JIMU GROUP LIMITED 積木集團有限 公 司 （股份代號：8187） （於開曼群島註冊成立的有限公司） 中期報告 INTERIM JIMU GROUP LIMITED 積木集團有限 公 司 (Stock Code: 8187) (Incorporated in the with limited liability) 香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM 的定位，乃為中小型公司提供的市場，此等公司相比起其他在聯交所上市的公司帶有較高投 資風險。有意投資的人士應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出 投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會承受較於主板買賣的證券為高的 市場波動風險，同時亦無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所對本報告的內容概不負責，對其準確性或完整性亦不發表任 何聲明，並明確表示概不就因本報告全部或任何部分內容而產生或依賴該等內容而引致的任何損 失承擔任何責任。 本報告載有根據聯交所GEM證券上市規則（「GEM上市規則」）規定須提供有關積木集團有限公司 （「本公司」） ...

(Incorporated in the Cayman Islands with limited liability) Stock Code: 6933 SINO-ENTERTAINMENT TECHNOLOGY HOLDINGS LIMITED 新娛科控股有限公司 股份代號：6933 SINO-ENTERTAINMENT TECHNOLOGY HOLDINGS LIMITED 新娛科控股有限公司 （於開曼群島註冊成立的有限公司） 2025 中期報告 2025 INTERIM REPORT 董事委員會 目錄 | 公司資料 | 2 | | --- | --- | | 財務摘要 | 3 | | 主席報告 | 4 | | 管理層討論及分析 | 5 | | 簡明綜合損益及其他全面收益表 | 9 | | 簡明綜合財務狀況表 | 10 | | 簡明綜合權益變動表 | 11 | | 簡明綜合現金流量表 | 12 | | 簡明綜合財務報表附註 | 13 | | 其他資料 | 24 | | 釋義 | 35 | 公司資料 董事會 執行董事 隋嘉恒先生 （主席） 李濤先生 非執行董事 何紹寧先生 獨立非執行董事 龐霞女士 鄧春華先 ...

[Company Information](index=3&type=section&id=Company%20Information) The company is incorporated in the Cayman Islands, headquartered in Xiamen, Fujian Province, China, with a principal place of business in Hong Kong - Zixin Group Holdings Limited is incorporated in the Cayman Islands, stock code 2187, headquartered in Xiamen, Fujian Province, China, with a principal place of business in Hong Kong[6](index=6&type=chunk)[7](index=7&type=chunk) - The Board of Directors comprises six executive directors, including Mr. Ye Zhijie (Chairman), and three independent non-executive directors, with audit, nomination, remuneration, and strategy committees established[6](index=6&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) The group's revenue increased by 6.4% year-on-year, but gross profit significantly declined by 82.6%, resulting in a net loss for the period Financial Highlights for the Six Months Ended June 30 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Revenue | 259,673 | 244,079 | 6.4% | | Gross Profit | 7,905 | 45,517 | (82.6%) | | (Loss) / Profit for the Period | (49,061) | 1,172 | (4,286.1%) | - Revenue increased by **6.4% year-on-year** to **RMB 259.7 million**, driven by ready-mixed concrete (14.0% growth) and iron ore tailings recycling and eco-friendly bricks (6.8% growth) businesses[9](index=9&type=chunk) - Gross profit significantly decreased by **82.6%** to **RMB 7.9 million**, with the period shifting from profit to a **loss of RMB 49.1 million**[10](index=10&type=chunk)[11](index=11&type=chunk) [Chairman's Report](index=5&type=section&id=Chairman%27s%20Report) The group, a concrete building materials manufacturer in Xiamen, saw revenue growth driven by iron ore tailings recycling, but overall gross profit and net profit declined - The Group is a concrete building materials manufacturer and supplier in Xiamen, Fujian Province, China, also engaged in comprehensive utilization of iron ore tailings and eco-friendly brick production in Changjiang, Hainan Province[12](index=12&type=chunk) - For the six months ended June 30, 2025, revenue grew by **6.4%** to **RMB 259.7 million**, primarily due to increased revenue from iron ore tailings recycling and ready-mixed concrete, partially offset by a decrease in precast concrete components revenue[12](index=12&type=chunk) - Overall gross profit decreased by **82.6%** to **RMB 7.9 million**, mainly due to a gross loss of approximately **RMB 19.3 million** from the ready-mixed concrete business, resulting in a net loss of approximately **RMB 49.1 million** for the period[13](index=13&type=chunk) - Looking ahead, market pressure on ready-mixed concrete and precast concrete components is expected to persist, while the iron ore tailings recycling and eco-friendly bricks business will continue to generate strong revenue[13](index=13&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed analysis of the group's financial performance, liquidity, and risk factors for the period [Business Review](index=7&type=section&id=Business%20Review) The group's total revenue increased by 6.4% year-on-year, driven by ready-mixed concrete and iron ore tailings recycling, despite a significant decline in precast concrete components Revenue Changes by Business Segment | Business Segment | 2025 (RMB thousands) | 2024 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Ready-mixed Concrete | 148,200 | 130,000 | 14.0% | | Precast Concrete Components | 870 | 10,600 | (91.8%) | | Iron Ore Tailings Recycling and Eco-friendly Bricks | 110,600 | 103,500 | 6.8% | | **Total Revenue** | **259,700** | **244,100** | **6.4%** | - Ready-mixed concrete revenue moderately increased, but the segment remains in a loss-making position with narrowing profit margins due to intense competition in the Xiamen market[20](index=20&type=chunk) - Precast concrete components revenue significantly decreased by **91.8%**, resulting in a segment loss, primarily due to market price competition[19](index=19&type=chunk)[20](index=20&type=chunk) - Iron ore tailings recycling and eco-friendly bricks revenue increased by **6.8%**, mainly due to higher selling prices[20](index=20&type=chunk) [Cost of Sales](index=7&type=section&id=Cost%20of%20Sales) Cost of sales increased by 26.8% to RMB 251.8 million, mainly due to higher revenue from iron ore tailings recycling and increased raw material costs for ready-mixed concrete - Cost of sales increased by approximately **RMB 53.2 million** or **26.8%** to **RMB 251.8 million**[21](index=21&type=chunk) - Key reasons include increased revenue from iron ore tailings recycling and eco-friendly bricks, and rising raw material costs for ready-mixed concrete despite falling selling prices due to price competition[21](index=21&type=chunk) - Depreciation of precast concrete components production lines was reclassified to administrative expenses due to temporary suspension of production, partially offsetting the increase in cost of sales[21](index=21&type=chunk) [Gross Profit and Gross Margin](index=7&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Overall gross profit significantly decreased by 82.6% to RMB 7.9 million, primarily due to a gross loss of RMB 19.3 million in the ready-mixed concrete business - Overall gross profit decreased by approximately **RMB 37.6 million** or **82.6%** from RMB 45.5 million to **RMB 7.9 million**[22](index=22&type=chunk) - The decline in gross profit is primarily attributable to a gross loss of approximately **RMB 19.3 million** from the ready-mixed concrete business (compared to a gross profit of approximately RMB 12.9 million in the same period last year)[23](index=23&type=chunk) [Other Income](index=8&type=section&id=Other%20Income) Other income increased by 83.4% to RMB 5.2 million, mainly due to non-recurring government grants and compensation for delayed trade receivables settlement - Other income increased by approximately **83.4%** to approximately **RMB 5.2 million**[24](index=24&type=chunk) - Primarily due to non-recurring government grants and awards received, and compensation for delayed settlement of trade receivables[24](index=24&type=chunk) [Selling Expenses](index=8&type=section&id=Selling%20Expenses) Selling expenses decreased by 38.1% to RMB 6.5 million, mainly due to reduced sales volume of precast concrete components - Selling expenses decreased by approximately **38.1%** to approximately **RMB 6.5 million**[25](index=25&type=chunk) - Primarily due to a decrease in sales volume of precast concrete components[25](index=25&type=chunk) [Administrative Expenses](index=8&type=section&id=Administrative%20Expenses) Administrative expenses increased by 46.5% to RMB 42.6 million, mainly due to the reclassification of depreciation for temporarily suspended precast concrete component production lines - Administrative expenses increased by approximately **46.5%** to approximately **RMB 42.6 million**[26](index=26&type=chunk) - Primarily due to the reclassification of depreciation for precast concrete component production lines to administrative costs following temporary suspension of production[26](index=26&type=chunk) [Net Finance Costs](index=8&type=section&id=Net%20Finance%20Costs) Net finance costs decreased by 13.6% to RMB 8.7 million, primarily due to a reduction in interest on bank borrowings - Net finance costs decreased by approximately **13.6%** to approximately **RMB 8.7 million**[27](index=27&type=chunk) - Primarily due to a decrease in interest on bank borrowings[27](index=27&type=chunk) [Income Tax (Expense) / Credit](index=8&type=section&id=Income%20Tax%20%28Expense%29%20%2F%20Credit) Income tax shifted from a credit to an expense of RMB 1.2 million, mainly due to losses in the ready-mixed concrete and precast concrete components businesses - Income tax expense for the period was approximately **RMB 1.2 million** (compared to a credit of approximately RMB 1.3 million in the same period last year)[28](index=28&type=chunk) - The low income tax expense is primarily due to losses in the ready-mixed concrete and precast concrete components businesses[28](index=28&type=chunk) [(Loss) / Profit for the Period](index=8&type=section&id=%28Loss%29%20%2F%20Profit%20for%20the%20Period) The group recorded a loss of approximately RMB 49.1 million for the period, compared to a profit of RMB 1.2 million in the prior year - The loss for the period was approximately **RMB 49.1 million** (compared to a profit of RMB 1.2 million in the same period last year)[29](index=29&type=chunk) [Liquidity and Financial Resources](index=8&type=section&id=Liquidity%20and%20Financial%20Resources) The group funds operations through cash from operating activities and borrowings, with net current liabilities of RMB 37.5 million and a gearing ratio of 54% as of June 30, 2025 - The Group primarily funds its operations through cash generated from operating activities and borrowings[30](index=30&type=chunk) Overview of Liquidity and Financial Resources | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Current Liabilities | 37,500 | 72,500 | | Cash and Cash Equivalents | 15,700 | 19,000 | | Current Borrowings | 121,100 | 227,700 | | Non-current Borrowings | 260,200 | 132,700 | | Gearing Ratio | 54% | 48% | [Currency Risk](index=9&type=section&id=Currency%20Risk) Operating primarily in China with RMB as the functional currency, the group does not anticipate significant currency risk and has no foreign currency hedging policy - Most of the Group's subsidiaries operate in China, with RMB as their functional currency[32](index=32&type=chunk) - No significant currency risk is expected to materially impact operating results, and there is currently no foreign currency hedging policy in place[32](index=32&type=chunk) [Capital Commitments](index=9&type=section&id=Capital%20Commitments) As of June 30, 2025, the group's capital commitments amounted to approximately RMB 451.8 million, an increase from the end of 2024 Capital