | 2024 ($ thousand) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Southeast Asia | 1,970,355 | 35.8 | 1,519,987 | 31.3 | | China | 3,136,520 | 57.1 | 2,998,260 | 61.6 | | New Markets | 362,374 | 6.6 | 291,592 | 6.0 | | Cross-border | 29,483 | 0.5 | 51,857 | 1.1 | | Total | 5,498,732 | 100.0 | 4,861,696 | 100.0 | [Unit Economics](index=21&type=section&id=Unit%20Economics) Southeast Asia saw a decrease in unit revenue but a larger decrease in unit cost, indicating healthy profitability; China's unit revenue was pressured, but rapidly declining unit costs maintained profit resilience; New Markets experienced a slight increase in unit revenue, with unit costs decreasing due to economies of scale and operational optimization [Southeast Asia Unit Economics](index=21&type=section&id=Southeast%20Asia%20Unit%20Economics) Southeast Asia unit revenue decreased from $0.74 to $0.61, while unit cost decreased from $0.60 to $0.50; the larger cost reduction was primarily due to economies of scale from increased parcel volume and operational optimization enabled by Chinese expertise Southeast Asia Unit Economics (2025 vs 2024) | Indicator | 2025 (USD) | Share (%) | 2024 (USD) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Unit revenue | 0.61 | 100.0 | 0.74 | 100.0 | | Unit cost | 0.50 | 82.0 | 0.60 | 81.1 | | Of which: Pick-up and delivery costs | 0.32 | 52.5 | 0.37 | 50.0 | | Transportation costs | 0.12 | 19.7 | 0.16 | 21.6 | | Sorting costs | 0.05 | 8.2 | 0.06 | 8.1 | | Other costs | 0.01 | 1.6 | 0.01 | 1.4 | - The decrease in unit cost was primarily due to improved network facility utilization efficiency from a **57.9% year-on-year increase** in parcel volume, and the empowerment of Chinese express delivery operational experience[57](index=57&type=chunk) [China Unit Economics](index=22&type=section&id=China%20Unit%20Economics) China's unit revenue decreased from $0.34 to $0.30, and unit cost decreased from $0.32 to $0.28; the rapid decline in unit cost was mainly due to economies of scale from increased volume and refined operational management, including network integration, investment in automated equipment, and optimization of transportation links China Unit Economics (2025 vs 2024) | Indicator | 2025 (USD) | Share (%) | 2024 (USD) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Unit revenue | 0.30 | 100.0 | 0.34 | 100.0 | | Unit cost | 0.28 | 93.3 | 0.32 | 94.1 | | Of which: Pick-up and delivery costs | 0.18 | 60.0 | 0.20 | 58.8 | | Transportation costs | 0.06 | 20.0 | 0.07 | 20.6 | | Sorting costs | 0.04 | 13.3 | 0.05 | 14.7 | | Other costs | 0.00 | 0.0 | 0.00 | 0.0 | - The rapid decrease in unit cost was primarily due to economies of scale from rapid volume growth and refined operational management across all cost segments[61](index=61&type=chunk) - The company operates **270 sets of automated sorting equipment** in China, with **65 new sets** added compared to the same period in 2024, enhancing sorting efficiency[63](index=63&type=chunk) [New Markets Unit Economics](index=23&type=section&id=New%20Markets%20Unit%20Economics) New Markets unit revenue slightly increased from $2.14 to $2.18, and unit cost slightly increased from $1.88 to $1.92; the cost structure was influenced by changes in client mix across different countries, but economies of scale and operational optimization are expected to continuously reduce costs with increasing parcel volume New Markets Unit Economics (2025 vs 2024) | Indicator | 2025 (USD) | Share (%) | 2024 (USD) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Unit revenue | 2.18 | 100.0 | 2.14 | 100.0 | | Unit cost | 1.92 | 88.1 | 1.88 | 88.0 | | Of which: Pick-up and delivery costs | 1.35 | 62.0 | 1.02 | 47.7 | | Transportation costs | 0.25 | 11.5 | 0.32 | 15.0 | | Sorting costs | 0.28 | 12.8 | 0.32 | 15.0 | | Other costs | 0.04 | 1.8 | 0.22 | 10.3 | - New Markets unit revenue slightly increased, and unit cost fluctuated slightly due to changes in client structure across different countries, but economies of scale and operational optimization in various segments will continuously reduce costs with increasing parcel volume[65](index=65&type=chunk) [Operating Costs and Expenses](index=24&type=section&id=Operating%20Costs%20and%20Expenses) Total operating costs and expenses increased by 13.5% year-on-year to $5.370 billion, primarily due to a 14.4% increase in fulfillment costs driven by higher parcel volume; staff welfare expenses and other labor costs also significantly increased due to business volume growth and increased headcount - Total operating costs and expenses increased by **13.5%** from **$4,731.2 million** in the first half of 2024 to **$5,370.4 million** in the first half of 2025[66](index=66&type=chunk) - Fulfillment costs increased by **14.4%** to **$2,661.6 million**, accounting for **48.4%** of total operating revenue[67](index=67&type=chunk) - Staff welfare expenses increased by **19.0%** to **$792.3 million**, and other labor costs increased by **36.4%** to **$404.5 million**[67](index=67&type=chunk) [Costs and Expenses by Nature](index=24&type=section&id=Costs%20and%20Expenses%20by%20Nature) Fulfillment costs, line-haul costs, staff welfare expenses, and other labor costs are the primary components of operating costs and expenses, all increasing with business volume growth Six Months Ended June 30 Costs and Expenses by Nature ($ thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Fulfillment costs | 2,661,639 | 2,326,470 | | Line-haul costs | 989,817 | 934,256 | | Staff welfare expenses | 792,285 | 665,685 | | Other labor costs | 404,541 | 296,691 | | Depreciation and amortization | 239,965 | 232,539 | | Materials | 60,689 | 58,318 | | Short-term leases | 67,995 | 79,834 | | Auditor's remuneration | 614 | 718 | | Advertising and marketing expenses | 4,834 | 6,215 | | Others | 147,978 | 130,463 | | Total | 5,370,357 | 4,731,189 | [Costs by Geographical Segment](index=25&type=section&id=Costs%20by%20Geographical%20Segment) Costs in Southeast Asia and China increased by 31.4% and 7.6% respectively, primarily due to increased parcel volume; New Markets costs grew by 24.3% due to business expansion, while cross-border costs decreased by 52.2% due to business transformation Six Months Ended June 30 Costs by Geographical Segment ($ thousand) | Region | 2025 | Share (%) | 2024 | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Southeast Asia | 1,619,383 | 32.7 | 1,232,702 | 28.5 | | China | 2,996,901 | 60.4 | 2,784,371 | 64.4 | | New Markets | 318,837 | 6.4 | 256,570 | 5.9 | | Cross-border | 25,007 | 0.5 | 52,321 | 1.2 | | Total | 4,960,128 | 100.0 | 4,325,964 | 100.0 | - Southeast Asia costs increased by **31.4%**, primarily due to a **57.9% increase** in parcel volume[68](index=68&type=chunk) - China costs increased by **7.6%**, primarily due to a **20.0% increase** in parcel volume[69](index=69&type=chunk) [Gross Profit and Gross Margin](index=26&type=section&id=Gross%20Profit%20and%20Gross%20Margin) The Group's overall gross margin decreased from 11.0% to 9.8%; gross margins in Southeast Asia and China both declined, New Markets' gross margin remained largely stable, while cross-border business's gross margin turned from loss to profit Six Months Ended June 30 Gross Profit and Gross Margin ($ thousand) | Region | 2025 Gross Profit | 2025 Gross Margin (%) | 2024 Gross Profit | 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Southeast Asia | 350,972 | 17.8 | 287,285 | 18.9 | | China | 139,619 | 4.5 | 213,889 | 7.1 | | New Markets | 43,537 | 12.0 | 35,022 | 12.0 | | Cross-border | 4,476 | 15.2 | (464) | (0.9) | | Total | 538,604 | 9.8 | 535,732 | 11.0 | - The Group's overall gross margin decreased from **11.0%** in the first half of 2024 to **9.8%** in the first half of 2025[70](index=70&type=chunk) - Cross-border business gross margin turned from a **0.9% loss** in the first half of 2024 to a **15.2% profit** in the first half of 2025[74](index=74&type=chunk) [Selling, General and Administrative Expenses](index=26&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) Selling, general and administrative expenses slightly increased by 0.4% year-on-year to $383.3 million, primarily due to a significant increase in share-based payments and expenses within staff welfare expenses Six Months Ended June 30 Selling, General and Administrative Expenses ($ thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Staff welfare expenses | 301,112 | 267,137 | | Office-related expenses | 17,960 | 14,127 | | Professional service fees | 5,291 | 24,514 | | Promotion and marketing expenses | 4,723 | 6,210 | | Depreciation and amortization | 27,065 | 28,895 | | Others | 27,122 | 40,777 | | Total | 383,273 | 381,660 | - Selling, general and administrative expenses increased by **0.4%** from **$381.7 million** in the first half of 2024 to **$383.3 million** in the first half of 2025[76](index=76&type=chunk) - The primary increase came from share-based payments and expenses within staff welfare expenses, growing from **$32.2 million** to **$67.3 million**[76](index=76&type=chunk) [Adjusted EBITDA](index=27&type=section&id=Adjusted%20EBITDA) The company's overall adjusted EBITDA increased by 24.2% year-on-year to $435.6 million, with the adjusted EBITDA margin improving to 7.9%; adjusted EBITDA significantly improved in Southeast Asia and New Markets, decreased in China, and cross-border business turned profitable Six Months Ended June 30 Adjusted EBITDA ($ thousand) | Region | 2025 | 2025 EBITDA Margin (%) | 2024 | 2024 EBITDA Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Southeast Asia | 312,796 | 15.9 | 207,770 | 13.7 | | China | 155,052 | 4.9 | 198,926 | 6.6 | | New Markets | 1,569 | 0.4 | (7,841) | (2.7) | | Cross-border | 2,878 | 9.8 | (7,233) | (13.9) | | Unallocated | (36,714) | N/A | (40,840) | N/A | | Total | 435,581 | 7.9 | 350,782 | 7.2 | - The company's overall adjusted EBITDA increased by **24.2%** from **$350.8 million** in the first half of 2024 to **$435.6 million** in the first half of 2025[77](index=77&type=chunk) - New Markets' adjusted EBITDA turned profitable from a **$7.8 million loss** to a **$1.6 million profit**, with the adjusted EBITDA margin improving from a **2.7% loss** to a **0.4% profit**[79](index=79&type=chunk) [Finance Costs – Net](index=28&type=section&id=Finance%20Costs%20%E2%80%93%20Net) Net finance costs decreased by 13.5% year-on-year to $38.886 million, primarily due to an increase in interest income from bank deposits Six Months Ended June 30 Finance Costs – Net ($ thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Interest income from bank deposits | 26,453 | 17,243 | | Interest expense on lease liabilities | (14,703) | (16,194) | | Interest expense on borrowings | (50,636) | (46,003) | | Total | (38,886) | (44,954) | - Net finance costs decreased by **13.5%** to **$38.9 million**, primarily due to an increase in interest income from bank deposits[81](index=81&type=chunk) [Other Income](index=28&type=section&id=Other%20Income) Other income, primarily comprising government grants and interest income from loans to third parties, increased from $3.148 million to $7.646 million Six Months Ended June 30 Other Income ($ thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Government grants | 4,416 | 100 | | Interest income from loans to third parties | 3,230 | 3,048 | | Total | 7,646 | 3,148 | - Government grants significantly increased, primarily including logistics development grants and talent team grants[82](index=82&type=chunk) [Non-IFRS Measures](index=29&type=section&id=Non-IFRS%20Measures) The company uses non-IFRS measures such as adjusted net profit, adjusted EBITDA, and adjusted EBIT to provide a more comparable view of operating performance, emphasizing that these measures should not replace or be superior to IFRS reporting - Non-IFRS measures, by eliminating non-cash items, transactions, and IPO-related items, aid in comparing operating performance across different periods and companies[83](index=83&type=chunk) - These measures should not be viewed in isolation from, or as a substitute for, or superior to, operating performance or financial position reported under IFRS[83](index=83&type=chunk) [Liquidity and Financial Resources](index=29&type=section&id=Liquidity%20and%20Financial%20Resources) The company's net cash flow from operating activities increased to $421.1 million, with cash and cash equivalents totaling $1.6619 billion; the debt-to-asset ratio decreased to 64.3%, and unused credit facilities exceeded $300 million, indicating ample liquidity and a robust financial position - For the six months ended June 30, 2025, cash flow generated from operating activities was **$421.1 million**, a **21.8% year-on-year increase**[84](index=84&type=chunk) - As of June 30, 2025, the Group's cash and cash equivalents totaled **$1,661.9 million**[84](index=84&type=chunk) - The debt-to-asset ratio (total liabilities as a percentage of total assets) was **64.3%**, a decrease from **65.4%** as of December 31, 2024[85](index=85&type=chunk) - Unused credit facilities exceeded **$300 million**, indicating ample available funds for the Group[84](index=84&type=chunk) [Foreign Exchange Risk](index=29&type=section&id=Foreign%20Exchange%20Risk) The company's subsidiaries primarily operate in China, Indonesia, the Philippines, Malaysia, Thailand, and Vietnam, with transactions typically settled in local currencies; foreign exchange risk mainly arises from foreign currency assets and liabilities with overseas business partners, and the company will continue to monitor exchange rate fluctuations and take measures to mitigate their impact - Foreign exchange risk primarily arises from assets and liabilities recognized when the Group's subsidiaries in China, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, and other countries receive or will receive, or pay or will pay foreign currencies to or from overseas business partners[86](index=86&type=chunk) - The company will continue to monitor exchange rate fluctuations and take measures to mitigate the impact of exchange rate volatility when necessary[87](index=87&type=chunk) [Capital Expenditures and Commitments](index=29&type=section&id=Capital%20Expenditures%20and%20Commitments) For the six months ended June 30, 2025, total capital expenditures were $230.3 million, a year-on-year increase; capital commitments primarily focused on buildings and vehicles, totaling $109.5 million - For the six months ended June 30, 2025, total capital expenditures were **$230.3 million**, compared to **$165.2 million** for the same period in 2024[88](index=88&type=chunk) As of June 30, 2025 Capital Commitments ($ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Buildings | 85,557 | 52,469 | | Right-of-use assets | – | 4,039 | | Vehicles | 23,894 | 24,892 | | Total | 109,451 | 81,400 | [Significant Acquisitions and Disposals](index=30&type=section&id=Significant%20Acquisitions%20and%20Disposals) In the first half of 2025, the Group did not have any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - In the first half of 2025, the Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures[90](index=90&type=chunk) [Employees and Remuneration Policy](index=30&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 183,157 full-time employees; the company offers competitive remuneration packages, participates in social insurance contribution schemes, and regularly provides training in professional ethics, work procedures, management, and technical skills - As of June 30, 2025, the Group had **183,157 full-time employees**[91](index=91&type=chunk) - The company determines employee remuneration based on factors such as qualifications, expertise, and years of relevant experience, and participates in social insurance contribution schemes[91](index=91&type=chunk) - The company regularly provides employees with training in professional ethics, work procedures, internal policies, management, technical skills, and other areas[91](index=91&type=chunk) [Pledged Assets](index=30&type=section&id=Pledged%20Assets) As of June 30, 2025, the company pledged $27 million in restricted deposits and pledged certain equipment and land use rights to secure borrowings - As of June 30, 2025, the company pledged **$27 million** in restricted deposits (December 31, 2024: **$29.5 million**)[92](index=92&type=chunk) - The company also pledged certain equipment and land use rights to secure borrowings[92](index=92&type=chunk) [Significant Investments Held](index=31&type=section&id=Significant%20Investments%20Held) As of June 30, 2025, the company held convertible bonds issued by Yimi with a fair value of approximately $493.1 million, representing 6.6% of total assets; Yimi primarily engages in less-than-truckload freight business and is actively expanding into overseas markets - As of June 30, 2025, the Group held convertible bonds issued by Yimi with a fair value of approximately **$493.1 million**, accounting for **6.6%** of the Group's total assets[93](index=93&type=chunk) - Yimi Global Limited primarily engages in less-than-truckload freight business and has expanded operations to Vietnam and Mexico in the first half of 2025, in addition to its existing markets in Indonesia, Malaysia, and the Philippines[93](index=93&type=chunk) [Future Plans for Material Investments and Capital Assets](index=31&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of June 30, 2025, the Group had no material investment or capital asset plans - As of June 30, 2025, the Group had no material investment or capital asset plans[95](index=95&type=chunk) [Contingent Liabilities](index=31&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities[96](index=96&type=chunk) [Other Information](index=32&type=section&id=Other%20Information) [Directors' and Chief Executive's Interests](index=32&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests) As of June 30, 2025, Mr. Li Jie held 971 million Class A shares (10.83%) and 7.943 million Class B shares (0.09%), Ms. Zheng Yufen held 40.008 million Class B shares (0.45%), and Mr. Zhang Yuan held 331.831 million Class B shares (3.70%) As of June 30, 2025 Directors' and Chief Executive's Interests | Director Name | Number and Class of Securities | Approximate Percentage of Holdings in Relevant Class of Shares of the Company | Approximate Percentage of Issued Shares of the Company | | :--- | :--- | :--- | :--- | | Mr. Li Jie | 971,390,048 Class A Shares | 100.00% | 10.83% | | | 7,943,362 Class B Shares | 0.10% | 0.09% | | Ms. Zheng Yufen | 40,008,020 Class B Shares | 0.50% | 0.45% | | Mr. Zhang Yuan | 331,831,635 Class B Shares | 4.15% | 3.70% | [Substantial Shareholders' Interests](index=33&type=section&id=Substantial%20Shareholders%27%20Interests) As of June 30, 2025, Jumping Summit Limited, Exceeding Summit Holding Limited, Topping Summit Limited, and Vistra Trust (Singapore) Pte. Limited each held 10.83% of the company's Class A shares and 0.09% of Class B shares; Mr. Chen Mingyong and Ms. Liang Xiaojing held 7.81% of Class B shares, Tencent Holdings Limited held 5.95% of Class B shares, and Boyu Capital-related entities held 5.11% to 5.18% of Class B shares As of June 30, 2025 Substantial Shareholders' Interests | Shareholder Name/Entity | Number and Class of Securities | Approximate Percentage of Holdings in Relevant Class of Shares of the Company | Approximate Percentage of Issued Shares of the Company | | :--- | :--- | :--- | :--- | | Jumping Summit Limited | 971,390,048 Class A Shares | 100.00% | 10.83% | | | 7,943,362 Class B Shares | 0.10% | 0.09% | | Exceeding Summit Holding Limited | 971,390,048 Class A Shares | 100.00% | 10.83% | | | 7,943,362 Class B Shares | 0.10% | 0.09% | | Topping Summit Limited | 971,390,048 Class A Shares | 100.00% | 10.83% | | | 7,943,362 Class B Shares | 0.10% | 0.09% | | Vistra Trust (Singapore) Pte. Limited | 971,390,048 Class A Shares | 100.00% | 10.83% | | | 7,943,362 Class B Shares | 0.10% | 0.09% | | Mr. Chen Mingyong | 700,887,980 Class B Shares | 8.76% | 7.81% | | Ms. Liang Xiaojing | 700,887,980 Class B Shares | 8.76% | 7.81% | | Tencent Holdings Limited | 533,278,240 Class B Shares | 6.67% | 5.95% | | Boyu Capital Fund IV, L.P. | 458,112,913 Class B Shares | 5.73% | 5.11% | | Boyu Capital General Partner IV, Ltd | 458,112,913 Class B Shares | 5.73% | 5.11% | | Boyu Capital Group Holdings Ltd | 464,619,113 Class B Shares | 5.81% | 5.18% | | Boyu Group, LLC | 464,619,113 Class B Shares | 5.81% | 5.18% | | XYXY Holdings Ltd. | 464,619,113 Class B Shares | 5.81% | 5.18% | | Mr. Tong Xiaomeng | 464,619,113 Class B Shares | 5.81% | 5.18% | [Share Incentive Schemes](index=34&type=section&id=Share%20Incentive%20Schemes) The company has a Pre-IPO Share Incentive Scheme and a 2024 Share Incentive Scheme; in the first half of 2024, 85,994,057 Class B share-related awards were granted to employees under the 2024 scheme, and an additional 73,089,720 Class B share-related awards were granted on March 18, 2025 [Pre-IPO Share Incentive Scheme](index=34&type=section&id=Pre-IPO%20Share%20Incentive%20Scheme) This scheme aims to align the interests of network partners and regional agents with company shareholders, with a maximum issuance of 38,000,000 Class A ordinary shares; no further shares will be issued under this scheme after listing - The Pre-IPO Share Incentive Scheme was initially approved by shareholders on February 26, 2022, and amended on May 31, 2023[104](index=104&type=chunk) - The maximum number of shares issuable under the scheme is **38,000,000 Class A ordinary shares** (equivalent to **190,000,000 Class B shares**)[104](index=104&type=chunk) - The company will not issue further shares under the Pre-IPO Share Incentive Scheme after the listing date[104](index=104&type=chunk) [2024 Share Incentive Scheme](index=35&type=section&id=2024%20Share%20Incentive%20Scheme) The 2024 Share Incentive Scheme was approved on June 18, 2024, with a ten-year validity; as of June 30, 2025, the scheme's authorized limit allowed for the grant of 726 million Class B shares, and during the reporting period, the company granted a total of 159 million Class B share-related awards to employees - The 2024 Share Incentive Scheme was approved and adopted by shareholders on June 18, 2024, with a validity period of **ten years**[108](index=108&type=chunk) - As of June 30, 2025, the authorized limit under the 2024 Share Incentive Scheme allowed for the grant of **726,343,361 Class B shares**[108](index=108&type=chunk) - From the adoption date to June 30, 2025, the company granted a total of **85,994,057 Class B share-related awards** to 251 employees on August 20, 2024, and a total of **73,089,720 Class B share-related