BOER POWER HOLDINGS LIMITED 博 耳 電 力 控 股 有 限 公 司 INTERIM REPORT 中期報告 2025 33 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 綜合權益變動表 34 CONDENSED CONSOLIDATED CASH FLOW STATEMENT 簡明綜合現金流量表 35 NOTES TO THE INTERIM FINANCIAL STATEMENTS 中期財務報表附註 CORPORATE INFORMATION 公司資料 BOARD OF DIRECTORS (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立的有限公司) 股份代號 Stock Code: 1685 Executive Directors www.boerpower.com Contents目錄 2 CORPORATE INFORMATION 公司資料 4 MANAGEMENT DISCUSSION AND ANALYSIS 管理層討論及分析 23 CO ...

中期報告 2025 中期報告 2025 綠水青山就是金山銀山 SOUTH MANGANESE INVESTMENT LIMITED 南 方 錳 業 財務業績 投 資 有 限 公 司 目錄 頁 次 2-3 公司資料 | 4 | 中期簡明綜合損益及其他全面收益表 | | --- | --- | | 5-6 | 中期簡明綜合財務狀況表 | | 7-8 | 中期簡明綜合權益變動表 | | 9 | 中期簡明綜合現金流量表 | | 10-36 | 中期簡明綜合財務報表附註 | | | 其他資料 | | 37-48 | 管理層討論及分析 | | --- | --- | | 49-62 | 環境、社會及管治報告 | | 63-70 | 我們的錳礦資源摘要及我們的錳礦石儲量摘要 | | 71 | 企業管治常規守則 | | 71 | 董事進行證券交易的標準守則 | | 71 | 董事及最高行政人員在股份及相關股份的權益 | | 72 | 主要股東及其他人士在股份及相關股份的權益 | | 73 | 購買、贖回或出售本公司的上市證券 | | 73 | 審閱帳目 | | 73 | 前瞻聲明 | | 74-76 | 詞匯表 | 2 南方 ...

[Contents](index=2&type=section&id=Contents) [Corporate Information](index=2&type=section&id=Corporate%20Information) The company's corporate information details its Board composition, key committees, principal banks, registered office in Bermuda, and Hong Kong share registrar and stock code [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) The company's Board of Directors comprises one Non-executive Director (Chairman) and four Independent Non-executive Directors, with key committees chaired by or including Independent Non-executive Directors - Board composition: one Non-executive Director (Chairman Liu Gao Yuan) and four Independent Non-executive Directors[2](index=2&type=chunk)[3](index=3&type=chunk) - Audit Committee Chairman: Lui Siu Tsuen; Remuneration Committee Chairman: Fung Nim Shu; Nomination Committee Chairman: Liu Gao Yuan[2](index=2&type=chunk)[3](index=3&type=chunk) [Company Details and Registrars](index=4&type=section&id=Company%20Details%20and%20Registrars) The company's main banks include Bank of China (Hong Kong) Limited and The Bank of East Asia, Limited, with its registered office in Bermuda and principal place of business in Central, Hong Kong - Principal banks: Bank of China (Hong Kong) Limited, The Bank of East Asia, Limited[4](index=4&type=chunk) - Registered office: Bermuda; Principal place of business: Central, Hong Kong[4](index=4&type=chunk) - Hong Kong Share Registrar: Tricor Secretaries Limited[5](index=5&type=chunk) - Stock code: 00310 on the Hong Kong Stock Exchange[6](index=6&type=chunk) [Chairman's Statement](index=5&type=section&id=Chairman's%20Statement) The Chairman's Statement highlights a challenging FY2024 with low productivity, rising global interest rates, and geopolitical tensions, while the Group strengthens its financial position through convertible bonds and equity financing - FY2024 faced a macro environment of low productivity, rising global interest rates, and geopolitical tensions[7](index=7&type=chunk)[9](index=9&type=chunk) - Local property and retail markets continued to decline, with economic recovery facing challenges[7](index=7&type=chunk)[9](index=9&type=chunk) - The company strengthened its financial position by issuing convertible notes and actively exploring equity financing opportunities[8](index=8&type=chunk)[9](index=9&type=chunk) [Management Discussion](index=6&type=section&id=Management%20Discussion) The Management Discussion covers the Group's strategic focus on investment management and capital raising, its financial performance including a narrowed loss, and significant liquidity challenges, alongside its outlook and operational details [Business and Operational Review](index=6&type=section&id=Business%20and%20Operational%20Review) In 2024, the Group focused on managing existing investments, optimizing operating costs, and raising new capital, with share trading suspended since April 2024 due to a disclaimer of opinion on 2023 financial statements - In 2024, the Group focused on managing existing investments, optimizing operating costs, and raising new capital[12](index=12&type=chunk)[15](index=15&type=chunk) - Due to the auditor's disclaimer of opinion on the 2023 financial statements, the company's shares were suspended from trading in April 2024, and efforts are underway to resume trading[12](index=12&type=chunk)[15](index=15&type=chunk) - The disposal of most listed investments during the year led to a significant decrease in total gains from financial assets at fair value through profit or loss[13](index=13&type=chunk)[16](index=16&type=chunk) [Financial Review](index=7&type=section&id=Financial%20Review) The Group's loss after tax narrowed to HK$17.3 million in 2024 (2023: HK$22.4 million), primarily due to controlled administrative and finance costs - **2024 and 2023 Key Financial Data Comparison** ``` | Indicator | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Loss after tax | (17,300) | (22,400) | | Administrative expenses | (9,000) | (9,400) | | Investment management expenses | (480) | (560) | | Finance costs | (706) | (997) | ``` - The narrowing of loss was mainly due to effective control over administrative expenses and finance costs[17](index=17&type=chunk)[20](index=20&type=chunk)[22](index=22&type=chunk) - Fair value loss recognized in other comprehensive expenses was **HK$0** (2023: HK$14.894 million), primarily related to impairment of the China lead-zinc mine investment[18](index=18&type=chunk)[21](index=21&type=chunk) [Results for the Year](index=7&type=section&id=Results%20for%20the%20Year) The Group recorded a loss after tax of approximately HK$17.3 million for the year, a reduction from HK$22.4 million in 2023, mainly due to fair value changes in listed equity investments and controlled administrative expenses - Loss after tax in 2024 was approximately **HK$17.3 million**, a decrease compared to a loss of **HK$22.4 million** in 2023[17](index=17&type=chunk)[20](index=20&type=chunk) - The loss was primarily due to fair value changes in listed equity investments at fair value through profit or loss, resulting in a loss of approximately **HK$0.3 million** (2023: HK$5.2 million) due to stock market volatility[22](index=22&type=chunk) - Administrative expenses were approximately **HK$9.0 million** (2023: HK$9.4 million), benefiting from cost control[22](index=22&type=chunk) [Gross Proceeds from Operations/Revenue](index=8&type=section&id=Gross%20Proceeds%20from%20Operations%2FRevenue) Gross proceeds from the disposal of financial assets at fair value through profit or loss significantly decreased to HK$4.337 million in 2024 from HK$16.504 million in 2023 - **Gross Proceeds from Operations/Revenue (HK$ thousand)** ``` | Indicator | 2024 | 2023 | | :--- | :--- | :--- | | Gross proceeds from disposal of financial assets at FVTPL (revenue nature) | 4,337 | 16,504 | | Dividend income | 6 | 30 | | **Total** | **4,343** | **16,534** | ``` - Gross proceeds from the disposal of financial assets at fair value through profit or loss (revenue nature) significantly decreased compared to 2023[24](index=24&type=chunk)[25](index=25&type=chunk) [Other Losses](index=8&type=section&id=Other%20Losses) Total other losses in 2024 amounted to HK$7.369 million, primarily from fair value changes of financial assets at fair value through profit or loss, including realized and unrealized losses - **Composition of Other Losses (HK$ thousand)** ``` | Type | 2024 | 2023 | | :--- | :--- | :--- | | **Fair value changes of financial assets at FVTPL** | | | | - Realized loss (revenue nature) | (6,642) | (732) | | - Realized loss (capital nature) | (490) | (3,839) | | - Unrealized loss (revenue nature) | (237) | (5,180) | | - Unrealized loss (capital nature) | — | (1,726) | | **Total** | **(7,369)** | **(11,477)** | ``` - Total other losses in 2024 were **HK$7.369 million**, a decrease from **HK$11.477 million** in 2023[27](index=27&type=chunk) [Administrative Expenses](index=9&type=section&id=Administrative%20Expenses) Administrative expenses decreased to approximately HK$9.0 million in 2024 from HK$9.4 million in 2023, mainly due to cost control, with staff remuneration being the largest expense item - Administrative expenses decreased from **HK$9.4 million** in 2023 to **HK$9.0 million** in 2024, primarily due to cost control[22](index=22&type=chunk)[29](index=29&type=chunk)[34](index=34&type=chunk) - Staff remuneration was the largest expense, amounting to **HK$6.037 million** in 2024, accounting for approximately **67%** of administrative expenses (2023: 57%)[29](index=29&type=chunk)[34](index=34&type=chunk) [Investment Management Expenses](index=9&type=section&id=Investment%20Management%20Expenses) Investment management expenses decreased to HK$0.48 million in 2024 from HK$0.56 million in 2023, attributed to a revised investment management agreement with Rich Concept Capital - Investment management expenses decreased from **HK$0.56 million** in 2023 to **HK$0.48 million** in 2024[17](index=17&type=chunk)[20](index=20&type=chunk)[30](index=30&type=chunk)[35](index=35&type=chunk) - The monthly management fee was reduced from **HK$80,000** to **HK$40,000** from March 1, 2023, until the contract expired on December 31, 2024[31](index=31&type=chunk)[35](index=35&type=chunk) [Finance Costs](index=9&type=section&id=Finance%20Costs) Finance costs decreased to HK$0.706 million in 2024 from HK$0.997 million in 2023, mainly due to a significant reduction in margin loan interest after repayment - Finance costs decreased from **HK$0.997 million** in 2023 to **HK$0.706 million** in 2024[17](index=17&type=chunk)[20](index=20&type=chunk)[32](index=32&type=chunk)[36](index=36&type=chunk) - Interest expenses on margin loans from securities brokers decreased from **HK$0.994 million** in 2023 to **HK$0.162 million** in 2024, primarily due to margin loan repayment[33](index=33&type=chunk)[36](index=36&type=chunk) - Interest expenses on convertible notes increased from **HK$3 thousand** in 2023 to **HK$0.544 million** in 2024[513](index=513&type=chunk) [Investments and Liquidity](index=10&type=section&id=Investments%20and%20Liquidity) The Group aims to enhance shareholder value through investments, but faced a significant decrease in cash and a sharp rise in gearing ratio to 268.23% by year-end 2024 - The Group's investment objective is to enhance shareholder value, with a strategy to identify and invest in listed and unlisted projects with growth potential[38](index=38&type=chunk)[41](index=41&type=chunk) - As of December 31, 2024, cash and cash equivalents were approximately **HK$0.334 million** (2023: HK$4.017 million), and margin loans were cleared (2023: HK$2.415 million)[48](index=48&type=chunk)[52](index=52&type=chunk) - The gearing ratio significantly increased from **66.33%** in 2023 to **268.23%** in 2024[54](index=54&type=chunk)[59](index=59&type=chunk) [Significant Investments](index=10&type=section&id=Significant%20Investments) As of December 31, 2024, the Group held a 14.7% equity interest in Koncentra Investments Limited, which indirectly holds a 7.94% minority interest in a China lead-zinc mine entity, with substantial unrealized losses - As of December 31, 2024, the Group held a **14.7%** equity interest in Koncentra Investments Limited, which indirectly holds a **7.94%** minority interest in a China lead-zinc mine entity[40](index=40&type=chunk)[43](index=43&type=chunk) - The fair value of the investment in Koncentra Investments remained at **HK$5.293 million**, but unrealized losses amounted to **HK$48.753 million**[44](index=44&type=chunk) - This investment is substantial, accounting for **86.5%** of the Group's total assets[44](index=44&type=chunk) [Liquidity and Financial Resources](index=11&type=section&id=Liquidity%20and%20Financial%20Resources) As of December 31, 2024, the Group's cash and cash equivalents significantly decreased to HK$0.334 million, margin loans were cleared, but loans from directors and a subsidiary director increased - **Liquidity and Financial Resources (HK$ thousand)** ``` | Indicator | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | 334 | 4,017 | | Loans from securities brokers | 0 | 2,415 | | Loans from directors | 1,000 | 600 | | Loans from a subsidiary director | 1,160 | 1,140 | ``` - All loans from directors and a subsidiary director are interest-free, repayable on demand, and unsecured by the company[48](index=48&type=chunk)[52](index=52&type=chunk) [Gearing Ratio](index=12&type=section&id=Gearing%20Ratio) As of December 31, 2024, the Group's gearing ratio (total liabilities/total assets) significantly increased to 268.23% from 66.33% in 2023, indicating a substantial rise in financial leverage - The gearing ratio significantly increased from **66.33%** in 2023 to **268.23%** in 2024[54](index=54&type=chunk)[59](index=59&type=chunk) [Capital Structure](index=12&type=section&id=Capital%20Structure) The Group's financial policy primarily relies on shareholders' funds and internal resources for investment activities and daily operations, with no foreign exchange hedging policy - The Group primarily utilizes shareholders' funds and internal resources for investment and daily operations[55](index=55&type=chunk)[60](index=60&type=chunk) - Funds are mainly held in Hong Kong Dollars, and there is no foreign exchange hedging policy[55](index=55&type=chunk)[60](index=60&type=chunk) [Outlook and Other Information](index=12&type=section&id=Outlook%20and%20Other%20Information) Management is actively exploring options to meet resumption conditions and raise capital, with trading suspended since April 2024 due to a disclaimer of opinion - Management is exploring options to meet resumption conditions and raise equity capital to seize investment opportunities[56](index=56&type=chunk)[61](index=61&type=chunk) - The company's shares were suspended from trading on April 2, 2024, due to the auditor's disclaimer of opinion on the financial statements[57](index=57&type=chunk)[62](index=62&type=chunk) - The company is taking appropriate measures to comply with the Stock Exchange's resumption guidance[58](index=58&type=chunk)[62](index=62&type=chunk) [Outlook](index=12&type=section&id=Outlook) The Hong Kong capital market appears to be recovering, and the company is actively exploring options to resume share trading and raise equity capital to enhance its balance sheet and seize investment opportunities - The Hong Kong capital market is recovering, and the company seeks to resume share trading and raise equity capital[56](index=56&type=chunk)[61](index=61&type=chunk) - The goal is to strengthen the balance sheet, seize domestic and international investment opportunities, and enhance shareholder value[56](index=56&type=chunk)[61](index=61&type=chunk) [Suspension of Trading](index=12&type=section&id=Suspension%20of%20Trading) The company's shares were suspended from trading on the Stock Exchange from 9:00 a.m. on April 2, 2024, due to the auditor's disclaimer of opinion on the 2023 financial statements - Shares were suspended from trading on April 2, 2024, due to the auditor's disclaimer of opinion on the 2023 financial statements[57](index=57&type=chunk)[62](index=62&type=chunk) - The company has received resumption guidance from the Stock Exchange and is taking measures to comply[58](index=58&type=chunk)[62](index=62&type=chunk) [Other Operational Details (Charges, Litigation, FX, Acquisitions, Customers/Suppliers)](index=13&type=section&id=Other%20Operational%20Details%20(Charges%2C%20Litigation%2C%20FX%2C%20Acquisitions%2C%20Customers%2FSup-pliers)) As of the year-end, the Group had no outstanding litigation, insignificant foreign exchange risk, no major acquisitions or disposals, and no principal customers or suppliers - As of the year-end, there were no outstanding legal proceedings or contingent liabilities[64](index=64&type=chunk)[65](index=65&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) - Foreign exchange fluctuation risk is insignificant, and the Group has no foreign exchange hedging policy[66](index=66&type=chunk)[67](index=67&type=chunk)[72](index=72&type=chunk) - There were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the year[68](index=68&type=chunk)[73](index=73&type=chunk) - Due to the nature of its business, the Group has no principal customers or suppliers[75](index=75&type=chunk)[78](index=78&type=chunk) [Employee and Remuneration Policies](index=14&type=section&id=Employee%20and%20Remuneration%20Policies) As of the year-end, the Group had 6 employees and 5 directors, with a remuneration policy aimed at providing competitive treatment and encouraging professional development - As of the year-end, the Group had **6 employees** and **5 directors**[76](index=76&type=chunk)[79](index=79&type=chunk) - The remuneration policy aims to provide competitive treatment and is reviewed annually by the Remuneration Committee[76](index=76&type=chunk)[79](index=79&type=chunk) - The Group encourages employees to participate in on-the-job training and continuous professional development, reimbursing related expenses[77](index=77&type=chunk)[79](index=79&type=chunk) [Directors' Report](index=15&type=section&id=Directors'%20Report) The Directors' Report covers general information, Board composition, shareholder details, corporate governance, risk management, stakeholder relations, and post-reporting events [General Information](index=15&type=section&id=General%20Information) The company's principal business is investment holding, with no dividend recommended for the year and no charitable donations made by the Group - The company is an investment holding company, with details of principal subsidiaries' businesses in Note 29 to the consolidated financial statements[81](index=81&type=chunk)[87](index=87&type=chunk) - The Board does not recommend the payment of a dividend for the year (2023: nil)[82](index=82&type=chunk)[88](index=88&type=chunk) - The Group made no charitable donations during the year (2023: HK$0)[85](index=85&type=chunk)[91](index=91&type=chunk) [Board of Directors](index=16&type=section&id=Board%20of%20Directors) The Board consists of one Non-executive Director and four Independent Non-executive Directors, with certain directors retiring and seeking re-election, and appropriate insurance maintained for potential legal actions - The Board of Directors comprises one Non-executive Director and four Independent Non-executive Directors[92](index=92&type=chunk)[93](index=93&type=chunk) - Mr. Liu Gao Yuan (Non-executive Director and Chairman) and Ms. Wong Lai Kin (Independent Non-executive Director) will retire and seek re-election at the upcoming AGM[92](index=92&type=chunk)[93](index=93&type=chunk) - All Independent Non-executive Directors have confirmed their independence in accordance with the Listing Rules[112](index=112&type=chunk)[116](index=116&type=chunk) - The company has purchased and maintained appropriate insurance coverage for potential legal proceedings against directors[114](index=114&type=chunk)[117](index=117&type=chunk) [Directors' Composition and Re-election](index=16&type=section&id=Directors'%20Composition%20and%20Re-election) The Board includes one Non-executive Director (Chairman) and four Independent Non-executive Directors, with two directors retiring and eligible for re-election at the upcoming AGM - The Board comprises one Non-executive Director and four Independent Non-executive Directors[92](index=92&type=chunk)[93](index=93&type=chunk) - Mr. Liu Gao Yuan and Ms. Wong Lai Kin will retire and seek re-election at the upcoming Annual General Meeting[92](index=92&type=chunk)[93](index=93&type=chunk) [Biographical Details of Directors and Senior Management](index=16&type=section&id=Biographical%20Details%20of%20Directors%20and%20Senior%20Management) The report provides detailed biographical information for all directors and senior management, including their extensive experience and remuneration, such as Mr. Liu Gao Yuan's monthly fee of HK$0.2 million - Mr. Liu Gao Yuan (74 years old) has over 45 years of international corporate development and management experience, with a monthly remuneration of **HK$0.2 million** in 2024[95](index=95&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) - Mr. Lui Siu Tsuen (69 years old) is a Fellow of the Hong Kong Institute of Certified Public Accountants, with over 30 years of experience in property investment, corporate finance, and media entertainment[99](index=99&type=chunk)[103](index=103&type=chunk) - Mr. Fung Nim Shu (59 years old) has over 28 years of experience in investment and mergers and acquisitions in China and Southeast Asia[100](index=100&type=chunk)[103](index=103&type=chunk) - Ms. Wong Lai Kin (59 years old) is a solicitor of the High Court of Hong Kong and a Chartered Financial Analyst, with over 30 years of legal experience[101](index=101&type=chunk)[104](index=104&type=chunk) - Mr. Yip Kwok Kwong (64 years old) is a Chartered Valuation Surveyor, with over 30 years of experience in valuation, surveying, and business development[105](index=105&type=chunk)[109](index=109&type=chunk) - Mr. Wan Tat Kee (68 years old) is the Financial Controller and Company Secretary, with over 30 years of experience in auditing and financial management[108](index=108&type=chunk)[110](index=110&type=chunk) - Independent Non-executive Directors each receive an annual remuneration of **HK$0.1 million**[107](index=107&type=chunk)[109](index=109&type=chunk) [Directors' Service Contracts and Independence](index=20&type=section&id=Directors'%20Service%20Contracts%20and%20Independence) No directors proposed for re-election have service contracts not terminable within one year without compensation, and all independent non-executive directors have confirmed their independence - No directors have entered into service contracts not terminable within one year without payment of compensation (other than statutory compensation)[111](index=111&type=chunk)[115](index=115&type=chunk) - All Independent Non-executive Directors have confirmed their independence, and the company considers them all to be independent[112](index=112&type=chunk)[116](index=116&type=chunk) [Permitted Indemnity Provision](index=20&type=section&id=Permitted%20Indemnity%20Provision) Directors are indemnified from company assets and profits against all actions, costs, losses, etc., incurred in their duties, except for fraud or dishonesty, with appropriate insurance maintained - Directors are indemnified from company assets and profits, except for fraud or dishonesty[113](index=113&type=chunk)[117](index=117&type=chunk) - The company has purchased and maintained appropriate insurance coverage for directors against potential legal proceedings[114](index=114&type=chunk)[117](index=117&type=chunk) [Shareholder Information](index=21&type=section&id=Shareholder%20Information) As of year-end, Mr. Liu Gao Yuan and his spouse held a combined 26.44% stake, with no share or convertible note purchase/redemption arrangements by the company or directors, and no pre-emptive rights - **Directors' and Substantial Shareholders' Long Positions in Shares (as of December 31, 2024)** ``` | Name/Company Name | Personal Interest (shares) | Family Interest (shares) | Corporate Interest (shares) | Total Interest (shares) | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | | Liu Gao Yuan | 5,340,000 | 26,689,084 | 26,689,084 | 32,029,084 | 26.44% | | Full Honour Development Limited | – | – | 26,689,084 | 26,689,084 | 22.03% | | Sun Matrix Limited | – | – | 26,689,084 | 26,689,084 | 22.03% | | Lan Yi | – | – | 26,689,084 | 32,029,084 | 26.44% | ``` - Mr. Liu Gao Yuan and his spouse, Ms. Lan Yi, collectively held **26.44%** of the company's shares[121](index=121&type=chunk)[125](index=125&type=chunk) - During the reporting period, neither the company nor its subsidiaries entered into any arrangements for the purchase, sale, or redemption of shares or convertible notes[127](index=127&type=chunk)[130](index=130&type=chunk) - There are no pre-emptive rights provisions in the company's bye-laws or Bermuda company law[159](index=159&type=chunk)[164](index=164&type=chunk) [Directors' and Chief Executive's Interests](index=21&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests) As of year-end, Mr. Liu Gao Yuan held a long position of 32.029 million shares, representing 26.44% of the issued share capital, through personal and corporate interests - **Mr. Liu Gao Yuan's Long Position in Shares (as of December 31, 2024)** ``` | Interest Type | Number of Shares | | :--- | :--- | | Personal Interest | 5,340,000 | | Family Interest | 26,689,084 | | Corporate Interest | 26,689,084 | | **Total Interest** | **32,029,084** | | **Percentage of Issued Share Capital** | **26.44%** | ``` - Mr. Liu Gao Yuan indirectly held shares through Sun Matrix Limited, a company jointly controlled by him and his spouse[121](index=121&type=chunk) [Substantial Shareholders](index=22&type=section&id=Substantial%20Shareholders) As of year-end, substantial shareholders included Full Honour Development Limited and Sun Matrix Limited, each holding 22.03% of shares, with Mr. Liu Gao Yuan and his spouse controlling 26.44% combined - **Substantial Shareholders' Long Positions in Shares (as of December 31, 2024)** ``` | Shareholder Name | Corporate Interest (shares) | Total Interest (shares) | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Full Honour Development Limited | 26,689,084 | 26,689,084 | 22.03% | | Sun Matrix Limited | 26,689,084 | 26,689,084 | 22.03% | | Liu Gao Yuan* | 26,689,084 | 32,029,084 | 26.44% | | Lan Yi | 26,689,084 | 32,029,084 | 26.44% | ``` - Full Honour Development Limited is wholly controlled by Sun Matrix Limited, which is 50% controlled by Mr. Liu Gao Yuan and 50% by his spouse, Ms. Lan Yi[125](index=125&type=chunk) [Arrangements to Purchase Shares or Convertible Notes](index=23&type=section&id=Arrangements%20to%20Purchase%20Shares%20or%20Convertible%20Notes) During the year, neither the company nor its subsidiaries entered into any arrangements for directors to benefit from purchasing company shares or convertible notes - During the year, neither the company nor its subsidiaries entered into any arrangements enabling directors to benefit from purchasing company shares or convertible notes[127](index=127&type=chunk)[130](index=130&type=chunk) - No directors, chief executives, their spouses, or children under 18 had any rights to subscribe for the company's securities[127](index=127&type=chunk)[130](index=130&type=chunk) [Directors' Interests in Transactions, Arrangements or Contracts of Significance](index=23&type=section&id=Directors'%20Interests%20in%20Transactions%2C%20Arrangements%20or%20Contracts%20of%20Significance) As of the year-end or at any time during the year, neither the company nor its subsidiaries entered into any significant transactions, arrangements, or contracts in which directors had a material interest - During the year, neither the company nor its subsidiaries entered into any significant transactions, arrangements, or contracts in which directors had a material interest[128](index=128&type=chunk)[131](index=131&type=chunk) [Corporate Governance & Risk](index=23&type=section&id=Corporate%20Governance%20%26%20Risk) The company's investment management agreement with Rich Concept Capital saw reduced fees, while it manages global economic volatility risks through experienced teams and adheres to environmental and regulatory compliance - The company's investment management agreement with Rich Concept Capital had its monthly management fee reduced from **HK$80,000** to **HK$40,000** from March 2023[134](index=134&type=chunk)[140](index=140&type=chunk) - The Group's primary risk is the impact of global economic volatility on investment prices and values[145](index=145&type=chunk) - To mitigate risks, the Group employs experienced investment executives and managers to manage a diversified investment portfolio, which is regularly reviewed[145](index=145&type=chunk) - The Group implements environmental protection measures in its daily operations, such as paper recycling and energy saving[146](index=146&type=chunk)[151](index=151&type=chunk) - The company complies with relevant laws and regulations, including Listing Rules, securities, company, tax, and labor laws, and engages legal and compliance advisors[148](index=148&type=chunk)[152](index=152&type=chunk) [Connected Transaction (Investment Management Agreement)](index=23&type=section&id=Connected%20Transaction%20(Investment%20Management%20Agreement)) The company's investment management agreement with Rich Concept Capital, effective until December 31, 2024, had its monthly management fee reduced from HK$80,000 to HK$40,000 from March 2023 - The company entered into an investment management agreement with Rich Concept Capital, appointing it as investment manager until December 31, 2024[129](index=129&type=chunk)[132](index=132&type=chunk) - The agreement stipulated a fixed monthly management fee of **HK$80,000** and a potential discretionary bonus of up to **HK$0.2 million**[133](index=133&type=chunk) - The monthly management fee was revised from **HK$80,000** to **HK$40,000** on March 21, 2023[134](index=134&type=chunk)[140](index=140&type=chunk) - The Board confirmed that this connected transaction was entered into on normal commercial terms, fair and reasonable, and in the overall interests of the shareholders[137](index=137&type=chunk)[141](index=141&type=chunk) [Management Contracts](index=24&type=section&id=Management%20Contracts) Apart from the investment management agreement, no other management and administration contracts concerning the whole or any substantial part of the company's business were entered into or existed during the year - Apart from the investment management agreement, no other significant management contracts existed during the year[139](index=139&type=chunk)[142](index=142&type=chunk) [Principal Risks and Uncertainties](index=25&type=section&id=Principal%20Risks%20and%20Uncertainties) The Group's primary risks stem from global economic volatility impacting the profitability of commercial enterprises and stock markets, leading to potential declines in investment values - The Group's principal activities are affected by global economic volatility, facing risks of declining investment prices and values[145](index=145&type=chunk) - Net asset value is a key performance indicator, reflecting the Group's value[143](index=143&type=chunk)[144](index=144&type=chunk) - Risks are mitigated by engaging experienced investment executives and regularly reviewing the diversified investment portfolio[145](index=145&type=chunk) [Environment Policies and Performance](index=26&type=section&id=Environment%20Policies%20and%20Performance) The Group promotes environmental protection in its daily business operations, including paper recycling and energy saving, and will review and consider further eco-friendly measures - The Group promotes environmental protection in its daily operations, including recycling consumables and saving energy[146](index=146&type=chunk)[151](index=151&type=chunk) - The Group will periodically review its environmental practices and consider further eco-friendly measures[146](index=146&type=chunk)[151](index=151&type=chunk) [Compliance with Laws and Regulations](index=26&type=section&id=Compliance%20with%20Laws%20and%20Regulations) The Group adheres to relevant laws and regulations, including Listing Rules, securities, company, tax, and labor laws, and employs legal and compliance advisors to ensure operational compliance - The Group complies with relevant laws and regulations, including Listing Rules, securities, company, tax, and labor laws[148](index=148&type=chunk)[152](index=152&type=chunk) - The Board found no material non-compliance and engages legal and compliance advisors when necessary[148](index=148&type=chunk)[152](index=152&type=chunk) [Stakeholder Relations & Other Policies](index=26&type=section&id=Stakeholder%20Relations%20%26%20Other%20Policies) The Group values employees and shareholders, maintaining communication to enhance value, has no major customers/suppliers, and the Board's dividend policy considers various financial factors - The Group considers employees and shareholders as key stakeholders, committed to enhancing shareholder value[149](index=149&type=chunk)[153](index=153&type=chunk)[156](index=156&type=chunk)[161](index=161&type=chunk) - The company did not purchase, sell, or redeem any shares during the year[158](index=158&type=chunk)[163](index=163&type=chunk) - The company has no pre-emptive rights provisions[159](index=159&type=chunk)[164](index=164&type=chunk) - The Board may declare dividends at its discretion, considering factors such as distributable reserves, performance, economic outlook, liquidity, and capital requirements[166](index=166&type=chunk) [Relationship with Stakeholders (Employees, Shareholders, Customers/Suppliers)](index=26&type=section&id=Relationship%20with%20Stakeholders%20(Employees%2C%20Shareholders%2C%20Customers%2FSup-pliers)) The Group values employees as its most valuable asset, providing competitive compensation and a safe working environment, and maintains regular communication with shareholders to enhance asset value - Employees are the Group's most valuable asset, provided with competitive remuneration and a healthy and safe working environment[150](index=150&type=chunk)[154](index=154&type=chunk) - The Group maintains regular communication with shareholders through AGMs and announcements, committed to enhancing asset value and profitability[156](index=156&type=chunk)[161](index=161&type=chunk) - Due to the nature of its business, the Group has no principal customers or suppliers[157](index=157&type=chunk)[162](index=162&type=chunk) [Purchase, Sale or Redemption of Shares of the Company](index=27&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Shares%20of%20the%20Company) Neither the company nor its subsidiaries purchased, sold, or redeemed any shares during the year - Neither the company nor its subsidiaries purchased, sold, or redeemed any shares during the year[158](index=158&type=chunk)[163](index=163&type=chunk) [Pre-Emptive Rights & Tax Relief](index=27&type=section&id=Pre-Emptive%20Rights%20%26%20Tax%20Relief) The company's articles of association and Bermuda company law do not contain pre-emptive rights, and no tax