Commitments | Date | Amount (RMB thousands) | | :--- | :--- | | June 30, 2025 | 451,800 | | December 31, 2024 | 404,300 | [Pledged Assets](index=9&type=section&id=Pledged%20Assets) Details regarding the pledging of the group's assets are provided in Note 20 to the condensed consolidated interim financial statements - Details regarding the pledging of the Group's assets are set out in Note 20 to the condensed consolidated interim financial statements[34](index=34&type=chunk) [Contingent Liabilities](index=9&type=section&id=Contingent%20Liabilities) The group had no contingent liabilities as of June 30, 2025, and December 31, 2024 - As of June 30, 2025, and December 31, 2024, the Group had no contingent liabilities[35](index=35&type=chunk) [Capital Structure](index=9&type=section&id=Capital%20Structure) The group's capital structure, consisting of equity attributable to owners, has remained unchanged since listing and is regularly reviewed by the Board - The Group's capital structure has remained unchanged since its listing, comprising equity attributable to owners of the Company[36](index=36&type=chunk) - The Board regularly reviews the Group's capital structure, considering the cost of capital and associated risks[36](index=36&type=chunk) [Significant Acquisitions and Disposals](index=9&type=section&id=Significant%20Acquisitions%20and%20Disposals) The group did not undertake any significant acquisitions or disposals related to subsidiaries, associates, or joint ventures during the period - During the period, the Group did not undertake any significant acquisitions or disposals related to subsidiaries, associates, or joint ventures[37](index=37&type=chunk) [Significant Investments](index=9&type=section&id=Significant%20Investments) The group did not have any significant investments during the period - During the period, the Group did not have any significant investments[38](index=38&type=chunk) [Employees and Remuneration Policy](index=10&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the group had 376 employees, with remuneration determined by qualifications, responsibilities, contributions, and experience, and some factory workers outsourced for efficiency - As of June 30, 2025, the Group had **376 employees** (June 30, 2024: 462 employees)[39](index=39&type=chunk) - Employee remuneration is determined with reference to factors such as qualifications, responsibilities, contributions, and experience[39](index=39&type=chunk) - The Group outsources some precast concrete component production line workers to certain labor service companies to enhance human resource efficiency and flexibility[39](index=39&type=chunk) [Use of Proceeds](index=10&type=section&id=Use%20of%20Proceeds) Net proceeds from the share offer were approximately HKD 238.7 million, with HKD 5.4 million utilized for expanding precast concrete component production capacity as of June 30, 2025 - Net proceeds from the share offer were approximately **HKD 238.7 million**[40](index=40&type=chunk) Overview of Use of Net Proceeds (HKD millions) | Use | Updated Proposed Use | Utilized as of Dec 31, 2024 | Utilized from Jan 1 to Jun 30, 2025 | Unutilized as of Jun 30, 2025 | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | | Expand precast concrete component production capacity | 24.5 | 5.4 | — | 5.4 | Before Dec 2025 | | Enhance IT systems | 1.2 | — | — | — | Not applicable | | Improve environmental protection systems | 1.2 | — | — | — | Not applicable | | Purchase mixer trucks and concrete pump trucks | 2.0 | — | — | — | Not applicable | | General working capital | 105.3 | — | — | — | Not applicable | | Repay borrowings | 104.5 | — | — | — | Not applicable | | **Total** | **238.7** | **5.4** | **—** | **5.4** | | [Prospects](index=10&type=section&id=Prospects) Increased competition in Xiamen's ready-mixed and precast concrete markets pressures profits, while Hainan's iron ore tailings utilization business is expected to remain a strong revenue source - Increased competition in Xiamen's ready-mixed concrete and precast concrete component markets significantly pressures and harms the Group's profits[41](index=41&type=chunk) - The comprehensive utilization of iron ore tailings in Hainan continues to be a primary revenue source for the Group, expected to remain strong due to ample supply and robust demand in neighboring areas[41](index=41&type=chunk) [Condensed Consolidated Interim Statement of Comprehensive Income](index=11&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) This statement presents the group's financial performance, showing a shift from profit to a significant loss for the six months ended June 30, 2025 Condensed Consolidated Interim Statement of Comprehensive Income (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 259,673 | 244,079 | | Cost of Sales | (251,768) | (198,562) | | Gross Profit | 7,905 | 45,517 | | Other Income | 5,203 | 2,837 | | Other Net Losses | (1,601) | (512) | | Selling Expenses | (6,483) | (10,470) | | Administrative Expenses | (42,617) | (29,099) | | Impairment Loss on Financial Assets (Increase) / Reversal | (1,594) | 1,618 | | Operating Profit | (39,187) | 9,891 | | Net Finance Costs | (8,669) | (10,032) | | Loss Before Income Tax | (47,856) | (141) | | Income Tax (Expense) / Credit | (1,205) | 1,313 | | (Loss) / Profit and Total Comprehensive (Loss) / Income for the Period Attributable to Owners of the Company | (49,061) | 1,172 | | Basic and Diluted (Loss) / Earnings Per Share (RMB) | (0.066) | 0.002 | [Condensed Consolidated Interim Statement of Financial Position](index=11&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the group's assets, liabilities, and equity as of June 30, 2025, showing a slight decrease in total assets and equity, with an increase in total liabilities Condensed Consolidated Interim Statement of Financial Position (As at June 30, 2025) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Assets** | | | | Total Non-current Assets | 646,184 | 601,421 | | Total Current Assets | 483,663 | 531,233 | | **Total Assets** | **1,129,847** | **1,132,654** | | **Equity** | | | | Total Equity | 328,888 | 377,949 | | **Liabilities** | | | | Total Non-current Liabilities | 279,768 | 150,989 | | Total Current Liabilities | 521,191 | 603,716 | | **Total Liabilities** | **800,959** | **754,705** | | **Total Equity and Liabilities** | **1,129,847** | **1,132,654** | - As of June 30, 2025, total assets slightly decreased to **RMB 1,129.8 million**, with non-current assets increasing and current assets decreasing[44](index=44&type=chunk) - Total equity decreased to **RMB 328.9 million**, and total liabilities increased to **RMB 801.0 million**, primarily due to an increase in non-current borrowings[44](index=44&type=chunk)[46](index=46&type=chunk) [Condensed Consolidated Interim Statement of Changes in Equity](index=13&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) This statement details changes in the group's equity for the six months ended June 30, 2025, reflecting a decrease primarily due to the loss incurred during the period Condensed Consolidated Interim Statement of Changes in Equity (For the Six Months Ended June 30, 2025) | Indicator | Share Capital (RMB thousands) | Reserves (RMB thousands) | Retained Earnings (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | As at January 1, 2025 | 6,358 | 364,659 | 6,932 | 377,949 | | Loss for the period | — | — | (49,061) | (49,061) | | As at June 30, 2025 | 6,358 | 364,659 | (42,129) | 328,888 | | As at January 1, 2024 | 6,358 | 364,659 | 82,131 | 453,148 | | Profit for the period | — | — | 1,172 | 1,172 | | As at June 30, 2024 | 6,358 | 364,659 | 83,303 | 454,320 | - As of June 30, 2025, total equity attributable to owners of the Company was **RMB 328.9 million**, a decrease from the beginning of the period, mainly due to a **loss of RMB 49.1 million** incurred, resulting in retained earnings turning into accumulated losses[47](index=47&type=chunk) [Condensed Consolidated Interim Statement of Cash Flows](index=14&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Cash%20Flows) This statement summarizes the group's cash flows from operating, investing, and financing activities, showing a significant decrease in operating cash flow and an increase in cash used for investing activities Condensed Consolidated Interim Statement of Cash Flows (For the Six Months Ended June 30, 2025) | Activity Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 8,262 | 53,998 | | Net Cash Used in Investing Activities | (70,506) | (28,874) | | Net Cash Generated from / (Used in) Financing Activities | 58,933 | (24,780) | | Net (Decrease) / Increase in Cash and Cash Equivalents | (3,311) | 344 | | Cash and Cash Equivalents at End of Period | 15,705 | 26,212 | - Net cash generated from operating activities significantly decreased to **RMB 8.3 million**, while net cash used in investing activities increased to **RMB 70.5 million**, primarily for the purchase of property, plant and equipment[49](index=49&type=chunk) - Financing activities shifted from cash used to cash generated of **RMB 58.9 million**, mainly due to increased proceeds from bank borrowings[49](index=49&type=chunk) - Cash and cash equivalents at the end of the period decreased to **RMB 15.7 million**[49](index=49&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=15&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed explanatory notes to the condensed consolidated interim financial statements, covering general information, accounting policies, risk management, and specific financial items [General Information of the Group](index=16&type=section&id=General%20Information%20of%20the%20Group) The group, incorporated in the Cayman Islands, primarily manufactures and sells ready-mixed and precast concrete components in China, and has expanded into eco-friendly bricks and iron ore tailings recycling since 2022 - The Company was incorporated in the Cayman Islands on November 14, 2018, as an investment holding company[50](index=50&type=chunk) - The Group is principally engaged in the manufacture and sale of ready-mixed concrete and precast concrete components in China, and since 2022, in the manufacture and sale of eco-friendly bricks and iron ore tailings recycling products[50](index=50&type=chunk) - The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since March 26, 2021[51](index=51&type=chunk) [Basis of Preparation](index=16&type=section&id=Basis%20of%20Preparation) The condensed consolidated interim financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024 - The condensed consolidated interim financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[55](index=55&type=chunk) - These statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024[55](index=55&type=chunk) [Significant Accounting Policies](index=17&type=section&id=Significant%20Accounting%20Policies) The significant accounting policies applied in these interim financial statements are consistent with the prior year, with the adoption of new and revised standards, including