awards** to 668 employees on March 18, 2025, under the 2024 Share Incentive Scheme[108](index=108&type=chunk) [Weighted Voting Rights Structure](index=36&type=section&id=Weighted%20Voting%20Rights%20Structure) The company employs a weighted voting rights structure where Class A shareholders receive ten votes per share, and Class B shareholders receive one vote per share; Mr. Li Jie is the beneficiary of the weighted voting rights, holding approximately 55.12% of the total voting power as of June 30, 2025 - Class A shareholders are entitled to **ten votes per share**, while Class B shareholders are entitled to **one vote per share**, except for reserved matters[111](index=111&type=chunk) - As of June 30, 2025, Mr. Li Jie is the beneficiary of the weighted voting rights, holding approximately **55.12%** of the total voting power[112](index=112&type=chunk) - One Class A share can be converted into one Class B share at a 1:1 ratio[113](index=113&type=chunk) [Corporate Governance](index=37&type=section&id=Corporate%20Governance) The company is committed to high standards of corporate governance and complies with the Corporate Governance Code; despite the Chairman and CEO roles being held by Mr. Li Jie, the company believes this arrangement benefits strategic planning and decision execution and will be regularly reviewed - The company complied with all code provisions of the Corporate Governance Code during the reporting period, except for the roles of Chairman and Chief Executive Officer being combined and held by Mr. Li Jie[115](index=115&type=chunk) - The Board believes that Mr. Li Jie's dual role as Chairman and Chief Executive Officer ensures consistent leadership for the Group and facilitates more effective and efficient overall strategic planning[115](index=115&type=chunk) [Joint Company Secretaries](index=37&type=section&id=Joint%20Company%20Secretaries) During the reporting period, Ms. Shang Quanxi and Mr. Zheng Chengjie served as Joint Company Secretaries; Ms. Shang received a waiver from the Stock Exchange for her qualification, conditional on Mr. Zheng's assistance during the waiver period - Ms. Shang Quanxi and Mr. Zheng Chengjie served as the company's Joint Company Secretaries[117](index=117&type=chunk) - Ms. Shang was granted a three-year waiver by the Stock Exchange for her qualification as Joint Company Secretary, conditional on Mr. Zheng's assistance during the waiver period[117](index=117&type=chunk) [Compliance with Model Code for Securities Transactions by Directors](index=37&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules, and all directors confirmed strict compliance with relevant provisions during the reporting period - The Group has adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions[118](index=118&type=chunk) - All directors confirmed their strict compliance with the relevant provisions of the Model Code during the reporting period[118](index=118&type=chunk) [Use of Proceeds](index=38&type=section&id=Use%20of%20Proceeds) The company's global offering raised net proceeds of HKD 3.5535 billion, primarily allocated to expanding its logistics network, broadening service scope, R&D and technological innovation, and general corporate purposes and working capital needs; as of June 30, 2025, a portion of the funds has been utilized, with the remainder expected to be fully utilized by the end of 2027 - The net proceeds from the global offering amounted to **HKD 3,553.50 million** (approximately **$454.3 million**)[119](index=119&type=chunk)[120](index=120&type=chunk) As of June 30, 2025 Use of Net Proceeds from Global Offering ($ million) | Purpose | Percentage of Net Proceeds (%) | Net Proceeds | Amount Unused as of Jan 1 | Amount Utilized During Reporting Period | Amount Used as of June 30 | Amount Unused as of June 30 | Expected Timeline for Full Utilization of Remaining Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Expand logistics network | 30 | 136.3 | 37.1 | 7.4 | 106.6 | 29.7 | By end of 2027 | | Expand company's service scope | 30 | 136.3 | 47.4 | 6.6 | 95.5 | 40.8 | By end of 2027 | | R&D and technological innovation | 30 | 136.3 | 84.0 | 10.6 | 62.9 | 73.4 | By end of 2027 | | General corporate purposes and working capital needs | 10 | 45.4 | 12.1 | 1.2 | 34.5 | 10.9 | By end of 2027 | | Total | 100 | 454.3 | 180.6 | 25.8 | 299.5 | 154.8 | | [Share Repurchases](index=39&type=section&id=Share%20Repurchases) During the reporting period, the company repurchased a total of 45,402,000 Class B shares on the Stock Exchange for a total consideration of HKD 269.2 million, aiming to enhance shareholder value in the long term; Mr. Li Jie, the beneficiary of weighted voting rights, proportionally converted Class A shares to Class B shares to maintain the weighted voting rights ratio - During the reporting period, the company repurchased a total of **45,402,000 Class B shares** on the Stock Exchange for a total consideration of **HKD 269,217,352.00**[122](index=122&type=chunk) - The repurchases aimed to enhance shareholder value in the long term[122](index=122&type=chunk) - Mr. Li Jie, the beneficiary of weighted voting rights, converted **6,369,192 Class A shares** into Class B shares on a one-to-one basis to prevent an increase in the proportion of shares with weighted voting rights[122](index=122&type=chunk) - As of June 30, 2025, a total of **72,472,600 repurchased shares** remained uncancelled and were held by the company as treasury shares[124](index=124&type=chunk) [Audit Committee and Other Board Committees](index=40&type=section&id=Audit%20Committee%20and%20Other%20Board%20Committees) The Audit Committee reviewed the interim financial statements and discussed accounting policies and risk management with management and the auditor; the company also established a Corporate Governance Committee, Nomination Committee, and Remuneration Committee to ensure comprehensive corporate governance - The Audit Committee comprises Ms. Zheng Yufen, Mr. Liu Erfei, and Mr. Lai Xueming, with Mr. Lai Xueming serving as Chairman[126](index=126&type=chunk) - The Audit Committee reviewed the Group's unaudited consolidated financial statements for the six months ended June 30, 2025[126](index=126&type=chunk) - The company also established a Corporate Governance Committee, a Nomination Committee, and a Remuneration Committee[127](index=127&type=chunk) [Interim Dividend](index=40&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[129](index=129&type=chunk) [Listing Rules Disclosure](index=41&type=section&id=Listing%20Rules%20Disclosure) The company disclosed terms related to financing agreements, stating that if controlling shareholder Mr. Li no longer exercises or controls the largest proportion of voting rights or is no longer entitled to issue instructions, the credit facility may be canceled, and all loans will become immediately due and payable - Pursuant to the financing agreements, if controlling shareholder Mr. Li no longer directly or indirectly exercises or controls the exercise of the single largest proportion of voting rights exercisable at the company's general meetings, or is no longer entitled to issue instructions regarding the company's operations, management, and financial policies, the credit facility will be immediately canceled, and all loans will become immediately due and payable[131](index=131&type=chunk) [Review Report on Interim Financial Information](index=42&type=section&id=Review%20Report%20on%20Interim%20Financial%20Information) PricewaterhouseCoopers reviewed the company's interim financial information for the six months ended June 30, 2025, and concluded, based on International Standard on Review Engagements 2410, that nothing indicated the interim financial information was not prepared in all material respects in accordance with International Accounting Standard 34 - PricewaterhouseCoopers reviewed the company's interim financial information for the six months ended June 30, 2025[134](index=134&type=chunk) - The scope of the review is substantially less than that of an audit conducted in accordance with International Standards on Auditing, and therefore no audit opinion is expressed[135](index=135&type=chunk) - The review concluded that nothing came to the auditor's attention that caused them to believe the interim financial information was not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting"[136](index=136&type=chunk) [Interim Condensed Consolidated Financial Statements](index=43&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Profit or Loss](index=43&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company reported revenue of $5.499 billion, profit for the period of $88.932 million, basic earnings per share of 1.0 US cents, and diluted earnings per share of 0.9 US cents, all showing significant improvement from the prior year Six Months Ended June 30 Interim Condensed Consolidated Statement of Profit or Loss Summary ($ thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 5,498,732 | 4,861,696 | | Operating costs | (4,960,128) | (4,325,964) | | Gross profit | 538,604 | 535,732 | | Operating profit | 125,398 | 115,025 | | Profit for the period | 88,932 | 31,026 | | Profit attributable to owners of the company | 86,365 | 27,589 | | Basic earnings per share (US cents) | 1.0 | 0.3 | | Diluted earnings per share (US cents) | 0.9 | 0.3 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=44&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's total comprehensive income for the period was $101.2 million, a significant improvement from the prior year's loss of $40.635 million, primarily due to a turnaround from loss to gain in currency translation differences Six Months Ended June 30 Interim Condensed Consolidated Statement of Comprehensive Income Summary ($ thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period | 88,932 | 31,026 | | Currency translation differences | 13,687 | (72,125) | | Other comprehensive income/(loss) for the period, net of tax | 12,292 | (71,661) | | Total comprehensive income/(loss) for the period | 101,224 | (40,635) | | Attributable to owners of the company | 102,045 | (44,049) | [Interim Condensed Consolidated Statement of Financial Position](index=45&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets were $7.442 billion, total liabilities were $4.784 billion, and total equity was $2.658 billion; non-current assets primarily included property, plant and equipment, intangible assets, and financial assets at fair value through profit or loss As of June 30, 2025 Interim Condensed Consolidated Statement of Financial Position Summary ($ thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 3,845,011 | 3,681,814 | | Current assets | 3,597,207 | 3,612,692 | | **Total assets** | 7,442,218 | 7,294,506 | | **Equity** | | | | Equity attributable to owners of the company | 2,961,170 | 2,825,313 | | Non-controlling interests | (303,404) | (302,765) | | **Total equity** | 2,657,766 | 2,522,548 | | **Liabilities** | | | | Non-current liabilities | 2,333,065 | 2,354,059 | | Current liabilities | 2,451,387 | 2,417,899 | | **Total liabilities** | 4,784,452 | 4,771,958 | | **Total equity and liabilities** | 7,442,218 | 7,294,506 | [Interim Condensed Consolidated Statement of Changes in Equity](index=47&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the company was $2.961 billion, an increase from the beginning of the period, primarily due to profit for the period and an increase in share-based payment reserves, while also considering the impact of share repurchases Six Months Ended June 30, 2025 Interim Condensed Consolidated Statement of Changes in Equity Summary ($ thousand) | Indicator | Share Capital | Share Premium | Treasury Shares | Other Reserves | Accumulated Losses | Total Attributable to Owners of the Company | Non-controlling Interests | Total Equity | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance as of January 1, 2025 | 18 | 9,061,736 | (19,420) | (190,781) | (6,026,240) | 2,825,313 | (302,765) | 2,522,548 | | Profit for the period | – | – | – | – | 86,365 | 86,365 | 2,567 | 88,932 | | Currency translation differences | – | – | – | 17,075 | – | 17,075 | (3,388) | 13,687 | | Repurchase of shares | – | – | (36,202) | – | – | (36,202) | – | (36,202) | | Staff welfare expenses – Share-based payment expenses | – | – | – | 67,347 | – | 67,347 | – | 67,347 | | Balance as of June 30, 2025 | 18 | 9,061,736 | (55,622) | (105,087) | (5,939,875) | 2,961,170 | (303,404) | 2,657,766 | [Interim Condensed Consolidated Statement of Cash Flows](index=49&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash flow from operating activities was $421.1 million, net cash flow