Management Discussion and Analysis [Definitions and Presentation Basis](index=4&type=section&id=Definitions%20and%20Presentation%20Basis) This section defines key financial terms like 'organic' and 'normalized,' highlighting adjustments to financial data for currency, scope, and non-underlying items to accurately reflect business performance - Organic data excludes the impact of currency translation and scope changes to reflect business-related performance[7](index=7&type=chunk) - Normalized metrics (EBITDA, EBIT, profit, tax rate, EPS) exclude non-underlying items to understand sustainable performance[7](index=7&type=chunk) [Consolidated Results for the First Half of 2025](index=5&type=section&id=Consolidated%20Results%20for%20the%20First%20Half%20of%202025) Budweiser APAC's consolidated results for H1 2025 show declines in total volume, revenue, gross profit, and all normalized profit metrics, with total volume down 6.1%, revenue down 5.6%, and normalized EBITDA down 8.0% Consolidated Results Overview for H1 2025 (Millions of USD) | Metric | H1 2025 | H1 2024 | Organic Growth | | :--- | :--- | :--- | :--- | | Total Volume (Hundred Thousand Liters) | 43,628 | 46,573 | -6.1% | | Revenue | 3,136 | 3,399 | -5.6% | | Gross Profit | 1,613 | 1,751 | -4.9% | | Gross Margin | 51.4% | 51.5% | 38 Basis Points | | Normalized EBITDA | 983 | 1,100 | -8.0% | | Normalized EBITDA Margin | 31.3% | 32.4% | – 82 Basis Points | | Normalized EBIT | 679 | 776 | -9.6% | | Normalized EBIT Margin | 21.7% | 22.8% | – 95 Basis Points | | Profit Attributable to Budweiser APAC Equity Holders | 409 | 541 | | | Normalized Profit Attributable to Budweiser APAC Equity Holders | 474 | 552 | | | EPS (in cents) | 3.10 | 4.10 | | | Normalized EPS (in cents) | 3.59 | 4.19 | | [Unaudited Organic Growth Calculation for the First Half of 2025](index=6&type=section&id=Unaudited%20Organic%20Growth%20Calculation%20for%20the%20First%20Half%20of%202025) This section details the H1 2025 organic growth calculation, showing negative growth in total volume, revenue, gross profit, and normalized EBITDA, primarily due to scope and currency translation impacts Organic Growth Figures for H1 2025 (Millions of USD) | Budweiser APAC | H1 2024 | Scope | Currency Translation | Organic Growth | H1 2025 | Organic Growth | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Volume (Hundred Thousand Liters) | 46,573 | (93) | – | (2,852) | 43,628 | -6.1% | | Revenue | 3,399 | (7) | (65) | (191) | 3,136 | -5.6% | | Cost of Sales | (1,648) | (9) | 29 | 105 | (1,523) | 6.4% | | Gross Profit | 1,751 | (16) | (36) | (86) | 1,613 | -4.9% | | Normalized EBIT | 776 | (11) | (12) | (74) | 679 | -9.6% | | Normalized EBITDA | 1,100 | (10) | (19) | (88) | 983 | -8.0% | | Normalized EBITDA Margin | 32.4% | | | | 31.3% | – 82 Basis Points | - This calculation is based on internal group records and management accounts, and has not been reviewed or audited by independent auditors[13](index=13&type=chunk) [Management Commentary](index=7&type=section&id=Management%20Commentary) Management noted a decline in H1 2025 total volume and revenue, primarily due to China market challenges and early shipments in South Korea; however, revenue per hectoliter increased, and the company maintained a strong balance sheet with a net cash position of **$2.4 billion** - Total volume decreased by **6.1%** in H1 2025, revenue by **5.6%**, and normalized EBITDA by **8.0%**[14](index=14&type=chunk) - In Q2 2025, volume and revenue decreased by **6.2%** and **3.9%** respectively, mainly due to China market challenges and early shipment arrangements in South Korea[15](index=15&type=chunk) - Revenue per hectoliter increased by **2.4%** in Q2, driven by positive brand portfolio effects in APAC and revenue management initiatives in the East region[15](index=15&type=chunk) - As of June 30, 2025, the company's net cash position was **$2.4 billion**, maintaining a strong balance sheet[15](index=15&type=chunk)[16](index=16&type=chunk) - China market volume decreased by **8.2%**, with revenue and revenue per hectoliter down **9.5%** and **1.4%** respectively[18](index=18&type=chunk) - South Korea's volume remained flat, outperforming the industry in both on-premise and off-premise channels[18](index=18&type=chunk) - India's business continued to grow, with double-digit volume and revenue growth in the premium and super-premium product portfolios[18](index=18&type=chunk) [Business Review](index=8&type=section&id=Business%20Review) This section reviews Budweiser APAC's performance in APAC West (China, India) and APAC East (South Korea); China faced volume and revenue declines, addressed by channel expansion and digitalization, while India showed strong growth in premium products, and South Korea maintained volume through innovation [APAC West](index=8&type=section&id=APAC%20West) APAC West experienced Q2 2025 declines in volume and revenue, but revenue per hectoliter increased, and normalized EBITDA saw a slight rise; overall H1 volume and revenue decreased, with normalized EBITDA also down - In Q2 2025, volume decreased by **5.6%**, revenue by **2.7%**, revenue per hectoliter increased by **3.0%**, and normalized EBITDA increased by **1.4%**[20](index=20&type=chunk) - In H1 2025, volume decreased by **6.9%**, revenue by **7.1%**, revenue per hectoliter by **0.2%**, and normalized EBITDA by **8.8%**[20](index=20&type=chunk) [China](index=8&type=section&id=China) China's market saw volume and revenue declines in Q2 and H1 2025, primarily due to business footprint and weak channels; however, the company enhanced commercial capabilities and brand strength through off-premise channel expansion, premiumization, and the BEES digital platform - In Q2 2025, China's volume decreased by **7.4%**, revenue by **6.4%**, and revenue per hectoliter increased by **1.1%**[21](index=21&type=chunk) - In H1 2025, China's volume decreased by **8.2%**, revenue by **9.5%**, and revenue per hectoliter by **1.4%**[21](index=21&type=chunk) - Off-premise channel volume and revenue contributions grew, with the share of premium and super-premium products in off-premise channels surpassing that of Chinese restaurants[21](index=21&type=chunk) - The B2B distributor and customer engagement platform BEES now covers over **320 cities** in China, continuously enhancing commercial capabilities[21](index=21&type=chunk) - The Budweiser brand deepened consumer connections through FIFA Club World Cup campaigns, while Harbin brand attracted Gen Z consumers with a 'Sports + Hip-Hop' transformation program[21](index=21&type=chunk)[22](index=22&type=chunk) [India](index=9&type=section&id=India) India's market showed strong performance, with Q2 2025 revenue growing double-digits and a significant increase in EBITDA margin; H1 saw double-digit volume and revenue growth in premium and super-premium product portfolios - In Q2 2025, India's revenue showed **double-digit growth**, with a significant increase in EBITDA margin[23](index=23&type=chunk) - In H1 2025, India's premium and super-premium product portfolios achieved **double-digit growth** in both volume and revenue[23](index=23&type=chunk) [APAC East](index=9&type=section&id=APAC%20East) APAC East experienced Q2 2025 declines in volume and revenue, with a significant drop in normalized EBITDA; H1 saw a slight volume decrease, modest increases in revenue and revenue per hectoliter, but normalized EBITDA still declined - In Q2 2025, volume decreased by **10.4%**, revenue by **8.4%**, and normalized EBITDA by **26.5%**[24](index=24&type=chunk) - In H1 2025, volume decreased by **0.5%**, revenue increased by **0.6%**, revenue per hectoliter increased by **1.1%**, and normalized EBITDA decreased by **4.5%**[24](index=24&type=chunk) [South Korea](index=9&type=section&id=South%20Korea) South Korea's Q2 2025 volume and revenue declined due to early shipment arrangements, but revenue per hectoliter grew; H1 volume remained flat, with the company outperforming the industry in on-premise and off-premise channels through product innovations like Cass Lemon Squeeze 7.0 and Cass Fresh ICE - In Q2 2025, South Korea's volume and revenue recorded **high single-digit declines**, primarily due to early shipment arrangements[25](index=25&type=chunk) - In H1 2025, South Korea's volume remained flat, outperforming the weak industry performance in both on-premise and off-premise channels[25](index=25&type=chunk) - New products like Cass Lemon Squeeze 7.0 and the summer limited edition Cass Fresh ICE were launched to meet consumer demand for higher alcohol content and refreshing taste[25](index=25&type=chunk) [Review of Operating Results for the Six Months Ended June 30, 2025, Compared to the Six Months Ended June 30, 2024](index=10&type=section&id=Review%20of%20Operating%20Results%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%2C%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030%2C%202024) This section compares H1 2025 and H1 2024 operating results, showing declines in volume, revenue, operating profit, and normalized EBITDA, though cost of sales decreased due to favorable commodity prices; profit attributable to equity holders decreased from **$541 million** to **$409 million** [Volume](index=10&type=section&id=Volume) Total volume decreased by **6.1%** in H1 2025, primarily due to the China business footprint, partially offset by India's performance - Total volume decreased by **6.1%** in H1 2025, mainly due to the China business footprint, partially offset by India's performance[28](index=28&type=chunk) [Revenue](index=10&type=section&id=Revenue) H1 2025 revenue decreased by **5.6%**, but revenue per hectoliter grew by **0.5%**, driven by positive brand portfolio effects in APAC and revenue management initiatives in APAC East - H1 2025 revenue decreased by **5.6%**, while revenue per hectoliter increased by **0.5%**[29](index=29&type=chunk) - Revenue growth was primarily driven by positive brand portfolio effects in APAC and revenue management initiatives in APAC East[29](index=29&type=chunk) [Cost of Sales](index=10&type=section&id=Cost%20of%20Sales) H1 2025 cost of sales decreased by **6.4%**, and cost of sales per hectoliter decreased by **0.2%**, primarily due to favorable commodity prices and cost management, partially offset by operating deleverage and country mix - H1 2025 cost of sales decreased by **6.4%**, and cost of sales per hectoliter decreased by **0.2%**[30](index=30&type=chunk) - Primarily driven by favorable commodity prices and cost management initiatives, partially offset by operating deleverage and country mix[30](index=30&type=chunk) [Selling, General and Administrative Expenses](index=10&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) Selling, general and administrative expenses decreased in H1 2025, mainly due to flexible management of commercial investments amid weak volumes, reduced variable compensation accruals in China, and a higher base in India - Selling, general and administrative expenses decreased, primarily due to flexible management of commercial investments amid weak volumes, reduced variable compensation accruals in China, and a higher base in India[31](index=31&type=chunk) [Other Operating Income](index=10&type=section&id=Other%20Operating%20Income) Details on other operating income can be found in Note 5 to the unaudited condensed consolidated interim financial statements of this interim report - For more information on other operating income, please refer to Note 5 to the unaudited condensed consolidated interim financial statements of this interim report[32](index=32&type=chunk) [Operating Profit Before Non-Underlying Items (Normalized EBIT)](index=10&type=section&id=Operating%20Profit%20Before%20Non-Underlying%20Items%20(Normalized%20EBIT)) Normalized EBIT decreased by **9.6%** in H1 2025 - Normalized EBIT decreased by **9.6%** in H1 2025[33](index=33&type=chunk) [Operating Profit](index=10&type=section&id=Operating%20Profit) Profit attributable to the company's equity holders decreased from **$541 million** in H1 2024 to **$409 million** in H1 2025 - Profit attributable to the company's equity holders decreased from **$541 million** in H1 2024 to **$409 million** in H1 2025[34](index=34&type=chunk) [Non-IFRS Financial Measures](index=10&type=section&id=Non-IFRS%20Financial%20Measures) Normalized EBITDA decreased by **8.0%** in H1 2025, with the margin declining by **82 basis points** to **31.3%**, mainly due to operating deleverage and increased commercial investments; this section emphasizes that normalized measures are management's performance indicators but should not replace IFRS measures - Normalized EBITDA decreased by **8.0%** in H1 2025, with the margin decreasing by **82 basis points** to **31.3%**[35](index=35&type=chunk) - Normalized EBITDA is a key financial metric regularly monitored by management, but it is not an accounting method under IFRS[37](index=37&type=chunk) [Non-Underlying Items](index=11&type=section&id=Non-Underlying%20Items) Non-underlying items are non-recurring gains or expenses deemed material by management for disclosure, primarily restructuring costs related to organizational integration aimed at improving efficiency and reducing the cost base; details on components and impact on operating profit are in Note 6 - Non-underlying items are gains or expenses that arise irregularly from normal business activities and are separately accounted for due to their size or nature, which is important for understanding sustainable performance[7](index=7&type=chunk)[39](index=39&type=chunk) - Non-underlying restructuring costs are primarily related to organizational integration, aiming to eliminate overlapping structures or redundant processes to achieve a lower cost base[39](index=39&type=chunk) [Income Tax Expense](index=11&type=section&id=Income%20Tax%20Expense) For the components of income tax expense and its overall impact on operating profit, please refer to Note 7 to the unaudited condensed consolidated interim financial statements of this interim report - For the components of income tax expense and its overall impact on operating profit, please refer to Note 7 to the unaudited condensed consolidated interim financial statements of this interim report[40](index=40&type=chunk) [Liquidity and Capital Resources](index=12&type=section&id=Liquidity%20and%20Capital%20Resources) This section outlines the company's liquidity and capital resources, with primary cash sources from operating activities and bank borrowings; as of June 30, 2025, net current liabilities were **$222 million**, and net cash position was **$2.4 billion**, with increased operating cash flow, decreased investing cash flow, and increased financing cash outflow, while financial risk management policies remained unchanged with no significant acquisitions or disposals [General](index=12&type=section&id=General) The company's primary cash flow sources are operating activities and bank borrowings, with main cash needs including capital expenditures, investments, increased subsidiary ownership, debt repayment, and dividend payments; as of June 30, 2025, net current liabilities were **$222 million**, which management views as a positive impact of working capital management - Primary cash flow sources are cash flows from operating activities and bank borrowings[41](index=41&type=chunk) - As of June 30, 2025, net current liabilities were **$222 million**, which management considers a positive impact of working capital management[41](index=41&type=chunk) - As of June 30, 2025, the company had undrawn uncommitted facilities of **$523 million**[41](index=41&type=chunk) [Cash and Cash Equivalents](index=12&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, the company's consolidated cash and cash equivalents were **$2.402 billion**, a decrease from **$2.867 billion** as of December 31, 2024 Cash and Cash Equivalents (Millions of USD) | Date | Amount (Million USD) | | :--- | :--- | | June 30, 2025 | 2,402 | | December 31, 2024 | 2,867 | [Cash Flows](index=12&type=section&id=Cash%20Flows) This section analyzes cash flows from operating, investing, and financing activities; operating cash flow increased, investing cash flow decreased mainly due to reduced cash pool deposits and recyclable packaging purchases, and financing cash outflow increased primarily due to higher dividend payments [Cash Flows from Operating Activities](index=12&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Cash flows from operating activities increased from **$223 million** in H1 2024 to **$267 million** in H1 2025, primarily due to an **$86 million** increase in cash generated from operations, attributable to working capital changes - Cash flows from operating activities increased from **$223 million** in H1 2024 to **$267 million** in H1 2025[43](index=43&type=chunk) - Cash generated from operations increased by **$86 million**, primarily due to increased working capital changes in H1 2025[43](index=43&type=chunk) [Cash Flows Used in Investing Activities](index=12&type=section&id=Cash%20Flows%20Used%20in%20Investing%20Activities) Cash flows used in investing activities in H1 2025 were **$110 million**, a significant decrease from **$250 million** in H1 2024, mainly due to reduced cash pool deposits with the Budweiser Group and lower purchases of recyclable packaging - Cash flows used in investing activities in H1 2025 were **$110 million**, a decrease from **$250 million** in H1 2024[44](index=44&type=chunk) - The decrease was primarily due to reduced cash pool deposits with the Budweiser Group and lower purchases of recyclable packaging[44](index=44&type=chunk) [Cash Flows Used in Financing Activities](index=13&type=section&id=Cash%20Flows%20Used%20in%20Financing%20Activities) Cash outflows from financing activities in H1 2025 were **$674 million**, an increase of **$29 million** from **$645 million** in H1 2024, primarily driven by increased dividend payments, partially offset by net proceeds from borrowings generated by funding arrangements - Cash outflows from financing activities in H1 2025 were **$674 million**, an increase of **$29 million** from H1 2024[46](index=46&type=chunk) - The increase was primarily driven by higher dividend payments, partially offset by net proceeds from borrowings generated by funding arrangements[46](index=46&type=chunk) [Contingent Liabilities](index=13&type=section&id=Contingent%20Liabilities) South Korean subsidiary Oriental Brewery Co., Ltd. (OB) faces lawsuits for customs audit claims and alleged employee embezzlement and customs evasion; OB and co-defendants will contest the customs evasion charges, with potential fine risks not expected to materially impact the company overall - South Korean subsidiary OB recorded **$66 million** in non-underlying expenses for customs audit claims, which are still being contested[48](index=48&type=chunk) - An OB employee was indicted for alleged embezzlement of company funds, commercial bribery, and customs evasion; OB and co-defendants will contest the customs evasion charges[48](index=48&type=chunk) - The potential fine risk is not expected to have a material impact on the company as a whole[48](index=48&type=chunk) [Debt and Balance Sheet](index=13&type=section&id=Debt%20and%20Balance%20Sheet) As of June 30, 2025, the company's total debt was **$326 million**, primarily interest-bearing bank loans, an increase from **$221 million** as of December 31, 2024; most debt is due within one year Debt Details (Millions of USD) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Unsecured Bank Loans and Other Loans | 199 | 98 | | Lease Liabilities | 127 | 123 | | **Total Debt** | **326** | **221** | [Capital Expenditures](index=14&type=section&id=Capital%20Expenditures) There were no significant changes to capital expenditure plans and their funding sources in H1 2025 - There were no significant changes to capital expenditure plans and their funding sources in H1 2025[51](index=51&type=chunk) [Pledged Assets](index=14&type=section&id=Pledged%20Assets) As of June 30, 2025, and December 31, 2024, the company had no pledged assets for loans and bank financing, but property collateral was provided to the consumption tax authorities in South Korea - As of June 30, 2025, and December 31, 2024, the company had no pledged assets for loans and bank financing[52](index=52&type=chunk) - In South Korea, the company has provided property collateral to the consumption tax authorities[52](index=52&type=chunk) [Key Financial Ratios](index=14&type=section&id=Key%20Financial%20Ratios) As of June 30, 2025, the cash (net of debt) to normalized EBITDA ratio increased to **2.2 times**, primarily due to a decrease in normalized EBITDA Key Financial Ratios | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash (Net of Debt) to Normalized EBITDA Ratio | 2.2 times | 1.9 times | - The ratio increased because normalized EBITDA decreased from **$1,100 million** in H1 2024 to **$983 million** in H1 2025[53](index=53&type=chunk) [Treasury Policy and Market and Other Financial Risks](index=14&type=section&id=Treasury%20Policy%20and%20Market%20and%20Other%20Financial%20Risks) The company faces market risks (currency, interest rate, commodity price), credit risk, and liquidity risk; risk management policies remained unchanged in H1 2025, with foreign currency exposure primarily involving Euro and USD procurement - Business activities face market risks (currency, cash flow interest rate, commodity price), credit risk, and liquidity risk[54](index=54&type=chunk) - Risk management policies remained unchanged in H1 2025, with foreign currency exposure primarily involving Euro and USD procurement[54](index=54&type=chunk) [Acquisitions or Disposals and Material Investments](index=14&type=section&id=Acquisitions%20or%20Disposals%20and%20Material%20Investments) In H1 2025, the company did not undertake any significant acquisitions or disposals, nor did it hold any material investments - In H1 2025, the company did not undertake any significant acquisitions or disposals, nor did it hold any material investments[55](index=55&type=chunk) [Events After the Reporting Period](index=14&type=section&id=Events%20After%20the%20Reporting%20Period) There were no significant events after the reporting period - There were no significant events after the reporting period[56](index=56&type=chunk) Other Information [Board Composition](index=15&type=section&id=Board%20Composition) The Board of Directors comprises seven directors, including executive, non-executive, and independent non-executive directors, ensuring a balanced governance structure - The Board of Directors currently comprises seven directors, including executive, non-executive, and independent non-executive directors[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) [Changes in Directors' Information](index=16&type=section&id=Changes%20in%20Directors'%20Information) Several changes occurred in the Board's composition during the reporting period, including Mr. Jan Craps ceasing to be CEO and Co-Chair, Mr. Cheng Yan Jun being appointed as the new CEO and Co-Chair, and Mr. Ricardo Tadeu being appointed as a Non-Executive Director - Mr. Jan Craps ceased to be Chief Executive Officer, Co-Chair, and Executive Director effective April 1, 2025[63](index=63&type=chunk) - Mr. Cheng Yan Jun was appointed Chief Executive Officer, Co-Chair, and Executive Director effective April 1, 2025[63](index=63&type=chunk) - Mr. Ricardo Tadeu was appointed Non-Executive Director effective May 15, 2025[63](index=63&type=chunk) [Audit and Risk Committee](index=16&type=section&id=Audit%20and%20Risk%20Committee) The company's Audit and Risk Committee has reviewed the interim financial information, and external auditor PricewaterhouseCoopers has conducted a review in accordance with International Standard on Review Engagements 2410 - The interim financial information contained in this interim report has been reviewed by the Audit and Risk Committee[61](index=61&type=chunk) - External auditor PricewaterhouseCoopers has conducted a review in accordance with International Standard on Review Engagements 2410[61](index=61&type=chunk) [Employees, Remuneration and Pension Schemes](index=16&type=section&id=Employees%2C%20Remuneration%20and%20Pension%20Schemes) This section details the company's employee situation, remuneration policy, and pension schemes; as of June 30, 2025, the company employed over **21,000 full-time employees**, primarily in China, South Korea, and India; the remuneration policy aims to incentivize high performance and is linked to sustainability goals, with long-term incentives mainly granted as share options or restricted share units [Employees](index=16&type=section&id=Employees) As of June 30, 2025, the company had a total of **21,461 full-time employees**, with the largest number in China at **17,893**; the company maintains good relations with employee unions, with no significant labor disputes in H1 Number of Full-Time Employees by Region as of June 30, 2025 | Region | As of June 30, 2025 | | :--- | :--- | | China | 17,893 | | South Korea | 1,876 | | India | 1,370 | | Vietnam | 243 | | Others | 79 | | **Total** | **21,461** | - The Group maintains a mutually respectful relationship with employee unions, and no labor disputes materially affecting the business occurred in H1 2025[65](index=65&type=chunk) [Remuneration](index=17&type=section&id=Remuneration) The company's remuneration policy aims to provide competitive compensation, incentivize high performance, and link the remuneration of executive directors, senior management, and employees to specific sustainability performance, goals, and metrics; long-term incentives are primarily granted as share options or restricted share units, some with performance-related vesting conditions - The remuneration policy aims to provide competitive and market-leading compensation to incentivize employees to achieve high performance[66](index=66&type=chunk) - The remuneration of executive directors, senior management, and employees is linked to specific sustainability performance, goals, and metrics[66](index=66&type=chunk) - The actual payment of performance-related variable remuneration (bonuses) is linked to the achievement of company, business unit, and individual objectives, based on financial and non-financial key performance indicators[68](index=68&type=chunk) - Long-term incentives are primarily paid in the form of share options or restricted share units, some of which may have performance-related vesting conditions, such as a total shareholder return performance test for the Budweiser Group[70](index=70&type=chunk)[71](index=71&type=chunk) [Share Incentive Schemes](index=19&type=section&id=Share%20Incentive%20Schemes) The company has five share incentive schemes to encourage senior management shareholding and attract and retain talent; as of June 30, 2025, **25,564,141 shares** were held in trust for awards; this section details participants, share limits, vesting periods, exercise/purchase price determination, remaining terms, and granted/outstanding awards [Summary of Share Incentive Schemes](index=19&type=section&id=Summary%20of%20Share%20Incentive%20Schemes) This section outlines key terms of the Long-Term Incentive Scheme, Restricted Share Unit Scheme, Employee Share Purchase Scheme, Share-Based Remuneration Scheme, and New Restricted Share Unit Scheme, including participant eligibility, share limits, vesting periods, exercise/purchase price determination, and scheme validity [Long-Term Incentive Scheme](index=19&type=section&id=Long-Term%20Incentive%20Scheme) The Long-Term Incentive Scheme allows granting share options to eligible employees and directors, with an exercise price no less than the highest of the closing price on the grant date, the average closing price of the preceding five business days, or the nominal value of the shares, valid for ten years from May 8, 2023 - Share options may be granted to eligible employees and directors of the Group as selected by the Remuneration Committee at its sole discretion[74](index=74&type=chunk) - The exercise price of share options is determined by the Board, not less than the highest of the closing price on the grant date, the average closing price of the preceding five business days, or the nominal value of the shares[79](index=79&type=chunk)[85](index=85&type=chunk) - The scheme is valid for **ten years** from May 8, 2023[79](index=79&type=chunk) [Restricted Share Unit Scheme](index=20&type=section&id=Restricted%20Share%20Unit%20Scheme) The Restricted Share Unit Scheme allows granting restricted share units to employees and directors who have contributed to the Group, with a purchase price no less than the highest of the closing price on the grant date, the average closing price of the preceding five business days, or the nominal value of the shares, valid for ten years from May 8, 2023 - Restricted share units may be granted to any employee and/or director whom the Board considers has contributed or will contribute to the Group[80](index=80&type=chunk) - The purchase price of restricted share units is determined by the Board, not less than the highest of the closing price on the grant date, the average closing price of the preceding five business days, or the nominal value of the shares[86](index=86&type=chunk)[93](index=93&type=chunk) - The scheme is valid for **ten years** from May 8, 2023[86](index=86&type=chunk) [Employee Share Purchase Scheme](index=21&type=section&id=Employee%20Share%20Purchase%20Scheme) The Employee Share Purchase Scheme offers eligible employees the opportunity to acquire restricted shares and grants 'matching' restricted share units, with a purchase price no less than the highest of the closing price on the grant date, the average closing price of the preceding five business days, or the nominal value of the shares, valid for ten years from May 8, 2023 - The Employee Share Purchase Scheme offers eligible employees the opportunity to acquire restricted shares and grants 'matching' restricted share units[87](index=87&type=chunk) - The purchase price of restricted share units or restricted shares is determined by the Board, not less than the highest of the closing price on the grant