HKAS 21 (Amendment) "Lack of Exchangeability" - The significant accounting policies applied in the preparation of the condensed consolidated interim financial statements are consistent with those applied in the annual consolidated financial statements for the year ended December 31, 2024[56](index=56&type=chunk) - The Group adopted HKAS 21 (Amendment) "Lack of Exchangeability", effective from January 1, 2025[57](index=57&type=chunk)[58](index=58&type=chunk) - Several new and revised standards (e.g., HKFRS 9, 18, 19) are not yet effective, and the Group is assessing their full impact[59](index=59&type=chunk) [Estimates](index=18&type=section&id=Estimates) Preparing interim financial statements requires management judgments, estimates, and assumptions that affect reported amounts of assets, liabilities, income, and expenses, with actual results potentially differing from estimates - The preparation of interim financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, and income and expenses[60](index=60&type=chunk) - The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the annual consolidated financial statements for the year ended December 31, 2024[60](index=60&type=chunk) [Financial Risk Management](index=19&type=section&id=Financial%20Risk%20Management) The group faces market, credit, and liquidity risks, with risk management plans aimed at minimizing adverse effects, and no changes in policies since the last year-end [Financial Risk Factors](index=19&type=section&id=Financial%20Risk%20Factors) The group's activities are exposed to market (foreign exchange and interest rate), credit, and liquidity risks, with an overall risk management plan focused on mitigating adverse impacts, and no derivative financial instruments used for hedging during the period - The Group's activities expose it to various financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk, and liquidity risk[61](index=61&type=chunk) - The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial performance[61](index=61&type=chunk) - There have been no changes in the Group's risk management policies since the end of the last annual period[62](index=62&type=chunk) [Credit Risk](index=19&type=section&id=Credit%20Risk) The group's credit risk primarily arises from cash and bank balances, trade receivables, and other receivables, with expected credit losses for trade receivables measured using a simplified approach based on aging and customer credit quality - The Group is exposed to credit risk in relation to its cash and bank balances, restricted bank balances, trade receivables, and other receivables[63](index=63&type=chunk) - The Group applies the simplified approach under HKFRS 9 to measure expected credit losses, which requires the use of the lifetime expected loss allowance for all trade receivables[66](index=66&type=chunk) Expected Loss Allowance for Trade Receivables (RMB thousands) | Aging | June 30, 2025 Gross Carrying Amount | June 30, 2025 Total Loss Allowance | December 31, 2024 Gross Carrying Amount | December 31, 2024 Total Loss Allowance | | :--- | :--- | :--- | :--- | :--- | | Within one year | 260,933 | 4,574 | 260,628 | 2,592 | | One to two years | 50,038 | 2,193 | 69,641 | 3,089 | | Two to three years | 58,410 | 8,618 | 59,356 | 12,257 | | Over three years | 39,240 | 17,500 | 32,649 | 13,353 | | **Total** | **408,621** | **32,885** | **422,274** | **31,291** | [Liquidity Risk](index=22&type=section&id=Liquidity%20Risk) The group manages liquidity risk through an analysis of contractual maturities of non-derivative financial liabilities, showing various maturities for borrowings, interest payables, trade payables, and other payables Maturity Analysis of Non-Derivative Financial Liabilities (RMB thousands) | Liability Type | Within One Year (2025) | One to Two Years (2025) | Two to Five Years (2025) | Over Five Years (2025) | Total (2025) | | :--- | :--- | :--- | :--- | :--- | :--- | | Borrowings (excluding factoring borrowings) | 71,200 | 53,800 | 44,900 | 161,510 | 331,410 | | Interest Payable | 12,818 | 637 | 3,923 | 12,408 | 29,786 | | Trade Payables | 322,425 | — | — | — | 322,425 | | Other Payables and Accrued Charges | 63,545 | — | — | — | 63,545 | | **Total** | **469,988** | **54,437** | **48,823** | **173,918** | **747,166** | [Fair Value Estimation of Financial Assets and Liabilities Measured at Amortized Cost](index=22&type=section&id=Fair%20Value%20Estimation%20of%20Financial%20Assets%20and%20Liabilities%20Measured%20at%20Amortized%20Cost) The carrying amounts of the group's current financial assets and liabilities approximate their fair values at the reporting date due to their short-term nature - The Group's current financial assets (including cash and bank balances and trade and other receivables) and current financial liabilities (including trade and other payables, bank borrowings, and lease liabilities) are short-term in nature[71](index=71&type=chunk) - Their carrying amounts approximate their fair values at the reporting date[71](index=71&type=chunk) [Segment Information](index=23&type=section&id=Segment%20Information) The group operates in three segments: ready-mixed concrete, precast concrete components, and recycled iron ore tailings and bricks, with the latter performing well while the former two recorded losses [Segment Information of the Group](index=24&type=section&id=Segment%20Information%20of%20the%20Group) For the six months ended June 30, 2025, the recycled iron ore tailings and bricks segment reported a profit of RMB 11.9 million, while ready-mixed concrete and precast concrete components segments recorded losses of RMB 39.1 million and RMB 10.4 million, respectively Segment Results (For the Six Months Ended June 30, 2025) | Segment | Revenue (RMB thousands) | Gross Profit (RMB thousands) | Segment Results (RMB thousands) | | :--- | :--- | :--- | :--- | | Ready-mixed Concrete | 148,220 | (19,268) | (39,124) | | Precast Concrete Components | 870 | 330 | (10,371) | | Recycled Iron Ore Tailings and Bricks | 110,583 | 26,843 | 11,933 | | **Total** | **259,673** | **7,905** | **(37,562)** | - Additions to non-current assets were primarily concentrated in the recycled iron ore tailings and bricks segment, amounting to **RMB 63.5 million**[75](index=75&type=chunk) - Total segment assets amounted to **RMB 1,053.8 million**, with the recycled iron ore tailings and bricks segment accounting for the largest proportion[75](index=75&type=chunk) [Contract Liabilities](index=26&type=section&id=Contract%20Liabilities) As of June 30, 2025, the group's total contract liabilities were RMB 7.2 million, mainly from ready-mixed concrete, with RMB 4.3 million revenue recognized from opening contract liabilities during the period Contract Liabilities (RMB thousands) | Business Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Recycled Iron Ore Tailings and Bricks | 469 | 3,732 | | Precast Concrete Components | 100 | — | | Ready-mixed Concrete | 6,587 | 1,321 | | **Total** | **7,156** | **5,053** | - Contract liabilities relate to non-refundable customer advances and fluctuate due to varying project durations[77](index=77&type=chunk) - Revenue recognized from opening contract liabilities during the period was **RMB 4.3 million** (2024: RMB 3.0 million)[79](index=79&type=chunk) [Expenses by Nature](index=27&type=section&id=Expenses%20by%20Nature) Total cost of sales, selling expenses, and administrative expenses amounted to RMB 300.9 million, primarily comprising raw materials and consumables used, employee benefit expenses, and outsourcing service fees Expenses by Nature (For the Six Months Ended June 30) | Expense Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Raw materials and consumables used | 195,381 | 126,214 | | Employee benefit expenses | 28,220 | 27,645 | | Outsourcing service fees | 16,949 | 18,101 | | Depreciation of property, plant and equipment | 15,375 | 15,637 | | Transportation expenses | 16,758 | 17,232 | | **Total** | **300,868** | **238,131** | - Raw materials and consumables used represent the largest expense item, significantly increasing year-on-year during the period[80](index=80&type=chunk) [Income Tax Expense / (Credit)](index=27&type=section&id=Income%20Tax%20Expense%20%2F%20%28Credit%29) Income tax expense for the period was RMB 1.2 million, mainly comprising China income tax, with Chinese subsidiaries subject to a 25% corporate income tax rate, and some enjoying a preferential rate of 15% Income Tax Expense / (Credit) (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax — China income tax | 1,274 | (1,868) | | Deferred income tax | (69) | 555 | | **Income Tax Expense / (Credit)** | **1,205** | **(1,313)** | - The Company is incorporated in the Cayman Islands and is not subject to Cayman Islands taxation; British Virgin Islands subsidiaries are also exempt from taxation; Hong Kong profits tax is provided at 16.5%, but there was no assessable profit during the period[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - Chinese subsidiaries are subject to a corporate income tax rate of 25%, except for Xiamen Zhixin Construction Technology Co., Ltd. and Zhixin Environmental Technology (Changjiang) Co., Ltd., which enjoy a preferential tax rate of 15%[84](index=84&type=chunk) [Basic and Diluted (Loss) / Earnings Per Share](index=28&type=section&id=Basic%20and%20Diluted%20%28Loss%29%20%2F%20Earnings%20Per%20Share) Basic loss per share was RMB 0.066, compared to basic earnings per share of RMB 0.002 in the prior year, with diluted loss per share being the same due to no potential dilutive ordinary shares Basic (Loss) / Earnings Per Share (For the Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | (Loss) / Profit attributable to owners of the Company (RMB thousands) | (49,061) | 1,172 | | Weighted average number of ordinary shares in issue | 748,000,000 | 748,000,000 | | Basic (Loss) / Earnings Per Share (RMB) | (0.066) | 0.002 | - As there were no potential dilutive ordinary shares outstanding as of June 30, 2025, the diluted earnings per share presented are the same as the basic earnings per share[87](index=87&type=chunk) [Dividends](index=29&type=section&id=Dividends) No dividends were paid, declared, or proposed by the company for the six months ended June 30, 2025 - For the six months ended June 30, 2025, no dividends were paid, declared, or proposed (2024: Nil)[88](index=88&type=chunk) [Property, Plant and Equipment, Right-of-Use Assets, Investment Properties and Intangible Assets](index=29&type=section&id=Property%2C%20Plant%20and%20Equipment%2C%20Right-of-Use%20Assets%2C%20Investment%20Properties%20and%20Intangible%20Assets) As of June 30, 2025, the group's total property, plant and equipment, right-of-use assets, investment properties, and intangible assets amounted to RMB 624.9 million, with additions of RMB 60.8 million to property, plant and equipment and total depreciation and amortization of RMB 17.6 million during the period Movements in Non-Current Assets (RMB thousands) | Asset Category | January 1, 2025 | Additions | Depreciation / Amortization | Disposals | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 412,302 | 60,758 | (15,375) | (1,432) | 456,253 | | Right-of-Use Assets | 100,367 | — | (1,695) | — | 98,672 | | Investment Properties | 31,085 | — | (557) | — | 30,528 | | Intangible Assets | 39,403 | 19 | (17) | — | 39,405 | | **Total** | **583,157** | **60,777** | **(17,644)** | **(1,432)** | **624,858** | - The Group has pledged certain assets to secure borrowings, details of which are set out in Note 20(a)[89](index=89&type=chunk) [Inventories](index=30&type=section&id=Inventories) As of June 30, 2025, the group's total inventories amounted to RMB 18.5 million, comprising raw materials and finished goods, with an impairment allowance of RMB 1.4 million Composition of Inventories (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | 13,047 | 12,702 | | Finished goods | 6,884 | 7,892 | | Less: Impairment allowance for inventories | (1,410) | (1,601) | | **Total** | **18,521** | **18,993** | - The closing balance of inventory impairment allowance was **RMB 1.4 million**, with zero increase in allowance recognized in profit or loss during the period, and **RMB 191 thousand** of allowance written off[90](index=90&type=chunk) [Trade Receivables](index=30&type=section&id=Trade%20Receivables) As of June 30, 2025, the group's total trade receivables were RMB 413.6 million, with an impairment allowance of RMB 32.9 million, and RMB 49.9 million subject to factoring arrangements Overview of Trade Receivables (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current trade receivables | 434,748 | 479,913 | | Less: Impairment allowance | (30,966) | (28,696) | | Non-current retention receivables | 11,756 | 16,405 | | Less: Impairment allowance | (1,919) | (2,595) | | **Total** | **413,619** | **465,027** | - The carrying amount of trade receivables includes receivables subject to factoring arrangements of **RMB 49.9 million** (December 31, 2024: RMB 38.1 million)[92](index=92&type=chunk) Aging Analysis of Trade Receivables (RMB thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 year | 261,330 | 261,204 | | 1 to 2 years | 51,130 | 74,880 | | 2 to 3 years | 71,449 | 99,729 | | Over 3 years | 62,595 | 60,505 | | **Total** | **446,504** | **496,318** | [Prepayments, Deposits and Other Receivables](index=31&type=section&id=Prepayments%2C%20Deposits%20and%20Other%20Receivables) As of June 30, 2025, total prepayments, deposits, and other receivables amounted to RMB 45.7 million, primarily comprising prepayments for raw materials and operating expenses, recoverable deductible VAT, and refundable deposits Composition of Prepayments, Deposits and Other Receivables (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepayments for raw materials and operating expenses | 15,100 | 12,796 | | Recoverable deductible VAT | 7,430 | 6,973 | | Rental receivables | 4,089 | 4,840 | | Refundable deposits | 10,110 | 9,285 | | Other receivables | 8,926 | 8,093 | | **Total** | **45,655** | **41,987** | - Due to their short-term nature, the carrying amounts of prepayments, deposits, and other receivables approximate their fair values at the reporting date[94](index=94&type=chunk) [Cash and Bank Balances](index=32&type=section&id=Cash%20and%20Bank%20Balances) As of June 30, 2025, the group's cash and bank balances decreased to RMB 15.7 million, with restricted bank balances representing pledged bank deposits Cash and Bank Balances (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash on hand and at bank | 15,705 | 19,036 | - Restricted bank balances represent bank deposits pledged for the issuance of bills payable[95](index=95&type=chunk) [Share Capital](index=32&type=section&id=Share%20Capital) As of June 30, 2025, the company's authorized share capital was 3,000,000,000 shares, with 748,000,000 shares issued, totaling RMB 6.4 million, remaining unchanged since January 1, 2025 Overview of Share Capital | Item | Number of Ordinary Shares | Share Capital (RMB thousands) | | :--- | :--- | :--- | | Authorized Share Capital (June 30, 2025) | 3,000,000,000 | 25,500 | | Issued Share Capital (June 30, 2025) | 748,000,000 | 6,358 | - Share capital remained unchanged as of January 1, 2025, and June 30, 2025[96](index=96&type=chunk) [Reserves](index=32&type=section&id=Reserves) As of June 30, 2025, the group's total reserves amounted to RMB 364.7 million, including share premium, capital reserve, and statutory reserve, remaining unchanged since January 1, 2025 Composition of Reserves (RMB thousands) | Item | Share Premium | Capital Reserve | Statutory Reserve | Total | | :--- | :--- | :--- | :--- | :--- | | From January 1, 2025 to June 30, 2025 | 220,966 | 127,135 | 16,558 | 364,659 | - Total reserves remained unchanged from January 1, 2025, to June 30, 2025[96](index=96&type=chunk) [Trade Payables](index=33&type=section&id=Trade%20Payables) As of June 30, 2025, the group's total trade payables were RMB 322.4 million, primarily due within one year, with carrying amounts approximating fair values Trade Payables (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables — Third parties | 322,425 | 299,173 | Aging Analysis of Trade Payables (RMB thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within one year | 266,976 | 246,851 | | One to two years | 15,555 | 50,035 | | Over two years | 39,894 | 2,287 | | **Total** | **322,425** | **299,173** | [Other Payables and Accrued Charges](index=33&type=section&id=Other%20Payables%20and%20Accrued%20Charges) As of June 30, 2025, total other payables and accrued charges amounted to RMB 70.4 million, mainly comprising payables for property, plant and equipment purchases and amounts due to related parties Composition of Other Payables and Accrued Charges (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Payables for property, plant and equipment purchases | 31,972 | 31,079 | | Amounts due to related parties | 16,605 | 7,919 | | Accrued operating expenses | 9,691 | 10,432 | | Employee benefit payables | 2,903 | 7,138 | | Other tax payables | 3,436 | 6,336 | | Others | 5,755 | 7,060 | | **Total** | **70,362** | **69,964** | - Due to their short-term nature, the carrying amounts of other payables and accrued charges approximate their fair values at the reporting date[98](index=98&type=chunk) [Borrowings](index=34&type=section&id=Borrowings) As of June 30, 2025, the group's total borrowings were RMB 381.3 million, with a significant increase in non-current borrowings, primarily secured bank and factoring borrowings, collateralized by various assets and guarantees [Bank Borrowings](index=34&type=section&id=Bank%20Borrowings) The group's total bank borrowings of RMB 381.3 million include secured bank and factoring borrowings, collateralized by assets such as property, plant and equipment, and guaranteed by the company and individuals Overview of Borrowings (RMB thousands) | Borrowing Type | June 30, 2025 Current | June 30, 2025 Non-current | June 30, 2025 Total | December 31, 2024 Current | December 31, 2024 Non-current | December 31, 2024 Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Secured bank borrowings | 71,200 | 260,210 | 331,410 | 189,637 | 132,691 | 322,328 | | Factoring borrowings | 49,890 | — | 49,890 | 38,061 | — | 38,061 | | **Total Borrowings** | **121,090** | **260,210** | **381,300** | **227,698** | **132,691** | **360,389** | - Secured bank borrowings are collateralized by the Group's assets, including property, plant and equipment, construction in progress, right-of-use assets, investment properties, and transferred receivables[100](index=100&type=chunk)[101](index=101&type=chunk) - Borrowings are also collateralized by corporate guarantees from certain subsidiaries, and guarantees from Mr. Ye Zhijie and his spouse, Mr. Huang Wengui, and an independent third-party credit guarantee company[100](index=100&type=chunk) [Repayment Schedule](index=35&type=section&id=Repayment%20Schedule) As of June 30, 2025, the group's total borrowings were RMB 381.3 million, with RMB 121.1 million due within one year and RMB 190.3 million due after more than three years Borrowings Repayment Schedule (RMB thousands) | Repayment Period | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within one year | 121,090 | 227,698 | | One to two years | 25,000 | 16,058 | | Two to three years | 44,900 | 19,980 | | Over three years | 190,310 | 96,653 | | **Total** | **381,300** | **360,389** | [Undrawn Borrowing Facilities](index=35&type=section&id=Undrawn%20Borrowing%20Facilities) As of June 30, 2025, the group had RMB 248.6 million in undrawn borrowing facilities, all of which were floating-rate bank borrowings maturing within one year Undrawn Borrowing Facilities (RMB thousands) | Maturity Period | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Maturing within one year | 248,640 | 800 | | Maturing in one to two years | — | 25,550 | | Maturing in two to three years | — | — | | Maturing after three years | — | 187 | | **Total** | **248,640** | **26,537** | [Commitments](index=35&type=section&id=Commitments) As of June 30, 2025, the group's total capital commitments amounted to RMB 451.7 million, primarily for contracted but unprovided property, plant and equipment Capital Commitments (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted but not provided for — Property, plant and equipment | 451,719 | 115,447 | | Authorized but not provided for — Property, plant and equipment | — | 288,805 | | **Total** | **451,719** | **404,252** | [Related Party Transactions](index=36&type=section&id=Related%20Party%20Transactions) The group engaged in related party transactions, mainly involving advances from and repayments to Mr. Ye Zhijie, and amounts payable to Mr. Ye Zhijie and Mr. Huang Kaining, which are unsecured, interest-free, and repayable on demand [Transactions with Related Parties](index=36&type=section&id=Transactions%20with%20Related%20Parties) During the period, the group received advances of RMB 8.7 million from Mr. Ye Zhijie, compared to repayments of RMB 1.6 million in the prior year Transactions with Related Parties (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Advances from / (Repayments to) related parties — Mr. Ye Zhijie | 8,686 | (1,553) | [Balances with Related Parties](index=36&type=section&id=Balances%20with%20Related%20Parties) As of June 30, 2025, amounts payable to related parties, Mr. Ye Zhijie and Mr. Huang Kaining, totaled RMB 16.6 million, used to supplement working capital, unsecured, interest-free, and repayable on demand Amounts Due to Related Parties (RMB thousands) | Related Party | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Mr. Ye Zhijie | 9,233 | 547 | | Mr. Huang Kaining | 7,372 | 7,372 | | **Total** | **16,605** | **7,919** | - Amounts due to Mr. Ye Zhijie and Mr. Huang Kaining are related party advances used to supplement the Group's working capital needs, unsecured, interest-free, and repayable on demand[105](index=105&type=chunk) [Key Management Personnel Remuneration](index=36&type=section&id=Key%20Management%20Personnel%20Remuneration) Key