[Report Overview and Company Information](index=2&type=section&id=%E6%8A%A5%E5%91%8A%E6%A6%82%E8%A7%88%E4%B8%8E%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF) This section provides an overview of the GEM market characteristics, disclaimers, and essential company information including registration, key personnel, and stock details [GEM Market Characteristics and Disclaimer](index=2&type=section&id=GEM%E5%B8%82%E5%9C%BA%E7%89%B9%E6%80%A7%E4%B8%8E%E5%85%8D%E8%B4%A3%E5%A3%B0%E6%98%8E) This report highlights the GEM market's design for small and medium-sized companies, emphasizing high investment risks, market volatility, and low liquidity - The GEM market targets small and medium-sized companies, entailing **higher investment risks**, potential for **high market volatility**, and **low liquidity**[2](index=2&type=chunk)[3](index=3&type=chunk)[6](index=6&type=chunk) - The company's directors assume full responsibility for the **accuracy, completeness, and non-misleading nature** of the information contained in this report[5](index=5&type=chunk)[6](index=6&type=chunk) [Company Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) This section details China Creative Holdings Limited's registered office, principal places of business, board members, authorized representatives, and key governance details - The company is registered in the Cayman Islands, with its China headquarters in Beijing and principal Hong Kong office in Sheung Wan[7](index=7&type=chunk)[8](index=8&type=chunk) - The Board of Directors includes **Mr. Yang Jian (Chairman)** and **Mr. Wang Yong** as Executive Directors, **Mr. Yang Shiyuan** and **Mr. Ge Xuyu** as Non-executive Directors, and **Ms. Fu Yuehong**, **Mr. Qiu Xinyuan**, and **Mr. Wang Xinghua** as Independent Non-executive Directors[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) - The Audit Committee is chaired by **Mr. Qiu Xinyuan**, the Remuneration Committee by **Ms. Fu Yuehong**, and the Nomination Committee by **Mr. Yang Jian**[9](index=9&type=chunk)[10](index=10&type=chunk)[13](index=13&type=chunk) - The company's stock code is **8368**, and its website is **www.creativechinahk.com**[12](index=12&type=chunk)[13](index=13&type=chunk) [Financial Statements](index=5&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section presents the company's unaudited condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=5&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company reported a net loss of RMB6,043 thousand, a significant reversal from the net profit of RMB1,013 thousand in the prior period, driven by a substantial decline in revenue and gross profit Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 9,105 | 25,695 | -64.6% | | Direct costs | (7,149) | (16,230) | -55.9% | | Gross profit | 1,956 | 9,465 | -79.4% | | Other income | 45 | 16 | 181.3% | | Other gains and losses | 1,137 | 309 | 268.0% | | (Loss) profit before tax | (5,553) | 1,357 | -509.2% | | Tax | (490) | (344) | 42.4% | | (Loss) profit for the period | (6,043) | 1,013 | -696.7% | | (Loss) earnings per share (RMB cents) | (1.05) | 0.19 | -652.6% | - Total comprehensive (expense) income for the period was **RMB(6,123) thousand**, compared to **RMB1,055 thousand** in the prior period, primarily impacted by the loss for the period and exchange differences on translating foreign operations[15](index=15&type=chunk) [Condensed Consolidated Statement of Financial Position](index=7&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, total assets slightly decreased, but non-current assets significantly increased due to property, plant, and equipment and intangible assets, while total current liabilities rose, leading to a slight reduction in net current assets and total equity Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 8,439 | 3,398 | 148.4% | | Total current assets | 402,218 | 407,458 | -1.3% | | Total assets | 410,657 | 410,856 | -0.05% | | Total current liabilities | 109,718 | 103,289 | 6.2% | | Total non-current liabilities | 45 | 552 | -91.9% | | Total liabilities | 109,763 | 103,841 | 5.7% | | Net assets | 300,894 | 307,015 | -2.0% | | Equity attributable to owners of the Company | 300,894 | 307,662 | -2.2% | - Total non-current assets significantly increased by **148.4%**, mainly due to property, plant, and equipment rising from **RMB135 thousand** to **RMB878 thousand**, and the addition of **RMB5,724 thousand** in intangible assets[17](index=17&type=chunk) - Net current assets decreased by **3.8%** from **RMB304,169 thousand** as of December 31, 2024, to **RMB292,500 thousand** as of June 30, 2025[18](index=18&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=9&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%9D%83%E7%9B%8A%E5%8F%98%E5%8A%A8%E8%A1%A8) For the six months ended June 30, 2025, total equity decreased from RMB307,015 thousand to RMB300,894 thousand, primarily due to a net loss of RMB6,043 thousand for the period and a reduction in exchange reserves Key Data from Condensed Consolidated Statement of Changes in Equity | Indicator | January 1, 2025 (RMB'000) | June 30, 2025 (RMB'000) | Change (RMB'000) | | :--- | :--- | :--- | :--- | | Share capital | 24,847 | 24,847 | 0 | | Share premium | 253,715 | 253,715 | 0 | | Other reserves | 3,784 | 3,784 | 0 | | Merger reserve | 9,300 | 9,300 | 0 | | Exchange reserve | 1,373 | 1,267 | (106) | | Accumulated losses | 14,643 | 7,981 | (6,662) | | Equity attributable to owners of the Company | 307,662 | 300,894 | (6,768) | | Non-controlling interests | (647) | – | 647 | | Total | 307,015 | 300,894 | (6,121) | - A **loss of RMB6,043 thousand** for the period was the primary factor contributing to the decrease in equity[19](index=19&type=chunk) - Non-controlling interests changed from **RMB(647) thousand** at the beginning of the year to **zero**, indicating the company acquired other interests from non-controlling interests[19](index=19&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=10&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, operating cash flow turned positive, but investing cash outflow significantly increased, and financing cash flow net decreased, leading to an improved but still exchange-rate-affected net increase in cash and cash equivalents Key Data from Condensed Consolidated Statement of Cash Flows | Indicator | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (RMB'000) | | :--- | :--- | :--- | :--- | | Net cash (used in) / from operating activities | 6,371 | (38,175) | 44,546 | | Net cash used in investing activities | (6,287) | (1) | (6,286) | | Net cash from financing activities | 357 | 35,232 | (34,875) | | Net increase / (decrease) in cash and cash equivalents | 441 | (2,944) | 3,385 | | Cash and cash equivalents at end of period | 11,362 | 22,573 | (11,211) | - Net cash from operating activities improved from a net outflow of **RMB38,175 thousand** in the prior period to a net inflow of **RMB6,371 thousand**, indicating improved operational efficiency[20](index=20&type=chunk) - Net cash used in investing activities significantly increased to **RMB(6,287) thousand**, primarily due to the purchase of intangible assets totaling **RMB5,723 thousand**[20](index=20&type=chunk) - Net cash from financing activities substantially decreased from **RMB35,232 thousand** in the prior period to **RMB357 thousand**, mainly due to proceeds from share issuance last year and bank loan repayments this period[20](index=20&type=chunk) [Notes to the Financial Statements](index=11&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) This section provides detailed notes to the unaudited condensed consolidated financial statements, covering company information, accounting policies, segment reporting, and other financial disclosures [Company Information and Business Overview](index=11&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E4%B8%9A%E5%8A%A1%E6%A6%82%E8%A7%88) China Creative Holdings Limited, incorporated in the Cayman Islands in 2013, primarily engages in investment holding, with subsidiaries involved in diverse businesses including film/TV production, concert organization, mobile app development, and artist management - The company's principal activity is investment holding, with subsidiaries engaged in film and television production, film distribution, concert organization, mobile application development and operation, and artist management[22](index=22&type=chunk)[24](index=24&type=chunk) - Guang Rui Investments Limited, wholly and beneficially owned by **Mr. Yang Shaoqian** and his spouse **Ms. Mou Sufang**, is the company's ultimate holding company[21](index=21&type=chunk)[23](index=23&type=chunk) [Basis of Presentation and Accounting Policies](index=12&type=section&id=%E5%85%B6%E5%88%97%E5%9F%BA%E5%87%86%E4%B8%8E%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96) The unaudited condensed consolidated financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules Chapter 18, using the historical cost convention, with no significant impact from new HKFRS amendments, and are presented in RMB - The financial statements are prepared in accordance with **HKAS 34** and **Chapter 18 of the GEM Listing Rules**, adopting the historical cost convention[25](index=25&type=chunk)[26](index=26&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - Amendments to Hong Kong Financial Reporting Standards applied during the period had **no significant impact** on the financial position and performance[32](index=32&type=chunk)[34](index=34&type=chunk) - The financial statements are presented in **RMB** and have been reviewed by the Board's Audit Committee[28](index=28&type=chunk)[31](index=31&type=chunk)[33](index=33&type=chunk)[35](index=35&type=chunk) [Revenue and Segment Information](index=14&type=section&id=%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E4%BF%A1%E6%81%AF) The Group's business is divided into four reportable segments: film/TV production, concert organization, mobile app development, and artist management, with total revenue significantly