date, the average closing price of the preceding five business days, or the nominal value of the shares[93](index=93&type=chunk) - The scheme is valid for **ten years** from May 8, 2023[94](index=94&type=chunk) [Share-Based Remuneration Scheme](index=22&type=section&id=Share-Based%20Remuneration%20Scheme) The Share-Based Remuneration Scheme allows employees and directors to elect to receive bonuses in cash, restricted shares, or a combination, and to purchase restricted share units at a discount, while also receiving additional 'matching' restricted share units; the purchase price is no less than the highest of the closing price on the grant date, the average closing price of the preceding five business days, or the nominal value of the shares, valid for ten years from May 8, 2023 - The scheme allows employees and directors to elect to receive bonuses in cash, restricted shares, or a combination, and to purchase restricted share units at a discount, while also receiving additional 'matching' restricted share units[95](index=95&type=chunk) - The purchase price of restricted share units or restricted shares is determined by the Board, not less than the highest of the closing price on the grant date, the average closing price of the preceding five business days, or the nominal value of the shares[101](index=101&type=chunk) - The scheme is valid for **ten years** from May 8, 2023[102](index=102&type=chunk) [New Restricted Share Unit Scheme](index=23&type=section&id=New%20Restricted%20Share%20Unit%20Scheme) The New Restricted Share Unit Scheme allows granting restricted share units to employees and directors who have contributed to the Group, with a purchase price no less than the highest of the closing price on the grant date, the average closing price of the preceding five business days, or the nominal value of the shares, valid for ten years from May 8, 2023 - Restricted share units may be granted to any employee and/or director whom the Board considers has contributed or will contribute to the Group[103](index=103&type=chunk) - The purchase price of restricted share units is determined by the Board, not less than the highest of the closing price on the grant date, the average closing price of the preceding five business days, or the nominal value of the shares[108](index=108&type=chunk)[110](index=110&type=chunk) - The scheme is valid for **ten years** from May 8, 2023[109](index=109&type=chunk) [Mandate Limit](index=24&type=section&id=Mandate%20Limit) The total number of shares that may be granted under all share incentive schemes (scheme mandate limit) is **10%** of the company's issued shares on the listing date or the date of approval for updating the limit; as of June 30, 2025, **1,237,682,943 shares** were available for grant, representing approximately **9.35%** of the issued share capital - The scheme mandate limit is **10%** of the total issued shares of the company on the listing date or the date of approval for updating the limit (**1,324,339,700 shares** as of May 8, 2023)[111](index=111&type=chunk) - As of June 30, 2025, the total number of share awards available for grant was **1,237,682,943 shares**, representing approximately **9.35%** of the company's issued share capital[117](index=117&type=chunk) [Details of Share Awards Granted and Outstanding for the Six Months Ended June 30, 2025](index=24&type=section&id=Details%20of%20Share%20Awards%20Granted%20and%20Outstanding%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025) This section provides detailed data on share options and restricted share units granted and outstanding for the six months ended June 30, 2025, including holdings by Mr. Jan Craps, Mr. Cheng Yan Jun, the five highest-paid individuals, and other eligible employees Details of Share Options Granted and Outstanding for the Six Months Ended June 30, 2025 | Grantee | Number of Share Options Outstanding as of January 1, 2025 | Number of Share Options Granted | Number of Share Options Lapsed | Number of Share Options Cancelled | Number of Share Options Exercised | Number of Share Options Outstanding as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Jan Craps | 15,289,898 | – | – | – | – | 15,289,898 | | Mr. Cheng Yan Jun | 1,475,538 | – | – | – | – | 1,475,538 | | Five Highest Paid Individuals | 2,719,045 | – | – | – | – | 2,719,045 | | Other Eligible Employees | 51,537,648 | – | – | (110,307) | – | 51,427,341 | Details of Restricted Share Units Granted and Outstanding for the Six Months Ended June 30, 2025 | Grantee | Scheme | Number of RSUs Outstanding as of January 1, 2025 | Number of RSUs Granted | Number of RSUs Vested | Number of RSUs Outstanding as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Jan Craps | Restricted Share Unit Scheme | 7,812,651 | – | (7,812,651) | – | | | New Restricted Share Unit Scheme | 4,190,913 | – | – | 4,190,913 | | | Share-Based Remuneration Scheme | 3,571,059 | – | (982,675) | 2,588,384 | | Mr. Cheng Yan Jun | New Restricted Share Unit Scheme | 1,145,835 | – | – | 1,145,835 | | | Share-Based Remuneration Scheme | 1,107,218 | 422,621 | (259,441) | 1,270,398 | | | | – | 18,585 | (18,585) | – | | Mr. Guo Peng | New Restricted Share Unit Scheme | 448,338 | – | – | 448,338 | | Ms. Yang Min De | New Restricted Share Unit Scheme | 359,245 | – | – | 359,245 | | Ms. Zeng Jing Xuan | New Restricted Share Unit Scheme | 359,245 | – | – | 359,245 | | Other Eligible Employees | Restricted Share Unit Scheme | 18,218,618 | – | (18,216,422) | – | | | New Restricted Share Unit Scheme | 72,947,813 | – | – | 70,126,308 | | | Share-Based Remuneration Scheme | 21,479,282 | 7,715,663 | (5,291,047) | 22,288,614 | | | | – | 379,226 | (379,226) | – | | | Employee Share Purchase Scheme | 626,526 | – | (264,396) | 362,130 | [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=27&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, Mr. Cheng Yan Jun held a total interest of **5,228,507 shares** in the company's shares and underlying shares, representing approximately **0.04%** of the issued share capital; Mr. Guo Peng, Ms. Yang Min De, and Ms. Zeng Jing Xuan also held a small number of restricted share units; Mr. Cheng Yan Jun held a total interest of **153,103 shares** in Budweiser Group shares, representing approximately **0.01%** Directors' and Chief Executive's Long Positions in Shares and Underlying Shares of the Company | Name of Director or Chief Executive | Nature of Interest | Number of Shares Involved in Unvested and Conditional Share Options, Restricted Share Units and Restricted Shares | Total Interest in Shares | Approximate Percentage of the Company's Issued Share Capital (%) | | :--- | :--- | :--- | :--- | :--- | | Mr. Cheng Yan Jun | Beneficial Owner | 4,249,170 | 5,228,507 | 0.04 | | Mr. Guo Peng | Beneficial Owner | 448,338 | 448,338 | 0.00 | | Ms. Yang Min De | Beneficial Owner | 359,245 | 359,245 | 0.00 | | Ms. Zeng Jing Xuan | Beneficial Owner | 359,245 | 359,245 | 0.00 | Directors' and Chief Executive's Long Positions in Shares and Underlying Shares of Budweiser Group (Associated Corporation) | Name of Director or Chief Executive | Nature of Interest | Number of Budweiser Group Ordinary Shares | Number of Shares Involved in Budweiser Group Unvested and Conditional Share Options and Restricted Share Units | Total Interest in Budweiser Group Shares | Approximate Percentage of Budweiser Group's Issued Share Capital (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Cheng Yan Jun | Beneficial Owner | 66,354 | 86,749 | 153,103 | 0.01 | [Major Shareholders' Interests](index=29&type=section&id=Major%20Shareholders'%20Interests) As of June 30, 2025, Budweiser Group and its intermediate holding companies, through controlled corporate interests, held **11,550,938,000 shares** in the company, representing **87.22%** of the issued share capital, making them the company's major shareholders; this section details Budweiser Group's complex equity structure and control relationships Major Shareholders' Interests in the Company's Shares | No. | Shareholder Name | Capacity | Number of Shares Held or in Which an Interest is Owned | Approximate Percentage of the Company's Issued Share Capital (%) | | :--- | :--- | :--- | :--- | :--- | | 1-25 | AB InBev Brewing Company (APAC) Limited and other Budweiser Group intermediate holding companies | Beneficial Owner/Controlled Corporate Interest | 11,550,938,000 | 87.22 | | 26 | Budweiser Group | Controlled Corporate Interest | 11,550,938,000 | 87.22 | | 27 | Stichting Anheuser-Busch InBev | Controlled Corporate Interest | 11,550,938,000 | 87.22 | | 28 | EPS Participations S.à r.l. | Controlled Corporate Interest | 11,550,938,000 | 87.22 | | 29 | Eugénie Patri Sébastien S.A. | Controlled Corporate Interest | 11,550,938,000 | 87.22 | | 30 | BRC S.à r.l. | Controlled Corporate Interest | 11,550,938,000 | 87.22 | | 31 | S-BR Global Investments Limited | Controlled Corporate Interest | 11,550,938,000 | 87.22 | | 32 | BR Global GP | Controlled Corporate Interest | 11,550,938,000 | 87.22 | | 33 | BR Global SCS | Controlled Corporate Interest | 11,550,938,000 | 87.22 | - Budweiser Group and its intermediate holding companies indirectly control **87.22%** of the company's issued share capital through a complex equity structure[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - Entities such as Stichting, EPS, EPS Participations S.à r.l., BRC, and Rayvax jointly and equally exercise control over Stichting and its shares through shareholder agreements, controlling **39.48%** of the voting rights attached to Budweiser Group's outstanding shares[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk) [Issued Debentures](index=33&type=section&id=Issued%20Debentures) The company did not issue any debentures in H1 2025 - The company did not issue any debentures in H1 2025[146](index=146&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=33&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) In H1 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - In H1 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[147](index=147&type=chunk) [Corporate Governance](index=33&type=section&id=Corporate%20Governance) The company is committed to achieving the highest standards of corporate governance to safeguard shareholder interests and has adopted a Corporate Governance Charter; this section outlines the company's compliance with the Corporate Governance Code and Model Code [Compliance with the Corporate Governance Code](index=34&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The company complied with the code provisions of the Corporate Governance Code in H1 2025, except for code provision C.2.1 (separation of roles of chairman and chief executive), as the Co-Chairs also serve as Chief Executive Officer - The company complied with the code provisions of the Corporate Governance Code in H1 2025, except for code provision C.2.1[149](index=149&type=chunk) - The deviation from code provision C.2.1 is due to the Co-Chairs (Mr. Jan Craps and Mr. Cheng Yan Jun) also serving as Chief Executive Officer, an arrangement the Board believes allows for more efficient Board operations[149](index=149&type=chunk) [Compliance with the Model Code](index=34&type=section&id=Compliance%20with%20the%20Model%20Code) The company has adopted a code for securities transactions by directors no less exacting than the Model Code set out in the Listing Rules, and all directors confirmed compliance with the relevant requirements in H1 2025 - The company has adopted its own code for securities transactions by directors, with terms no less exacting than the Model Code set out in Appendix C3 of the Listing Rules[150](index=150&type=chunk) - All directors confirmed compliance with the required standards set out in the Model Code and the Dealing Code in H1 2025[151](index=151&type=chunk) [Interim Dividend](index=34&type=section&id=Interim%20Dividend) The Board resolved not to declare an interim dividend for H1 2025 - The Board resolved not to declare an interim dividend for H1 2025[152](index=152&type=chunk) [Treasury Shares](index=34&type=section&id=Treasury%20Shares) As of June 30, 2025, the company held no treasury shares as defined under the Listing Rules; shares purchased by the trustee for share incentive schemes are presented as 'treasury shares' in financial statements but do not constitute treasury shares under the Listing Rules - As of June 30, 2025, the company held no treasury shares as defined under the Listing Rules[153](index=153&type=chunk) - Shares purchased by the trustee to settle share awards under the share incentive schemes are presented as 'treasury shares' in the financial statements but do not constitute treasury shares under the Listing Rules[153](index=153&type=chunk) Interim Financial Information Review Report [To the Board of Directors of Budweiser APAC Limited](index=35&type=section&id=To%20the%20Board%20of%20Directors%20of%20Budweiser%20APAC%20Limited) PricewaterhouseCoopers submitted an interim financial information review report to the Board of Directors of Budweiser APAC Limited, confirming a review conducted in accordance with International Standard on Review Engagements 2410, with no material discrepancies found - PricewaterhouseCoopers has reviewed the interim financial information of Budweiser APAC Limited for the six months ended June 30, 2025[154](index=154&type=chunk) - A review is substantially less in scope than an audit, and consequently, no audit opinion is expressed[155](index=155&type=chunk) - The review concluded that nothing has come to their attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 'Interim Financial Reporting'[156](index=156&type=chunk) [Unaudited Condensed Consolidated Interim Statement of Profit or Loss](index=36&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company's revenue was **$3.136 billion**, down from **$3.399 billion** in the prior year; profit for the period was **$427 million**, lower than **$553 million** last year; basic earnings per share were **3.10 cents** Unaudited Condensed Consolidated Interim Statement of Profit or Loss (Millions of USD) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Revenue | 3,136 | 3,399 | | Gross Profit | 1,613 | 1,751 | | Operating Profit Before Non-Underlying Items | 679 | 776 | | Operating Profit | 666 | 761 | | Net Finance Income | 3 | 20 | | Profit Before Tax | 690 | 795 | | Income Tax Expense | (263) | (242) | | Profit for the Period | 427 | 553 | | Profit Attributable to Budweiser APAC Equity Holders | 409 | 541 | | Basic Earnings Per Share (in cents) | 3.10 | 4.10 | | Diluted Earnings Per Share (in cents) | 3.07 | 4.07 | [Unaudited Condensed Consolidated Interim Statement of Comprehensive Income](index=37&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's profit for the period was **$427 million**; other comprehensive income primarily stemmed from exchange differences on translating foreign operations, resulting in total comprehensive income of **$852 million**, significantly higher than **$179 million** in the prior year Unaudited Condensed Consolidated Interim Statement of Comprehensive Income (Millions of USD) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Profit for the Period | 427 | 553 | | Exchange Differences on Translating Foreign Operations | 437 | (388) | | Cash Flow Hedges (Loss)/Gain | (12) | 14 | | Other Comprehensive Income/(Loss), Net of Tax | 425 | (374) | | Total Comprehensive Income | 852 | 179 | | Total Comprehensive Income Attributable to Budweiser APAC Equity Holders | 833 | 168 | | Non-Controlling Interests | 19 | 11 | [Unaudited Condensed Consolidated Interim Statement of Financial Position](index=38&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets were **$14.784 billion**, total equity was **$10.373 billion**, current liabilities were **$3.789 billion**, non-current liabilities were **$622 million**, and net current liabilities were **$222 million** Unaudited Condensed Consolidated Interim Statement of Financial Position (Millions of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Total Non-Current Assets | 11,217 | 10,946 | | Total Current Assets | 3,567 | 3,832 | | **TOTAL ASSETS** | **14,784** | **14,778** | | **EQUITY AND LIABILITIES** | | | | Equity Attributable to Budweiser APAC Equity Holders | 10,300 | 10,184 | | Non-Controlling Interests | 73 | 56 | | **TOTAL EQUITY** | **10,373** | **10,240** | | Total Non-Current Liabilities | 622 | 605 | | Total Current Liabilities | 3,789 | 3,933 | | **TOTAL EQUITY AND LIABILITIES** | **14,784** | **14,778** | [Unaudited Condensed Consolidated Interim Statement of Changes in Equity](index=40&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, equity attributable to Budweiser APAC equity holders increased from **$10.184 billion** at the beginning of the period to **$10.300 billion**, primarily due to positive impacts from profit for the period and exchange differences on translating foreign operations, partially offset by dividend payments Unaudited Condensed Consolidated Interim Statement of Changes in Equity (Millions of USD) | Metric | January 1, 2025 | Profit for the Period | Other Comprehensive (Loss)/Income | Share-Based Payments | Treasury Shares | Dividends | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Attributable to Budweiser APAC Equity Holders | 10,184 | 409 | 424 | (6) | 37 | (748) | 10,300 | | Non-Controlling Interests | 56 | 18 | 1 | – | – | (2) | 73 | | **TOTAL EQUITY** | **10,240** | **427** | **425** | **(6)** | **37** | **(750)** | **10,373** | - Retained earnings include legal statutory reserves in China, amounting to **$269 million** as of June 30, 2025[166](index=166&type=chunk) [Unaudited Condensed Consolidated Interim Statement of Cash Flows](index=41&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, cash flows from operating activities were **$267 million**, cash flows used in investing activities were **$110 million**, and cash flows used in financing activities were **$674 million**; cash and cash equivalents at period-end were **$2.402 billion** Unaudited Condensed Consolidated Interim Statement of Cash Flows (Millions of USD) | Activity Type | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash Flows from Operating Activities | 267 | 223 | | Cash Flows Used in Investing Activities | (110) | (250) | | Cash Flows Used in Financing Activities | (674) | (645) | | Net Decrease in Cash and Cash Equivalents | (517) | (672) | | Cash and Cash Equivalents at End of Period | 2,402 | 2,406 | [Notes to the Unaudited Condensed Consolidated Interim Financial Statements](index=43&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes to the condensed consolidated interim financial statements, covering company information, financial risk management, key accounting estimates, segment reporting, changes in assets, liabilities, and equity, as well as related party transactions and contingencies [1. General Information and Basis of Presentation](index=43&type=section&id=1.%20General%20Information%20and%20Basis%20of%20Presentation) Budweiser APAC Limited is incorporated in the Cayman Islands, primarily engaged in beer brewing and distribution in the Asia Pacific region; these interim financial statements are prepared in accordance with the HKEX Listing Rules and IAS 34, on a going concern basis - The company was incorporated in the Cayman Islands on April 10, 2019, and its shares were listed on the Hong Kong Stock Exchange on September 30, 2019[172](index=172&type=chunk) - The Group is primarily engaged in beer brewing and distribution in the Asia Pacific region, with its ultimate parent company being Anheuser-Busch InBev SA/NV (Budweiser Group)[173](index=173&type=chunk)[174](index=174&type=chunk) - The interim financial statements are prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34 'Interim Financial Reporting,' and are presented on a going concern basis[175](index=175&type=chunk)[177](index=177&type=chunk) [2. Financial Risk Management](index=44&type=section&id=2.%20Financial%20Risk%20Management) The Group faces market, credit, and liquidity risks; as of June 30, 2025, net current liabilities were **$222 million**, but the company has sufficient cash flow and financing capacity; capital management aims to optimize shareholder value while maintaining financial flexibility; fair value measurements use a three-level hierarchy, with fair values of derivatives and non-derivative financial liabilities determined by valuation techniques - The Group's business activities are exposed to market risks (currency, cash flow interest rate, commodity risk), credit risk, and liquidity risk, with no changes in risk management policies[178](index=178&type=chunk) - As of June 30, 2025, net current liabilities were **$222 million**, but the Group has strong cash-generating capabilities, with cash flows from operating activities of **$267 million**[179](index=179&type=chunk) - Capital management aims to optimize shareholder value by distributing cash flows from subsidiaries to the Group, while maintaining investment-grade ratings[180](index=180&type=chunk) Reconciliation of Cash (Net of Debt) (Millions of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 2,402 | 2,867 | | Cash Pool Deposits with Budweiser Group | 57 | 48 | | Interest-Bearing Loans and Borrowings | (307) | (204) | | **Cash (Net of Debt)** | **2,152** | **2,711** | Gearing Ratio | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash (Net of Debt) | (2,152) | (2,711) | | Total Equity | 10,373 | 10,240 | | Total Capital | 8,221 | 7,529 | | **Gearing Ratio** | **-26.2%** | **-36.0%** | - Fair value measurements are based on a three-level input hierarchy, with fair values of derivatives and non-derivative financial liabilities determined using common valuation techniques[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) [3. Critical Accounting Estimates and Judgements](index=47&type=section&id=3.%20Critical%20Accounting%20Estimates%20and%20Judgements) This section outlines management's critical accounting estimates and judgments in preparing financial statements, including impairment assessments of goodwill and intangible assets, determination of intangible asset useful lives, contingencies, income tax positions, trade incentives, and share-based payments; these estimates and judgments significantly impact financial statement amounts - Goodwill and indefinite useful life intangible asset impairment tests rely on several key judgments, estimates, and assumptions, and are performed at least annually[192](index=192&type=chunk) - Management determines that intangible assets such as brands have indefinite useful lives due to their established market position and perpetual legal rights[194](index=194&type=chunk) - Estimates and assumptions for contingencies impact asset and liability valuations; significant contingent liabilities are disclosed, and provisions for contingent losses are recorded when probable and reasonably estimable[196](index=196&type=chunk)[197](index=197&type=chunk)[199](index=199&type=chunk) - Determining income tax provisions involves significant judgment, and tax audits and inquiries may take a long time to resolve, with final outcomes potentially affecting current and deferred income tax assets and liabilities[201](index=201&type=chunk) - Assessing the nature of trade incentives and whether payments are in exchange for distinct goods and services requires judgment, impacting their classification in the statement of profit or loss and statement of financial position[203](index=203&type=chunk) - The fair value of share-based payments is estimated using a binomial Hull model, involving subjective assumptions such as risk-free interest rates, dividend yields, and expected volatility[204](index=204&type=chunk) [4. Segment Reporting](index=50&type=section&id=4.%20Segment%20Reporting) The Group operates through two geographical segments: APAC East (South Korea, Japan, New Zealand) and APAC West (China, India, Vietnam, and exports); management uses normalized EBITDA as a segment performance measure; in H1 2025, both segments experienced declines in volume, revenue, and normalized EBITDA - The Group operates through two geographical segments: APAC East (primarily South Korea, Japan, and New Zealand) and APAC West (China, India, Vietnam, and other export markets in APAC)[205](index=205&type=chunk) - Management uses performance indicators such as normalized EBITDA as measures of segment performance[205](index=205&type=chunk) Segment Results for the Six Months Ended June 30, 2025 and 2024 (Millions of USD) | Metric | APAC East (2025) | APAC East (2024) | APAC West (2025) | APAC West (2024) | Total (2025) | Total (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Volume (Hundred Thousand Liters) | 5,706 | 5,732 | 37,922 | 40,841 | 43,628 | 46,573 | | Revenue | 614 | 649 | 2,522 | 2,750 | 3,136 | 3,399 | | Normalized EBITDA | 176 | 199 | 807 | 901 | 983 | 1,100 | | Normalized EBITDA Margin % | 28.7% | 30.7% | 32.0% | 32.8% | 31.3% | 32.4% | Reconciliation of Profit Attributable to Budweiser APAC Equity Holders to Normalized EBITDA (Millions of USD) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Profit Attributable to Budweiser APAC Equity Holders | 409 | 541 | | Profit for the Period | 427 | 553 | | Normalized EBIT | 679 | 776 | | Normalized EBITDA | 983 | 1,100 | [5. Other Operating Income](index=51&type=section&id=5.%20Other%20Operating%20Income) For the six months ended June 30, 2025, total other operating income was **$40 million**, primarily comprising grants and incentives (**$17 million**) and net gains on disposal of property, plant and equipment and intangible assets (**$17 million**) Other Operating Income (Millions of USD) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Grants and Incentives | 17 | 23 | | Net Gains on Disposal of Property, Plant and Equipment and Intangible Assets | 17 | 21 | | Other Operating Income | 6 | 12 | | **Total** | **40** | **56** | - Grants and incentives primarily relate to various subsidies and incentives provided by local governments based on the Group's operations and development in those regions[212](index=212&type=chunk) [6. Non-Underlying Items](index=52&type=section&id=6.%20Non-Underlying%20Items) For the six months ended June 30, 2025, the impact of non-underlying items on profit from operations was negative **$13 million**, mainly due to restructuring costs; additionally, internal restructuring resulted in non-underlying income tax of **$53 million** Impact of Non-Underlying Items on Profit (Millions of USD) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Restructuring | (13) | (15) | | Impact on Profit from Operations | (13) | (15) | | Tax Impact on Non-Underlying Items | 1 | 4 | | Non-Underlying Income Tax | (53) | – | | **Net Impact on Profit** | **(65)** | **(11)** | - Non-underlying restructuring costs are primarily related to organizational integration, aiming to eliminate overlapping structures or redundant processes[213](index=213&type=chunk) - Internal restructuring resulted in capital gains tax and withholding tax on distributed earnings, recognized as non-underlying income tax within income tax expense[213](index=213&type=chunk) [7. Income Tax Expense](index=53&type=section&id=7.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, total income tax expense was **$263 million**, with an effective tax rate of **39.3%** and a normalized effective tax rate of **30.9%**; internal restructuring led to non-underlying income tax, impacting the effective tax rate Income Tax Expense (Millions of USD) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Current Tax Expense | (256) | (234) | | Deferred Tax Expense | (7) | (8) | | **Total Income Tax Expense** | **(263)** | **(242)** | | Effective Tax Rate | 39.3% | 31.0% | | Normalized Effective Tax Rate | 30.9% | 30.9% | - In H1 2025, internal restructuring resulted in capital gains tax and withholding tax on distributed earnings, recognized as non-underlying income tax within income tax expense[214](index=214&type=chunk) [8. Property, Plant and Equipment](index=54&type=section&id=8.%20Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, total property, plant and equipment amounted to **$2.488 billion**, comprising **$2.381 billion** in owned assets and **$107 million** in leased assets; payments for the acquisition of property, plant and equipment in H1 were **$95 million** Property, Plant and Equipment (Millions of USD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Owned Property, Plant and Equipment | 2,381 | 2,479 | | Leased Property, Plant and Equipment (Right-of-Use Assets) | 107 | 106 | | **Total Property, Plant and Equipment** | **2,488** | **2,585** | - Payments for the acquisition of property, plant and equipment in H1 2025 amounted to **$95 million**[216](index=216&type=chunk) [9. Goodwill](index=55&type=section&id=9.%20Goodwill) As of June 30, 2025, the total carrying amount of goodwill was **$6.265 billion**, an increase from **$5.945 billion** at the end of the previous year, primarily due to foreign exchange movements; the Group performs annual goodwill impairment tests, with no impairment indicators identified as of the reporting period end Goodwill Movement (Millions of USD) | Item | Amount (Million USD) | | :--- | :--- | | Balance at End of Previous Year (December 31, 2024) | 5,945 | | Impact of Foreign Exchange Movements | 320 | | **Balance at Period/Year-End (June 30, 2025)** | **6,265** | - The Group performs goodwill impairment tests annually in the second half of the year or when impairment indicators are identified; no impairment indicators were identified for the six months ended June 30, 2025[217](index=217&type=chunk) Goodwill Carrying Amount by Cash Generating Unit (Millions of USD) | Cash Generating Unit | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | South Korea | 3,253 | 2,988 | | China | 3,003 | 2,948 | | Other Countries | 9 | 9 | | **Total Goodwill Carrying Amount** | **6,265** | **5,945** | [10. Intangible Assets](index=56&type=section&id=10.%20Intangible%20Assets) For the six months ended June 30, 2025, acquisitions and expenditures for intangible assets amounted to **$13 million**; intangible assets with indefinite useful lives, primarily brands and distribution rights, will be tested for impairment in the second half of the year or when a triggering event occurs - Acquisitions and expenditures for intangible assets in H1 2025 amounted to **$13 million**[219](index=219&type=chunk) - Intangible assets with indefinite useful lives, primarily including brands and certain distribution rights, will be tested for impairment in the second half of the year or when a triggering event occurs[219](index=219&type=chunk) [11. Trade and Other Receivables](index=56&type=section&id=11.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total current trade and other receivables were **$740 million**, an increase from **$496 million** as of December 31, 2024; trade receivables and accrued income amounted to **$557 million**; impairment losses on trade receivables recognized were **$4 million** Current Trade and Other Receivables (Millions of USD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables and Accrued Income | 557 | 346 | | Trade Receivables from Budweiser Group | 8 | 14 | | Indirect Tax Receivables | 113 | 83 | | Prepayments | 53 | 40 | | Other Receivables | 9 | 13 | | **Current Trade and Other Receivables** | **740** | **496** | - Trade receivables and trade receivables from Budweiser Group are on average due within **90 days** from the invoice date[220](index=220&type=chunk) - Impairment losses on trade receivables recognized in H1 2025 amounted to **$4 million**[220](index=220&type=chunk) Aging Analysis of Current Trade Receivables and Trade Receivables from Budweiser Group (Millions of USD) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Not Overdue | 510 | 319 | | Less than 30 days | 30 | 14 | | 30 to 59 days | 7 | 3 | | 60 to 89 days | 4 | 6 | | Over 90 days | 14 | 18 | | **Net Carrying Amount of Trade Receivables and Trade Receivables from Budweiser Group** | **565** | **3