management personnel remuneration for the six months ended June 30, 2025, was approximately RMB 1.6 million, a decrease from the prior year - Key management personnel remuneration for the six months ended June 30, 2025, was approximately **RMB 1,645,000** (2024: RMB 2,144,000)[105](index=105&type=chunk) [Corporate Governance and Other Information](index=36&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section outlines the company's commitment to sound corporate governance principles and compliance with relevant codes and regulations [Corporate Governance](index=37&type=section&id=Corporate%20Governance) The Board is committed to establishing sound corporate governance principles and confirms the company's compliance with the Corporate Governance Code during the period - The Board is committed to establishing sound corporate governance principles and practices and achieving high standards of corporate governance[107](index=107&type=chunk) - The Board has reviewed the Company's corporate governance practices and is satisfied that for the six months ended June 30, 2025, the Company has applied the principles and complied with the code provisions set out in the Corporate Governance Code[108](index=108&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=37&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted a code of conduct no less exacting than the Model Code, and all directors confirmed compliance during the period, with the code also applied to relevant employees with inside information - The Company has adopted a code of conduct regarding securities transactions by directors, the terms of which are no less exacting than the required standard set out in the Model Code[109](index=109&type=chunk) - Following specific enquiries made by the Company to all Directors, the Directors confirmed that they had complied with the required standards set out in the Model Code and the code of conduct regarding directors' dealings for the six months ended June 30, 2025[109](index=109&type=chunk) [Directors' and Chief Executive's Interests and/or Short Positions in the Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=38&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%2For%20Short%20Positions%20in%20the%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, Mr. Ye Zhijie and Mr. Huang Wengui held substantial shares through controlled corporations, while Mr. Lai Quanshui, Mr. Qiu Limiao, and Mr. Ye Dan also held beneficial interests Directors' Interests in the Company's Shares | Director | Nature of Interest | Number of Shares Interested | Approximate Percentage of Interest in the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Ye Zhijie | Interest in controlled corporation | 274,706,100 (L) | 36.73% | | Mr. Huang Wengui | Interest in controlled corporation | 121,568,700 (L) | 16.25% | | Mr. Lai Quanshui | Beneficial interest | 10,000,000 (L) | 1.34% | | Mr. Qiu Limiao | Beneficial interest | 56,000 (L) | 0.01% | | Mr. Ye Dan | Beneficial interest | 50,000 (L) | 0.01% | - Mr. Ye Zhijie is the sole shareholder of Zhixin Investment Holdings Limited, and Mr. Huang Wengui is the sole shareholder of Yaohao Holdings Limited, and are therefore deemed to be interested in the shares held by them[113](index=113&type=chunk) [Substantial Shareholders' Interests and/or Short Positions in the Shares and Underlying Shares of the Company](index=39&type=section&id=Substantial%20Shareholders%27%20Interests%20and%2For%20Short%20Positions%20in%20the%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, Zhixin Investment Holdings Limited, Yaohao Holdings Limited, their respective spouses, and Huatai Securities Co., Ltd. and its subsidiaries were substantial shareholders of the company Substantial Shareholders' Long Positions in the Company's Shares | Name / Company Name | Nature of Interest | Number of Shares Interested | Approximate Percentage of Interest in the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Zhixin Investment Holdings Limited | Beneficial interest | 274,706,100 | 36.73% | | Ms. Hong Wei | Spouse's interest | 274,706,100 | 36.73% | | Yaohao Holdings Limited | Beneficial interest | 121,568,700 | 16.25% | | Ms. Lin Lingling | Spouse's interest | 121,568,700 | 16.25% | | Huatai Securities Co., Ltd. | Interest in controlled corporation | 37,718,000 | 5.04% | | Huatai International Financial Holdings Company Limited | Interest in controlled corporation | 37,718,000 | 5.04% | | Huatai Financial Holdings (Hong Kong) Limited | Beneficial interest | 37,718,000 | 5.04% | - Ms. Hong Wei is the spouse of Mr. Ye Zhijie, and Ms. Lin Lingling is the spouse of Mr. Huang Wengui, and are deemed to be interested in the shares held by their respective spouses under the Securities and Futures Ordinance[117](index=117&type=chunk) - Huatai Securities Co., Ltd. and its subsidiaries (Huatai International Financial Holdings Company Limited, Huatai Financial Holdings (Hong Kong) Limited) hold shares through controlled corporate interests[117](index=117&type=chunk) [Changes in Directors](index=40&type=section&id=Changes%20in%20Directors) There were no changes in directors or their information requiring disclosure under the Listing Rules for the six months ended June 30, 2025 - For the six months ended June 30, 2025, there were no changes in directors or their information requiring disclosure under the Listing Rules[118](index=118&type=chunk) [Directors' Interests in Competing Businesses](index=40&type=section&id=Directors%27%20Interests%20in%20Competing%20Businesses) No directors held interests in any business competing or potentially competing with the group, nor had any conflicts of interest, for the six months ended June 30, 2025 - For the six months ended June 30, 2025, no director held any interest in any business competing or potentially competing, directly or indirectly, with the Group's business[119](index=119&type=chunk) - Nor were there any actual or potential conflicts of interest with the Group[119](index=119&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=40&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025 - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[120](index=120&type=chunk) [Review of Interim Financial Statements](index=40&type=section&id=Review%20of%20Interim%20Financial%20Statements) The unaudited condensed consolidated interim financial statements and this interim report for the six months ended June 30, 2025, have been reviewed by the Audit Committee - The unaudited condensed consolidated interim financial statements of the Company and its subsidiaries for the six months ended June 30, 2025, and this interim report have been reviewed by the Audit Committee[121](index=121&type=chunk) [Interim Dividend](index=40&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[122](index=122&type=chunk) [Glossary](index=40&type=section&id=Glossary) This section provides definitions for key terms used throughout the report

[Unaudited Interim Condensed Consolidated Financial Information](index=2&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section presents the unaudited interim condensed consolidated financial statements for the period ended June 30, 2025 [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, Hendu Group's revenue grew significantly by 37.4% to HKD 221,708 thousand, with profit for the period increasing by 126.8% to HKD 17,691 thousand, and basic earnings per share rising to 8.9 HK cents Condensed Consolidated Statement of Profit or Loss Key Data | Indicator | June 30, 2025 (Thousand HKD) | June 30, 2024 (Thousand HKD) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 221,708 | 161,393 | +37.4% | | Gross Profit | 64,271 | 43,401 | +48.1% | | Operating Profit | 21,682 | 8,570 | +153.0% | | Profit Before Tax | 21,682 | 8,564 | +153.2% | | Profit for the Period Attributable to Company Shareholders | 17,691 | 7,800 | +126.8% | | Basic and Diluted Earnings Per Share (HK cents) | 8.9 | 3.9 | +128.2% | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, profit for the period was HKD 17,691 thousand, and with exchange differences from foreign operations, total comprehensive income attributable to company shareholders reached HKD 21,364 thousand, a substantial increase from HKD 3,219 thousand in the prior year Condensed Consolidated Statement of Comprehensive Income Key Data | Indicator | June 30, 2025 (Thousand HKD) | June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Profit for the Period | 17,691 | 7,800 | | Exchange Differences on Translation of Financial Statements of Foreign Operations | 3,673 | (4,581) | | Total Comprehensive Income for the Period Attributable to Company Shareholders | 21,364 | 3,219 | - In the first half of 2025, exchange gains from translating financial statements of foreign operations were **HKD 3,673 thousand**, compared to an exchange loss of HKD 4,581 thousand in the prior period, primarily due to the appreciation of RMB against HKD[6](index=6&type=chunk)[50](index=50&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets increased to HKD 514,900 thousand, and shareholders' equity rose to HKD 447,045 thousand, with a significant increase in trade and bills receivables within current assets, while total liabilities remained low Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Total Assets | 514,900 | 495,982 | | Non-current Assets | 210,313 | 218,479 | | Current Assets | 304,587 | 277,503 | | Total Equity | 447,045 | 431,650 | | Total Liabilities | 67,855 | 64,332 | | Current Liabilities | 59,746 | 56,226 | | Non-current Liabilities | 8,109 | 8,106 | - Trade and bills receivables significantly increased from **HKD 80,903 thousand** as of December 31, 2024, to **HKD 131,991 thousand** as of June 30, 2025[7](index=7&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to company shareholders increased from HKD 431,650 thousand at the beginning of the year to HKD 447,045 thousand, mainly driven by total comprehensive income of HKD 21,364 thousand, partially offset by dividends paid of HKD 5,969 thousand Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | January 1, 2025 (Thousand HKD) | Total Comprehensive Income for the Period (Thousand HKD) | Dividends Paid (Thousand HKD) | June 30, 2025 (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Total Equity | 431,650 | 21,364 | (5,969) | 447,045 | | Other Reserves | 13,997 | 3,673 | – | 17,670 | | Retained Earnings | 397,757 | 17,691 | (5,969) | 409,479 | [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was HKD 11,215 thousand, compared to a net inflow of HKD 20,185 thousand in the prior year, with net cash from investing activities of HKD 6,627 thousand and net cash used in financing activities of HKD 6,055 thousand, resulting in a net decrease in cash and cash equivalents of HKD 10,643 thousand Condensed Consolidated Statement of Cash Flows Key Data | Indicator | June 30, 2025 (Thousand HKD) | June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Net Cash (Used in) Generated from Operating Activities | (11,215) | 20,185 | | Net