declining by 64.6% year-on-year, primarily due to reduced film/TV production and copyright investment - The Group has four reportable segments: **TV series/film production and film copyright investment**, **concert and event organization**, **mobile application development and operation**, and **artist management**[36](index=36&type=chunk)[37](index=37&type=chunk) - For the six months ended June 30, 2025, total revenue was **RMB9,105 thousand**, a **64.6% decrease** from **RMB25,695 thousand** in the prior period[40](index=40&type=chunk)[48](index=48&type=chunk) [Revenue Composition](index=15&type=section&id=%E6%94%B6%E5%85%A5%E6%9E%84%E6%88%90) For the six months ended June 30, 2025, revenue from script copyright sales and program production remained the primary source but significantly decreased year-on-year, while concert and event revenue also fell sharply, and artist management services generated no income Revenue Composition Comparison | Revenue Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Sale of script copyrights and programs | 8,700 | 22,900 | -62.0% | | Concert and event income | 188 | 2,226 | -91.5% | | Live streaming e-commerce | 217 | 185 | 17.3% | | Provision of artist management services | – | 384 | -100.0% | | **Total Revenue** | **9,105** | **25,695** | **-64.6%** | [Business Segment Performance](index=16&type=section&id=%E4%B8%9A%E5%8A%A1%E5%88%86%E9%83%A8%E8%A1%A8%E7%8E%B0) For the six months ended June 30, 2025, the TV series/film production segment experienced significant declines in both revenue and profit, while concert and event organization, mobile application development, and artist management segments all recorded losses Business Segment Revenue and Profit Comparison (2025 vs 2024) | Segment | 2025 Revenue (RMB'000) | 2024 Revenue (RMB'000) | Revenue Change (%) | 2025 Profit/(Loss) (RMB'000) | 2024 Profit/(Loss) (RMB'000) | Profit Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | TV series/film production and film distribution business | 8,700 | 22,900 | -62.0% | 1,689 | 9,003 | -81.2% | | Concert and event organization | 188 | 2,226 | -91.5% | (1,552) | (328) | 373.2% | | Mobile application development and operation | 217 | 185 | 17.3% | (1,122) | (2,986) | -62.5% | | Artist management business | – | 384 | -100.0% | (968) | (725) | 33.5% | | **Total** | **9,105** | **25,695** | **-64.6%** | **(1,953)** | **4,964** | **-139.3%** | - The **significant decline in both revenue and profit** from the TV series/film production segment is the primary reason for the Group's overall performance downturn[43](index=43&type=chunk)[45](index=45&type=chunk) - The loss from the mobile application development and operation segment significantly narrowed from **RMB(2,986) thousand** in 2024 to **RMB(1,122) thousand** in 2025[43](index=43&type=chunk)[45](index=45&type=chunk) [Geographical Information](index=20&type=section&id=%E5%9C%B0%E5%8C%BA%E4%BF%A1%E6%81%AF) The Group's revenue primarily originates from Mainland China, encompassing script copyright sales, live streaming e-commerce, and some concert and event income, with no revenue from Southeast Asia or Taiwan in the first half of 2025 Revenue by Geographical Region Comparison | Region and Revenue Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | **China** | | | | - Sale of script copyrights and programs | 8,700 | 22,900 | | - Provision of artist management services | – | 384 | | - Live streaming e-commerce | 217 | 185 | | - Concert and event income | 188 | – | | **Other Southeast Asian countries and Taiwan** | | | | - Concert and event income | – | 2,226 | | **Total** | **9,105** | **25,695** | - In the first half of 2025, all revenue was generated from **Mainland China**, with **no revenue contribution from Southeast Asia and Taiwan**, which had **RMB2,226 thousand** in concert and event income in the prior period[53](index=53&type=chunk) [Major Customer Information](index=21&type=section&id=%E4%B8%BB%E8%A6%81%E5%AE%A2%E6%88%B7%E4%BF%A1%E6%81%AF) For the six months ended June 30, 2025, the Group's revenue was highly concentrated, with one major customer (Customer III) contributing 95.6% of total revenue, a shift from two major customers in the prior period Major Customer Revenue Comparison | Customer | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Customer I (Film/TV Production) | N/A* | 18,900 | | Customer II (Film/TV Production) | N/A* | 4,000 | | Customer III (Film/TV Production) | 8,700 | N/A* | | **Total** | **8,700** | **22,900** | - In the first half of 2025, a **single customer (Customer III)** contributed **95.6%** of the Group's total revenue, indicating extremely high customer concentration[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) [Other Income, Gains and Losses](index=22&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E3%80%81%E6%94%B6%E7%9B%8A%E5%8F%8A%E4%BA%8F%E6%8D%9F) For the six months ended June 30, 2025, both other income and other gains increased, with other income primarily from bank interest and miscellaneous sources, and other gains and losses influenced by net exchange gains and a loss on disposal of a subsidiary Other Income Comparison | Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Interest income from bank deposits | 2 | 16 | -87.5% | | Miscellaneous income | 43 | – | N/A | | **Total** | **45** | **16** | **181.3%** | Other Gains and Losses Comparison | Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Exchange gains / (losses), net | 5,629 | 309 | 1722.0% | | Loss on disposal of a subsidiary | (4,492) | – | N/A | | **Total** | **1,137** | **309** | **268.0%** | - Net exchange gains significantly increased, but were partially offset by the loss on disposal of a subsidiary, resulting in a **substantial net increase** in other gains and losses[60](index=60&type=chunk) [Loss Before Tax](index=23&type=section&id=%E9%99%A4%E7%A8%8E%E5%89%8D%E4%BA%8F%E6%8D%9F) For the six months ended June 30, 2025, the company reported a loss before tax of RMB5,553 thousand, a reversal from a profit of RMB1,357 thousand in the prior period, primarily driven by increased staff costs and zero amortization of intangible assets Components of Loss Before Tax Comparison | Expense Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Auditor's remuneration | 327 | 323 | 1.2% | | Directors' emoluments | 1,097 | 1,097 | 0.0% | | Other staff costs | 3,582 | 2,763 | 29.6% | | Other staff retirement benefit scheme contributions | 391 | 362 | 8.0% | | **Total staff costs** | **5,397** | **4,545** | **18.8%** | | Depreciation of property, plant and equipment | 206 | 64 | 221.9% | | Depreciation of right-of-use assets | 794 | 909 | -12.6% | | Amortisation of intangible assets | – | 841 | -100.0% | - Total staff costs increased by **18.8%** year-on-year, with other staff costs showing significant growth[62](index=62&type=chunk) - Amortisation of intangible assets was **zero** for the current period, compared to **RMB841 thousand** in the prior period[62](index=62&type=chunk) [Finance Costs](index=23&type=section&id=%E8%B4%A2%E5%8A%A1%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, total finance costs increased to RMB536 thousand from RMB444 thousand in the prior period, primarily due to a significant rise in interest expenses on amounts payable to a related party Finance Costs Comparison | Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on bank borrowings | 233 | 289 | -19.4% | | Interest on lease liabilities | 46 | 42 | 9.5% | | Interest on amount due to a related party | 257 | 113 | 127.4% | | **Total** | **536** | **444** | **20.7%** | - Interest expense on amounts due to a related party significantly increased by **127.4%** year-on-year, being the primary driver of the rise in finance costs[64](index=64&type=chunk) [Tax](index=24&type=section&id=%E7%A8%8E%E9%A1%B9) For the six months ended June 30, 2025, tax expense increased to RMB490 thousand from RMB344 thousand in the prior period, mainly comprising current and deferred tax in China, with some Chinese subsidiaries enjoying corporate income tax exemptions in the Horgos Economic Development Zone Tax Expense Comparison | Category | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Current tax – Hong Kong | – | – | 0.0% | | Current tax – China | (251) | (101) | 148.5% | | Deferred tax | (239) | (243) | -1.6% | | **Tax for the period** | **(490)** | **(344)** | **42.4%** | - Current tax provision in China significantly increased by **148.5%** year-on-year[66](index=66&type=chunk) - Subsidiaries such as Horgos Zongheng Wuxian Culture Media Co Ltd and Horgos Feichi Culture Communication Co Ltd enjoy corporate income tax exemption policies[67](index=67&type=chunk)[68](index=68&type=chunk) [Dividends and (Loss) Earnings Per Share](index=25&type=section&id=%E8%82%A1%E6%81%AF%E4%B8%8E%E6%AF%8F%E8%82%A1%EF%BC%88%E4%BA%8F%E6%8D%9F%EF%BC%89%E6%BA%A2%E5%88%A9) The Board does not recommend any dividend for the six months ended June 30, 2025, with basic and diluted loss per share at RMB1.05 cents, reflecting the company's shift from profit to loss compared to RMB0.19 cents profit per share in the prior period - The Directors do not recommend the payment of any dividend for the six months ended June 30, 2025[69](index=69&type=chunk)[70](index=70&type=chunk) (Loss) Earnings Per Share Comparison | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | (Loss) profit for the purpose of basic (loss) earnings per share (RMB'000) | (6,043) | 1,059 | | Weighted average number of ordinary shares ('000 shares) | 577,798 | 559,337 | | (Loss) earnings per share (RMB cents) | (1.05) | 0.19 | - Due to the loss recorded for the period, basic and diluted loss per share was **RMB1.05 cents**, compared to **RMB0.19 cents** profit per share in the prior period[72](index=72&type=chunk) [Property, Plant and Equipment and Right-of-Use Assets](index=26&type=section&id=%E7%89%A9%E4%B8%9A%E3%80%81%E5%8E%82%E6%88%BF%E5%8F%8A%E8%AE%BE%E5%A4%87%E4%B8%8E%E4%BD%BF%E7%94%A8%E6%9D%83%E8%B5%84%E4%BA%A7) For the six months ended June 30, 2025, the Group acquired approximately RMB948 thousand in property, plant, and equipment, a decrease from RMB2,177 thousand in the prior period, with no significant lease terminations or new right-of-use asset recognitions - For the six months ended June 30, 2025, additions to property, plant and equipment amounted to approximately **RMB948 thousand**, a **56.4% decrease** year-on-year[74](index=74&type=chunk)[78](index=78&type=chunk) - No gain was recognized on early termination of leases, nor were new right-of-use assets and lease liabilities recognized during the period[75](index=75&type=chunk)[76](index=76&type=chunk)[79](index=79&type=chunk) [Intangible Assets](index=26&type=section&id=%E6%97%A0%E5%BD%A2%E8%B5%84%E4%BA%A7) For the six months ended June 30, 2025, the Group acquired approximately RMB5,724 thousand in intangible assets, a new category of acquisition compared to the prior period - For the six months ended June 30, 2025, the Group acquired approximately **RMB5,724 thousand** in intangible assets[77](index=77&type=chunk)[80](index=80&type=chunk) - No intangible assets were acquired in the prior period[77](index=77&type=chunk)[80](index=80&type=chunk) [Trade and Other Receivables](index=27&type=section&id=%E8%B4%B8%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) As of June 30, 2025, total trade