[Company Profile](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E7%B0%A1%E4%BB%8B) China Youran Dairy Group is a leading upstream dairy market player, covering breeding, feed, and raw milk production across the entire industry chain - China Youran Dairy Group Co., Ltd. is a leader in China's upstream dairy market, with a complete business covering the entire industry chain from breeding and feed to raw milk production[3](index=3&type=chunk) - As of June 30, 2025, the Group operates **100 dairy farms**, **15 feed production bases**, **16 forage production bases**, **5 core dairy cattle breeding bases**, and one online platform "Jumucheng Technology"[4](index=4&type=chunk) - Owns **623,350 head of dairy cattle** and **21,452 head of dairy goats**, with a production of **2,081,580 tons of high-quality raw milk** and specialty raw milk[4](index=4&type=chunk) - Sales of breeding products reached **540,606 doses (pieces)**, with embryo product sales increasing by **13.5%** compared to mid-2024[4](index=4&type=chunk) - The company is committed to comprehensively enhancing technological value, leading the high-quality development of China's dairy industry, and continuously contributing to its healthy, low-carbon, and sustainable development[5](index=5&type=chunk) [Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) The company announced significant changes to its board of directors and committee members, with new appointments and resignations, and confirmed Deloitte Touche Tohmatsu as its auditor - Mr. Hao Haijun was appointed Executive Director, Chairman, and President on March 28, 2025, and Ms. Meng Yilan was appointed Executive Director on the same day[12](index=12&type=chunk) - Mr. Bai Wenzhong, Ms. Li Lin, and Ms. Huang Lin were appointed Non-executive or Independent Non-executive Directors on June 27, 2025[12](index=12&type=chunk) - Mr. Yuan Jun, Mr. Qiu Zhongwei, Mr. Xu Jun, Mr. Yang Huicheng, and Mr. Shen Jianzhong resigned from their respective directorships[12](index=12&type=chunk)[13](index=13&type=chunk) - Members of the Audit Committee, Remuneration Committee, Nomination Committee, and Environmental, Social and Governance Committee were adjusted[12](index=12&type=chunk)[13](index=13&type=chunk) - The company's auditor is Deloitte Touche Tohmatsu, with its registered office in the Cayman Islands and headquarters in Hohhot, Inner Mongolia, China[13](index=13&type=chunk)[15](index=15&type=chunk) [Summary](index=6&type=section&id=%E6%91%98%E8%A6%81) The Group reported a 2.3% revenue increase to RMB 10.28 billion, with gross profit up 8.3% and a significant 47.0% reduction in loss for the period, driven by improved gross margin and optimized herd structure 2025 H1 Key Financial and Operational Data (Unaudited) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 10,284,217 | 10,054,941 | 2.3 | | Gross Profit | 3,086,430 | 2,848,892 | 8.3 | | Loss for the Period | (247,126) | (466,707) | 47.0 | | Loss for the Period Attributable to Owners of the Company | (296,571) | (330,873) | 10.4 | | Cash EBITDA | 2,810,692 | 2,623,640 | 7.1 | | Profit for the Period (before fair value adjustment of biological assets) | 1,985,389 | 1,804,038 | 10.1 | | Annualized Yield per Mature Cow (excluding Jersey cows) (tons) | 12.9 | 12.6 | 2.4 | - Gross margin increased from **28.3%** in mid-2024 to **30.0%** during the reporting period[20](index=20&type=chunk) - Raw milk feed costs decreased year-on-year, with continuous expansion of herd size and optimization of herd structure, increasing the proportion of mature cows to **53.5%**[20](index=20&type=chunk) - The Board does not recommend the distribution of an interim dividend for the six months ended June 30, 2025[16](index=16&type=chunk) [Production Base Location Map](index=8&type=section&id=%E7%94%A2%E7%94%A2%E5%9F%BA%E5%9C%B0%E4%BD%8D%E7%BD%AE%E5%9C%96) The Group operates 100 dairy farms and multiple feed and forage production bases across 17 provinces in China, supporting a large herd and diverse product offerings - The Group operates **100 dairy farms** across **17 provinces, municipalities, and autonomous regions** in China, with approximately **623,000 head of dairy cattle** and over **21,000 head of dairy goats**[22](index=22&type=chunk) - Owns **5 core breeding bases** (including Wisconsin, USA, Horinger, and Qingshuihe, China), **15 feed production bases**, and **16 forage production bases**[22](index=22&type=chunk) - During the reporting period, concentrate feed product output exceeded **547,000 tons**, and over **10,000 types of farming consumables** were provided through online platforms and **24 offline dairy cattle supermarkets**[22](index=22&type=chunk) Distribution of Production Bases (as of June 30, 2025) | Region | Operating Farms (number) | Of which: New Operating Farms during Reporting Period (number) | Feed Production Bases (number) | Forage Production Bases (number) | | :--- | :--- | :--- | :--- | :--- | | Inner Mongolia-Shanxi Region | 44 | 1 | 3 | 1 | | Northeast Region | 18 | / | 3 | 4 | | North China Region | 11 | 1 | 1 | 1 | | Central China Region | 21 | 1 | 4 | 8 | | Northwest Region | 6 | / | 4 | 2 | | **Total** | **100** | **3** | **15** | **16** | [Management Discussion and Analysis](index=9&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) This section provides an in-depth review of the Group's operational performance, financial results, and strategic initiatives, including industry trends, business segments, R&D, quality, procurement, digitalization, and sustainability efforts [Industry Review](index=9&type=section&id=%E8%A1%8C%E6%A5%AD%E5%9B%9E%E9%A1%A7) During the reporting period, China's macroeconomy showed stable growth, but the dairy industry faced capacity adjustments, insufficient demand, and low raw milk prices, partially offset by declining bulk raw material costs and supportive government policies - China's macro policies showed effectiveness, with the economy maintaining a stable and positive development trend, but the supply-demand imbalance in the dairy product industry remained prominent[24](index=24&type=chunk) - Total raw milk production increased slightly by **0.5%** year-on-year, with growth slowing by **2.9 percentage points** compared to the same period in 2024[24](index=24&type=chunk) - The average price of raw milk in major dairy-producing provinces decreased by **11.7%** year-on-year to **RMB 3.08 per kilogram**[24](index=24&type=chunk) - Declining bulk raw material prices: average prices of soybean meal and corn decreased by approximately **8.8%** and **9.2%** year-on-year, respectively, and imported alfalfa hay prices decreased by approximately **9.9%**, partially alleviating cost pressures[24](index=24&type=chunk) - National policies aim to strengthen raw milk quality and expand demand for raw milk, including expanding the coverage of "student milk" and new standards prohibiting the use of reconstituted milk in sterilized milk[25](index=25&type=chunk) [Business Review](index=10&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) During the reporting period, the Group, as China's largest integrated upstream dairy product and service provider, achieved a 2.3% year-on-year revenue increase to RMB 10,284 million, primarily driven by its raw milk business - The Group's revenue increased by **2.3%** from **RMB 10,055 million** in mid-2024 to **RMB 10,284 million** during the reporting period[28](index=28&type=chunk) Overview of Revenue by Business Segment (for the six months ended June 30, 2025) | Business Segment | Revenue (RMB billions) | Revenue Share (%) | | :--- | :--- | :--- | | Raw Milk | 79.0 | 76.8 | | Ruminant Farming Systematized Solutions | 23.9 | 23.2 | - Raw milk business revenue increased by **7.9%** year-on-year, while ruminant farming systematized solutions revenue decreased by **12.7%** year-on-year[29](index=29&type=chunk)[30](index=30&type=chunk) [Raw Milk Business](index=12&type=section&id=%E5%8E%9F%E6%96%99%E5%A5%B6%E6%A5%AD%E5%8B%99) The raw milk business saw a 7.9% revenue increase and 15.8% sales volume growth, despite a 7.0% average price drop, achieved through farm expansion, herd optimization, and technology-driven lean management, while also advancing low-carbon environmental strategies - Raw milk business revenue was approximately **RMB 7.9 billion**, an increase of **7.9%** compared to mid-2024, accounting for **76.8%** of total revenue[29](index=29&type=chunk) - Raw milk sales volume was approximately **2,039,670 tons**, an increase of **15.8%** compared to mid-2024; the average price of raw milk was **RMB 3.87 per kilogram**, a decrease of **7.0%** compared to mid-2024[34](index=34&type=chunk) - Added **3 new operational dairy farms**, bringing the total to **100**; dairy cattle inventory reached **623,350 head**, with the proportion of mature cows increasing to **53.5%** (an increase of **3.9 percentage points** compared to June 30, 2024)[33](index=33&type=chunk)[36](index=36&type=chunk) - Annualized yield per mature cow (excluding Jersey cows) was **12.9 tons**, an increase of **2.4%** compared to mid-2024[34](index=34&type=chunk)[37](index=37&type=chunk) - Built a technology system of "data-driven decision-making – intelligent IoT – breeding innovation", applied the "Hui Mu Yun" smart farm management system, and conducted genetic improvement through OPU-IVF embryo transfer technology[38](index=38&type=chunk) - Promoted lean management with the TPM system as the core, achieving a **12.0%** year-on-year decrease in feed cost per kilogram of raw milk[39](index=39&type=chunk) - Implemented a low-carbon environmental strategy, including **11 photovoltaic farm projects**, upgrading **62 farm boilers** to air source heat pumps, and promoting new energy equipment[42](index=42&type=chunk) - Conducted research on substituting imported alfalfa, optimized wrapped alfalfa silage technology, and reduced imported alfalfa hay purchases by **9.9%** compared to mid-2024[43](index=43&type=chunk) [Ruminant Farming Systematized Solutions](index=15&type=section&id=%E5%8F%8D%E9%9B%BB%E5%8B%95%E7%89%A9%E9%A4%8A%E6%AE%96%E7%B3%BB%E7%B5%B1%E5%8C%96%E8%A7%A3%E6%B1%BA%E6%96%B9%E6%A1%88) The Ruminant Farming Systematized Solutions business generated RMB 2.39 billion in revenue, offering premium feed, breeding technologies, and consumables, with significant growth in beef cattle and sheep feed sales and breeding products, while enhancing market competitiveness through strategic initiatives - Ruminant farming systematized solutions revenue was approximately **RMB 2.39 billion**, accounting for **23.2%** of total revenue[30](index=30&type=chunk) - Concentrate feed sales volume was **430,688 tons**, a year-on-year decrease of **9.7%**; beef cattle and sheep feed sales achieved a significant year-on-year increase of **60.9%**[48](index=48&type=chunk)[51](index=51&type=chunk) - Operates **15 feed production bases**, with concentrate feed production of **547,053 tons** during the reporting period; Bayannur production base was awarded the 2025 Municipal Green Manufacturing Demonstration Unit[49](index=49&type=chunk) - Launched "Youyi Niu" a specialized feed brand for dairy cattle, pioneered the "Beef Cattle and Sheep Customer Value Creation Service System", and successfully expanded into the Mongolian market[50](index=50&type=chunk)[51](index=51&type=chunk) - Breeding product sales increased by **10.3%** to **540,606 doses (pieces)**, with sex-sorted embryo sales increasing by **13.5%** year-on-year[64](index=64&type=chunk) - Operates **5 core breeding bases**, building a diversified germplasm supply system for "dairy cattle + beef cattle + dairy goats", with **4 breeding bulls** ranked among the top 10 nationwide by the American Holstein Association[65](index=65&type=chunk)[68](index=68&type=chunk) - Achieved multiple significant technological breakthroughs in high-end dairy cattle germplasm excavation, breeding new technology innovation ("Breeding No. 1 Chip"), gene-editing bio-breeding and sex control technology, and industrial application of high-yield dairy cattle sex-sorted embryos[66](index=66&type=chunk)[70](index=70&type=chunk) - Forage business established **16 production bases**, improved quality through alfalfa cold-resistance gene technology and wrapped silage technology, promoted integrated crop-livestock farming, and completed approximately **55,100 mu** of no-till carbon sequestration sowing[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - Dairy cattle supermarket business provides over **10,000 types of farming consumables** through the online platform "Jumucheng Technology" and **24 offline dairy cattle supermarkets**, and launched its own brand cleaning solution "Youmujing"[60](index=60&type=chunk)[62](index=62&type=chunk) [R&D Strategic Management](index=21&type=section&id=%E7%A0%94%E7%99%BC%E6%88%B0%E7%95%A5%E7%AE%A1%E7%90%86) Leveraging over 40 years of experience, the Group focuses on full-chain upstream dairy R&D with a team of nearly 400, securing 11 new patents and accumulating 102 core patents, driving innovation in farming, feed, breeding, and sustainable practices - R&D team of nearly **400 people**, with **11 new patent authorizations** and a cumulative total of **102 core patented technologies** covering various business segments[72](index=72&type=chunk) - Participated in the formulation and release of **1 national standard**, **3 industry standards**, and **1 local standard** during the reporting period[72](index=72&type=chunk) - R&D focuses on innovation in herd farming technology, development of specialty raw milk, research on feed nutritional value, breakthroughs in cattle genetic improvement and sex control technology, and standards for integrated crop-livestock farming and ecological farming[69](index=69&type=chunk) - Built a diversified product matrix, including **8 types of specialty raw milk** and concentrate feed products with independent core technologies (e.g., carbon reduction and yield-increasing feed)[72](index=72&type=chunk) - Deepened the application of herd genetic improvement and sex control technologies, innovated roughage processing technologies and planting models, and actively promoted major agricultural bio-breeding projects[72](index=72&type=chunk) [Quality Assurance](index=23&type=section&id=%E8%B3%AA%E9%87%8F%E4%BF%9D%E9%9A%9C) Committed to "creating the source of human healthy life with quality," the Group implements a "full value chain" quality management model, achieving 100% product qualification rates and raw milk quality far exceeding EU standards through digital systems and international certifications - Built a "full value chain" quality management model covering the entire upstream dairy industry chain, obtaining multiple food safety and quality management system certifications including SQF, ISO9001, ISO22000, ChinaGAP, FAMI-QS, and ISO17025[73](index=73&type=chunk) - The first comprehensive enterprise in China to pass SQF certification for livestock farming and feed processing[73](index=73&type=chunk) - Utilizes near-infrared databases, quality information management systems, EHSQ, and Hui Mu Yun smart farm management system to achieve real-time collection, precise transmission, and intelligent analysis of full-chain quality information[74](index=74&type=chunk) - Products maintained a **100% qualification rate** in national and local supervision and inspections during the reporting period[74](index=74&type=chunk) - Raw milk's total bacterial count and somatic cell count are significantly superior to standards in China's National Premium Milk Project and industry standards in the United States, Japan, and the European Union[74](index=74&type=chunk) [Procurement Strategic Management](index=24&type=section&id=%E6%8E%A1%E8%B3%BC%E6%88%B0%E7%95%A5%E7%AE%A1%E7%90%86) The Group employs a "full lifecycle" supplier management system, focusing on cost reduction and efficiency, utilizing diverse procurement strategies and digitalization to manage bulk raw material price volatility, resulting in a 12.0% decrease in raw milk feed costs, while integrating sustainability into its supply chain - Adopted a "full lifecycle" supplier management system, utilizing various procurement strategies such as hedging, strategic reserves, direct sourcing, global procurement, and dynamic pricing[76](index=76&type=chunk) - Implemented digitalization projects such as "Material Procurement Planning and Execution Full-Process Digitalization Project", "Electronic Contract Digital Management", and "Visualized Report Monitoring" to enhance supply chain efficiency[76](index=76&type=chunk) - Average feed cost for raw milk decreased by **12.0%** compared to mid-2024, primarily due to declining bulk raw material market prices and supply chain process control[76](index=76&type=chunk) - Promoted green cooperation with suppliers, procuring **3,305 tons of deforestation-free soybean meal**, reducing supply chain carbon emissions[77](index=77&type=chunk) - Formulated and issued the "Supplier ESG Management Measures" to strengthen full-lifecycle ESG management of suppliers and enhance ESG risk control capabilities[77](index=77&type=chunk) [Digitalization Management](index=24&type=section&id=%E6%95%B8%E5%AD%97%E5%8C%96%E7%AE%A1%E7%90%86) Adhering to "data-driven business innovation, technology-enabled business value-add," the Group upgrades digital assets like "Hui Mu Yun," building four core capabilities including full-lifecycle dairy cattle data management and integrated business-finance control, while pioneering "fully intelligent unmanned cowsheds" and proprietary digital tools - Adhered to the principle of "data-driven business innovation, technology-enabled business value-add", optimizing and upgrading digital assets such as "Hui Mu Yun" and the "Dairy Cattle Precision Nutrition Platform"[78](index=78&type=chunk) - Focused on building four core capabilities: full-lifecycle dairy cattle and production operation data management; integrated business, finance, and human resources control platform; integrated environmental, health, safety, and quality management and traceability system; and precision marketing, service, and deep channel management capabilities[78](index=78&type=chunk) - Pioneered the creation of "fully intelligent unmanned cowsheds", adopting the most advanced international intelligent robots, TMR feeding systems, and intelligent bio-fermentation systems[79](index=79&type=chunk) - Independently developed digital tools such as the "Supply Chain Master Planning System" and "Hui Cao Yun – Forage Planting Supervision System" to promote full-industry chain digitalization[79](index=79&type=chunk) - Continuously enhanced the automation of company production and operation data collection, unmanned operations, remote management, and comprehensive optimization of business chains through big data platforms and AI algorithm models[79](index=79&type=chunk) [Construction of Sustainable Development Model](index=25&type=section&id=%E5%8F%AF%E6%8C%81%E7%BA%8C%E7%99%BC%E5%B1%95%E6%A8%A1%E5%BC%8F%E6%A7%8B%E5%BB%BA) The Group deepens its green and sustainable development strategy, targeting carbon peak by 2030 and carbon neutrality by 2050, advancing biogas utilization, integrated crop-livestock farming across nearly 2 million mu, and publishing biodiversity and climate reports, earning recognition in S&P Global's Sustainability Yearbook - Continuously deepened the sustainable development management system, adhering to the strategic goals of carbon peak by **2030** and carbon neutrality by **2050**[80](index=80&type=chunk) - Promoted high-value utilization of biogas for purification and external sales, completed the project proposal review for the Zhumadian farm's carbon asset development project[80](index=80&type=chunk) - Vigorously developed the "integrated crop-livestock farming" model, promoting grassland improvement and forage planting, with actual integrated farming land area of nearly **2 million mu**[80](index=80&type=chunk) - Implemented the "straw-to-milk" program, providing free organic fertilizer to local farmers and promoting silage varieties, driving income growth for farmers and herders[80](index=80&type=chunk) - First time publishing the **2024 "Biodiversity Protection Report"** and **"Climate Information Disclosure Report"**, systematically identifying and assessing nature-related impacts, risks, and opportunities[82](index=82&type=chunk) - Selected for S&P Global's "Sustainability Yearbook (China Edition)" for two consecutive years, and ranked among the **top 10 Chinese enterprises** in the food industry in the S&P Global CSA 2024 assessment for the "2025 Sustainability Yearbook (China Edition)"[82](index=82&type=chunk) [Outlook](index=26&type=section&id=%E5%89%8D%E6%99%AF) The Group will leverage national policy benefits, with innovation as its core engine, integrating digitalization and lean management to deepen six core strategic initiatives, consolidating its leading position in the upstream dairy industry and driving sustainable high-quality development - Innovation as the core engine for high-quality development, comprehensively integrating digitalization technology with lean management models[83](index=83&type=chunk) - Raw milk business will be driven by "innovation + lean management", improving feed conversion rates, yield per cow, and profit per cow, and accelerating the implementation of intelligent technology R&D[83](index=83&type=chunk) - Feed business aims to rank first in ruminant dairy cattle business and among the top three in beef cattle and sheep business within five years, focusing on building a "product strength + service strength + brand strength" system[86](index=86&type=chunk) - Forage business will deeply cultivate high-quality forage breeding and improvement, optimize planting models and processing technologies, and reduce production costs[86](index=86&type=chunk) - Breeding business will focus on cultivating high-quality breeding cattle, continuously breaking through "bottleneck" technologies, and promoting self-sufficiency in dairy cattle, beef cattle, and dairy goat germplasm[86](index=86&type=chunk) - Continuously consolidate and expand the long-term advantages of being "the most comprehensive, largest in scale, best structured and laid out, and most efficiently operated" in the upstream dairy industry chain[85](index=85&type=chunk) [Financial Review](index=28&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) During the reporting period, the Group's revenue increased by 2.3% to RMB 10,284 million, gross profit rose by 8.3% to RMB 3,086 million, and gross margin improved to 30.0%, with loss for the period significantly narrowed by 47.0% to RMB (247) million, primarily due to increased raw milk sales, lower feed costs, reduced finance costs, and a narrower loss from fair value changes of biological assets Revenue Overview (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 10,284,217 | 10,054,941 | 2.3 | | Raw Milk Revenue | 7,895,650 | 7,320,419 | 7.9 | | Ruminant Farming Systematized Solutions Revenue | 2,388,567 | 2,734,522 | (12.7) | Gross Profit and Gross Margin (for the six months ended June 30) | Business Segment | 2025 Gross Profit (RMB thousands) | 2025 Gross Margin (%) | 2024 Gross Profit (RMB thousands) | 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Raw Milk | 2,743,407 | 34.7 | 2,374,825 | 32.4 | | Ruminant Farming Systematized Solutions | 343,023 | 14.4 | 474,067 | 17.3 | | **Total** | **3,086,430** | **30.0** | **2,848,892** | **28.3** | - Loss for the period narrowed by **47.0%** from **RMB 467 million** in mid-2024 to **RMB 247 million** during the reporting period[112](index=112&type=chunk) - Loss from changes in fair value less costs to sell of biological assets decreased from **RMB 2,271 million** in mid-2024 to **RMB 2,233 million** during the reporting period[101](index=101&type=chunk) - Finance costs decreased by **14.8%** from **RMB 463 million** in mid-2024 to **RMB 395 million** during the reporting period[109](index=109&type=chunk) Non-IFRS Measures (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash EBITDA | 2,810,692 | 2,623,640 | | Profit for the Period (before fair value adjustment of biological assets) | 1,985,389 | 1,804,038 | [Liquidity and Capital Resources](index=34&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90) The Group generated RMB 2,869 million in net cash from operating activities, with a net increase of RMB 65 million in cash and cash equivalents, while the net leverage ratio slightly decreased to 184.6%, and capital commitments significantly reduced due to the completion of strategic farm layouts Cash Flow Overview (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 2,868,737 | 3,343,107 | | Net Cash Used in Investing Activities | (2,784,050) | (3,957,784) | | Net Cash Used in Financing Activities | (19,155) | (2,198,596) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 65,532 | (2,813,273) | | Cash and Cash Equivalents at End of Period | 1,681,320 | 1,674,270 | - Net leverage ratio was **184.6%** as of June 30, 2025, a decrease of **0.6 percentage points** from **185.2%** as of December 31, 2024, primarily due to a decrease in net debt[127](index=127&type=chunk) - Capital commitments were **RMB 434 million**, a significant decrease from **RMB 949 million** as of December 31, 2024, mainly due to the completion of strategic layout for dairy farm construction in the golden milk source belt[128](index=128&type=chunk) - Certain bank and other borrowings are secured by the Group's assets, including **36.26%** equity interest in Saikexing, **60.59%** equity interest in Shanxi Youran Tianhe Dairy, and **61.44%** equity interest in Tangshan Youran Dairy[129](index=129&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities[126](index=126&type=chunk) [Employees and Remuneration Policy](index=38&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 12,890 full-time employees, with total remuneration expenses of RMB 844 million, an 8.0% increase, as the company focuses on building a sustainable talent supply chain through internal development, external recruitment, performance-based incentives, and corporate culture enhancement Employee Function Distribution (as of June 30, 2025) | Function | Number of Employees | Percentage of Total (%) | | :--- | :--- | :--- | | Management Personnel | 1,280 | 9.9 | | Professional Personnel | 1,422 | 11.0 | | Technical Personnel | 2,881 | 22.4 | | Skilled Personnel | 6,970 | 54.1 | | Support Personnel | 337 | 2.6 | | **Total** | **12,890** | **100.0** | - Total remuneration expenses (excluding contributions to retirement benefit plans) were **RMB 844 million**, an increase of **8.0%** compared to **RMB 782 million** in mid-2024[141](index=141&type=chunk) - In terms of talent assurance, the company adheres to a combination of internal cultivation and external recruitment, conducts dynamic talent inventory, and deepens cooperation with educational institutions[139](index=139&type=chunk) - In terms of capability building, the "Youran Talent Navigation" talent development program was upgraded, establishing a three-dimensional talent development system of "management echelon, professional competence, and expert cultivation"[142](index=142&type=chunk) - In terms of organizational activation and efficiency improvement, the "2025 Business Unit Performance 'Horse Racing' Evaluation Plan" was formulated to enhance organizational efficiency through mechanism innovation and management optimization[142](index=142&type=chunk) - In terms of cultural construction, internal cohesion and external influence were enhanced through vision leadership, system integration, value assessment management, and innovative practice construction[142](index=142&type=chunk) [Significant Events After Reporting Period](index=40&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E9%96%93%E5%BE%8C%E9%87%8D%E5%A4%A7%E4%BA%8B%E4%BB%B6) No significant events affecting the Group occurred from the end of the reporting period up to the date of this report - No significant events affecting the Group occurred from the end of the reporting period up to the date of this report[144](index=144&type=chunk) [Continuing Connected Transactions](index=40&type=section&id=%E6%8C%81%E7%BA%8C%E9%97%9C%E9%80%A3%E4%BA%A4%E6%98%93) The Group entered into a Logistics and Operations Support Services Framework Agreement with Inner Mongolia Yishun Supply Chain Management Co., Ltd., ensuring fair and reasonable transaction terms through structured, competitive bidding and robust internal control measures - Entered into a "Logistics and Operations Support Services Framework Agreement" with Inner Mongolia Yishun Supply Chain Management Co., Ltd. (Yishun)[145](index=145&type=chunk) - Employs a structured and competitive bidding process to manage and determine the engagement of suppliers and service providers, ensuring fair and reasonable transaction terms[145](index=145&type=chunk) - Each bidding process involves the establishment of an inter-departmental review committee and requires multi-level internal approval procedures to ensure supervision and accountability[146](index=146&type=chunk) - Strict internal control measures are in place, including verification by the legal department that service fees align with winning bids, and review of service fee settlements by business and finance departments[147](index=147&type=chunk) [Other Information](index=41&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers directors' and major shareholders' interests, securities transactions, corporate governance compliance, audit committee details, interim dividends, and investor relations [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or any Associated Corporation](index=41&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%88%96%E5%85%B6%E4%BB%BB%E4%BD%95%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E7%9A%84%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, no directors or chief executives of the Company held any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations - As of June 30, 2025, none of the Directors or chief executives of the Company had any interests or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations that were required to be disclosed[148](index=148&type=chunk) [Major Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=41&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, major shareholders including Yili, Boyuan Investment Holdings Limited, Jingang, PAG and its affiliates, and Meadowland Investment Limited Partnership held shares in the Company, with Yili Group holding a total of 33.93% and PAG Group holding 21.13% Major Shareholders' Shareholdings (as of June 30, 2025) | Name of Shareholder | Nature of Interest | Number of Shares (L) | Percentage of Issued Share Capital (%) | | :--- | :--- | :--- | :--- | | Yili | Interest in Controlled Corporation | 1,320,800,000 | 33.93 | | Boyuan Investment Holdings Limited | Beneficial Interest | 800,000,000 | 20.55 | | Jingang | Beneficial Interest | 520,800,000 | 13.38 | | PAG | Interest in Controlled Corporation | 822,602,530 | 21.13 | | Pacific Alliance Group Limited | Interest in Controlled Corporation | 822,602,530 | 21.13 | | Shan Weijian | Interest in Controlled Corporation | 822,602,530 | 21.13 | | PAG Capital Limited | Interest in Controlled Corporation | 822,602,530 | 21.13 | | PAG Dairy GP I Limited | Interest in Controlled Corporation | 822,602,530 | 21.13 | | PAG Dairy I LP | Interest in Controlled Corporation | 822,602,530 | 21.13 | | PAG II | Beneficial Interest | 822,602,530 | 21.13 | | Meadowland Investment Limited Partnership | Beneficial Interest | 564,982,819 | 14.51 | - Yili, through its wholly-owned subsidiaries Boyuan Investment Holdings Limited and Jingang, is deemed to have an interest in a total of **1,320,800,000 shares**[152](index=152&type=chunk) - PAG, through its controlled entities PAG II, PAG Dairy I LP, PAG Dairy GP I Limited, PAG Capital Limited, and Pacific Alliance Group Limited, is deemed to have an interest in a total of **822,602,530 shares**[152](index=152&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=42&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and as of June 30, 2025, the Company held no treasury shares - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[151](index=151&type=chunk) - As of June 30, 2025, the Company did not hold any treasury shares[151](index=151&type=chunk) [Compliance with Corporate Governance Code](index=43&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The Company is