Cash Generated from (Used in) Investing Activities | 6,627 | (7,197) | | Net Cash Used in Financing Activities | (6,055) | (225) | | Net (Decrease) Increase in Cash and Cash Equivalents | (10,643) | 12,763 | | Cash and Cash Equivalents at June 30 | 42,785 | 51,443 | - Operating cash flow shifted from a net inflow of **HKD 20,185 thousand** in the prior period of 2024 to a net outflow of **HKD 11,215 thousand** in the same period of 2025[10](index=10&type=chunk) - Investing cash flow shifted from a net outflow of **HKD 7,197 thousand** in the prior period of 2024 to a net inflow of **HKD 6,627 thousand** in the same period of 2025, primarily due to increased proceeds from the disposal of financial assets at fair value through profit or loss[10](index=10&type=chunk) [Notes to Unaudited Interim Condensed Consolidated Financial Information](index=8&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes to the unaudited interim condensed consolidated financial information, covering general information, basis of preparation, accounting policies, estimates, and specific financial statement line items [General Information](index=8&type=section&id=General%20Information) The Company is an investment holding company primarily engaged in manufacturing and trading wire and cable products, incorporated in Bermuda, with financial information presented in Hong Kong Dollars - The Group is primarily engaged in the **manufacturing and trading of wire and cable products**[11](index=11&type=chunk) [Basis of Preparation](index=8&type=section&id=Basis%20of%20Preparation) The unaudited interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants - The financial information is prepared in accordance with **Hong Kong Accounting Standard 34 "Interim Financial Reporting"**[12](index=12&type=chunk) [Accounting Policies](index=8&type=section&id=Accounting%20Policies) The accounting policies adopted are consistent with the 2024 consolidated financial statements, except for income tax estimates and the adoption of new/revised HKFRSs, where the "Lack of Exchangeability" amendment has no significant impact on past or future periods - Accounting policies are consistent with the 2024 consolidated financial statements, except for income tax estimates and the adoption of new/revised Hong Kong Financial Reporting Standards[13](index=13&type=chunk) - The Group first applied **HKAS 21 and HKFRS 1 (Amendments) "Lack of Exchangeability"** on January 1, 2025, with no significant impact expected[14](index=14&type=chunk) - Management is evaluating several new/revised standards effective in 2026 and 2027, which are not expected to impact operating results or financial position[15](index=15&type=chunk)[16](index=16&type=chunk) [Estimates](index=10&type=section&id=Critical%20Accounting%20Estimates%20and%20Judgements) The preparation of interim financial information involves management's judgments, estimates, and assumptions, consistent with those used in the 2024 consolidated financial statements, with carrying amounts of financial assets and liabilities approximating fair value due to their short-term maturity - Significant judgments made by management in applying accounting policies and estimating uncertainties are consistent with the 2024 consolidated financial statements[17](index=17&type=chunk) - The carrying amounts of financial assets and liabilities approximate their fair values due to their short-term maturity[18](index=18&type=chunk) [Revenue and Segment Information](index=10&type=section&id=Revenue%20and%20Segment%20Information) The Group primarily manufactures and trades wire and cable products, with revenue of HKD 221,708 thousand in the first half of 2025, where the Americas segment contributed the most with HKD 174,528 thousand, accounting for 78.7% of total revenue, and two major customers contributed HKD 156,837 thousand, both from the Americas segment Revenue and Segment Results by Region for H1 2025 | Region | Revenue (Thousand HKD) | Segment Results (Thousand HKD) | Total Segment Assets (Thousand HKD) | | :--- | :--- | :--- | :--- | | Hong Kong | 11,631 | 3,545 | 51,493 | | China (excluding Hong Kong) | 17,965 | (3,564) | 86,693 | | Americas | 174,528 | 20,163 | 179,972 | | Vietnam | 9,877 | 1,706 | 103,868 | | Japan | 7,224 | 1,248 | 2,314 | | Other Countries | 483 | 83 | 199 | | **Total Reported Segments** | **221,708** | **23,181** | **424,539** | - Revenue from the Americas segment increased by **53.7%** year-on-year to **HKD 174,528 thousand**, accounting for **78.7%** of total revenue, making it the Group's primary income source[20](index=20&type=chunk)[55](index=55&type=chunk) Major Customer Revenue Contribution | Customer | June 30, 2025 (Thousand HKD) | June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Customer A | 114,714 | 60,359 | | Customer B | 42,123 | 40,705 | | **Total** | **156,837** | **101,064** | - Two major customers (Customer A and Customer B) contributed **HKD 156,837 thousand** in revenue, representing **70.7%** of total revenue, both from the Americas segment[22](index=22&type=chunk)[23](index=23&type=chunk) [Other Income](index=13&type=section&id=Other%20Income) For the six months ended June 30, 2025, total other income was HKD 6,070 thousand, an increase from HKD 4,803 thousand in the prior period, mainly due to a net gain of HKD 3,252 thousand from fair value changes of financial assets at fair value through profit or loss Other Income Details | Item | June 30, 2025 (Thousand HKD) | June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Scrap Sales | 698 | 2,001 | | Rental Income from Investment Properties | 865 | 1,715 | | Net Gain from Fair Value Changes of Financial Assets at Fair Value Through Profit or Loss | 3,252 | – | | Interest Income | 489 | 458 | | Government Grants | 12 | 35 | | Freight Costs Received from Customers | 72 | 385 | | Miscellaneous Income | 682 | 209 | | **Total** | **6,070** | **4,803** | - A net gain of **HKD 3,252 thousand** from fair value changes of financial assets at fair value through profit or loss was the primary driver of other income growth in the first half of 2025[24](index=24&type=chunk) [Operating Profit](index=13&type=section&id=Operating%20Profit) Operating profit is stated after deducting or including various expenses, with significant increases in cost of inventories and staff costs, and a rise in revaluation loss on investment properties Operating Profit Deductions/Inclusions | Item | June 30, 2025 (Thousand HKD) | June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Depreciation | 4,278 | 4,500 | | Cost of Inventories | 111,325 | 83,155 | | Revaluation Loss on Investment Properties | 9,128 | 4,926 | | Staff Costs (including Directors' Emoluments) | 50,500 | 44,709 | | Provision for Inventories (included in Cost of Inventories) | 10,348 | 2,929 | - Cost of inventories同比增長33.9%至**HKD 111,325 thousand**, and staff costs increased by **12.9%** to **HKD 50,500 thousand**[25](index=25&type=chunk) - Revaluation loss on investment properties increased from **HKD 4,926 thousand** in the prior period of 2024 to **HKD 9,128 thousand** in the same period of 2025[25](index=25&type=chunk) [Finance Costs](index=14&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, the Group incurred no finance costs, compared to HKD 6 thousand in interest expense on lease liabilities in the prior period - No finance costs were incurred in the first half of 2025, indicating no borrowing or lease liability interest expenses for the Group[26](index=26&type=chunk) [Taxation](index=14&type=section&id=Taxation) For the six months ended June 30, 2025, total taxation was HKD 3,991 thousand, a significant increase from HKD 764 thousand in the prior period, primarily due to a substantial rise in Hong Kong profits tax Taxation Details | Item | June 30, 2025 (Thousand HKD) | June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 7,290 | 1,257 | | Overseas Tax | 1,125 | 1,416 | | Deferred Tax Arising from and Reversal of Temporary Differences | (4,424) | (1,909) | | **Total** | **3,991** | **764** | - Hong Kong profits tax significantly increased from **HKD 1,257 thousand** in the prior period of 2024 to **HKD 7,290 thousand** in the same period of 2025[29](index=29&type=chunk) - Hong Kong profits tax is calculated at a two-tiered rate, with **8.25%** for the first HKD 2,000,000 and **16.5%** for the remainder[27](index=27&type=chunk) [Staff Costs](index=15&type=section&id=Staff%20Costs) For the six months ended June 30, 2025, total staff costs were HKD 50,500 thousand, an increase from the prior period, mainly due to growth in wages, salaries, and allowances, as well as social security costs, with directors' and key management personnel's remuneration also rising Staff Costs Details | Item | June 30, 2025 (Thousand HKD) | June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Wages, Salaries and Allowances | 42,403 | 41,789 | | Social Security Costs | 7,160 | 1,850 | | Retirement Benefit Costs – MPF Scheme Contributions | 200 | 210 | | Others | 737 | 860 | | **Total** | **50,500** | **44,709** | - Social security costs significantly increased from **HKD 1,850 thousand** in the prior period of 2024 to **HKD 7,160 thousand** in the same period of 2025[30](index=30&type=chunk) Directors' and Key Management Personnel's Remuneration | Item | June 30, 2025 (Thousand HKD) | June 30, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Directors' Emoluments | 8,685 | 7,522 | | Key Management Personnel's Remuneration | 10,123 | 8,947 | [Earnings Per Share](index=16&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share were 8.9 HK cents, a significant increase from 3.9 HK cents in the prior period, with diluted earnings per share being the same as basic earnings per share due to no potential dilutive ordinary shares at period-end - Basic earnings per share increased from **3.9 HK cents** in the prior period of 2024 to **8.9 HK cents** in the same period of 2025[31](index=31&type=chunk) - Earnings per share are calculated based on the weighted average of **198,958,000** ordinary shares outstanding during the period[31](index=31&type=chunk) [Dividends](index=16&type=section&id=Dividends) The Board resolved to declare an interim dividend of HKD 0.02 per ordinary share for the six months ended June 30, 2025, consistent with the prior period, and a final dividend of HKD 5,969 thousand for the year ended December 31, 2024, was also paid - An interim dividend of **HKD 0.02 per share** was declared, consistent with the same period in 2024[32](index=32&type=chunk) - A final dividend of **HKD 5,969 thousand** for the year ended December 31, 2024, was paid on June 6, 2025[32](index=32&type=chunk) [Property, Plant and Equipment](index=17&type=section&id=Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, the net book value of property, plant and equipment was HKD 119,707 thousand, a decrease from HKD 123,874 thousand at the beginning of the year, primarily affected by depreciation and exchange adjustments, despite new additions during the period Changes in