and other receivables slightly decreased to RMB386,440 thousand, with a reduction in net trade receivables offset by an increase in prepayments and deposits, primarily for script copyright pre-production and film distribution rights Trade and Other Receivables Comparison | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Gross trade receivables | 125,670 | 167,462 | -24.9% | | Less: Impairment allowance | (4,053) | (5,009) | -19.1% | | **Net trade receivables** | **121,617** | **162,453** | **-25.2%** | | Prepayments and deposits | 262,139 | 226,099 | 16.0% | | Other receivables | 2,684 | 2,710 | -1.0% | | **Total** | **386,440** | **391,262** | **-1.2%** | - Prepayments and deposits increased by **16.0%**, primarily including prepaid expenses of approximately **RMB229,638 thousand** for script copyright pre-production and acquisition of film distribution and revenue rights[82](index=82&type=chunk)[87](index=87&type=chunk) Trade Receivables Ageing Analysis (Net) | Ageing | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Within 30 days | – | – | | 31 to 90 days | 8,397 | 130,392 | | 91 to 180 days | – | – | | Over 180 days | 113,220 | 32,061 | | **Total** | **121,617** | **162,453** | - Trade receivables over **180 days** significantly increased from **RMB32,061 thousand** as of December 31, 2024, to **RMB113,220 thousand** as of June 30, 2025, while those aged **31 to 90 days** substantially decreased[89](index=89&type=chunk) [Trade Payables](index=28&type=section&id=%E8%B4%B8%E6%98%93%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9) As of June 30, 2025, total trade payables significantly increased to RMB5,720 thousand from RMB411 thousand as of December 31, 2024, with all payables aged between 91 and 365 days Trade Payables Ageing Analysis | Ageing | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 91 to 365 days | 5,720 | – | | Over 365 days | – | 411 | | **Total** | **5,720** | **411** | - Total trade payables significantly increased by **1291.7%** year-on-year, with all amounts concentrated in the **91 to 365 days** ageing category[92](index=92&type=chunk) [Bank Borrowings](index=29&type=section&id=%E9%93%B6%E8%A1%8C%E5%80%9F%E6%AC%BE) As of June 30, 2025, bank borrowings repayable within one year decreased to RMB14,648 thousand from RMB16,000 thousand as of December 31, 2024, with all borrowings unsecured and carrying annual interest rates between 2.8% and 4.3% Bank Borrowings Comparison | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Bank borrowings repayable within one year | 14,648 | 16,000 | -8.45% | - Bank borrowings are **unsecured** and bear annual interest rates ranging from **2.8% to 4.3%** (2.8% to 3.5% in 2023)[94](index=94&type=chunk)[95](index=95&type=chunk) [Share Capital](index=29&type=section&id=%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's authorized and issued share capital remained unchanged, following a placement of 49,410,000 ordinary shares in February 2024 at a net issue price of approximately HK$0.472 per share Share Capital Structure | Category | June 30, 2025 ('000 shares) | January 1, 2024 ('000 shares) | | :--- | :--- | :--- | | Authorised ordinary shares | 1,600,000 | 1,600,000 | | Issued and fully paid ordinary shares | 577,797,719 | 528,387,719 | - On February 19, 2024, the company placed **49,410,000 ordinary shares** at **HK$0.50 per share**, with a net issue price of approximately **HK$0.472 per share**[98](index=98&type=chunk)[100](index=100&type=chunk) [Related Party Transactions](index=30&type=section&id=%E5%85%B3%E8%BF%9E%E6%96%B9%E4%BA%A4%E6%98%93) The Group engages in various related party transactions, including salaries to controlling shareholders, lease payments to directors, loans from related companies, and amounts payable to a director and a shareholder, with interest-bearing loans from related companies at 6.125% per annum Related Party Transactions Comparison | Related Party Relationship | Type of Transaction | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | :--- | | Shareholder A | Salaries | 38 | 38 | | Shareholder B | Salaries | 38 | 38 | | Director A | Lease payments | 565 | 550 | | Related company | Proceeds from loans | 2,845 | 6,407 | | Related company | Interest expense on loans | 256 | 113 | - Amounts due to a related company are **unsecured**, bear interest at **6.125% per annum**, and are repayable within one year[108](index=108&type=chunk) - Amounts due from non-controlling interests of a subsidiary, amounts due to a director, and amounts due to a shareholder are all **unsecured, interest-free**, and repayable on demand or within one year[108](index=108&type=chunk) [Capital Management](index=32&type=section&id=%E8%B5%84%E6%9C%AC%E7%AE%A1%E7%90%86) The Group aims to ensure continuous operation, provide shareholder returns, and maintain an optimal capital structure to minimize funding costs, with its debt-to-equity ratio increasing to 7.3% as of June 30, 2025, from 6.6% at the end of 2024, primarily due to increased net debt - The Group's capital management objectives are to safeguard its ability to continue as a going concern, provide returns to shareholders, and maintain an optimal capital structure to reduce the cost of capital[109](index=109&type=chunk)[113](index=113&type=chunk) Capital Gearing Ratio Comparison | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Debt | 33,336 | 32,237 | | Less: Cash and cash equivalents | (11,362) | (11,837) | | **Net debt** | **21,974** | **20,400** | | Equity | 300,894 | 307,015 | | **Net debt to equity ratio** | **7.3%** | **6.6%** | - The debt-to-equity ratio increased from **6.6%** at the end of 2024 to **7.3%** as of June 30, 2025, primarily due to an increase in net debt[112](index=112&type=chunk)[116](index=116&type=chunk)[118](index=118&type=chunk) [Management Discussion and Analysis](index=34&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) This section provides management's perspective on the Group's financial performance and operational review for the period, including key financial metrics, business segment performance, and future outlook [Financial Review](index=34&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%BE) For the six months ended June 30, 2025, the Group experienced significant declines in revenue and gross profit, resulting in a shift from profit to loss, despite increased other gains and reduced administrative and selling expenses, reflecting challenging financial conditions with decreased net current assets and liquidity ratio, and increased gearing - Revenue decreased by **64.6%** year-on-year to **RMB9.1 million**, primarily due to a decline in sales from the script copyright and program business[119](index=119&type=chunk)[122](index=122&type=chunk) - Gross profit decreased by **78.9%** year-on-year to **RMB2.0 million**, mainly due to a decline in gross profit from the film and television production segment and increased assessment costs for the concert segment[120](index=120&type=chunk)[123](index=123&type=chunk) - Other gains increased by **267%** year-on-year to **RMB1.1 million**, primarily influenced by the net effect of exchange gains and the loss on disposal of a subsidiary recognized through profit or loss[121](index=121&type=chunk)[124](index=124&type=chunk) - Loss attributable to owners of the Company for the period was approximately **RMB6.0 million**, compared to a profit of approximately **RMB1.1 million** in the prior period, mainly due to reduced revenue from the TV series segment[133](index=133&type=chunk)[136](index=136&type=chunk) - Net current assets decreased from **RMB304.2 million** to **RMB292.5 million**, the current ratio decreased from **3.94 times** to **3.67 times**, and the debt-to-equity ratio increased from **6.6%** to **7.3%**[137](index=137&type=chunk)[139](index=139&type=chunk) [Revenue](index=34&type=section&id=%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, the Group's revenue decreased by 64.6% to RMB9.1 million from RMB25.7 million in the prior period, primarily due to reduced sales in the script copyright and program business - Revenue decreased by **64.6%** year-on-year, from **RMB25.7 million** to **RMB9.1 million**[119](index=119&type=chunk)[122](index=122&type=chunk) - The decrease in revenue was primarily due to a decline in sales from the **script copyright and program business**[119](index=119&type=chunk)[122](index=122&type=chunk) [Gross Profit](index=34&type=section&id=%E6%AF%9B%E5%88%A9) For the six months ended June 30, 2025, gross profit decreased by 78.9% to RMB2.0 million from RMB9.5 million in the prior period, mainly due to reduced gross profit in the TV series/film production segment and increased assessment costs for virtual reality projects in concert organization - Gross profit decreased by **78.9%** year-on-year, from **RMB9.5 million** to **RMB2.0 million**[120](index=120&type=chunk)[123](index=123&type=chunk) - The decrease in gross profit was mainly due to a decline in gross profit from the **TV series/film production segment** and increased assessment costs for virtual reality projects in the **concert and event organization segment**[120](index=120&type=chunk)[123](index=123&type=chunk) [Other Gains and Losses](index=34&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E4%BA%8F%E6%8D%9F) For the six months ended June 30, 2025, other gains increased by 267% to RMB1.1 million from RMB0.3 million in the prior period, primarily attributable to the net effect of exchange gains and the recognition of cumulative losses from the disposal of a non-material subsidiary through profit or loss - Other gains increased by **267%** year-on-year, from **RMB0.3 million** to **RMB1.1 million**[121](index=121&type=chunk)[124](index=124&type=chunk) - The increase was primarily due to the **net effect of exchange gains** and the recognition of cumulative losses from the disposal of a non-material subsidiary through profit or loss[121](index=121&type=chunk)[124](index=124&type=chunk) [Expenses](index=35&type=section&id=%E5%BC%80%E6%94%AF) For the six months ended June 30, 2025, selling and distribution costs decreased by 16.7% to RMB1.0 million, mainly for live streaming e-commerce, while administrative expenses slightly decreased to RMB8.1 million, primarily due to reduced live streaming studio rentals, legal and professional fees, and staff costs - Selling and distribution costs decreased by **16.7%** year-on-year to **RMB1.0 million**, primarily for the live streaming e-commerce business[125](index=125&type=chunk)[128](index=128&type=chunk) - Administrative expenses slightly decreased to **RMB8.1 million**, mainly due to the absence of live streaming studio rentals, reduced legal and professional fees, and lower staff costs[126](index=126&type=chunk)[129](index=129&type=chunk) [Income Tax Expense](index=35&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) For the six months ended June 30, 2025, income tax expense increased to RMB0.5 million from RMB0.3 million in the prior period, mainly due to profit from script copyright sales, with some Chinese subsidiaries enjoying corporate income tax exemptions in the Horgos Economic Development Zone - Income tax expense increased year-on-year to **RMB0.5 million**, primarily due to profit from the sale of script copyrights[127](index=127&type=chunk)[130](index=130&type=chunk) - Hong Kong