committed to strict corporate governance, complying with all applicable provisions of the Corporate Governance Code, except for the combined roles of Chairman and President held by Mr. Hao Haijun, which the Board believes ensures strategic decision-making unity and consistency - The Company has adopted and complied with all applicable code provisions of the Corporate Governance Code[153](index=153&type=chunk) - A deviation from code provision C.2.1 of the Corporate Governance Code exists, as the roles of Chairman and President are combined and held by Mr. Hao Haijun[154](index=154&type=chunk) - The Board believes this structure facilitates the unity and consistency of the Group's strategic decision-making and is committed to continuously evaluating the effectiveness of the governance structure[154](index=154&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=43&type=section&id=%E9%81%B5%E5%AE%88%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The Company 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 during the reporting period - The Company has adopted the Model Code as set out in Appendix C3 of the Listing Rules as its code of conduct regarding securities transactions by Directors of the Company[156](index=156&type=chunk) - Following specific enquiries made to all Directors, all Directors confirmed that they had strictly complied with the required standards set out in the Model Code during the reporting period[156](index=156&type=chunk) [Audit Committee](index=43&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising Ms. Xie Xiaoyan (Chairperson), Mr. Yao Feng, and Ms. Huang Lin, reviewed the Group's unaudited interim financial statements and report, discussing accounting policies and internal controls with management and auditors, who conducted their review in accordance with ISRE 2410 - The Audit Committee comprises three members: Ms. Xie Xiaoyan (Chairperson), Mr. Yao Feng, and Ms. Huang Lin[157](index=157&type=chunk) - The Committee reviewed the Group's unaudited interim financial statements and interim report for the reporting period, and discussed accounting policies and internal control matters with senior management and the auditors[157](index=157&type=chunk) - The condensed consolidated financial statements for the reporting period have been reviewed by the auditors in accordance with International Standard on Review Engagements 2410[157](index=157&type=chunk) [Other Board Committees](index=44&type=section&id=%E5%85%B6%E4%BB%96%E8%91%A3%E4%BA%8B%E5%A7%94%E5%93%A1%E6%9C%83) In addition to the Audit Committee, the Company has also established a Nomination Committee, a Remuneration Committee, and an Environmental, Social and Governance Committee - In addition to the Audit Committee, the Company has also established a Nomination Committee, a Remuneration Committee, and an Environmental, Social and Governance Committee[158](index=158&type=chunk) [Interim Dividend](index=44&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the distribution of an interim dividend for the reporting period - The Board does not recommend the distribution of an interim dividend for the reporting period[159](index=159&type=chunk) [Changes in Directors' Information](index=44&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E8%AE%8A%E5%8B%95) During the reporting period, the Company's Board of Directors underwent several changes, including the appointment of Mr. Hao Haijun as Executive Director, Chairman, and President, Ms. Meng Yilan as Executive Director, and Mr. Bai Wenzhong, Ms. Li Lin, and Ms. Huang Lin as Non-executive or Independent Non-executive Directors, alongside the resignations of Mr. Yuan Jun, Mr. Qiu Zhongwei, Mr. Xu Jun, Mr. Yang Huicheng, and Mr. Shen Jianzhong - Mr. Hao Haijun was appointed as an Executive Director, Chairman of the Board, and President of the Company, effective March 28, 2025[160](index=160&type=chunk) - Ms. Meng Yilan was appointed as an Executive Director of the Company, effective March 28, 2025[161](index=161&type=chunk) - Mr. Bai Wenzhong, Ms. Li Lin, and Ms. Huang Lin were appointed as Non-executive or Independent Non-executive Directors, effective June 27, 2025[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - Mr. Yuan Jun, Mr. Qiu Zhongwei, Mr. Xu Jun, Mr. Yang Huicheng, and Mr. Shen Jianzhong resigned from their respective directorships[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) [Investor Relations](index=44&type=section&id=%E6%8A%95%E8%B3%87%E8%80%85%E9%97%9C%E4%BF%82) The Company actively promotes investor relations and communication through meetings, events, and online platforms (youranir@yourandairy.com, www.yourandairy.com) to ensure institutional investors and financial analysts are well-informed about the company - The Company has adopted an active policy to promote investor relations and communication, holding meetings and events with the investment community from time to time[171](index=171&type=chunk) - Investors can stay updated via email at youranir@yourandairy.com or the company website at www.yourandairy.com[171](index=171&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=45&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) Deloitte Touche Tohmatsu reviewed the Group's condensed consolidated financial statements for the six months ended June 30, 2025, concluding no material non-compliance with IAS 34, without expressing an audit opinion due to the limited scope - Deloitte Touche Tohmatsu reviewed the condensed consolidated financial statements of China Youran Dairy Group Company Limited for the six months ended June 30, 2025[174](index=174&type=chunk)[177](index=177&type=chunk) - The scope of review is substantially less than that of an audit conducted in accordance with International Standards on Auditing, and therefore no audit opinion is expressed[175](index=175&type=chunk) - Conclusion: Nothing has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34[176](index=176&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=46&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group reported a loss for the period of RMB (247,126) thousand, a significant reduction from the previous year, with total revenue of RMB 10,284,217 thousand and gross profit of RMB 3,086,430 thousand Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 10,284,217 | 10,054,941 | | Cost of Sales | (9,680,506) | (9,328,073) | | Gain on initial recognition of agricultural produce at fair value less costs to sell at point of harvest | 2,482,719 | 2,122,024 | | Gross Profit | 3,086,430 | 2,848,892 | | Loss from changes in fair value less costs to sell of biological assets | (2,232,515) | (2,270,745) | | Other Income | 153,112 | 264,938 | | Selling and distribution expenses | (304,271) | (305,123) | | Administrative expenses | (402,049) | (374,557) | | Finance costs | (394,501) | (462,959) | | Loss before tax | (214,325) | (403,722) | | Income tax expense | (32,801) | (62,985) | | Loss for the period | (247,126) | (466,707) | | Loss for the period attributable to owners of the Company | (296,571) | (330,873) | | Basic loss per share (RMB) | (0.08) | (0.09) | [Condensed Consolidated Statement of Financial Position](index=47&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group reported total equity of RMB 11,936,059 thousand, with non-current assets primarily comprising property, plant and equipment and biological assets, and a net current liability position of RMB 12,273,383 thousand Condensed Consolidated Statement of Financial Position (as of June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, plant and equipment | 14,775,073 | 15,076,822 | | Biological assets | 14,957,339 | 15,364,953 | | Interests in associates | 853,170 | 891,844 | | **Current Assets** | | | | Inventories | 2,946,083 | 4,311,226 | | Trade receivables | 753,931 | 691,643 | | Bank balances and cash | 1,117,576 | 829,310 | | Deposits with related parties | 563,744 | 785,359 | | **Current Liabilities** | | | | Trade and bills payables | 1,266,620 | 2,275,854 | | Bank and other borrowings | 17,331,654 | 16,709,437 | | **Non-current Liabilities** | | | | Bank and other borrowings | 7,324,343 | 7,546,965 | | **Total Equity** | **11,936,059** | **12,159,758** | - As of June 30, 2025, the Group's net current liabilities amounted to **RMB 12,273,383 thousand**[180](index=180&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=49&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) The Group's total equity as of June 30, 2025, was RMB 11,936,059 thousand, reflecting a loss for the period attributable to owners of the company of RMB 296,571 thousand Condensed Consolidated Statement of Changes in Equity (for the six months ended June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Equity attributable to owners of the Company | 11,022,000 | 11,469,470 | | Non-controlling interests | 914,059 | 1,131,629 | | **Total Equity** | **11,936,059** | **12,601,099** | - Loss for the period attributable to owners of the Company was **RMB 296,571 thousand**, while profit for the period attributable to non-controlling interests was **RMB 49,547 thousand**[184](index=184&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=50&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) The Group reported net cash generated from operating activities of RMB 2,868,737 thousand, with a net increase of RMB 65,532 thousand in cash and cash equivalents at the end of the period Condensed Consolidated Statement of Cash Flows (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 2,868,737 | 3,343,107 | | Net cash used in investing activities | (2,784,050) | (3,957,784) | | Net cash used in financing activities | (19,155) | (2,198,596) | | Net increase/(decrease) in cash and cash equivalents | 65,532 | (2,813,273) | | Cash and cash equivalents at end of period | 1,681,320 | 1,674,270 | - Net cash generated from operating activities primarily derived from cash generated from operations, less income tax paid[186](index=186&type=chunk) - Net cash used in investing activities was mainly attributable to payments for biological assets, deposits placed in pledged restricted bank deposits, and payments for property, plant and equipment[186](index=186&type=chunk) - Net cash used in financing activities was primarily attributable to new bank and other borrowings, and used for repayment of principal and interest on bank and other borrowings[186](index=186&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=51&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes to the condensed consolidated financial statements, covering general information, basis of preparation, accounting policies, revenue and segment information, cost of sales, other income, finance costs, income tax, loss for the period, earnings per share, dividends, property, plant and equipment, goodwill, biological assets, trade receivables, impairment losses, prepayments, deposits and other receivables, interests in associates, financial assets at fair value through profit or loss, trade and bills payables, other payables and accruals, bank and other borrowings, share capital, fair value measurement, related party transactions, capital commitments, contingent liabilities, and events after the reporting period [General Information](index=51&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) China Youran Dairy Group Company Limited, incorporated in the Cayman Islands and listed on the Stock Exchange since June 18, 2021, primarily engages in raw milk production and sales, and trading, production, and sales of feed, dairy cattle supermarket consumables, and breeding products in China, with its condensed consolidated financial statements presented in RMB - The Company was incorporated in the Cayman Islands, and its shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since June 18, 2021[187](index=187&type=chunk) - The Group is principally engaged in the production and sale of raw milk and the trading, production, and sale of feed, dairy cattle supermarket consumables, and breeding products in China[187](index=187&type=chunk) - The condensed consolidated financial statements are presented in RMB[187](index=187&type=chunk) [Basis of Preparation](index=51&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated financial statements are prepared in accordance with IAS 34 and Listing Rules, and despite net current liabilities, are presented on a going concern basis as the directors believe the Group has sufficient funds for the next 12 months - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[188](index=188&type=chunk) - As of June 30, 2025, the Group had net current liabilities of **RMB 12.3 billion**[189](index=189&type=chunk) - The condensed consolidated financial statements are prepared on a going concern basis, as the Directors of the Company believe the Group will have sufficient funds to meet its liabilities as they fall due for at least 12 months from June 30, 2025[189](index=189&type=chunk) [Accounting Policies](index=52&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared on a historical cost basis, except for biological assets and certain financial instruments measured at fair value, with the initial application of IAS 21 (Amendment) 'Lack of Exchangeability' having no significant impact - The condensed consolidated financial statements are prepared on the historical cost basis, except for biological assets which are measured at fair value less costs to sell; and certain financial instruments which are measured at fair value at the end of the reporting period[190](index=190&type=chunk) - The initial application of IAS 21 (Amendment) 'Lack of Exchangeability' during this interim period did not have a significant impact on the Group's financial position and performance for the current and prior periods[191](index=191&type=chunk) [Revenue and Segment Information](index=52&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's total revenue for the reporting period was RMB 10,284,217 thousand, primarily from raw milk sales, with revenue recognized at a point in time, and the raw milk business contributing the majority of segment revenue and results Revenue from Contracts with Customers by Type of Goods (for the six months ended June 30) | Type of Goods | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of raw milk | 7,895,650 | 7,320,419 | | Sales of feed | 2,074,100 | 2,436,934 | | Sales of dairy cattle supermarket consumables | 228,161 | 231,679 | | Sales of breeding products | 86,306 | 65,909 | | **Total** | **10,284,217** | **10,054,941** | - Revenue is recognized at a point in time[192](index=192&type=chunk) - Raw milk business generated **RMB 7,895,650 thousand** in revenue from external customers, while ruminant farming systematized solutions generated **RMB 2,388,567 thousand** from external customers[193](index=193&type=chunk) - Raw milk business segment results were **RMB 2,223,593 thousand**, and ruminant farming systematized solutions segment results were **RMB 161,661 thousand**[193](index=193&type=chunk) - All revenue is derived from customers located in mainland China, and all non-current assets are located in mainland China, thus no geographical information is presented[199](index=199&type=chunk) - Major customer A (Yili Group) contributed the majority of revenue, including sales of raw milk, feed, dairy cattle supermarket consumables, and breeding products[200](index=200&type=chunk) [Cost of Sales](index=56&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) The Group's total cost of sales for the reporting period increased by 3.8% to RMB 9,680,506 thousand, primarily due to growth in the raw milk business and fair value adjustments of agricultural produce, while the ruminant farming systematized solutions segment saw a decrease in cost of sales Cost of Sales Analysis (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of raw milk sold before fair value adjustment | 5,152,243 | 4,945,594 | | Fair value adjustment of raw milk | 2,491,292 | 2,134,191 | | Cost of raw milk sold after fair value adjustment | 7,643,535 | 7,079,785 | | Cost of feed sold before fair value adjustment of roughage and other agricultural produce | 1,801,342 | 2,029,233 | | Fair value adjustment of roughage and other agricultural produce | (8,573) | (12,167) | | Cost of feed sold after fair value adjustment | 1,792,769 | 2,017,066 | | Cost of dairy cattle supermarket consumables sold | 187,687 | 187,117 | | Cost of breeding products | 56,515 | 44,105 | | **Total cost of sales** | **9,680,506** | **9,328,073** | - Total cost of sales increased by **3.8%** from **RMB 9,328 million** in mid-2024 to **RMB 9,681 million** during the reporting period, mainly due to the growth in the raw milk business and the impact of fair value adjustments of agricultural produce[91](index=91&type=chunk) - Cost of raw milk sold before fair value adjustment increased by **4.2%**, primarily due to increased sales volume resulting from a larger number of lactating cows[92](index=92&type=chunk) - Cost of sales for ruminant farming systematized solutions decreased by **9.5%**, mainly due to lower sales volume and cost control[93](index=93&type=chunk) [Other Income](index=57&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) The Group's other income for the reporting period was RMB 153,112 thousand, a 42.2% decrease from mid-2024, primarily due to reduced government grants, subsidies, and interest income Other Income Analysis (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Government grants released from deferred income | 44,851 | 55,322 | | Award subsidies | 71,669 | 123,955 | | Rental income | 6,010 | 8,257 | | Bank interest income | 8,459 | 45,899 | | Interest income from Yili Group | 3,046 | 3,416 | | Income from disposal of scrap materials | 4,451 | 6,742 | | Compensation income | 4,232 | 13,253 | | Others | 10,394 | 8,094 | | **Total** | **153,112** | **264,938** | - Other income decreased by **42.2%** from **RMB 265 million** in mid-2024 to **RMB 153 million** during the reporting period, mainly due to a decrease in award subsidies and interest income[102](index=102&type=chunk) [Other Gains and Losses](index=57&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E虧%E6%90%8D) The Group's other gains and losses for the reporting period significantly increased to a gain of RMB 11,090 thousand, primarily driven by higher gains from the disposal of property, plant and equipment and the reversal of provisions for litigation losses Other Gains and Losses Analysis (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net exchange differences | (1,518) | 203 | | Net gain/(loss) on disposal of property, plant and equipment | 4,892 | (725) | | Fair value gain on financial assets at fair value through profit or loss | 779 | 756 | | Gain/(loss) on termination of lease agreements | 849 | (190) | | Reversal of provision related to a civil lawsuit | 5,574 | – | | Others | 514 | 301 | | **Total** | **11,090** | **345** | - Other gains and losses increased from a gain of **RMB 0.3 million** in mid-2024 to a gain of **RMB 11 million** during the reporting period, mainly due to increased gains from the disposal of property, plant and equipment and the reversal of provisions for litigation losses[104](index=104&type=chunk) [Finance Costs](index=58&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) The Group's finance costs for the reporting period decreased by 14.8% to RMB 394,501 thousand, primarily due to lower interest on bank and other borrowings and increased amounts capitalized as construction in progress Finance Costs Analysis (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 357,422 | 439,270 | | Interest on lease liabilities | 41,329 | 37,915 | | Discount unwinding of other provisions | 469 | 443 | | Less: Amount capitalized as construction in progress | (4,719) | (14,859) | | **Total** | **394,501** | **462,959** | - Finance costs decreased by **14.8%** from **RMB 463 million** in mid-2024 to **RMB 395 million** during the reporting period, primarily due to a reduction in the Group's financing interest rates[109](index=109&type=chunk) [Income Tax Expense](index=58&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) The Group's income tax expense for the reporting period decreased by 47.9% to RMB 32,801 thousand, mainly due to lower profits in the ruminant farming systematized solutions business, benefiting from agricultural exemptions, Western Development preferential tax rates, and local tax reductions Income Tax Expense Analysis (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | PRC corporate income tax | 37,167 | 63,834 | | Over-provision in prior periods | (747) | (722) | | Deferred tax | (3,619) | (127) | | **Total** | **32,801** | **62,985** | - Income tax expense decreased by **47.9%** from **RMB 63 million** in mid-2024 to **RMB 33 million** during the reporting period, primarily due to a decrease in profit from the Group's ruminant farming systematized solutions business[111](index=111&type=chunk) - Certain subsidiaries of the Company are exempt from PRC corporate income tax on taxable profits generated from agricultural operations in China[209](index=209&type=chunk) - Certain subsidiaries operating in China are eligible for a **15%** preferential tax rate under the Western Development preferential tax policy[209](index=209&type=chunk) - Dorbod Muquanyuanxing Feed Co., Ltd. has been eligible for a **40%** corporate income tax reduction since 2022[209](index=209&type=chunk) [Loss for the Period](index=59&type=section&id=%E6%9C%9F%E5%85%A7%E虧%E6%90%8D) The Group's loss for the period significantly narrowed to RMB 247,126 thousand, primarily due to increased raw milk sales, reduced per-kilogram cost of sales, lower finance costs, and a smaller loss from fair value changes of biological assets - The Group incurred a loss of **RMB 467 million** in mid-2024, which significantly narrowed to a loss of **RMB 247 million** during the reporting period[112](index=112&type=chunk) - The main reasons include increased gross profit due to higher raw milk sales volume and lower per-kilogram cost of sales; decreased finance costs; and a reduction in loss from changes in fair value less costs to sell of biological assets[112](index=112&type=chunk) Depreciation and Amortization for the Period (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 611,150 | 554,078 | | Depreciation of right-of-use assets | 109,300 | 103,541 | | Amortization of intangible assets | 1,791 | 1,634 | | **Depreciation and amortization directly charged to profit or loss** | **386,547** | **335,194** | - R&D costs recognized in profit or loss increased to **RMB 60,514 thousand** from **RMB 47,600 thousand** in mid-2024[210](index=210&type=chunk) - Total staff costs were **RMB 923,148 thousand**, and after deducting capitalization to biological assets, amounted to **RMB 699,594 thousand**[210](index=210&type=chunk) [Loss Per Share](index=60&type=section&id=%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) The basic and diluted loss per share attributable to owners of the Company for the reporting period was RMB (0.08), a narrower loss compared to RMB (0.09) in mid-2024, with no diluted loss per share presented due to the absence of potential ordinary shares Loss Per Share (for the six months ended June 30) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic | (0.08) | (0.09) | | Diluted | (0.08) | (0.09) | - The number of ordinary shares used to calculate basic and diluted loss per share was **3,892,728 thousand shares** for 2025 and **3,795,404 thousand shares** for 2024[212](index=212&type=chunk) - As there were no issued potential ordinary shares for the six months ended June 30, 2024 and 2025, diluted loss per share for both periods is not presented[212](index=212&type=chunk) [Dividends](index=60&type=section&id=%E8%82%A1%E6%81%AF) The Company neither paid, declared, nor proposed any dividends during this interim period, and the Board has decided not to pay a dividend for this period - The Company neither paid, declared, nor proposed any dividends during this interim period[213](index=213&type=chunk) - The Directors of the Company have decided not to pay a dividend for this interim period[213](index=213&type=chunk) [Property, Plant and Equipment and Right-of-Use Assets](index=60&type=section&id=%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99%E4%BB%A5%E5%8F%8A%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2) During this interim period, the Group's construction in progress increased by RMB 167,669 thousand for ongoing farm construction and capital improvements, while new lease agreements resulted in the recognition of RMB 5,331 thousand in right-of-use assets and RMB 4,883 thousand in lease liabilities - During this interim period, the Group's construction in progress increased by a total of **RMB 167,669 thousand**, used for ongoing farm construction and capital improvements[214](index=214&type=chunk) - At the commencement of leases, the Group recognized right-of-use assets of **RMB 5,331 thousand** and lease liabilities of **RMB 4,883 thousand**[214](index=214&type=chunk) [Goodwill](index=61&type=section&id=%E5%95%86%E8%AD%BD) The Group's goodwill had a carrying amount of RMB 672,014 thousand, primarily from the acquisitions of Saikexing Group in 2020 and Fonterra China Farms Group in 2021, with Saikexing Group's recoverable amount exceeding its carrying amount and no impairment signs for Fonterra China Farms Group's goodwill as of June 30, 2025 - Goodwill had a carrying amount of **RMB 672,014 thousand**[215](index=215&type=chunk) - Goodwill arose from the acquisition of Saikexing Group in 2020 (**RMB 762,741 thousand**) and the acquisition of Fonterra China Farms Group in 2021 (**RMB 30,239 thousand**)[215](index=215&type=chunk) - As of June 30, 2025, the recoverable amount of Saikexing Group exceeded its carrying amount by **RMB 38,442 thousand**[216](index=216&type=chunk) - Based on management's assessment, there were no indications that the goodwill of Fonterra China Farms Group had been impaired since its acquisition[216](index=216&type=chunk) [Biological Assets](index=62&type=section&id=%E7%94%9F%E7%89%A9%E8%B3%87%E7%94%A2) As of June 30, 2025, the Group's biological assets had a fair value of RMB 14,957,524 thousand, primarily comprising calves and heifers, mature cows, fattening cattle, breeding bulls, and dairy goats, with independent valuers assisting in the fair value assessment Fair Value of Biological Assets (as of June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Calves and heifers | 6,142,225 | 6,294,224 | | Mature cows | 8,375,147 | 8,657,642 | | Fattening cattle | 185 | 250 | | Breeding bulls and others | 158,380 | 122,995 | | Dairy goats | 278,745 | 282,204 | | Breeding rams, young rams and ram lambs | 2,842 | 7,888 | | **Total** | **14,957,524** | **15,365,203** | - The Group has engaged JLL, an independent valuer, to assist in assessing the fair value of the Group's biological assets[218](index=218&type=chunk) [Trade Receivables](index=62&type=section&id=%E9%8A%B7%E5%94%AE%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, the Group's trade receivables (net of allowance for credit losses) amounted to RMB 753,931 thousand, with the majority falling within 90 days, and trade receivables from related parties totaling RMB 1,340,531 thousand Trade Receivables (net of allowance for credit losses) (as of June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 862,705 | 766,343 | | Less: Allowance for credit losses | (108,774) | (74,700) | | **Total** | **753,931** | **691,643** | Aging Analysis of Trade Receivables (net of allowance for credit losses) (as of June 30, 2025) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 90 days | 667,725 | 571,639 | | 91 to 180 days | 58,813 | 76,566 | | 181 days to 1 year | 22,975 | 32,730 | | Over 1 year | 4,418 | 10,708 | | **Total** | **753,931** | **691,643** | - Trade receivables from related parties amounted to **RMB 1,340,531 thousand**, with an aging within **90 days** from the