profits tax provision was **zero**, while China corporate income tax provision was **RMB0.3 million**[127](index=127&type=chunk)[130](index=130&type=chunk) - Subsidiaries in the Horgos Economic Development Zone enjoy corporate income tax exemption policies, valid until **2024 or 2028**[131](index=131&type=chunk)[134](index=134&type=chunk) [Profit/(Loss) Attributable to Owners of the Company for the Period](index=36&type=section&id=%E6%9C%9F%E5%86%85%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%8B%A5%E6%9C%89%E4%BA%BA%E5%BA%94%E4%BD%97%E6%BA%A2%E5%88%A9%E2%88%95%E8%99%A7%E6%8D%9F) For the six months ended June 30, 2025, the loss attributable to owners of the Company was approximately RMB6.0 million, a reversal from a profit of approximately RMB1.1 million in the prior period, primarily due to reduced revenue in the TV series segment - Loss attributable to owners of the Company was approximately **RMB6.0 million**, compared to a profit of approximately **RMB1.1 million** in the prior period[133](index=133&type=chunk)[136](index=136&type=chunk) - The loss was primarily due to a **decrease in revenue from the TV series segment**[133](index=133&type=chunk)[136](index=136&type=chunk) [Financial Resources, Liquidity and Capital Structure](index=37&type=section&id=%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90%E3%80%81%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E5%8F%8A%E8%B5%84%E6%9C%AC%E7%BB%93%E6%9E%84) As of June 30, 2025, the Group's net current assets decreased to approximately RMB292.5 million, the current ratio fell to 3.67 times, and the debt-to-equity ratio rose to 7.30%, reflecting a challenging financial position primarily due to loan repayments and increased project-related payables - Net current assets were approximately **RMB292.5 million**, a **3.8% decrease** year-on-year[137](index=137&type=chunk)[139](index=139&type=chunk) - The current ratio was **3.67 times**, a decrease from **3.94 times** at the end of 2024[137](index=137&type=chunk)[139](index=139&type=chunk) - The debt-to-equity ratio increased to **7.30%**, primarily due to an increase in net debt[137](index=137&type=chunk)[139](index=139&type=chunk) [Credit Risk](index=37&type=section&id=%E4%BF%A1%E8%B4%B7%E9%A3%8E%E9%99%A9) The Group's credit risk primarily stems from trade and other receivables, bank balances, and amounts due from non-controlling interests, though directors believe trade receivables credit risk was significantly mitigated at period-end through internal credit ratings and historical loss experience - Credit risk primarily arises from **trade and other receivables, bank balances**, and **amounts due from non-controlling interests**[138](index=138&type=chunk)[140](index=140&type=chunk) - The company's directors believe that the credit risk of trade receivables was **significantly reduced** at the end of the reporting period, assessed through internal credit ratings and historical loss experience[141](index=141&type=chunk)[144](index=144&type=chunk) [Business Review and Outlook](index=38&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%A7%E5%8F%8A%E5%B1%95%E6%9C%9B) The Group operates in film/TV production, concert organization, mobile app development, and artist management, with film/TV revenue declining but a focus on original IP, concert business driven by immersive experiences, continued growth in live streaming e-commerce, and zero artist management revenue due to unrenewed contracts, with management confident in future improvements - The Group primarily engages in **film and television production, concert and event organization, mobile application development and operation**, and **artist management businesses**[142](index=142&type=chunk)[145](index=145&type=chunk) - Management is confident in overcoming challenges and continuously improving business under the leadership of an experienced team[156](index=156&type=chunk)[161](index=161&type=chunk) [TV Series/Film Production and Film Copyright Investment](index=38&type=section&id=%E8%BF%9E%E7%BB%AD%E5%89%A7%E2%88%95%E7%94%B5%E5%BD%B1%E5%88%B6%E4%BD%9C%E5%8F%8A%E7%94%B5%E5%BD%B1%E7%89%88%E6%9D%83%E6%8A%95%E8%B5%84) For the six months ended June 30, 2025, program production and related services revenue decreased to approximately RMB8.7 million, mainly due to fewer script copyright sales and films, but the Group continues to collaborate with Chinese film and television companies to expand original IP creation, adaptation, production, and distribution - Revenue from program production and related services decreased year-on-year, primarily due to **fewer script copyright sales and films**[143](index=143&type=chunk)[146](index=146&type=chunk) - The Group actively collaborates with Chinese film and television production companies to expand businesses such as **original script creation, adaptation, production, and distribution** to incubate more proprietary IPs[147](index=147&type=chunk)[150](index=150&type=chunk) [Concert and Event Organization](index=39&type=section&id=%E6%BC%94%E5%94%B1%E4%BC%9A%E5%8F%8A%E6%B4%BB%E5%8A%A8%E7%AD%B9%E5%8A%9E) For the six months ended June 30, 2025, concert and event organization revenue significantly decreased to approximately RMB0.2 million due to no concerts held, but the Group launched the "Three-Body: Fourth Dimension" immersive experience in Beijing in early 2025, utilizing metaverse technology, and plans to explore more opportunities in various regions - Revenue from concert and event organization significantly decreased year-on-year, primarily because **no concerts were held** during the reporting period[148](index=148&type=chunk)[151](index=151&type=chunk) - The Group launched the **"Three-Body: Fourth Dimension" immersive experience** in Beijing in early 2025, utilizing metaverse visual effects and mixed reality technology[149](index=149&type=chunk)[151](index=151&type=chunk) - The Group will explore opportunities to organize more concerts and events in different regions in the future[152](index=152&type=chunk)[157](index=157&type=chunk) [Mobile Application Development and Operation](index=40&type=section&id=%E7%A7%BB%E5%8A%A8%E5%BA%94%E7%94%A8%E7%A8%8B%E5%BC%8F%E7%9A%84%E5%BC%80%E5%8F%91%E5%92%8C%E8%BF%90%E8%90%A5) For the six months ended June 30, 2025, mobile application development and operation revenue remained stable at approximately RMB0.2 million, primarily from live streaming e-commerce, with plans to deepen cooperation with celebrities, train assistant streamers, and introduce virtual anchors to expand the market - Revenue from the mobile application development and operation segment remained stable year-on-year, primarily from the **live streaming e-commerce business**[153](index=153&type=chunk)[158](index=158&type=chunk) - The Group plans to continue deep cooperation with renowned celebrities, actively train assistant streamers, and introduce virtual anchors to further develop the live streaming e-commerce market[154](index=154&type=chunk)[159](index=159&type=chunk) [Artist Management Business](index=40&type=section&id=%E8%89%BA%E4%BA%BA%E7%BB%8F%E7%BA%AA%E4%B8%9A%E5%8A%A1) For the six months ended June 30, 2025, net revenue from artist management business was zero, a decrease from RMB0.4 million in the prior period, mainly because artists had not renewed management contracts and no new work was arranged, with future efforts focused on expanding the artist roster - Net revenue from artist management business was **zero**, compared to **RMB0.4 million** in the prior period, primarily due to artists not renewing management contracts and no new work arrangements during the period[155](index=155&type=chunk)[160](index=160&type=chunk) - The Group is committed to developing a more comprehensive artist roster in the future to bring greater value to the Group[161](index=161&type=chunk) [Principal Risks and Uncertainties](index=41&type=section&id=%E4%B8%BB%E8%A6%81%E9%A3%8E%E9%99%A9%E5%8F%8A%E4%B8%8D%E7%A1%AE%E5%AE%9A%E5%9B%A0%E7%B4%A0) The Group faces significant risks including high customer concentration (95.6% of revenue from one client), intense competition in TV content production and event organization, and market demand uncertainties and regulatory immaturity in new businesses like mobile app development and live streaming e-commerce, which are vulnerable to economic downturns and rapid consumer behavior changes - The Group is highly dependent on a limited number of customers, with the largest customer contributing **95.6%** of total revenue, posing risks of contract cancellation or termination[163](index=163&type=chunk)[167](index=167&type=chunk) - The TV broadcasting content production and event organization markets are highly competitive, facing **price pressure** and **threats from substitutes**[164](index=164&type=chunk)[165](index=165&type=chunk)[168](index=168&type=chunk) - New businesses such as mobile application development and live streaming e-commerce face risks of **uncertain market demand, rapid changes in user behavior**, and **immature regulatory environments**[169](index=169&type=chunk)[170](index=170&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) [Employees and Remuneration Policy](index=42&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 had 27 employees, a decrease of two from the prior period, with remuneration determined by performance, experience, and market conditions, subject to annual performance reviews and discretionary bonuses - As of June 30, 2025, the Group had **27 employees**, a decrease from **29** in the prior period[171](index=171&type=chunk)[174](index=174&type=chunk) - Remuneration policy is based on **employee performance, experience, and market conditions**, updated annually, and may include discretionary bonuses[171](index=171&type=chunk)[174](index=174&type=chunk) [Foreign Currency Risk](index=43&type=section&id=%E5%A4%96%E5%B9%A3%E9%A2%A8%E9%99%A9) The Group's recurring sales and purchases are primarily settled in RMB, and the company continuously reviews and monitors risks associated with foreign currencies - The Group's recurring sales and purchases are primarily settled in **RMB**[175](index=175&type=chunk)[179](index=179&type=chunk) - The company will continuously review and monitor risks arising from foreign currencies[175](index=175&type=chunk)[179](index=179&type=chunk) [Capital Expenditure](index=43&type=section&id=%E8%B5%84%E6%9C%AC%E5%BC%80%E6%94%AF) For the six months ended June 30, 2025, the Group incurred approximately RMB948 thousand in capital expenditure for new property, plant, and equipment, a decrease from RMB2,177 thousand in the prior period - For the six months ended June 30, 2025, capital expenditure amounted to **RMB948 thousand**, a **56.4% decrease** year-on-year[176](index=176&type=chunk)[180](index=180&type=chunk) [Capital Commitments](index=43&type=section&id=%E8%B5%84%E6%9C%AC%E6%89%BF%E6%8B%85) As of June 30, 2025, the Group's capital commitments significantly increased to RMB69.7 million from RMB41.8 million as of December 31, 2024 - As of June 30, 2025, capital commitments were **RMB69.7 million**, an increase of **66.7%** from **RMB41.8 million** at the end of 2024[177](index=177&type=chunk)[181](index=181&type=chunk) [Contingent Liabilities](index=43&type=section&id=%E6%88%96%E7%84%B6%E8%B4%9F%E5%80%BA) The Group's indirect wholly-owned subsidiary provided a