[Report of Directors](index=3&type=section&id=Report%20of%20Directors) This section covers corporate governance, share option and award schemes, equity-linked agreements, directors' and substantial shareholders' interests, share repurchases, and other significant corporate matters [Share Option Scheme](index=3&type=section&id=Share%20Option%20Scheme) The 2015 Share Option Scheme terminated in May 2025, with no new grants and all outstanding options either exercised or lapsed by June 30, 2025 - The 2015 Share Option Scheme terminated in May 2025, with no new share options granted during the reporting period[3](index=3&type=chunk)[7](index=7&type=chunk) Details of 2015 Share Option Scheme Movements (As of June 30, 2025) | Metric | Number | | :--- | :--- | | Share options held as of December 31, 2024 | 2,953,500 | | Share options granted during the period | – | | Share options exercised during the period | 2,343,500 | | Share options lapsed during the period | 610,000 | | Share options held as of June 30, 2025 | 0 | - The weighted average closing price before exercise by group employees was approximately **HKD 13.58**[10](index=10&type=chunk) [Share Award Schemes](index=5&type=section&id=Share%20Award%20Schemes) The company's 2015 Share Award Scheme terminated in January 2025, while the 2025 scheme, adopted concurrently, granted **12,503,380** award shares during the period to incentivize key employees and directors - The 2015 Share Award Scheme terminated on January 21, 2025, with no new award shares granted thereafter[11](index=11&type=chunk)[16](index=16&type=chunk) - The 2025 Share Award Scheme was adopted on January 21, 2025, with a ten-year validity, aiming to incentivize key employees, directors, and external expert consultants[18](index=18&type=chunk)[22](index=22&type=chunk) - During the reporting period, the company granted **12,503,380** award shares under the 2025 Share Award Scheme[27](index=27&type=chunk)[28](index=28&type=chunk) Share Award Scheme Share Movements (As of June 30, 2025) | Participant Category | Unvested as of December 31, 2024 | Granted during the Period | Vested during the Period | Lapsed during the Period | Unvested as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Directors (Xu Shaochun) | 200,000 | – | 112,500 | – | 87,500 | | Directors (Lin Bo) | 337,500 | 100,000 | 137,500 | – | 300,000 | | Other Employees | 23,988,075 | 12,403,380 | 9,957,636 | 1,656,875 | 24,776,944 | | **Total** | **24,525,575** | **12,503,380** | **10,207,636** | **1,656,875** | **25,164,444** | - The weighted average fair value of award shares granted during the period was **HKD 10.43** per share, with a four-year vesting period[37](index=37&type=chunk) [Equity-linked Agreement](index=10&type=section&id=Equity-linked%20agreement) In December 2023, the company completed a placement of **154,627,000** new shares to Al-Rayyan Holdings LLC, raising approximately **HKD 1.561 billion** in net proceeds, primarily for capital market transactions and general working capital, with most funds utilized - On December 14, 2023, the company completed a placement of **154,627,000** new shares to Al-Rayyan Holdings LLC at a subscription price of **HKD 10.10** per share[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) Utilization of Subscription Proceeds (As of June 30, 2025) | Purpose | Subscription Proceeds (HKD '000) | Utilized during the Period (HKD '000) | Utilized as of June 30, 2025 (HKD '000) | Unutilized as of June 30, 2025 (HKD '000) | | :--- | :--- | :--- | :--- | :--- | | Potential Capital Market Transactions (80.0%) | 1,248,786 | 59,902 | 960,220 | 288,566 | | General Operations and Working Capital (20.0%) | 312,197 | 0 | 312,197 | 0 | | **Total** | **1,560,983** | **59,902** | **1,272,417** | **288,566** | [Directors' and Chief Executive's Interests and Short Positions in the Shares, Underlying Shares or Debentures](index=11&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20or%20Short%20Positions%20in%20the%20Shares,%20Underlying%20Shares%20or%20Debentures) As of June 30, 2025, the company's directors and chief executive held interests in the company's shares, with Mr. Xu Shaochun being the largest holder, representing **19.81%** of the issued share capital Directors' Interests in Shares/Underlying Shares (As of June 30, 2025) | Name of Director | Nature of Interest | Number of Shares/Underlying Shares | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Xu Shaochun | Interest in Controlled Corporation and Beneficial Owner | 703,254,499 (L) | 19.81% | | Lin Bo | Beneficial Owner and Beneficiary of Trust | 2,152,717 (L) | 0.06% | | Gary Clark Biddle | Beneficial Owner | 1,230,000 (L) | 0.03% | | Dong Mingzhu | Beneficial Owner | 280,000 (L) | 0.01% | [Substantial Shareholders' and Other Persons' Interests and Short Positions in the Shares, Underlying Shares and Debentures](index=13&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20the%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, Easy Key Holdings Limited and its wholly-owned subsidiaries, Oriental Tao Limited and Billion Tao Limited, were substantial shareholders, in addition to directors, while BlackRock, Inc. held both long and short positions in the company's shares Substantial Shareholders' Long Positions in Shares/Underlying Shares (As of June 30, 2025) | Name of Shareholder | Nature of Interest | Number of Shares/Underlying Shares | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Easy Key Holdings Limited | Interest in Controlled Corporation | 682,198,624 (L) | 19.22% | | Oriental Tao Limited | Beneficial Owner | 386,312,000 (L) | 10.88% | | Billion Tao Limited | Beneficial Owner | 295,886,624 (L) | 8.34% | | BlackRock, Inc. | Interest in Controlled Corporation | 189,172,437 (L) | 5.33% | - BlackRock, Inc. also held **10,096,000** short positions, along with **225,000** long positions and **8,495,000** short positions in unlisted derivatives (cash settled)[60](index=60&type=chunk)[62](index=62&type=chunk) [Purchase, Sale or Redemption of Shares](index=17&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Shares) During the reporting period, the company repurchased **5,059,000** shares on the Stock Exchange, which were cancelled on February 24, 2025, with no other purchases, sales, or redemptions of listed securities by the company or its subsidiaries Share Repurchase Details (During the Reporting Period) | Transaction Date | Number of Shares Repurchased | Highest Price Per Share (HKD) | Lowest Price Per Share (HKD) | Total Paid Price (HKD) | | :--- | :--- | :--- | :--- | :--- | | 2025/01/02 | 167,000 | 8.08 | 8.08 | 1,349,360.00 | | 2025/01/03 | 1,192,000 | 8.08 | 7.99 | 9,549,740.00 | | 2025/01/06 | 1,500,000 | 8.00 | 7.89 | 11,909,220.00 | | 2025/01/08 | 1,000,000 | 7.80 | 7.79 | 7,799,730.00 | | 2025/01/10 | 700,000 | 7.91 | 7.80 | 5,496,170.00 | | 2025/01/13 | 500,000 | 7.75 | 7.75 | 3,875,000.00 | | **Total** | **5,059,000** | | | **39,979,220.00** | - The aforementioned **5,059,000** repurchased shares were cancelled on February 24, 2025[67](index=67&type=chunk)[69](index=69&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Significant Investments Held and Future Plans for Material Investments or Capital Assets Acquisitions](index=17&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Significant%20Investments%20Held%20and%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets%20Acquisitions) During the reporting period, the Group made no other material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures, and as of June 30, 2025, held no significant investments exceeding **5%** of total assets, nor had any future plans for material investments or capital asset acquisitions - During the reporting period, the Group made no other material investments, nor any material acquisitions or disposals of subsidiaries, associates, or joint ventures[68](index=68&type=chunk)[70](index=70&type=chunk) - As of June 30, 2025, the Group held no other significant investments exceeding **5%** of its total assets, and had no future plans for material investments or capital asset acquisitions[68](index=68&type=chunk)[70](index=70&type=chunk) [Change of Information of Directors](index=18&type=section&id=Change%20of%20Information%20of%20Directors) During the reporting period, Non-executive Director Mr. Gary Clark Biddle and Independent Non-executive Director Ms. Katherine Rong Xin resigned from their independent non-executive director positions at other listed companies - Non-executive Director Mr. Gary Clark Biddle ceased to be an independent non-executive director of Shui On Land Limited effective May 16, 2025[72](index=72&type=chunk)[78](index=78&type=chunk) - Independent Non-executive Director Ms. Katherine Rong Xin ceased to be an independent non-executive director of Fosun Tourism Group effective March 20, 2025[73](index=73&type=chunk)[78](index=78&type=chunk) [Corporate Governance](index=18&type=section&id=Corporate%20Governance) The company complied with most Corporate Governance Code provisions, with the Chairman and CEO roles combined under Mr. Xu Shaochun, which the Board deems beneficial for stable development, and is committed to continuous improvement and compliance training - The company complied with all code provisions of the Corporate Governance Code during the reporting period, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Xu Shaochun[75](index=75&type=chunk)[79](index=79&type=chunk) - The Board believes Mr. Xu Shaochun's dual role facilitates effective strategy formulation and rapid market response, promoting the company's stable and healthy development[75](index=75&type=chunk)[79](index=79&type=chunk) - The company continuously arranges training for directors, senior management, and relevant employees on director responsibilities, continuous professional development, and compliance to enhance corporate governance standards[76](index=76&type=chunk)[79](index=79&type=chunk) [Code of Conduct Regarding Directors' Securities Transactions](index=19&type=section&id=Code%20of%20Conduct%20Regarding%20Directors'%20Securities%20Transactions) The company adopted a code of conduct for directors' securities transactions no less exacting than the Model Code, and all directors confirmed compliance during the reporting period - The company has adopted a code of conduct for directors' securities transactions, with standards no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers[80](index=80&type=chunk)[83](index=83&type=chunk) - Following specific inquiries to all directors, all confirmed compliance with the code of conduct during the reporting period[80](index=80&type=chunk)[83](index=83&type=chunk) [Audit Committee](index=19&type=section&id=Audit%20Committee) The Audit Committee reviewed the Group's accounting principles, internal controls, and financial reporting matters, concluding that the unaudited consolidated results for the reporting period complied with applicable accounting standards and were adequately disclosed - The Audit Committee reviewed the Group's adopted accounting policies and management, discussing review, internal control, and financial reporting matters[81](index=81&type=chunk)[84](index=84&type=chunk) - The Audit Committee believes the Group's unaudited consolidated results for the reporting period were prepared in accordance with applicable accounting standards and requirements, with adequate disclosure[81](index=81&type=chunk)[84](index=84&type=chunk) [Interim Dividend](index=19&type=section&id=Interim%20Dividend) The Board does not recommend paying an interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - During the reporting period, the Board did not recommend declaring an interim dividend (for the six months ended June 30, 2024: nil)[82](index=82&type=chunk)[85](index=85&type=chunk) [Appreciation](index=19&type=section&id=Appreciation) The Board extends sincere gratitude to all management, staff, and shareholders for their contributions and continued support during the reporting period - The Board thanks all management and staff for their contributions to the Group during the period, and sincerely appreciates shareholders' continuous support[86](index=86&type=chunk) [BUSINESS REVIEW AND OUTLOOK](index=21&type=section&id=BUSINESS%20REVIEW%20AND%20OUTLOOK) This section reviews the company's financial performance, strategic focus on AI, cloud subscriptions, and global expansion, concluding with an outlook on future growth and market positioning [Financial Results](index=21&type=section&id=Financial%20Results) For the six months ended June 30, 2025, the Group's revenue grew by **11.2%** year-on-year, with cloud services revenue up **11.9%**, and loss attributable to equity holders significantly narrowed by **55.1%**, driven by cloud subscription scalability and AI-driven efficiency gains Key Financial Data for H1 2025 | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Y-o-Y Growth/Narrowing | | :--- | :--- | :--- | :--- | | Revenue | 3,192,499 | 2,870,025 | +11.2% | | Cloud Services Revenue | 2,672,918 | 2,389,247 | +11.9% | | Loss Attributable to Equity Holders of the Company | (97,738) | (217,851) | Narrowed 55.1% | | Basic Loss Per Share | (2.78) cents | (6.12) cents | Narrowed 54.58% | | Net Cash Outflow from Operating Activities | (18,215) | (166,292) | Improved | - The year-on-year narrowing of losses was primarily due to the scaling effect of cloud subscription business and efficiency improvements driven by AI[92](index=92&type=chunk)[95](index=95&type=chunk) [Strategy Review and Business Highlights](index=21&type=section&id=Strategy%20Review%20and%20Business%20Highlights) Kingdee adheres to an 'AI-first, Subscription-first, Globalization' strategy, aiming to become an enterprise management AI platform, achieving high-quality growth in cloud subscriptions, accelerating AI agent deployment, and expanding overseas markets to build a global ecosystem - Kingdee is committed to becoming the 'most trusted enterprise management AI platform,' with 'AI-first, Subscription-first, Globalization' as its strategic themes[94](index=94&type=chunk)[96](index=96&type=chunk) - Kingdee ranks first in market share in multiple segments, including China's SaaS ERP and financial cloud, and has been ranked first in IDC China's growth-oriented enterprise application software market for **21** consecutive years[97](index=97&type=chunk)[99](index=99&type=chunk) - Kingdee is the first and only Chinese vendor included in Gartner's 'Market Guide for PLM Software in Discrete Manufacturing' and is listed in Gartner's Top 10 Generative AI Models in the China market[97](index=97&type=chunk)[99](index=99&type=chunk) [Cloud Subscriptions Leading the Industry with Continued High-Quality Growth](index=22&type=section&id=Cloud%20Subscriptions%20Leading%20the%20Industry%20with%20Continued%20High-Quality%20Growth) Kingdee continues its 'Subscription-first' strategy, achieving significant growth in both cloud subscription revenue and Annual Recurring Revenue (ARR), with strong performance across large, growth, and small and micro enterprise markets, maintaining healthy Net Dollar Retention (NDR) rates Key Cloud Subscription Business Metrics (As of June 30, 2025) | Metric | Amount/Quantity | Y-o-Y Growth | | :--- | :--- | :--- | | Cloud Subscription Revenue | approximately RMB 1.684 billion | +22.1% | | As % of Group Total Revenue | approximately 52.8% | - | | Cloud Subscription Annual Recurring Revenue (ARR) | approximately RMB 3.73 billion | +18.5% | | Cloud Subscription Business Contract Liabilities Balance | approximately RMB 3.378 billion | +24.7% | Performance of Cloud Product Lines (As of June 30, 2025) | Product Line | Revenue/Customer Count | Cloud Subscription Revenue | Y-o-Y Growth | NDR | | :--- | :--- | :--- | :--- | :--- | | Kingdee Cloud · Cosmic and Kingdee Cloud · Galaxy (Large Enterprises) | Total revenue approximately RMB 845 million | approximately RMB 276 million | +34.3% (Total revenue) / +41.1% (Cloud subscription) | 108% | | Kingdee Cloud · Starlight (Growth Enterprises) | Customer count reached **46,000** | approximately RMB 740 million | +9.5% (Customer count) / +19.0% (Cloud subscription) | 94% | | Kingdee Cloud · Stellar and Kingdee Jingdou Cloud (Small and Micro Enterprises) | Customer counts reached **85,000** and **386,000** respectively | approximately RMB 537 million | +35.1% (Stellar customer count) / +15.0% (Jingdou Cloud customer count) / +23.8% (Total cloud subscription) | 93% (Stellar) / 88% (Jingdou Cloud) | [AI-Driven Technological Innovation Accelerating Scenario-Based Deployment of Intelligent Agents](index=24&type=section&id=AI-Driven%20Technological%20Innovation%20Accelerating%20Scenario-Based%20Deployment%20of%20Intelligent%20Agents) Kingdee, guided by its 'AI-first' strategy, deeply integrates AI into SaaS products and operations, with AI contract value exceeding **RMB 150 million** during the period, launching Cosmic AI Agent Platform 2.0 and AI-native intelligent agents, and collaborating with enterprises and strategic partners to accelerate AI application in enterprise management and financial risk control - During the reporting period, AI contract value exceeded **RMB 150 million**[106](index=106&type=chunk)[108](index=108&type=chunk) - Kingdee launched Cosmic AI Agent Platform 2.0, along with AI-native intelligent agents like Kingkey Financial Report and ChatBI, securing key clients such as Hisense Group and Tongwei Co., Ltd[106](index=106&type=chunk)[108](index=108&type=chunk) - Active AI assistant users reached **170,000**, helping small and micro enterprises improve bookkeeping efficiency by approximately **80%**, invoicing efficiency by approximately **40%**, and tax filing efficiency by approximately **60%**[109](index=109&type=chunk)[110](index=110&type=chunk) - Kingdee Fintech won first prize in the Digital China Innovation Competition for its 'Intelligent Financial Risk Control Large Model' and signed agreements with financial institutions including China Construction Bank and Bank of Communications[109](index=109&type=chunk)[110](index=110&type=chunk) - Kingdee strengthened AI collaborations with strategic partners like Volcengine, Alibaba Cloud, and Huawei Cloud, enhancing R&D efficiency and large model inference performance[109](index=109&type=chunk)[110](index=110&type=chunk) [Accelerating Global Expansion and Building an Overseas Ecosystem of Partners](index=26&type=section&id=Accelerating%20Global%20Expansion%20and%20Building%20an%20Overseas%20Ecosystem%20of%20Partners) Kingdee actively pursues its globalization strategy, expanding into overseas markets like Southeast Asia and the Middle East, signing **259** Chinese outbound and local overseas enterprises, strengthening overseas delivery capabilities, building localized applications and language packs, and deepening cooperation with international banking partners to support Chinese enterprises' global development - Kingdee actively promotes its global strategic layout, vigorously expanding into overseas markets such as Southeast Asia and the Middle East[111](index=111&type=chunk)[113](index=113&type=chunk) - Kingdee Cloud · Starlight signed **259** Chinese outbound and local overseas enterprises, covering various industries including modern services, equipment manufacturing, and electronic high-tech[111](index=111&type=chunk)[113](index=113&type=chunk) - Kingdee built a three-network-in-one overseas delivery resource pool and established partnerships in countries such as Malaysia, the Philippines, Thailand, and Vietnam[112](index=112&type=chunk)[113](index=113&type=chunk) - Kingdee has developed localized applications and language packs for multiple countries or regions, including Singapore, Vietnam, and the Middle East, and deepened cooperation with international business partners such as Standard Chartered Bank, HSBC, and Deutsche Bank[112](index=112&type=chunk)[113](index=113&type=chunk) [Outlook](index=40&type=section&id=Outlook) Kingdee firmly adheres to its core 'AI-first, Subscription-first, Globalization' strategy, aiming to integrate AI technology and management wisdom to empower global enterprises and individuals, promote the rise of Chinese management models worldwide, and strive to become a global leading enterprise management AI company by **2030** - AI+SaaS is reshaping the industry landscape, injecting powerful growth momentum into Kingdee[191](index=191&type=chunk)[192](index=192&type=chunk) - Kingdee will adhere to its core 'AI-first, Subscription-first, Globalization' strategy, integrating AI technology and management wisdom to empower every enterprise and individual globally[191](index=191&type=chunk)[192](index=192&type=chunk) - Kingdee's goal is to grow into a global leading enterprise management AI company by **2030**[191](index=191&type=chunk)[192](index=192&type=chunk) [MANAGEMENT DISCUSSION AND ANALYSIS](index=27&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section provides a detailed analysis of the Group's financial performance, including revenue, profitability, and cash flow, alongside discussions on employee remuneration and social responsibility initiatives [Key Financial Information](index=27&type=section&id=Key%20Financial%20Information) This section details the Group's H1 2025 financial performance, covering revenue growth, improved gross margin, expense control, narrowed losses, and key balance sheet and cash flow changes, driven primarily by strong cloud subscription growth, with administrative expenses increasing due to personnel optimization H1 2025 Revenue Composition and Growth | Revenue Source | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Y-o-Y Growth | | :--- | :--- | :--- | :--- | | Total Turnover | 3,192,499 | 2,870,025 | +11.2% | | Cloud Subscription Business Revenue | 1,684,262 | 1,379,747 | +22.1% | | Products, Implementation and Other Revenue | 1,508,237 | 1,490,278 | +1.2% | H1 2025 Profit and Expense Overview | Metric | H1 2025 (RMB '000) | H1 2024 (RMB '000) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Gross Profit | 2,095,341 | 1,815,187 | +15.4% | | Gross Profit Margin | 65.6% | 63.2% | +2.4 percentage points | | Selling and Distribution Expenses | 1,263,898 | 1,224,514 | +3.2% | | Selling and Distribution Expenses as % of Turnover | 39.6% | 42.7% | -3.1 percentage points | | Administrative Expenses | 346,049 | 249,036 | +39.0% | | Administrative Expenses as % of Turnover | 10.8% | 8.7% | +2.1 percentage points | | Research and Development Expenses (Recognized in Income Statement) | 775,514 | 806,695 | -3.9% | | Research and Development Expenses as % of Turnover | 24.3% | 28.1% | -3.8 percentage points | | Net Loss Margin Attributable to Parent Company | 3.1% | 7.6% | -4.5 percentage points | | Basic Loss Per Share | (2.78) cents | (6.12) cents | Loss narrowed 54.58% | - The increase in administrative expenses was primarily due to personnel structure optimization and increased severance payments[121](index=121&type=chunk)[125](index=125&type=chunk) Financial Assets and Liabilities Overview (As of June 30, 2025) | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Financial Assets at Fair Value Through Profit or Loss | 1,572,744 | 1,448,148 | +124,596 | | Investments in Associates | 530,575 | 523,449 | +7,126 | | Contract Assets | 373,880 | 365,707 | +8,173 | | Loans to Third Parties (Net) | 404,725 | 371,117 | +33,608 | | Contract Liabilities | 3,991,174 | 3,723,569 | +267,605 | | Total Cash and Bank Balances | 3,538,160 | 4,175,154 | -636,994 | | Net Current Assets | 32,975 | 152,296 | -119,321 | | Current Ratio | 1.01 | - | - | | Outstanding Bank Borrowings | – | 205,082 | -205,082 | - The increase in contract liabilities was primarily due to the growth of the Group's cloud subscription business[151](index=151&type=chunk)[155](index=155&type=chunk) - The majority of the Group's cash, bank deposits, and wealth management products are denominated in RMB, with approximately **RMB 157,802,000** denominated in foreign currencies[152](index=152&type=chunk)[156](index=156&type=chunk) - The Group's exposure to interest rate risk primarily arises from borrowings; currently, interest rate swaps are not used for hedging, but the Group monitors and adopts hedging strategies when necessary[157](index=157&type=chunk)[158](index=158&type=chunk)[164](index=164&type=chunk) - The Group's exchange rate risk primarily stems from USD to RMB and HKD to RMB exchange rates, with no formal foreign currency hedging policy currently in place[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[165](index=165&type=chunk) - The Group manages credit risk by transacting with state-owned or reputable financial institutions and assessing the credit quality of distributors[162](index=162&type=chunk)[163](index=163&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk)[172](index=172&type=chunk) - Funds and liquidity are centrally managed by the Treasury Department, utilizing a 'cash pool' strategy to purchase wealth management products for enhanced returns, and establishing stringent fund management principles and budget control systems[171](index=171&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) Total Appraised Value of Major Properties (As of June 30, 2025) | Property Name | Address | Current Use | Lease Term | Total Appraised Value (RMB '000) | | :--- | :--- | :--- | :--- | :--- | | Beijing Kingdee Software Park | Shunyi District, Beijing | Office | Long-term | 647,836 | | Shanghai Kingdee Software Park | Pudong, Shanghai | Office | Long-term | 368,940 | | Shenzhen Kingdee Software Park | Nanshan District, Shenzhen | Office | Long-term | 270,105 | | Kingdee Cloud Building | Nanshan District, Shenzhen | Office | Long-term | 828,370 | | Shenzhen W1-B | Nanshan District, Shenzhen | Office | Long-term | 49,440 | | **Total** | | | | **2,164,691** | [Employees and Remuneration Policy](index=38&type=section&id=Employees%20and%20Remuneration%20Policy) As of the reporting period, the Group had **11,043** employees, focusing on customer-centricity and quality, incentivizing innovation, and attracting AI talent, with remuneration based on responsibilities, performance, contributions, and market conditions - During the reporting period, the Group's employee count reached **11,043**[182](index=182&type=chunk)[184](index=184&type=chunk) - The Group adheres to a 'customer-centric, long-term quality-first' approach, incentivizing product innovation and quality development, and attracting leading AI transformation talent and outstanding fresh graduates[182](index=182&type=chunk)[184](index=184&type=chunk) - Remuneration policy is primarily determined based on each employee's job responsibilities, work performance, outstanding contributions, length of service, and prevailing market conditions[183](index=183&type=chunk)[184](index=184&type=chunk) [Social Responsibility](index=39&type=section&id=Social%20Responsibility) Kingdee actively fulfills its corporate social responsibility, being included in the S&P Global Sustainability Yearbook (China Edition) 2024 for three consecutive years, with significant investments in talent development, enterprise management, and public welfare, including university collaborations, digital transformation training, and various charitable activities - Kingdee was included in the S&P Global Sustainability Yearbook (China Edition) 2024 for **three** consecutive years, gaining international recognition for its ESG practices[185](index=185&type=chunk)[189](index=189&type=chunk) - In talent development, Kingdee collaborated with universities to complete **78** industry-academia cooperation projects, established new partnerships with **51** universities, and provided digital learning services to over **20,000** students and more than **500** university faculty members[186](index=186&type=chunk)[189](index=189&type=chunk) - In enterprise management, Kingdee offers digital transformation workshops for entrepreneurs and executives through its Digital Academy and hosts the China Management · Global Forum to promote research on Chinese management models[187](index=187&type=chunk)[189](index=189&type=chunk) - In public welfare, Kingdee continuously participates in charitable initiatives such as poverty alleviation through education, voluntary blood donation, and urban environmental protection[188](index=188&type=chunk)[190](index=190&type=chunk) [Condensed Consolidated Interim Statement of Financial Position](index=41&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly decreased, while non-current assets remained stable; both current assets and liabilities decreased, leading to a slight reduction in net assets and total equity, notably with no outstanding bank borrowings Summary of Condensed Consolidated Interim Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 8,159,791 | 8,148,881 | | Current assets | 5,295,942 | 5,632,114 | | **Total assets** | **13,455,733** | **13,780,995** | | **Liabilities** | | | | Non-current liabilities | 163,523 | 172,396 | | Current liabilities | 5,262,967 | 5,479,818 | | **Total liabilities** | **5,426,490** | **5,652,214** | | **Net assets** | **8,029,243** | **8,128,781** | | **Equity** | | | | Equity attributable to owners of the Company | 7,961,785 | 8,049,956 | | Non-controlling interests | 67,458 | 78,825 | | **Total equity** | **8,029,243** | **8,128,781** | - As of June 30, 2025, the Group had no outstanding bank borrowings, compared to **RMB 205,082,000** as of December 31, 2024[194](index=194&type=chunk) [Condensed Consolidated Interim Income Statement](index=43&type=section&id=Condensed%20Consolidated%20Interim%20Income%20Statement) For the six months ended June 30, 2025, the Group's revenue grew by **11.2%** year-on-year, with gross profit up **15.4%**, while loss before income tax and current period loss significantly narrowed, and basic loss per share attributable to equity holders substantially decreased, reflecting improved operating efficiency Summary of Condensed Consolidated Interim Income Statement (For the six months ended June 30, 2025) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue from contracts with customers | 3,192,499 | 2,870,025 | | Cost of sales | (1,097,158) | (1,054,838) | | Gross profit | 2,095,341 | 1,815,187 | | Selling and distribution expenses | (1,263,898) | (1,224,514) | | Administrative expenses | (346,049) | (249,036) | | Research and development costs | (775,514) | (806,695) | | Other income and gains – net | 136,223 | 171,939 | | Finance income – net | 34,000 | 47,722 | | Share of profits of associates – net | 7,126 | 6,053 | | Loss before income tax | (133,563) | (263,285) | | Income tax credit | 24,458 | 24,707 | | Loss for the period | (109,105) | (238,578) | | Loss attributable to equity holders of the Company | (97,738) | (217,851) | | Basic loss per share (RMB cents) | (2.78) | (6.12) | - Loss for the period significantly narrowed by **54.27%** year-on-year, primarily due to revenue growth and expense control[195](index=195&type=chunk) [Condensed Consolidated Interim Statement of Comprehensive Income](index=44&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total comprehensive loss for the period was **RMB 104,183,000**, a significant narrowing from **RMB 242,104,000** in the prior period, primarily due to reduced loss for the period and a shift from foreign currency translation differences from loss to gain Summary of Condensed Consolidated Interim Statement of Comprehensive Income (For the six months ended June 30, 2025) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Loss for the period | (109,105) | (238,578) | | Other comprehensive income/(loss) | 4,922 | (3,526) | | **Total comprehensive loss for the period** | **(104,183)** | **(242,104)** | | Total comprehensive loss attributable to equity holders of the Company | (92,816) | (221,377) | | Total comprehensive loss attributable to non-controlling interests | (11,367) | (20,727) | - Total comprehensive loss narrowed by **56.97%** year-on-year, primarily due to a reduced loss for the period and a shift from foreign currency translation differences from loss to gain[196](index=196&type=chunk) [Condensed Consolidated Interim Statement of Changes in Equity](index=45&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the company's total equity slightly decreased, primarily due to loss for the period and share repurchases, partially offset by employee share option exercises and share award scheme values, while other reserves increased due to share cancellations and share award scheme adjustments Summary of Condensed Consolidated Interim Statement of Changes in Equity (For the six months ended June 30, 2025) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Balance at January 1 | 8,128,781 | 8,702,152 | | Loss for the period | (109,105) | (238,578) | | Other comprehensive loss | 4,922 | (3,526) | | Staff share option scheme: Proceeds from issue of shares | 10,100 | 6,299 | | Share award scheme: Value of employee services | 51,169 | 43,205 | | Share award scheme: Transfer of shares to grantees upon vesting | (1,152) | 152 | | Shares purchased for share award scheme | (18,372) | (120,992) | | Repurchase of shares | (37,100) | (359,589) | | Cancellation of shares | – | – | | Transactions with non-controlling interests | – | 18,000 | | **Balance at June 30** | **8,029,243** | **8,047,123** | - Total equity decreased from **RMB 8,128,781,000** as of January 1, 2025, to **RMB 8,029,243,000** as of June 30, 2025, primarily impacted by loss for the period and share repurchases[197](index=197&type=chunk) - Other reserves increased from **RMB 911,387,000** to **RMB 1,161,525,000** due to share cancellations and adjustments to the share award scheme[197](index=197&type=chunk) [Condensed Consolidated Interim Cash Flow Statement](index=47&type=section&id=Condensed%20Consolidated%20Interim%20Cash%20Flow%20Statement) For the six months ended June 30, 2025, the Group's operating cash outflow significantly improved, investment activities shifted from net outflow to net inflow, and financing cash outflow substantially decreased, collectively leading to a net increase in cash and cash equivalents at period-end, indicating a marked improvement in the company's cash flow position Summary of Condensed Consolidated Interim Cash Flow Statement (For the six months ended June 30, 2025) | Cash Flow Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Net cash used in operating activities | (18,215) | (166,292) | | Net cash generated from/(used in) investing activities | 456,075 | (650,806) | | Net cash used in financing activities | (292,745) | (888,701) | | Net increase/(decrease) in cash and cash equivalents | 145,115 | (1,705,799) | | Cash and cash equivalents at end of period | 1,673,106 | 1,258,498 | - Net cash outflow from operating activities significantly decreased by **89.09%** year-on-year, indicating a substantial improvement in operating efficiency[199](index=199&type=chunk) - Cash flow from investing activities shifted from a net outflow in H1 2024 to a net inflow in H1 2025, primarily due to increased proceeds from the disposal of financial assets[199](index=199&type=chunk) - Net cash outflow from financing activities decreased by **67.06%** year-on-year, mainly due to reduced repayments of borrowings and payments for share repurchases[200](index=200&type=chunk) [Notes to the Condensed Consolidated Interim Financial Information](index=49&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides selected notes to the condensed consolidated interim financial information, covering general company details, basis of preparation, significant accounting policies, estimates, segment reporting, asset details, financial instruments, and related party transactions [General information](index=49&type=section&id=General%20information) Kingdee International Software Group Company Limited is an investment holding company primarily engaged in cloud subscription services, software product sales, implementation, consulting, operation and maintenance, and upgrade services, with its shares listed on the Hong Kong Stock Exchange in **2001** - The Company is an investment holding company, primarily engaged in cloud subscription business and products, implementation, and other services[202](index=202&type=chunk)[207](index=207&type=chunk) - The Company's shares were listed on The Stock Exchange of Hong Kong Limited on February 15, 2001[203](index=203&type=chunk)[207](index=207&type=chunk) [Basis of preparation](index=49&type=section&id=Basis%20of%20preparation) This unaudited condensed consolidated interim financial information is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and