corporate guarantee, retaining approximately RMB15.0 million in project revenue interests as "other payables" to mitigate related risks, with directors deeming the fair value of the guarantee immaterial and existing payables sufficient to cover potential claims - The Group retained approximately **RMB15.0 million** in project revenue interests as "other payables" to mitigate risks related to corporate guarantees[178](index=178&type=chunk)[182](index=182&type=chunk) - The directors believe the fair value of the corporate guarantee is **not material**, and existing other payables are sufficient to cover any claims arising from litigation[178](index=178&type=chunk)[182](index=182&type=chunk) [Material Investments, Acquisitions or Disposals](index=44&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E3%80%81%E6%94%B6%E8%B4%AD%E6%88%96%E5%87%BA%E5%94%AE) For the six months ended June 30, 2025, the Group held no material investments and undertook no material acquisitions or disposals of subsidiaries or associated companies - For the six months ended June 30, 2025, the Group held **no material investments** and undertook **no material acquisitions or disposals** of subsidiaries or associated companies[183](index=183&type=chunk) [Disclosure of Interests and Other Information](index=45&type=section&id=%E6%9D%83%E7%9B%8A%E6%8A%AB%E9%9C%B2%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B5%84%E6%96%99) This section details the interests of directors, chief executives, and substantial shareholders in the company's securities, along with information on share repurchases, share option schemes, and competing interests [Directors' and Chief Executives' Interests](index=45&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%AC%8A%E7%9B%8A) As of June 30, 2025, Executive Director Mr. Wang Yong held a 13.24% long position in the company's ordinary shares through Goldbless International Limited, with Mr. Yang Jian and Mr. Yang Shiyuan also holding shares in Youth Success Holdings Limited Directors' Long Positions in the Company's Ordinary Shares | Name of Director | Capacity and Nature of Interest | Number of Shares | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Goldbless International Limited | Beneficial owner | 76,500,000 | 13.24% | | Mr. Wang Yong | Interest in controlled corporation | 76,500,000 | 13.24% | Directors' Long Positions in Youth Success Holdings Limited's Ordinary Shares | Name of Director | Number of Shares | Percentage of Equity | | :--- | :--- | :--- | | Mr. Yang Jian | 1,273 | 12.73% | | Mr. Yang Shiyuan | 148 | 1.48% | - Save as disclosed, as of June 30, 2025, no other directors or chief executives held any interests or short positions in the shares, underlying shares, or debentures of the company or any of its associated corporations[191](index=191&type=chunk) [Substantial Shareholders' and Other Persons' Interests](index=47&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E4%B8%9C%E5%8F%8A%E5%85%B6%E4%BB%96%E4%BA%BA%E5%A3%AB%E6%AC%8A%E7%9B%8A) As of June 30, 2025, Youth Success Holdings Limited, its ultimate controlling shareholders Mr. Yang Shaoqian and Ms. Mou Sufang, were deemed to hold approximately 58.77% to 59.22% of the company's shares through multi-layered holdings and shareholder voting agreements, alongside other major shareholders Substantial Shareholders' Long Positions in the Company's Ordinary Shares | Name/Company Name of Shareholder | Capacity and Nature of Interest | Number of Shares | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Youth Success Holdings Limited | Beneficial owner; Deemed to be interested under shareholder voting agreement | 339,586,958 | 58.77% | | Guang Rui Investments Limited | Beneficial owner; Interest in controlled corporation; Deemed to be interested under shareholder voting agreement | 342,181,358 | 59.22% | | Mr. Yang Shaoqian | Interest in controlled corporation; Spouse's interest; Deemed to be interested under shareholder voting agreement | 342,181,358 | 59.22% | | Ms. Mou Sufang | Interest in controlled corporation; Spouse's interest; Deemed to be interested under shareholder voting agreement | 342,181,358 | 59.22% | | Mr. Liang Longfei | Beneficial owner | 36,000,000 | 6.23% | | TAN KOON AIK | Beneficial owner | 44,671,963 | 7.73% | | ANG YU YUAN SHAWN | Beneficial owner | 35,990,566 | 6.23% | | Alpine Nova Limited | Beneficial owner | 30,362,150 | 5.26% | | Mr. Wang Xu | Interest in controlled corporation | 30,362,150 | 5.26% | - Youth Success Holdings Limited is deemed to have voting rights over shares held by **Mr. Liang Longfei, TAN KOON AIK, ANG YU YUAN SHAWN**, and **Alpine Nova Limited** through shareholder voting agreements[198](index=198&type=chunk)[204](index=204&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=49&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%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and there were no treasury shares held as of that date - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[200](index=200&type=chunk)[202](index=202&type=chunk) - As of June 30, 2025, the company held **no treasury shares**[203](index=203&type=chunk) [Share Option Scheme](index=50&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The company adopted a share option scheme on November 3, 2015, valid for 10 years, to reward eligible contributors, but as of June 30, 2025, no options had been granted, exercised, cancelled, or lapsed, with 24,000,000 shares available for grant - The share option scheme was adopted on **November 3, 2015**, with a **10-year validity**, aiming to reward eligible individuals who contribute to the Group[205](index=205&type=chunk)[206](index=206&type=chunk) - As of June 30, 2025, **no share options** had been granted, exercised, cancelled, or lapsed under the share option scheme, and there were no outstanding share options[205](index=205&type=chunk)[206](index=206&type=chunk) - As of June 30, 2025, the number of share options available for grant was **24,000,000 shares**[205](index=205&type=chunk)[206](index=206&type=chunk) [Competing Interests](index=50&type=section&id=%E7%AB%B6%E7%88%AD%E6%AC%8A%E7%9B%8A) For the six months ended June 30, 2025, no directors, controlling shareholders, or their close associates held any interests in businesses directly or indirectly competing with the Group or had any other conflicts of interest - For the six months ended June 30, 2025, no directors, controlling shareholders, or their close associates held any interests in businesses competing with the Group or had any conflicts of interest[207](index=207&type=chunk)[208](index=208&type=chunk) [Corporate Governance Practices](index=51&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A7%84) This section outlines the company's adherence to the GEM Listing Rules' Corporate Governance Code, including compliance, roles of Chairman and CEO, internal audit function, directors' securities transactions, and the Audit Committee's responsibilities [Compliance with Corporate Governance Code](index=51&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99%E5%90%88%E8%A7%84%E6%80%A7) The Board has adopted the Corporate Governance Code in Appendix C1 of the GEM Listing Rules and reports compliance for the six months ended June 30, 2025, with two deviations from code provisions C.2.1 and D.2.2 - The Board has adopted the Corporate Governance Code set out in **Appendix C1 of the GEM Listing Rules**[213](index=213&type=chunk)[214](index=214&type=chunk) - For the six months ended June 30, 2025, the Corporate Governance Code has been complied with, except for code provisions **C.2.1 and D.2.2**[214](index=214&type=chunk) [Responsibilities of Chairman and Chief Executive Officer](index=51&type=section&id=%E4%B8%BB%E5%B8%AD%E5%8F%8A%E8%A1%8C%E6%94%BF%E7%B8%BD%E8%A3%81%E8%81%B7%E8%B2%AC) Mr. Yang Jian serves as both Chairman and CEO, overseeing overall operations, management, business development, and strategic planning, with the Board ensuring a balance of power through its experienced composition and regularly reviewing the need for separation of these roles - **Mr. Yang Jian** concurrently holds the positions of Chairman of the Board and Chief Executive Officer, responsible for the Group's overall operations, management, business development, and strategic planning[210](index=210&type=chunk)[214](index=214&type=chunk) - The Board believes that the balance of power is ensured through the operation of an experienced Board, and will regularly review whether the two roles need to be separated[212](index=212&type=chunk)[215](index=215&type=chunk) [Internal Audit Function](index=52&type=section&id=%E5%85%A7%E9%83%A8%E5%AF%A9%E6%A0%B8%E5%8A%9F%E8%83%BD) The company currently lacks an internal audit function, deeming it unnecessary given the Group's current business scale, nature, and complexity, with the Board directly responsible for internal controls and their effectiveness, subject to periodic review - The company currently **does not have an internal audit function**, believing there is no immediate need based on the Group's current business scale, nature, and complexity[216](index=216&type=chunk)[219](index=219&type=chunk) - The Board will be directly responsible for the Group's internal controls and review their effectiveness, and will review this situation from time to time[216](index=216&type=chunk)[219](index=219&type=chunk) [Directors' Securities Transactions](index=52&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 has adopted GEM Listing Rules 5.48 to 5.67 as the code of conduct for directors' securities transactions, and all directors have confirmed compliance with these required standards for the six months ended June 30, 2025, and up to the report date - The company has adopted **GEM Listing Rules 5.48 to 5.67** as the code of conduct for directors' dealings in the company's securities[217](index=217&type=chunk)[220](index=220&type=chunk) - Following specific enquiries, all directors have confirmed compliance with the required standards for securities transactions for the six months ended June 30, 2025, and up to the date of this report[217](index=217&type=chunk)[220](index=220&type=chunk) [Audit Committee](index=52&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%91%98%E6%9C%83) The Audit Committee, established with terms of reference compliant with GEM Listing Rules, comprises three independent non-executive directors and is responsible for reviewing and overseeing the Group's financial and internal controls and risk management, having reviewed the unaudited condensed consolidated results for the period and found them compliant with applicable standards - The Audit Committee's terms of reference comply with the **GEM Listing Rules**, with primary responsibilities to review and oversee the Group's financial controls, internal controls, and risk management systems[218](index=218&type=chunk)[221](index=221&type=chunk) - The committee comprises three independent non-executive directors: **Mr. Qiu Xinyuan (Chairman), Ms. Fu Yuehong**, and **Mr. Wang Xinghua**[218](index=218&type=chunk)[221](index=221&type=chunk) - The Audit Committee has reviewed the unaudited condensed consolidated results for the period and considers them to be in compliance with applicable accounting standards, the GEM Listing Rules, and statutory requirements[222](index=222&type=chunk)