should be read in conjunction with the annual financial statements for the year ended December 31, 2024 - This unaudited condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'[205](index=205&type=chunk)[209](index=209&type=chunk) - This condensed consolidated interim financial information is unaudited[204](index=204&type=chunk)[208](index=208&type=chunk) [Significant accounting policies](index=49&type=section&id=Significant%20accounting%20policies) The accounting policies adopted in this period are consistent with the 2024 annual financial statements, except for the initial adoption of amendments to IAS 21; IFRS 18 (Presentation and Disclosure in Financial Statements) will be effective in **2027**, with its impact still under assessment - The Group first adopted IAS 21 (Amendments) 'Lack of Exchangeability' effective January 1, 2025[215](index=215&type=chunk)[212](index=212&type=chunk) - IFRS 18 'Presentation and Disclosure in Financial Statements' will be effective on January 1, 2027, and is expected to impact the presentation of the income statement, with its effects still under assessment[214](index=214&type=chunk)[216](index=216&type=chunk)[221](index=221&type=chunk) [Estimates](index=51&type=section&id=Estimates) The preparation of interim financial information requires management to make judgments, estimates, and assumptions, with the key sources of uncertainty in these judgments and estimates being the same as those applied in the consolidated financial statements for the year ended December 31, 2024 - The preparation of interim financial information requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses[218](index=218&type=chunk)[222](index=222&type=chunk) - The key sources of significant judgments and estimation uncertainties applied by management in applying the Group's accounting policies are the same as those applied in the consolidated financial statements for the year ended December 31, 2024[219](index=219&type=chunk)[222](index=222&type=chunk) [Segment information](index=51&type=section&id=Segment%20information) Effective **2025**, the Group adjusted its internal reporting structure to separately measure cloud subscriptions and products, implementation, and other services as distinct business segments; during the period, external customer revenue from mainland China constituted the vast majority, with no single customer contributing over **10%** of total revenue - Effective **2025**, the Group adjusted its internal reporting structure to separately measure cloud subscriptions and products, implementation, and other services as distinct business segments[224](index=224&type=chunk)[226](index=226&type=chunk) Segment Revenue and Gross Profit (For the six months ended June 30, 2025) | Segment | Revenue (RMB '000) | Cost of Sales (RMB '000) | Gross Profit (RMB '000) | | :--- | :--- | :--- | :--- | | Cloud Subscription | 1,684,262 | (63,666) | 1,620,596 | | Products, Implementation and Other | 1,508,237 | (1,033,492) | 474,745 | | **Group Total** | **3,192,499** | **(1,097,158)** | **2,095,341** | - As of June 30, 2025, total revenue from external customers in mainland China was **RMB 3,150,889,000**, accounting for **98.69%** of total revenue[231](index=231&type=chunk)[232](index=232&type=chunk) - For the six months ended June 30, 2025, and June 30, 2024, no single customer contributed more than **10%** of the Group's revenue[233](index=233&type=chunk) [Property, plant, equipment and intangible assets](index=54&type=section&id=Property,%20plant,%20equipment%20and%20intangible%20assets) As of June 30, 2025, the Group's net property, plant, and equipment amounted to **RMB 1,730,141,000**, and net intangible assets to **RMB 1,227,297,000**, with additions and depreciation for PPE, and additions and amortization for intangible assets during the period Movements in Property, Plant and Equipment (For the six months ended June 30, 2025) | Metric | Amount (RMB '000) | | :--- | :--- | | Net book value at January 1 | 1,744,118 | | Additions | 39,464 | | Disposals | (2,693) | | Depreciation | (50,748) | | **Net book value at June 30** | **1,730,141** | Movements in Intangible Assets (For the six months ended June 30, 2025) | Metric | Amount (RMB '000) | | :--- | :--- | | Net book value at January 1 | 1,231,892 | | Additions | 262,863 | | Amortization | (267,458) | | **Net book value at June 30** | **1,227,297** | [Leases](index=55&type=section&id=Leases) As of June 30, 2025, the Group's right-of-use assets amounted to **RMB 208,178,000** and lease liabilities to **RMB 47,504,000**; during the period, right-of-use assets increased, and lease-related depreciation and interest expenses were incurred, with the Group leasing multiple offices under contracts typically ranging from **1** to **8** years, including renewal options Lease-Related Amounts (As of June 30, 2025) | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Right-of-use assets | 208,178 | 188,074 | | Lease liabilities | 47,504 | 48,252 | | Depreciation expense of right-of-use assets (six months) | 19,671 | 16,884 | | Interest expense (six months) | 1,315 | 1,826 | | Total cash outflow for leases (six months) | 50,067 | 21,590 | - For the six months ended June 30, 2025, right-of-use assets increased by **RMB 40,791,000**[240](index=240&type=chunk)[241](index=241&type=chunk) - The Group leases multiple offices under fixed-term contracts, typically ranging from **1** to **8** years, which may also include renewal options[248](index=248&type=chunk)[251](index=251&type=chunk) [Investments in associates](index=58&type=section&id=Investments%20in%20associates) As of June 30, 2025, the Group's investments in associates had a carrying value of **RMB 530,575,000**, with a share of profits from associates of **RMB 7,126,000** for the period; all associates are unlisted and operate in mainland China Movements in Carrying Value of Investments in Associates (For the six months ended June 30, 2025) | Metric | Amount (RMB '000) | | :--- | :--- | | January 1 | 523,449 | | Share of profits of associates – net | 7,126 | | **June 30** | **530,575** | - All of the Group's associates are unlisted companies operating in mainland China[255](index=255&type=chunk) [Financial assets at fair value through profit or loss](index=58&type=section&id=Financial%20assets%20at%20fair%20value%20through%20profit%20or%20loss) As of June 30, 2025, the Group's total financial assets at fair value through profit or loss amounted to **RMB 1,572,744,000**, an increase from year-end 2024, primarily comprising wealth management products, listed equity securities, and unlisted equity investments Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Category | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Wealth management products | 602,544 | 480,188 | | Listed equity securities | 107,893 | 95,373 | | Unlisted equity investments | 862,307 | 872,587 | | **Total** | **1,572,744** | **1,448,148** | - Wealth management products have maturities ranging from **1** to **12** months, with expected annual returns between **0.50%** and **2.85%**, and fair value determined using the income approach[267](index=267&type=chunk)[268](index=268&type=chunk) Movements in Level 3 Financial Instruments (For the six months ended June 30, 2025) | Metric | Amount (RMB '000) | | :--- | :--- | | January 1 | 1,352,775 | | Additions | 2,448,100 | | Disposals | (2,333,230) | | Gains/(losses) recognized in profit or loss | (2,794) | | **June 30** | **1,464,851** | [Trade and other receivables and loans to third parties](index=64&type=section&id=Trade%20and%20other%20receivables%20and%20loans%20to%20third%20parties) As of June 30, 2025, the Group's net trade receivables amounted to **RMB 179,685,000**, and net loans to third parties were **RMB 404,725,000**; third-party loans carry annual interest rates ranging from **8.00%** to **24.00%** and are assessed as low credit risk Trade Receivables and Third-Party Loans Overview (As of June 30, 2025) | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade receivables – net | 179,685 | 140,952 | | Bills receivable | 61,684 | 40,396 | | Interest receivable | 106,518 | 181,565 | | **Loans to third parties – net** | **404,725** | **371,117** | | Current portion | 266,332 | 240,862 | | Non-current portion | 138,393 | 130,255 | Aging Analysis of Trade Receivables (As of June 30, 2025) | Aging | Amount (RMB '000) | | :--- | :--- | | 0–90 days | 133,962 | | 91–180 days | 11,139 | | 181–360 days | 28,087 | | Over 360 days | 134,805 | | **Total** | **307,993** | - Loans to third parties carry annual interest rates between **8.00%** and **24.00%**, and are all denominated in RMB[282](index=282&type=chunk)[285](index=285&type=chunk) - The Group's debt instrument investments, including loans to third parties, are assessed as low-risk investments[169](index=169&type=chunk)[172](index=172&type=chunk) [Share capital and share premium](index=67&type=section&id=Share%20capital%20and%20share%20premium) As of June 30, 2025, the company's share capital was **RMB 85,228,000** and share premium was **RMB 5,934,432,000**; during the reporting period, share capital decreased due to share cancellations, and share premium varied due to share award schemes and cancellations Movements in Share Capital and Share Premium (As of June 30, 2025) | Metric | Number of Shares ('000) | Share Book Value (RMB '000) | Share Premium (RMB '000) | Total (RMB '000) | | :--- | :--- | :--- | :--- | :--- | | Balance at January 1, 2025 | 3,586,015 | 86,068 | 6,174,163 | 6,260,231 | | Employee share option scheme – Proceeds from issue of shares | 2,344 | 56 | 10,044 | 10,100 | | Share award scheme – Value of employee services | – | – | 51,169 | 51,169 | | Share award scheme – Transfer of shares to grantees upon vesting | – | – | (83,659) | (83,659) | | Cancellation of shares | (38,889) | (896) | (217,285) | (218,181) | | **Balance at June 30, 2025** | **3,549,470** | **85,228** | **5,934,432** | **6,019,660** | - Share capital decreased by **RMB 896,000** due to share cancellations, and share premium net decreased by **RMB 239,731,000** due to share award schemes and cancellations[197](index=197&type=chunk)[290](index=290&type=chunk) [Trade and other payables](index=68&type=section&id=Trade%20and%20other%20payables) As of June 30, 2025, the Group's total trade and other payables amounted to **RMB 1,197,220,000**, a decrease from year-end 2024, primarily comprising salaries and employee benefits payable, accrued expenses, and construction payables Trade and Other Payables Overview (As of June 30, 2025) | Category | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade payables | 75,358 | 82,595 | | Bills payable | 33,445 | 105,893 | | Salaries and employee benefits payable | 176,344 | 301,335 | | Accrued expenses | 355,687 | 391,521 | | Construction payables | 290,030 | 311,275 | | **Total** | **1,197,220** | **1,487,683** | Aging Analysis of Trade Payables (As of June 30, 2025) | Aging | Amount (RMB '000) | | :--- | :--- | | 0-180 days | 67,981 | | 181-360 days | 3,328 | | Over 360 days | 4,049 | | **Total** | **75,358** | - Construction payables primarily represent amounts owed to construction companies by the Group for building expenses related to Kingdee Cloud Building[298](index=298&type=chunk) [Borrowings](index=70&type=section&id=Borrowings) As of June 30, 2025, the Group had no outstanding bank borrowings, compared to **RMB 205,082,000** as of December 31, 2024, indicating that all bank borrowings were repaid during the reporting period Borrowings (As of June 30, 2025) | Category | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Non-current bank borrowings – unsecured | – | – | | Current bank borrowings – unsecured | – | 5,082 | | Current portion of long-term bank borrowings | – | 200,000 | | **Total** | **–** | **205,082** | - As of June 30, 2025, the Group had no outstanding bank borrowings[304](index=304&type=chunk) - The Group's bank borrowings had an average annual interest rate of **2.25%** (December 31, 2024)[303](index=303&type=chunk)[304](index=304&type=chunk) [Revenue from contracts with customers](index=71&type=section&id=Revenue%20from%20contracts%20with%20customers) For the six months ended June 30, 2025, the Group's total revenue from contracts with customers was **RMB 3,192,499,000**, with cloud subscription revenue being the largest contributor and showing significant growth Revenue from Contracts with Customers (For the six months ended June 30, 2025) | Revenue Source | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Cloud Subscription | 1,684,262 | 1,379,747 | | Products, Implementation and Other | 1,508,237 | 1,490,278 | | **Total** | **3,192,499** | **2,870,025** | - Cloud subscription revenue grew by **22.1%** year-on-year, serving as the primary driver of the Group's revenue growth[306](index=306&type=chunk) [Expenses by nature](index=72&type=section&id=Expenses%20by%20nature) For the six months ended June 30, 2025, the Group's primary expense items were research and development costs, staff welfare expenses, and outsourcing service fees; R&D costs decreased, while depreciation and amortization expenses increased Expenses by Nature (For the six months ended June 30, 2025) | Expense Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Research and development costs | 775,514 | 806,695 | | Staff welfare expenses (excluding research and development costs) | 1,395,342 | 1,583,044 | | Outsourcing service fees | 261,134 | 249,049 | | Depreciation of property, plant and equipment | 50,748 | 28,784 | | Depreciation of right-of-use assets | 19,671 | 16,884 | | Amortization of trademarks, computer software and copyrights and customer relationships | 9,901 | 6,336 | | Net impairment losses on financial assets and contract assets | 20,792 | 23,941 | - Research and development costs decreased by **3.9%** year-on-year, and staff welfare expenses decreased by **11.86%** year-on-year[309](index=309&type=chunk) - Depreciation of property, plant and equipment increased by **76.38%** year-on-year, and depreciation of right-of-use assets increased by **16.51%** year-on-year[309](index=309&type=chunk) [Other income and gains – net](index=73&type=section&id=Other%20income%20and%20gains%20%E2%80%93%20net) For the six months ended June 30, 2025, the Group's other income and gains – net amounted to **RMB 136,223,000**, a decrease from the prior period, primarily due to reduced VAT refunds and research project income, partially offset by increased rental income Other Income and Gains – Net (For the six months ended June 30, 2025) | Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | VAT refunds and research project income | 82,859 | 135,283 | | Rental income | 39,604 | 27,137 | | Realized and unrealized net gains/(losses) on financial assets at fair value through profit or loss | 9,697 | 6,853 | | Foreign currency exchange (losses)/gains | (1,842) | 126 | | Others | 5,905 | 2,540 | | **Total** | **136,223** | **171,939** | - Other income and gains – net decreased by **20.89%** year-on-year, primarily due to reduced VAT refunds and research project income[311](index=311&type=chunk) [Income tax credit](index=74&type=section&id=Income%20tax%20credit) For the six months ended June 30, 2025, the Group recorded an income tax credit of **RMB 24,458,000**; several subsidiaries within the Group benefit from tax incentives, including a **10%** preferential tax rate for key software enterprises, a **15%** preferential tax rate for high-tech enterprises, and corporate income tax exemption Income Tax Credit (For the six months ended June 30, 2025) | Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Current income tax | 130 | (2,906) | | Deferred income tax | (24,588) | (21,801) | | **Total** | **(24,458)** | **(24,707)** | - Kingdee Software (China) Co., Ltd. is expected to qualify as a key software enterprise, applying a **10%** preferential tax rate[313](index=313&type=chunk)[74](index=74&type=chunk) - Kingdee Diejin Cloud Computing Co., Ltd. and several other subsidiaries are recognized as high-tech enterprises, enjoying a **15%** preferential tax rate[313](index=313&type=chunk)[74](index=74&type=chunk) - Kingdee Cloud Technology Co., Ltd. is expected to qualify as a key software enterprise, enjoying corporate income tax exemption[314](index=314&type=chunk)[316](index=316&type=chunk) [Losses per share](index=75&type=section&id=Losses%20per%20share) For the six months ended June 30, 2025, basic loss per share attributable to equity holders of the Company was **RMB 2.78 cents**, a significant narrowing from **RMB 6.12 cents** in the prior period; due to the Group's loss for the period, potential share options and share award schemes were not included in diluted loss per share calculation, thus diluted loss per share is the same as basic loss per share Losses Per Share (For the six months ended June 30, 2025) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to equity holders of the Company (RMB '000) | (97,738) | (217,851) | | Weighted average number of ordinary shares in issue ('000) | 3,512,972 | 3,562,560 | | **Basic loss per share (RMB cents per share)** | **(2.78)** | **(6.12)** | | **Diluted loss per share (RMB cents per share)** | **(2.78)** | **(6.12)** | - As the Group incurred losses for the six months ended June 30, 2025, and June 30, 2024, potential share options and share award schemes were not included in the calculation of diluted loss per share, as their inclusion would be anti-dilutive[320](index=320&type=chunk)[321](index=321&type=chunk) [Dividends](index=77&type=section&id=Dividends) The Board does not recommend paying an interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board does not recommend paying an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[325](index=325&type=chunk) [Related party transactions](index=78&type=section&id=Related%20party%20transactions) As of June 30, 2025, the Group engaged in transactions with related parties (including associates and entities controlled by directors) for goods sales, service sales, rental income, and goods and service purchases; balances arising from these transactions are interest-free, unsecured, and repayable on demand Amounts of Related Party Transactions (For the six months ended June 30, 2025) | Transaction Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Sales of goods | 521 | 1,460 | | Sales of services | 1,646 | 1,095 | | Rental income | 2,154 | 2,587 | | Purchases of goods | 1,165 | 1,136 | | Purchases of services | 26,545 | 23,433 | Current Balances Arising from Related Party Transactions (As of June 30, 2025) | Category | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Amounts due to related parties recorded in 'Contract liabilities' | 3,635 | 2,605 | | Amounts due to related parties recorded in 'Trade payables' | 5,223 | 1,185 | | Amounts due from related parties | 10,292 | 10,027 | - Balances arising from the aforementioned related party transactions are interest-free, unsecured, and repayable on demand[333](index=333&type=chunk)

[Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B5%84%E6%96%99) This section provides essential details about the company's structure and contact points [Board of Directors and Committees](index=4&type=section&id=%E8%91%A3%E4%BA%8B%E4%BC%9A%E5%8F%8A%E5%A7%94%E5%91%98%E4%BC%9A) This section details the composition of Yuanxu Technology Holdings Limited's Board of Directors and its key committees - The Chairman and Chief Executive Officer of the Board is Dato' Sri Chai Shui Li[7](index=7&type=chunk) - The Audit, Remuneration, and Nomination Committees are all chaired by independent non-executive directors[7](index=7&type=chunk) [Company Contact Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%81%94%E7%BB%9C%E4%BF%A1%E6%81%AF) This section provides key contact and identification details, including the company's headquarters and stock code - The company's headquarters and principal place of business in Singapore are located at No. 43 Tuas View Circuit, Singapore 637360[8](index=8&type=chunk) - The company's stock code is **8637**[8](index=8&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=5&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This section presents the Group's financial performance, highlighting revenue, profit, and earnings per share for the period [Performance Overview](index=5&type=section&id=%E4%B8%9A%E7%BB%A9%E6%A6%82%E8%A7%88) The Group achieved significant revenue growth of 33.2% to S$24,766 thousand, with profit for the period increasing by 49.4% Key Data from Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (S$ thousand) | 2024 (S$ thousand) | Change (S$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 24,766 | 18,598 | 6,168 | 33.2% | | Cost of sales | (14,355) | (11,203) | (3,152) | 28.1% | | Gross profit | 10,411 | 7,395 | 3,016 | 40.8% | | Other income | 766 | 1,435 | (669) | (46.6%) | | Net other gains/(losses) | (548) | 375 | (923) | -246.1% | | Administrative expenses | (5,102) | (5,717) | 615 | (10.8%) | | Operating profit | 5,527 | 3,488 | 2,039 | 58.5% | | Finance costs | (1,296) | (623) | (673) | 108.0% | | Share of loss of an associate | (278) | (111) | (167) | 150.5% | | Profit before tax | 3,953 | 2,754 | 1,199 | 43.5% | | Income tax expense | (821) | (657) | (164) | 24.9% | | Profit for the period | 3,132 | 2,097 | 1,035 | 49.4% | | Total comprehensive income for the period | 3,138 | 2,098 | 1,040 | 49.6% | | Basic and diluted earnings per share (Singapore cents per share) | 2.10 | 1.70 | 0.40 | 23.5% | [Condensed Consolidated Statement of Financial Position](index=6&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) This section outlines the Group's financial position, detailing assets, liabilities, and equity at the period-end [Assets, Liabilities, and Equity Overview](index=6&type=section&id=%E8%B5%84%E4%BA%A7%E3%80%81%E8%B4%9F%E5%80%BA%E5%8F%8A%E6%9D%83%E7%9B%8A%E6%A6%82%E8%A7%88) As of June 30, 2025, total net assets increased by 10.9% to S$43,700 thousand, driven by higher current assets and net current assets Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (S$ thousand) | December 31, 2024 (S$ thousand) | Change (S$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current assets | 42,580 | 43,470 | (890) | (2.0%) | | Current assets | 37,653 | 33,030 | 4,623 | 14.0% | | Current liabilities | (12,943) | (11,656) | (1,287) | 11.0% | | Net current assets | 24,710 | 21,374 | 3,336 | 15.6% | | Non-current liabilities | (23,590) | (25,432) | 1,842 | (7.2%) | | Net assets | 43,700 | 39,412 | 4,288 | 10.9% | | Total equity attributable to owners of the company | 43,700 | 39,412 | 4,288 | 10.9% | - The increase in current assets was primarily driven by growth in inventories, trade and other receivables, and cash and bank balances[11](index=11&type=chunk) - The decrease in non-current liabilities was mainly due to a reduction in lease liabilities[12](index=12&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=8&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 movements in the Group's equity during the reporting period [Analysis of Changes in Equity](index=8&type=section&id=%E6%9D%83%E7%9B%8A%E5%8F%98%E5%8A%A8%E5%88%86%E6%9E%90) Total equity increased to S$43,700 thousand, primarily driven by profit for the period and share-based payment expenses Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | Balance at January 1, 2025 (S$ thousand) | Profit for the period (S$ thousand) | Other comprehensive income for the period (S$ thousand) | Share of capital contribution from an associate (S$ thousand) | Share-based payment expenses (S$ thousand) | Balance at June 30, 2025 (S$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Share capital | 26 | — | — | — | — | 26 | | Retained earnings/(accumulated losses) | (2,924) | 3,132 | — | — | — | 208 | | Currency translation reserve | (264) | — | 6 | — | — | (258) | | Share premium | 8,327 | — | — | — | — | 8,327 | | Other reserves | 34,247 | — | — | 171 | 979 | 35,397 | | **Total equity** | **39,412** | **3,132** | **6** | **171** | **979** | **43,700** | - In the corresponding period of 2024, total equity increased from **S$26,997 thousand** to **S$29,095 thousand**, primarily driven by **profit for the period of S$2,097 thousand**[15](index=15&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=9&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 analyzes the Group's cash inflows and outflows from operating, investing, and financing activities [Cash Flow Analysis](index=9&type=section&id=%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E5%88%86%E6%9E%90) Net cash from operating activities was S$5,099 thousand, with net cash outflows from investing and financing activities, leading to a period-end cash balance of S$18,959 thousand Key Data from Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2025 (S$ thousand) | 2024 (S$ thousand) | Change (S$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net cash from operating activities | 5,099 | 6,455 | (1,356) | (21.0%) | | Net cash used in investing activities | (1,654) | (403) | (1,251) | 310.4% | | Net cash used in financing activities | (2,460) | (2,852) | 392 | (13.8%) | | Net increase in cash and cash equivalents | 985 | 3,200 | (2,215) | (69.2%) | | Cash and cash equivalents at beginning of period | 17,974 | 9,225 | 8,749 | 94.8% | | Cash and cash equivalents at end of period | 18,959 | 12,425 | 6,534 | 52.6% | - Net cash outflow from investing activities significantly increased, mainly due to higher additions to property, plant, and equipment[17](index=17&type=chunk) - Net cash outflow from financing activities decreased, primarily due to lower repayment of borrowings[17](index=17&type=chunk) [Notes to the Unaudited Condensed Consolidated Interim Financial Statements](index=10&type=section&id=%E6%9C%AA%E7%BB%8F%E5%AE%A1%E6%A0%B8%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) This section provides detailed explanations and disclosures supporting the condensed consolidated interim financial statements [General Information](index=10&type=section&id=%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) The Group, listed on GEM on July 2, 2024, primarily offers precision machining and welding services, with unaudited financial statements presented in S$ thousand - The Group primarily engages in precision machining and precision welding services[19](index=19&type=chunk) - The company's shares were listed on GEM of the Stock Exchange on **July 2, 2024**[19](index=19&type=chunk) - The financial statements are presented in **S$ thousand** and are unaudited[21](index=21&type=chunk)[22](index=22&type=chunk) [Basis of Preparation](index=10&type=section&id=%E7%BC%96%E8%A3%BD%E5%9F%BA%E5%87%86) The unaudited condensed consolidated financial statements adhere to IFRS, GEM Listing Rules, and IAS 34, with no significant impact expected from new standards - The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and International Accounting Standard 34 "Interim Financial Reporting"[23](index=23&type=chunk) - New standards and amendments are not expected to have a significant impact on the Group's financial statements[23](index=23&type=chunk) [Revenue and Segment Information](index=11&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B5%84%E6%96%99) Revenue is primarily from precision machining and welding, with significant growth in the semiconductor sector and key contributions from Singapore and Malaysia Revenue by Service Category (S$ thousand) | Service Category | 2025 | 2024 | | :--- | :--- | :--- | | Precision machining | 13,240 | 8,133 | | Precision welding | 11,526 | 10,465 | | **Total** | **24,766** | **18,598** | Revenue by Customer Segment (S$ thousand) | Customer Segment | 2025 | 2024 | | :--- | :--- | :--- | | Semiconductor | 22,911 | 16,264 | | Aerospace | 1,214 | 1,766 | | Data storage | 593 | 464 | | Others | 48 | 104 | | **Total** | **24,766** | **18,598** | Revenue by Customer Geographical Location (S$ thousand) | Geographical Location | 2025 | 2024 | | :--- | :--- | :--- | | Singapore | 9,079 | 5,461 | | Malaysia | 10,758 | 8,253 | | United States | 2,794 | 2,882 | | Others | 2,135 | 2,002 | | **Total** | **24,766** | **18,598** | [Other Income](index=12&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income decreased to S$766 thousand, primarily due to reduced rental and service income from expired agreements Other Income Details (S$ thousand) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Rental income | 370 | 651 | | Service income | — | 566 | | Scrap sales income | 85 | 44 | | Government grants | 43 | 43 | | Others | 268 | 131 | | **Total** | **766** | **1,435** | - Government grants include employment subsidies for older workers, progressive wage credit scheme, and hiring incentive schemes[29](index=29&type=chunk) [Net Other Gains / (Losses)](index=13&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E2%81%84%EF%BC%88%E4%BA%8F%E6%8D%9F%EF%BC%89%E5%87%80%E9%A2%9D) The period recorded a net other loss of S$548 thousand, primarily due to net foreign exchange losses, partially offset by an associate equity dilution gain Net Other Gains / (Losses) Details (S$ thousand) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Net foreign exchange (losses)/gains | (849) | 320 | | Gain on disposal of right-of-use assets | — | 55 | | Gain from dilution of equity interest in an associate | 301 | — | | **Total** | **(548)** | **375** | [Administrative Expenses](index=13&type=section&id=%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) Administrative expenses decreased to S$5,102 thousand, primarily due to no listing expenses, partially offset by share-based payments and professional fees Administrative Expenses Details (S$ thousand) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Wages and salaries | 1,779 | 1,547 | | Depreciation expense | 529 | 513 | | Amortization expense | 144 | 144 | | Business development expenses | 252 | 390 | | Share-based payments | 979 | — | | Listing expenses | — | 2,316 | | Professional fees | 287 | 22 | | Repair and maintenance costs | 251 | 110 | | Property tax | 117 | 100 | | Utility expenses | 188 | 191 | | Others | 576 | 384 | | **Total** | **5,102** | **5,717** | - Share-based payments arose from the grant of shares to Group employees[32](index=32&type=chunk) [Profit Before Income Tax](index=14&type=section&id=%E9%99%A4%E6%89%80%E5%BE%97%E7%A8%8E%E5%89%8D%E6%BA%A2%E5%88%A9) Profit before tax is net of increased staff costs (S$6,115 thousand) and other expenses like depreciation and utility costs Items Deducted from Profit Before Tax (S$ thousand) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Staff costs — salaries, wages and other benefits | 5,566 | 3,625 | | Staff costs — defined contribution retirement plan contributions | 550 | 477 | | Depreciation of property, plant and equipment | 424 | 499 | | Depreciation of investment property | 21 | 21 | | Depreciation of right-of-use assets | 1,145 | 1,080 | | Listing expenses | — | 2,316 | | Utility expenses | 623 | 636 | Employee Benefit Expenses Recognized in Profit or Loss (S$ thousand) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Cost of sales | 3,357 | 2,555 | | Administrative expenses | 2,758 | 1,547 | | **Total** | **6,115** | **4,102** | [Income Tax Expense](index=14&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) Income tax expense increased to S$821 thousand, consisting of current and deferred tax components Income Tax Expense Details (S$ thousand) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Current tax | 567 | 714 | | Deferred tax | 254 | (57) | | **Income tax expense** | **821** | **657** | [Dividends](index=15&type=section&id=%E8%82%A1%E6%81%AF) The Board did not declare any interim dividend for the six months ended June 30, 2025 - The Board did not declare an interim dividend for the six months ended **June 30, 2025**[36](index=36&type=chunk) [Earnings Per Share](index=15&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Profit attributable to owners was S$3,132 thousand, with basic and diluted EPS of 2.10 Singapore cents, showing growth from the prior year Earnings Per Share Data | Indicator | 2025 (S$ thousand/thousand shares/Singapore cents) | 2024 (S$ thousand/thousand shares/Singapore cents) | | :--- | :--- | :--- | | Profit for the period attributable to owners of the company | 3,132 | 2,097 | | Weighted average number of ordinary shares | 150,000 | 123,000 | | Basic and diluted earnings per share | 2.10 | 1.70 | - Diluted earnings per share is the same as basic earnings per share as there were no potentially dilutive ordinary shares outstanding during both periods[38](index=38&type=chunk) [Property, Plant and Equipment](index=16&type=section&id=%E7%89%A9%E6%A5%AD%E3%80%81%E5%8E%82%E6%88%BF%E5%8F%8A%E8%AE%BE%E5%A4%87) Property, plant and equipment increased to S$7,056 thousand, with additions primarily for construction in progress Carrying Amount of Property, Plant and Equipment (S$ thousand) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Freehold land | 603 | 607 | | Freehold buildings | 1,160 | 1,192 | | Office equipment | — | — | | Renovations | 2,655 | 363 | | Plant and machinery | 2,326 | 2,483 | | Motor vehicles | 6 | 5 | | Furniture and fittings | 288 | 281 | | Computers | 18 | 22 | | Construction in progress | — | 947 | | **Total** | **7,056** | **5,900** | - Additions during the period amounted to **S$1,591 thousand**, mainly for construction in progress, with **S$2,358 thousand** reclassified from construction in progress to renovations[40](index=40&type=chunk) [Investment Property](index=17&type=section&id=%E6%8A%95%E8%B5%84%E7%89%A9%E4%B8%9A) Investment property decreased slightly to S$513 thousand, stated at cost less accumulated depreciation with a 28-year useful life Carrying Amount of Investment Property (S$ thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cost | 1,150 | 1,150 | | Accumulated depreciation | 637 | 616 | | **Carrying amount** | **513** | **534** | - Investment property includes a leasehold property in Singapore with an estimated useful life of **28 years**[42](index=42&type=chunk) [Right-of-Use Assets](index=18&type=section&id=%E4%BD%BF%E7%94%A8%E6%9D%83%E8%B5%84%E4%BA%A7) Right-of-use assets decreased to S$24,869 thousand, with additions primarily for motor vehicles Carrying Amount of Right-of-Use Assets (S$ thousand) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Leasehold properties | 16,199 | 16,840 | | Machinery | 7,371 | 7,750 | | Motor vehicles | 1,299 | 1,361 | | **Total** | **24,869** | **25,951** | - Depreciation expense for the period was **S$1,145 thousand**[44](index=44&type=chunk) [Intangible Assets](index=19&type=section&id=%E6%97%A0%E5%BD%A2%E8%B5%84%E4%BA%A7) Intangible assets decreased to S$1,849 thousand, primarily due to amortization of customer relationships Carrying Amount of Intangible Assets (S$ thousand) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Customer contracts | — | — | | Customer relationships | 1,849 | 1,993 | | **Total** | **1,849** | **1,993** | - Amortization expense for the period was **S$144 thousand**, entirely from customer relationships[45](index=45&type=chunk) [Trade and Other Receivables](index=20&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) Total trade and other receivables increased to S$11,392 thousand, driven by higher third-party trade receivables, predominantly in the 0-30 day aging category Overview of Trade and Other Receivables (S$ thousand) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current amount due from an associate | 2,103 | 2,783 | | Current trade receivables from third parties | 9,957 | 7,504 | | Current non-trade receivables | 1,435 | 1,451 | | **Total** | **11,392** | **8,955** | Aging Analysis of Trade Receivables (S$ thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | 6,573 | 5,084 | | 31 to 60 days | 2,075 | 2,000 | | 61 to 90 days | 569 | 374 | | Over 90 days | 740 | 46 | | **Total** | **9,957** | **7,504** | - Trade receivables are generally due for settlement within **30 to 60 days** from the invoice date, with no impairment losses recognized during the period[49](index=49&type=chunk)[50](index=50&type=chunk) [Trade and Other Payables](index=21&type=section&id=%E8%B4%B8%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9) Total trade and other payables increased to S$6,189 thousand, driven by higher third-party trade payables, predominantly in the 0-30 day aging category Overview of Trade and Other Payables (S$ thousand) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current trade payables to third parties | 4,464 | 3,139 | | Current non-trade payables | 1,725 | 2,507 | | **Total** | **6,189** | **5,646** | Aging Analysis of Trade Payables (S$ thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | 3,405 | 1,360 | | 31 to 60 days | 615 | 1,209 | | 61 to 90 days | 192 | 260 | | Over 90 days | 252 | 310 | | **Total** | **4,464** | **3,139** | - Trade payables are generally interest-free with credit terms of **30 to 60 days** from the invoice date[51](index=51&type=chunk) [Borrowings](index=22&type=section&id=%E5%80%9F%E6%AC%BE) Total borrowings decreased to S$2,334 thousand, primarily comprising bank loans Overview of Borrowings (S$ thousand) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current bank loans | 2,233 | 2,390 | | Non-current bank loans | 101 | 145 | | **Total** | **2,334** | **2,535** | [Share Capital](index=22&type=section&id=%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company had 150,000,000 issued ordinary shares; 2024 saw capital increases and new share issuance for GEM listing Details of Share Capital Movement (S$ thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of ordinary shares (issued) | 150,000,000 | 150,000,000 | | Share capital | 26 | 26 | | Share premium | 8,327 | 8,327 | | **Total** | **8,353** | **8,353** | - On **June 7, 2024**, the authorized share capital increased from **HK$380,000** to **HK$1,000,000**[56](index=56&type=chunk) - On **July 2, 2024**, the company issued **27,000,000** ordinary shares through public offer and placing, raising approximately **S$11,343 thousand** (net of listing expenses)[57](index=57&type=chunk) [Management Discussion and Analysis](index=24&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) This section provides insights into the Group's operational performance, financial position, and future strategies [Business Review](index=24&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%BE) The Group, a precision engineering service provider, saw revenue growth in machining and welding, driven by semiconductor demand and stable outstanding purchase orders - Revenue from precision machining services increased by approximately **S$5.1 million**, and precision welding services by approximately **S$1.1 million**, primarily driven by increased demand from the semiconductor industry[60](index=60&type=chunk) - As of **June 30, 2025**, the Group's accumulated outstanding purchase orders were approximately **S$17.8 million**, higher than **S$17.2 million** in the corresponding period of 2024[61](index=61&type=chunk) [Future Outlook](index=24&type=section&id=%E6%9C%AA%E6%9D%A5%E5%B1%95%E6%9C%9B) The Group aims for first-class precision engineering services, planning to deepen client cooperation and explore new opportunities in data storage, oil and gas, and aerospace for sustainable growth - The business objective is to provide first-class value based on trust, knowledge, innovation, and synergy[62](index=62&type=chunk) - Plans to consolidate its position in data storage, oil and gas, and aerospace industries by deepening cooperation with existing clients and identifying new clients and opportunities[62](index=62&type=chunk) - Actively evaluates business strategies, optimizes capital and resource utilization, and seeks to diversify revenue sources[62](index=62&type=chunk) [Financial Review](index=25&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%BE) Revenue grew 33.2% driven by semiconductor demand, leading to a 49.4% increase in profit for the period despite higher finance costs; the company maintains strong liquidity and a lower gearing ratio [Revenue](index=25&type=section&id=%E6%94%B6%E7%9B%8A) Revenue increased by **33.2%** to approximately **S$24.8 million**, primarily driven by increased semiconductor industry demand Revenue Change (S$ thousand) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 24,766 | 18,598 | 33.2% | [Cost of Sales](index=25&type=section&id=%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC) Cost of sales increased by **28.1%** to approximately **S$14.4 million**, consistent with sales growth Cost of Sales Change (S$ thousand) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Cost of sales | 14,355 | 11,203 | 28.1% | [Other Income](index=25&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income decreased by **46.6%** to approximately **S$0.8 million**, mainly due to expired rental and service agreements Other Income Change (S$ thousand) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Other income | 766 | 1,435 | (46.6%) | [Net Other Gains or Losses](index=25&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E6%88%96%E4%BA%8F%E6%8D%9F%E5%87%80%E9%A2%9D) The period recorded a net other loss of approximately S$0.5 million, primarily due to net foreign exchange losses, partially offset by an associate equity dilution gain - Net other losses of approximately **S$0.5 million** were recorded for the six months ended **June 30, 2025**, compared to net other gains of approximately **S$0.4 million** in the corresponding period of 2024[66](index=66&type=chunk) - Primarily due to net foreign exchange losses of approximately **S$0.8 million** recognized in the corresponding period of 2025, partially offset by a gain from dilution of equity interest in an associate of approximately **S$0.3 million**[66](index=66&type=chunk) [Administrative Expenses](index=25&type=section&id=%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) Administrative expenses decreased by **10.8%** to approximately **S$5.1 million**, mainly due to no listing expenses, partially offset by share-based payments and professional fees Administrative Expenses Change (S$ thousand) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 5,102 | 5,717 | (10.8%) | - The decrease was mainly due to the absence of listing expenses in the corresponding period of 2025 (2024: approximately **S$2.3 million**), partially offset by share-based payments to employees of approximately **S$1.0 million** and an increase in professional fees of approximately **S$0.3 million**[67](index=67&type=chunk) [Finance Costs](index=25&type=section&id=%E8%B4%A2%E5%8A%A1%E6%88%90%E6%9C%AC) Finance costs increased by **108.0%** to approximately **S$1.3 million**, mainly due to discounting on receivables from an associate Finance Costs Change (S$ thousand) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 1,296 | 623 | 108.0% | [Profit for the Period](index=26&type=section&id=%E6%9C%9F%E5%86%85%E6%BA%A2%E5%88%A9) Profit for the period increased by **49.4%** to approximately **S$3.1 million** Profit for the Period Change (S$ thousand) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 3,132 | 2,097 | 49.4% | [Liquidity, Financial Resources and Capital Structure](index=26&type=section&id=%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E3%80%81%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90%E5%8F%8A%E8%B5%84%E6%9C%AC%E7%BB%93%E6%9E%84) Capital structure remained stable post-GEM listing; cash and bank balances were approximately S$19.0 million, with total borrowings of S$2.3 million at 3.42% to 5.75% interest - The company's shares were successfully listed on GEM of the Stock Exchange on **July 2, 2024**[71](index=71&type=chunk) - As of **June 30, 2025**, the Group had cash and bank balances of approximately **S$19.0 million** (December 31, 2024: approximately **S$18.0 million**)[71](index=71&type=chunk) - As of **June 30, 2025**, the Group's total borrowings were approximately **S$2.3 million**, bearing effective annual interest rates ranging from **3.42% to 5.75%**, and are expected to mature between **2025 and 2028**[71](index=71&type=chunk) [Gearing Ratio](index=26&type=section&id=%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E6%AF%94%E7%8E%87) The Group's gearing ratio decreased to **5.3%** as of June 30, 2025 Gearing Ratio | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing ratio | 5.3% | 6.4% | [Capital Expenditure](index=26&type=section&id=%E8%B5%84%E6%9C%AC%E5%BC%80%E6%94%AF) Capital expenditure primarily comprised renovation costs of approximately S$1.4 million to support expansion plans - Capital expenditure primarily arose from renovation costs of approximately **S$1.4 million** incurred to support the Group's expansion plans[73](index=73&type=chunk) [Interim Dividends](index=26&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board resolved not to declare any interim dividend for the six months ended **June 30, 2025**[74](index=74&type=chunk) [Future Plans for Major Investments and Capital Assets](index=26&type=section&id=%E4%B8%BB%E8%A6%81%E6%8A%95%E8%B5%84%E5%8F%8A%E8%B5%84%E6%9C%AC%E8%B5%84%E4%BA%A7%E7%9A%84%E6%9C%AA%E6%9D%A5%E8%AE%A1%E5%88%92) No other plans for major investments and capital assets existed as of June 30, 2025, beyond those in the prospectus - Other than those disclosed in the prospectus, the Group had no other plans for major investments and capital assets as of **June 30, 2025**[75](index=75&type=chunk) [Significant Investments, Acquisitions or Disposals of Subsidiaries and Associates](index=26&type=section&id=%E5%AF%B9%E9%99%84%E5%B1%9E%E5%85%AC%E5%8F%B8%E5%8F%8A%E8%81%94%E8%90%A5%E5%85%AC%E5%8F%B8%E7%9A%84%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E3%80%81%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B4%AD%E6%88%96%E5%87%BA%E5%94%AE) No significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures occurred for the six months ended June 30, 2025 - The Group did not undertake any significant investments, acquisitions, or disposals of subsidiaries, associates, and joint ventures for the six months ended **June 30, 2025**[76](index=76&type=chunk) [Issue of Shares and Use of Proceeds from Share Offer](index=27&type=section&id=%E5%8F%91%E8%A1%8C%E8%82%A1%E4%BB%BD%E5%8F%8A%E8%82%A1%E4%BB%BD%E5%8F%91%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A1%B9%E7%94%A8%E9%80%94) The company raised approximately HK$65.34 million from its July 2, 2024 GEM listing, with proceeds allocated to expansion, quality control, marketing, debt repayment, and working capital - The company's shares have been listed on GEM of the Stock Exchange since **July 2, 2024**, raising approximately **HK$65.34 million** through the issue of **27,000,000** ordinary shares via public offer and placing[77](index=77&type=chunk) Use of Net Proceeds from Share Offer and Actual Utilization (As of June 30, 2025) | Purpose | Actual Total Net Proceeds (S$ thousand) | Approximate Percentage of Total Net Proceeds | Amount Actually Utilized (S$ thousand) | Unutilized Net Proceeds (S$ thousand) | Expected Date of Full Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | | Expand operational scale and enhance production capacity | 1,129 | 60.1% | 510 | 619 | June 30, 2026 | | Enhance quality control capabilities | 289 | 15.4% | 64 | 225 | December 31, 2025 | | Increase marketing efforts to maintain relationships with existing customers and diversify customer base | 88 | 4.7% | 32 | 56 | June 30, 2026 | | Repay certain bank borrowings used for general working capital | 184 | 9.8% | 184 | — | Not applicable | | Working capital and general corporate purposes | 188 | 10.0% | 98 | 90 | June 30, 2026 | | **Total** | **1,878** | **100%** | **888** | **990** | | - The remaining net proceeds as of **June 30, 2025**, have been placed in short-term interest-bearing accounts with licensed commercial banks and/or other authorized financial institutions[79](index=79&type=chunk) [Implementation Plan of Business Strategies](index=28&type=section&id=%E4%B8%9A%E5%8A%A1%E7%AD%96%E7%95%A5%E5%AE%9E%E6%96%BD%E8%AE%A1%E5%88%92) The Group actively implements strategies for operational expansion, quality control, marketing, and working capital management, including procurement, hiring, system evaluation, and client engagement - For operational expansion, raw materials have been procured, CNC programmers and production planners hired, remuneration improved, and quotations for lorries are being sought[82](index=82&type=chunk) - To enhance quality control capabilities, quotations for a production planning system are being sought from potential suppliers[82](index=82&type=chunk) - For increased marketing efforts, clients are regularly invited to visit the factory, and the company website has been maintained and improved[82](index=82&type=chunk) - For working capital and general corporate purposes, the Group's operating and general working capital is continuously allocated and monitored[82](index=82&type=chunk) [Pledge of Group Assets](index=29&type=section&id=%E9%9B%86%E5%9B%A2%E8%B5%84%E4%BA%A7%E6%8A%BC%E8%AE%B0) As of June 30, 2025, the Group pledged freehold buildings (S$1.2 million) and investment property (S$513 thousand) to secure term loan facilities - Freehold buildings with a carrying amount of approximately **S$1.2 million** have been pledged to secure term loan facilities[83](index=83&type=chunk) - Investment property with a carrying amount of **S$513 thousand** has been pledged to secure term loan facilities[83](index=83&type=chunk) [Foreign Exchange Risk Management](index=29&type=section&id=%E5%A4%96%E6%B1%87%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) The Group faces transactional currency risk from USD-denominated transactions but has no hedging policy as the risk is currently not significant, though management will monitor it - The Group's transactional currency risk primarily arises from sales or purchases denominated in **US Dollars**[84](index=84&type=chunk) - Currently, there is no foreign currency hedging policy, but management will continue to closely monitor foreign exchange risk[84](index=84&type=chunk) [Key Risks and Uncertainties](index=29&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) All business risks are detailed in the "Risk Factors" section of the prospectus - All risks involved in the Group's business are set out in the "Risk Factors" section of the prospectus[85](index=85&type=chunk) [Contingent Liabilities and Capital Commitments](index=29&type=section&id=%E6%88%96%E7%84%B6%E8%B4%9F%E5%80%BA%E5%8F%8A%E8%B5%84%E6%9C%AC%E6%89%BF%E6%8B%85) As of June 30, 2025, the Group had no significant contingent liabilities or capital commitments - As of **June 30, 2025**, the Group had no significant contingent liabilities or capital commitments[86](index=86&type=chunk) [Employees and Remuneration Policy](index=29&type=section&id=%E9%9B%87%E5%91%98%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 189 employees with S$5.1 million in staff costs, and maintains a policy of regular remuneration review, discretionary bonuses, and training - As of **June 30, 2025**, the Group employed a total of **189** employees (December 31, 2024: **179** employees)[87](index=87&type=chunk) - For the six months ended **June 30, 2025**, staff costs were approximately **S$5.1 million** (corresponding period in 2024: **S$4.1 million**)[87](index=87&type=chunk) - The company regularly reviews remuneration packages, grants discretionary bonuses to eligible employees based on individual and Group performance, and provides training to enhance employee knowledge[87](index=87&type=chunk)[88](index=88&type=chunk) [Other Information](index=30&type=section&id=%E5%85%B6%E4%BB%96%E8%B5%84%E6%96%99) This section covers additional disclosures, including director and shareholder interests, corporate governance, and compliance matters [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares or Debentures of the Company and its Associated Corporations](index=30&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%91%98%E4%BA%8E%E6%9C%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%85%B6%E7%9B%B8%E8%81%94%E6%B3%95%E5%9B%A2%E7%9A%84%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E5%85%B3%E8%82%A1%E4%BB%BD%E6%88%96%E5%80%BA%E6%9D%83%E8%AF%81%E4%B8%AD%E4%B9%8B%E6%9D%83%E7%9B%8A%E5%8F%8A%E6%B7%A1%E4%BB%93) As of June 30, 2025, directors and the chief executive held long positions in company shares, with Dato' Sri Chai Shui Li and Ms. Yu Wei Juan each holding 53.12% and 100% in their associated corporations Directors' and Chief Executive's Long Positions in the Company's Shares (As of June 30, 2025) | Name of Director/Chief Executive | Total number of shares held/in which an interest is owned | Percentage of total issued shares | | :--- | :--- | :--- | | Dato' Sri Chai Shui Li | 79,677,814 | 53.12% | | Ms. Yu Wei Juan | 79,677,814 | 53.12% | | Mr. Soh Chin Yew | 7,405,369 | 4.94% | | Mr. Cheang Cheong Kim | 12,299,998 | 8.20% | | Mr. Ang Yong Seng | 80,000 | 0.05% | - Dato' Sri Chai Shui Li wholly owns SGP Capital Holdings Limited, Ms. Yu Wei Juan wholly owns Baccini Capital Holdings Limited, and Mr. Cheang Cheong Kim wholly owns Angelling Capital Holdings Limited, each holding **100%** equity interest in their respective entities[91](index=91&type=chunk)[92](index=92&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in the Shares and Underlying Shares of the Company](index=31&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%E4%BA%8E%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E5%85%B3%E8%82%A1%E4%BB%BD%E4%B8%AD%E7%9A%84%E6%9D%83%E7%9B%8A%E5%8F%8A%E6%B7%A1%E4%BB%93) As of June 30, 2025, SGP BVI, Baccini, and Angelling were substantial shareholders, holding 37.51%, 14.92%, and 8.20% equity respectively Substantial Shareholders' Long Positions in the Company's Shares (As of June 30, 2025) | Name/Designation of Substantial Shareholder | Capacity/Nature of Interest | Number of Shares Held/in which an Interest is Owned | Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | SGP BVI | Beneficial interest | 56,272,335 | 37.51% | | Baccini | Beneficial interest | 22,373,479 | 14.92% | | Angelling | Beneficial interest | 12,299,998 | 8.20% | [Directors' Right to Acquire Shares or Debentures](index=31&type=section&id=%E8%91%A3%E4%BA%8B%E8%B4%AD%E4%B9%B0%E8%82%A1%E4%BB%BD%E6%88%96%E5%80%BA%E6%9D%83%E8%AF%81%E7%9A%84%E6%9D%83%E5%88%A9) No arrangements existed for directors, their spouses, or minor children to benefit from acquiring shares or debentures of the company or any other corporation - Neither the company, its holding company, nor any of its subsidiaries has entered into any arrangements to enable the Directors or their spouses or children under 18 years of age to acquire benefits by means of the acquisition of shares or debentures of the company or any other body corporate[94](index=94&type=chunk) [Share Option Scheme](index=32&type=section&id=%E8%B4%AD%E6%9C%9F%E6%9D%83%E8%AE%A1%E5%88%92) A share option scheme was adopted on June 7, 2024, but no options were granted or outstanding as of June 30, 2025 - The company adopted a share option scheme on **June 7, 2024**[96](index=96&type=chunk) - As of **June 30, 2025**, no share options were granted during the period or since the adoption of the scheme, and there were no outstanding share options[97](index=97&type=chunk) [Connected Transactions and Related Party Transactions](index=32&type=section&id=%E5%85%B3%E8%BF%9E%E4%BA%A4%E6%98%93%E5%8F%8A%E5%85%B3%E8%81%94%E6%96%B9%E4%BA%A4%E6%98%93) The Group engaged in connected transactions with Metasurface & Co for goods and services, complying with GEM Listing Rules disclosure requirements Connected Transactions (S$ thousand) | Transaction Type | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Purchase of goods and services (Metasurface & Co) | 155 | 110 | | Apportioned administrative fees (Metaoptics Technologies) | — | 3 | - The Group has complied with the disclosure requirements under Chapter 20 of the GEM Listing Rules[98](index=98&type=chunk) [Competing Interests](index=32&type=section&id=%E7%AB%9E%E4%BA%89%E6%9D%83%E7%9B%8A) Directors were unaware of any competing business or interests held by them, controlling shareholders, or their close associates as of June 30, 2025 - The Directors are not aware of any competing interests[99](index=99&type=chunk) [Directors' and Controlling Shareholders' Interests in Material Transactions, Arrangements or Contracts](index=32&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E6%8E%A7%E8%82%A1%E8%82%A1%E4%B8%9C%E4%BA%8E%E9%87%8D%E5%A4%A7%E4%BA%A4%E6%98%93%E3%80%81%E5%AE%89%E6%8E%92%E6%88%96%E5%90%88%E7%BA%A6%E4%B8%AD%E7%9A%84%E6%9D%83%E7%9B%8A) Except for connected transactions with Metasurface & Co, no director had material interests in any significant transactions, arrangements, or contracts involving the company or its subsidiaries - Save for the connected transactions with Metasurface & Co, no Director had any material interest, whether directly or indirectly, in any material transaction, arrangement or contract to which the company, its holding company or any of its subsidiaries was a party[100](index=100&type=chunk) [Permitted Indemnity Provision](index=32&type=section&id=%E8%8E%B7%E5%87%86%E5%BC%A5%E5%81%BF%E6%9D%A1%E6%96%87) Every director is entitled to indemnification by the company's assets against losses or liabilities incurred in the discharge of their duties - Every Director is entitled to be indemnified by the company out of its assets[101](index=101&type=chunk) [Management Contracts](index=32&type=section&id=%E7%AE%A1%E7%90%86%E5%90%88%E7%BA%A6) No management or administration contracts for the company's business existed, other than employment contracts, for the six months ended June 30, 2025 - No contracts concerning the management and administration of the whole or any substantial part of the business of the company were entered into or existed during the six months ended **June 30, 2025**, other than employment contracts[102](index=102&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=33&type=section&id=%E8%B4%AD%E4%B9%B0%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B5%8E%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%82%A1%E4%BB%BD) Neither the company nor its subsidiaries purchased, redeemed, or sold any listed securities, and no treasury shares were held for the six months ended June 30, 2025 - Neither the company nor any of its subsidiaries purchased, redeemed or sold any of the company's listed securities[103](index=103&type=chunk) - The company did not hold any treasury shares[104](index=104&type=chunk) [Directors' Securities Transactions](index=33&type=section&id=%E8%91%A3%E4%BA%8B%E8%BF%9B%E8%A1%8C%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93) The company adopted and directors confirmed compliance with the GEM Listing Rules' required standard for directors' securities dealings - The company has adopted the required standard of dealings in securities by directors as set out in the GEM Listing Rules[105](index=105&type=chunk) - Each of the Directors has confirmed that they have complied with the required standard during the six months ended **June 30, 2025**[105](index=105&type=chunk) [Sufficiency of Public Float](index=33&type=section&id=%E8%B6%B3%E5%A4%9F%E5%85%AC%E4%BC%97%E6%8C%81%E8%82%A1%E9%87%8F) Directors confirmed the company's public float met GEM Listing Rules requirements as of the report date - The Directors confirmed that the company's public float as at the date of this report has met the requirements of the GEM Listing Rules[106](index=106&type=chunk) [Tax Relief and Exemptions](index=33&type=section&id=%E7%A8%8E%E9%A1%B9%E5%87%8F%E5%85%8D%E5%8F%8A%E8%B1%81%E5%85%8D) Directors were unaware of any tax relief or exemptions for shareholders holding company securities - The Directors are not aware of any tax relief and exemptions available to shareholders by virtue of holding the company's securities[107](index=107&type=chunk) [Pre-emptive Rights](index=33&type=section&id=%E4%BC%98%E5%85%88%E8%B4%AD%E4%B9%B0%E6%9D%83) Neither the Articles nor Cayman Islands Companies Act restrict pre-emptive rights, not requiring proportional new share offers to existing shareholders - Neither the Articles nor the Companies Act of the Cayman Islands contain any restrictions on pre-emptive rights[108](index=108&type=chunk) [Compliance with Relevant Laws and Regulations](index=33&type=section&id=%E9%81%B5%E5%AE%88%E7%9B%B8%E5%85%B3%E6%B3%95%E5%BE%8B%E5%8F%8A%E6%B3%95%E8%A7%84) To the best of directors' knowledge, the Group complied with all relevant and material business laws and regulations - The Group has complied with all relevant laws and regulations relating to and having a significant impact on the business of the Group[109](index=109&type=chunk) [Corporate Governance Practices](index=34&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A7%84) The company adheres to good corporate governance and the Code; the combined Chairman and CEO role is deemed optimal for Group management and shareholder interests - The Board is committed to fulfilling its responsibilities to shareholders, safeguarding and ensuring shareholder value through sound corporate governance[110](index=110&type=chunk) - The company has complied with all applicable principles and code provisions of the Corporate Governance Code for the six months ended **June 30, 2025**, and up to the date of this report, except for the combined roles of Chairman and Chief Executive Officer held by Dato' Sri Chai Shui Li[111](index=111&type=chunk)[113](index=113&type=chunk) - The Board believes that the combined roles of Chief Executive Officer and Chairman of the Board held by Dato' Sri Chai Shui Li are most suitable, and the current arrangement is beneficial to the Group's management and in the overall interests of the company and its shareholders[113](index=113&type=chunk) [Review by Audit Committee](index=34&type=section&id=%E7%94%B1%E5%AE%A1%E6%A0%B8%E5%A7%94%E5%91%98%E4%BC%9A%E5%AE%A1%E9%98%85) This report's financial information is unaudited; the Audit Committee reviewed accounting principles, controls, and financial reporting, confirming compliance with applicable accounting standards - The financial information in this report has not been audited or reviewed by the company's independent auditor[114](index=114&type=chunk) - The Audit Committee, comprising three independent non-executive Directors, has reviewed this report and the Group's unaudited condensed consolidated financial statements for the six months ended **June 30, 2025**[114](index=114&type=chunk) [Events After Reporting Period](index=34&type=section&id=%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%90%8E%E4%BA%8B%E9%A1%B9) No significant events occurred post-June 30, 2025, that could materially impact the Group's assets, liabilities, or future operations - No significant events have occurred from **June 30, 2025**, up to the date of this report that could materially affect the Group's assets and liabilities or future operations[115](index=115&type=chunk)

2025 INTERIM REPORT 中期報告 CONTENTS 目錄 | 2 | Financial Highlights | | --- | --- | | | 財務概要 | | 3 | Chairman's Statement | | | 主席報告書 | | 7 | Management Discussion and Analysis | | | 管理層討論與分析 | | 22 | Report of Directors | | | 董事會報告書 | | 32 | Corporate Governance | | | 企業管治事宜 | | 35 | Consolidated Statement of Profit or Loss | 37 Consolidated Statement of Profit or Loss and Other Comprehensive Income 綜合損益及其他全面收入表 (Incorporated in the Cayman Islands with limited liability) Stock Code 股份代號 : 3389 ( 於開曼群島註冊成立之有限公司 ...

本產品採用FSC®認證的和其他受控來源的材料。 目錄 掃描並下載 本報告 2 財務摘要 3 主席報告 5 管理層討論及分析 5 業務回顧 18 資本資源及流動資金 21 財務資料 21 獨立核數師審閱報告 22 簡明綜合中期收益表 23 簡明綜合中期全面收益表 24 簡明綜合中期財務狀況表 26 簡明綜合中期現金流動表 28 簡明綜合中期權益變動表 30 簡明綜合中期財務報表附註 47 企業管治及其他資料 58 股東參考資料 60 釋義 62 公司資料 財務摘要 | | 二零二五年 | 二零二四年 | | | --- | --- | --- | --- | | | 上半年 | 上半年 | 百分比變動 | | | 百萬港元 | 百萬港元 | | | 合併收入 (1) | 9,954 | 6,039 | 65% | | 物業銷售 | 6,422 | 2,325 | 176% | | 物業租賃及其他 | 2,502 | 2,649 | - 6% | | 酒店營運 | 1,030 | 1,065 | 3% - | | 收入 (2) | 8,059 | 5,040 | 60% | | 基礎溢利 (3) | 978 | ...

目 錄 | 公 | 司 | 資 | 料 | | | | | | | | | | | | | 2 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 中 | 期 | 簡 | 明 | 綜 | 合 | 損 | 益 | 及 | 全 | 面 | 收 | 益 | 表 | | | 4 | | 中 | 期 | 簡 | 明 | 綜 | 合 | 財 | 務 | 狀 | 況 | 表 | | | | | | 6 | | 中 | 期 | 簡 | 明 | 綜 | 合 | 權 | 益 | 變 | 動 | 表 | | | | | | 8 | | 中 | 期 | 簡 | 明 | 綜 | 合 | 現 | 金 | 流 | 量 | 表 | | | | | | 10 | | 未 | 經 | 審 | 核 | 簡 | 明 | 綜 | 合 | 中 | 期 | 財 | 務 | 資 | 料 | 附 | 註 | 11 | | 管 | 理 | 層 | 討 | 論 | 與 | 分 | 析 | | | | ...