Net Book Value of Property, Plant and Equipment | Item | January 1, 2025 (Thousand HKD) | Additions (Thousand HKD) | Depreciation (Thousand HKD) | Exchange Adjustments (Thousand HKD) | June 30, 2025 (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Book Value | 123,874 | 511 | (4,278) | (390) | 119,707 | - Additions to property, plant and equipment amounted to **HKD 511 thousand**, with depreciation expense of **HKD 4,278 thousand** during the period[33](index=33&type=chunk) - As of June 30, 2025, and December 31, 2024, no property, plant or equipment was pledged as collateral for the Group's bank financing[34](index=34&type=chunk) [Investment Properties](index=18&type=section&id=Investment%20Properties) As of June 30, 2025, investment properties were measured at fair value of HKD 74,821 thousand, a decrease from HKD 83,391 thousand as of December 31, 2024, with fair value determined by the directors using the direct comparison method Fair Value of Investment Properties | Indicator | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | At Fair Value | 74,821 | 83,391 | - The fair value of investment properties decreased, with directors determining fair value based on open market value using the direct comparison method[35](index=35&type=chunk) - As of June 30, 2025, and December 31, 2024, no investment properties were pledged as collateral for the Group's bank financing[35](index=35&type=chunk) [Inventories](index=18&type=section&id=Inventories) As of June 30, 2025, net inventories were HKD 118,998 thousand, a decrease from December 31, 2024, primarily due to an increase in inventory provision, despite an increase in raw materials Inventories Details | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Raw Materials | 69,504 | 65,522 | | Work-in-progress | 6,388 | 8,101 | | Finished Goods | 71,856 | 74,144 | | Less: Provision for Inventories | (28,750) | (18,402) | | **Net** | **118,998** | **129,365** | - Inventory provision increased from **HKD 18,402 thousand** as of December 31, 2024, to **HKD 28,750 thousand** as of June 30, 2025[36](index=36&type=chunk) [Trade and Other Receivables](index=19&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, net trade and other receivables were HKD 131,991 thousand, a significant increase from December 31, 2024, mainly due to growth in current to three-month receivables, with a net increase in loss allowance of HKD 1,697 thousand during the period Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Current to Three Months | 102,344 | 67,663 | | Four to Six Months | 29,424 | 11,687 | | Over Six Months | 533 | 420 | | **Total Trade Receivables** | **132,301** | **79,770** | | Less: Loss Allowance | (2,042) | (345) | | **Net Trade Receivables** | **130,259** | **79,425** | | Bills Receivables | 1,732 | 1,478 | | **Total** | **131,991** | **80,903** | - Total trade receivables increased from **HKD 79,770 thousand** as of December 31, 2024, to **HKD 132,301 thousand** as of June 30, 2025[37](index=37&type=chunk) - Net loss allowance increased by approximately **HKD 1,697 thousand** during the period, compared to a decrease of HKD 72 thousand in the prior period[38](index=38&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=19&type=section&id=Financial%20Assets%20at%20FVTPL) As of June 30, 2025, financial assets at fair value through profit or loss amounted to HKD 4,830 thousand, primarily equity securities listed in Hong Kong, a decrease from HKD 8,240 thousand as of December 31, 2024 Financial Assets at Fair Value Through Profit or Loss | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Equity Securities Listed in Hong Kong | 4,830 | 8,240 | [Share Capital](index=20&type=section&id=Share%20Capital) As of June 30, 2025, and December 31, 2024, the Company's authorized share capital was HKD 50,000 thousand, and issued and fully paid share capital was HKD 19,896 thousand, both consisting of ordinary shares with a par value of HKD 0.10 each Share Capital Structure | Item | Number of Shares | Amount (Thousand HKD) | | :--- | :--- | :--- | | Authorized Share Capital (Ordinary Shares of HKD 0.10 each) | 500,000,000 | 50,000 | | Issued and Fully Paid Share Capital (Ordinary Shares of HKD 0.10 each) | 198,958,000 | 19,896 | [Other Reserves](index=20&type=section&id=Other%20Reserves) As of June 30, 2025, total other reserves were HKD 17,670 thousand, an increase from HKD 13,997 thousand at the beginning of the year, primarily due to exchange differences of HKD 3,673 thousand arising from the translation of financial statements of subsidiaries Changes in Other Reserves | Item | January 1, 2025 (Thousand HKD) | Exchange Differences (Thousand HKD) | June 30, 2025 (Thousand HKD) | | :--- | :--- | :--- | | Total Other Reserves | 13,997 | 3,673 | 17,670 | | Exchange Fluctuation Reserve | (23,397) | 3,673 | (19,724) | - Exchange differences of **HKD 3,673 thousand** arising from the translation of financial statements of subsidiaries significantly impacted other reserves[40](index=40&type=chunk) [Trade and Other Payables](index=21&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables were HKD 48,374 thousand, a decrease from December 31, 2024, mainly due to a decline in trade payables, while employee benefit provisions increased Trade and Other Payables Details | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Trade Payables | 12,549 | 20,999 | | Other Payables and Accruals | 14,652 | 14,918 | | Employee Benefit Provisions | 21,173 | 15,431 | | **Total** | **48,374** | **51,348** | - Trade payables decreased from **HKD 20,999 thousand** as of December 31, 2024, to **HKD 12,549 thousand** as of June 30, 2025[41](index=41&type=chunk) - Employee benefit provisions increased from **HKD 15,431 thousand** as of December 31, 2024, to **HKD 21,173 thousand** as of June 30, 2025[41](index=41&type=chunk) [Financial Guarantees and Pledges](index=21&type=section&id=Financial%20Guarantees%20and%20Pledges) As of June 30, 2025, the Group's bank facilities included trade and loan facilities of HKD 69,300 thousand and forward foreign exchange contract limits of HKD 94,200 thousand, all secured by limited guarantees provided by the Company and certain subsidiaries Bank Facilities | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Trade and Loan Facilities | 69,300 | 72,300 | | Forward Foreign Exchange Contract Limits | 94,200 | 93,192 | - All bank facilities are secured by **limited guarantees** provided by the Company and certain subsidiaries[42](index=42&type=chunk) [Commitments](index=22&type=section&id=Commitments) As of June 30, 2025, the Group's total minimum future lease payments under non-cancellable operating leases amounted to HKD 3,392 thousand, a decrease from December 31, 2024, and the Group had no capital commitments Non-cancellable Operating Lease Commitments | Term | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | One Year | 1,730 | 1,730 | | Two Years | 1,380 | 1,689 | | Three Years | 282 | 878 | | **Total** | **3,392** | **4,297** | - The Group had **no capital commitments** as of June 30, 2025, and December 31, 2024[46](index=46&type=chunk) [Approval of Unaudited Interim Condensed Consolidated Financial Information](index=22&type=section&id=Approval%20of%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Information) The unaudited interim condensed consolidated financial information was approved by the Board of Directors on August 19, 2025 - The financial information was **approved by the Board of Directors on August 19, 2025**[45](index=45&type=chunk) [Management Discussion and Analysis](index=23&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the Group's financial performance, liquidity, business operations, and future outlook for the period [Financial Review](index=23&type=section&id=Financial%20Review) Despite complex global geopolitical and economic conditions, US President Trump's tariff policies stimulated early shipments from customers, leading to a 37.4% year-on-year revenue growth to HKD 221,700 thousand and a 126.8% increase in profit attributable to shareholders to HKD 17,691 thousand for the first half of 2025, while the Group maintained a zero-debt and net cash position and declared an interim dividend of HKD 0.02 per share - Revenue for the first half of 2025 reached **HKD 221,700 thousand**, a **37.4% increase** compared to the prior period of 2024[48](index=48&type=chunk) - Unaudited consolidated profit attributable to company shareholders was **HKD 17,691 thousand**, a **126.8% increase** from HKD 7,800 thousand in the prior period of 2024[49](index=49&type=chunk) - Earnings per share were **HKD 0.089**, a **128.2% increase** from HKD 0.039 in the prior period of 2024[49](index=49&type=chunk) - Due to the appreciation of RMB against HKD, other comprehensive income was **HKD 3,673 thousand**, resulting in unaudited total comprehensive income of **HKD 21,364 thousand** for the period[50](index=50&type=chunk) - The Board approved an interim dividend of **HKD 0.02 per share**, consistent with the prior period[48](index=48&type=chunk)[51](index=51&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=24&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group maintains a prudent financial management strategy with a zero gearing ratio and no borrowings, reporting bank balances and cash of HKD 42,785 thousand and shareholders' equity of HKD 447,045 thousand as of June 30, 2025, with working capital of HKD 244,841 thousand and a high current ratio of 510% - The gearing ratio remained at **zero**, with the Group having no borrowings[52](index=52&type=chunk) - As of June 30, 2025, bank balances and cash amounted to **HKD 42,785 thousand**, and shareholders' equity was **HKD 447,045 thousand**[52](index=52&type=chunk) - Working capital was **HKD 244,841 thousand**, and the current ratio was **510%**[52](index=52&type=chunk) [Exchange Rate Risk](index=24&type=section&id=Exchange%20Rate%20Risk) All foreseeable exchange rate risks faced by the Group are appropriately managed, with hedging arrangements utilized when necessary - All foreseeable exchange rate risks are appropriately managed, with hedging arrangements used as needed[53](index=53&type=chunk) [Business Review](index=24&type=section&id=Business%20Review) Despite global economic challenges, the uncertainty of US tariff policies prompted early customer shipments, leading to a 37.4% revenue growth for the Group, with Vietnam's shipments significantly increasing to 74% of turnover while China's factory deliveries decreased, harness sales accounting for 57% of revenue and power cords 41%, Americas business turnover growing by 53.7% to 78.7% of total turnover, gross profit margin improving to 29.0%, inventory turnover accelerating, and net profit margin rising to 8.0% - The Group's revenue increased from **HKD 161,393 thousand** in the prior period of 2024 to **HKD 221,708 thousand** in the same period of 2025, a **37.4% increase**, primarily due to increased orders from US customers[55](index=55&type=chunk) - Shipments from Vietnam accounted for **74%** of the Group's turnover (2024: 68%), while deliveries from China factories decreased to **26%** (2024: 32%)[54](index=54&type=chunk) Product Sales Contribution | Product Category | H1 2025 Contribution (%) | H1 2024 Contribution (%) | | :--- | :--- | :--- | | Harness Sales | 57% | 43% | | Power Cords | 41% | 56% | | Cables, Wires and Plastic Resins | 2% | 1% | - Americas business turnover increased by **53.7%** year-on-year to **HKD 174,528 thousand**, accounting for approximately **78.7%** of the Group's total turnover[55](index=55&type=chunk) - Gross profit margin increased from **26.9%** in the prior period of 2024 to **29.0%** in the same period of 2025, mainly due to a weaker Vietnamese Dong, cost control, and efficient production equipment[56](index=56&type=chunk) - Inventory levels decreased by **8.0%** to **HKD 118,998 thousand**, and inventory turnover reduced from **187 days to 144 days**[57](index=57&type=chunk) - Net profit margin improved from **4.8%** in the first half of 2024 to **8.0%** in the first half of 2025, primarily due to higher investment gains and interest income[57](index=57&type=chunk) [Outlook](index=25&type=section&id=Outlook) The global geopolitical and economic landscape remains unpredictable, but tariff disputes show signs of easing, with the US reaching tariff reduction agreements with countries including Vietnam, and potential for future interest rate cuts; despite challenges from high US tariffs on Chinese goods, the Group will continue to expand Vietnamese production capacity, strategically utilize surplus land and factory buildings in China, and strengthen inventory and working capital management to navigate market changes and achieve stable growth - The global geopolitical and economic landscape remains unpredictable, but tariff disputes show signs of easing, with the US reaching tariff reduction agreements with several countries, including Vietnam[58](index=58&type=chunk) - News reports from major monetary authorities, including the US Federal Reserve and the European Central Bank, indicate potential for future interest rate cuts[58](index=58&type=chunk) - Goods from China are subject to a **30% tariff**, while imported products from Vietnam face a **20% tariff**, complicating pricing structures[59](index=59&type=chunk) - US President Trump extended the tariff war with China by **90 days**, temporarily suspending triple-digit tariffs on Chinese goods, which is positive news[59](index=59&type=chunk) - Management will continue to focus on expanding Vietnamese production facilities, developing strategies to more effectively utilize surplus land and factory buildings in China, inventory control, working capital management, and ensuring appropriate recurring expenses[61](index=61&type=chunk) [Employees and Remuneration Policy](index=27&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 875 full-time personnel globally, with a male-to-female ratio of 1:2.1, and remuneration packages are market-driven, reviewed annually based on performance, experience, and industry practice, with the Group encouraging employees to pursue external courses for continuous learning - As of June 30, 2025, the Group employed **875 full-time personnel globally**, with a male-to-female ratio of **1:2.1**[62](index=62&type=chunk) - Remuneration packages are market-driven, with senior management remuneration reviewed and determined annually based on employee performance, experience, and industry practice[62](index=62&type=chunk) - The Group encourages employees to pursue external courses for continuous learning[62](index=62&type=chunk) [Directors' and Chief Executive's Interests in Shares, Underlying Shares and Debentures](index=28&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, Mr. Meng Chun Hung and Ms. Koo Tik On (Mr. Meng's wife) were both deemed to have interests in 147,810,000 shares held by Spector Holdings Limited, representing 74.29% of the issued share capital, while Mr. Lau Chun Ki held 138,000 shares, representing 0.07% Directors' Long Positions in Shares | Name | Personal Interest | Family Interest | Corporate Interest | Total Interest | Total Interest as % of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | | Meng Chun Hung | – | – | 147,810,000 | 147,810,000 | 74.29% | | Koo Tik On | – | 147,810,000 | – | 147,810,000 | 74.29% | | Lau Chun Ki | 138,000 | – | – | 138,000 | 0.07% | - Mr. Meng Chun Hung beneficially owns **99.9%** of Spector Holdings Limited, and Ms. Koo Tik On, being Mr. Meng's wife, is therefore deemed to have an interest in the shares held by Spector Holdings[63](index=63&type=chunk)[64](index=64&type=chunk) [Substantial Shareholders' Interests in the Share Capital of the Company](index=29&type=section&id=Substantial%20Shareholders'%20Interests%20in%20the%20Share%20Capital%20of%20the%20Company) As of June 30, 2025, Spector Holdings Limited held 147,810,000 shares, representing 74.29% of the issued share capital, making it a substantial shareholder of the Company Substantial Shareholders' Interests in the Share Capital of the Company | Name | Corporate Interest | Total Interest | Total Interest as % of Issued Share Capital | | :--- | :--- | :--- | :--- | | Spector Holdings | 147,810,000 | 147,810,000 | 74.29% | - Spector Holdings is **99.9%** owned by Mr. Meng and the remaining **0.1%** by Ms. Koo[67](index=67&type=chunk) [Public Float](index=30&type=section&id=Public%20Float) As of August 19, 2025, over 25% of the Company's issued share capital was held by the public, complying with listing rule requirements - As of August 19, 2025, **over 25%** of the Company's issued share capital was held by the public[69](index=69&type=chunk) [Corporate Governance and Social Responsibility](index=30&type=section&id=Corporate%20Governance%20and%20Social%20Responsibility) The Group is committed to protecting shareholders' interests and enhancing corporate governance, having established a Supervisory Committee, Audit Committee, Remuneration Committee, and Nomination Committee, with the Audit Committee having reviewed the financial information, and the Group actively participates in social activities in Hong Kong, China, and Vietnam, while adhering to the Corporate Governance Code and the Model Code for Securities Transactions - The Group has established a Supervisory Committee, Audit Committee, Remuneration Committee, and Nomination Committee to enhance its corporate governance standards[71](index=71&type=chunk) - The Audit Committee has reviewed the Group's adopted accounting principles and practices with management, and discussed risk management, internal controls, and financial reporting matters[70](index=70&type=chunk) - The Group continues to participate in and support social activities in Hong Kong, China (excluding Hong Kong), and Vietnam[72](index=72&type=chunk) - For the six months ended June 30, 2025, the Company has complied with the provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules[73](index=73&type=chunk) - Following specific inquiries with all Directors, they have complied with the Model Code for Securities Transactions for the six months ended June 30, 2025[74](index=74&type=chunk) [Other Matters](index=31&type=section&id=Other%20Matters) During the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, redeemed, or sold any of the Company's shares, no significant events occurred after the reporting period, this interim report has been published on the HKEX and Company websites, and the Board expresses gratitude to shareholders, partners, customers, and employees - During the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, redeemed, or sold any of the Company's shares[75](index=75&type=chunk) - No significant events occurred after the reporting period up to the date of this report[76](index=76&type=chunk) - This interim report and interim results announcement have been published on the HKEX website and the Company's website[77](index=77&type=chunk) - The Board sincerely thanks shareholders, partners, customers, and employees for their strong support and hard work[78](index=78&type=chunk) [Company Information](index=32&type=section&id=Company%20Information) This section provides detailed company information for Hendu Group Limited, including Board members (executive, non-executive, independent non-executive directors), committee members (Audit, Remuneration, Nomination, Supervisory Committees), authorized representatives, company secretary, registered office, principal place of business in Hong Kong, stock code, legal advisors, principal bankers, auditors, share registrars, and company website - The Board of Directors includes **5 executive directors** (including Meng Chun Hung as CEO and Vice Chairman), **1 non-executive director** (Koo Tik On as Chairman), and **3 independent non-executive directors**[79](index=79&type=chunk)[80](index=80&type=chunk) - The Company has an Audit Committee, Remuneration Committee, Nomination Committee, and Supervisory Committee, with **Mr. Lau Chun Ki chairing the first three** and **Ms. Koo Tik On chairing the Supervisory Committee**[80](index=80&type=chunk) - The Company's stock code is **00725**, and its auditor is **Fuyima Ze Certified Public Accountants Limited**[81](index=81&type=chunk)

[Characteristics of GEM](index=2&type=section&id=GEM%E4%B9%8B%E7%89%B9%E8%89%B2) The GEM market targets small and medium-sized companies, entailing higher investment risks, potential volatility, and no guaranteed liquidity - The GEM market is positioned for small and medium-sized companies, implying **higher investment risks**, **potential market volatility**, and **no guarantee of high liquidity**[2](index=2&type=chunk)[3](index=3&type=chunk)[7](index=7&type=chunk) - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited are not responsible for the report's content, do not guarantee its accuracy or completeness, and disclaim liability for any losses[4](index=4&type=chunk)[7](index=7&type=chunk) - The directors assume full responsibility for the report's content, confirming the information is **accurate, complete, and not misleading**[5](index=5&type=chunk)[7](index=7&type=chunk) [Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides an overview of the company's board members, committee structures, and other essential corporate details [Directors](index=3&type=section&id=Directors) This section lists the company's executive and independent non-executive directors, including the Chairman and CEO - Executive Directors: Mr. Zhang Siyuan (Chairman), Mr. Wang Wendong (Chief Executive Officer), and Mr. Fung Chi Kin[9](index=9&type=chunk)[10](index=10&type=chunk) - Independent Non-executive Directors: Ms. Ng Lai Yin, Mr. Yeung Chun Wah, and Mr. Tian Yuan[9](index=9&type=chunk)[10](index=10&type=chunk) [Committee Composition](index=3&type=section&id=Committee%20Composition) This section details the composition and chairpersons of the Audit, Executive, Remuneration, and Nomination Committees - Audit Committee Chairperson: Ms. Ng Lai Yin[9](index=9&type=chunk)[10](index=10&type=chunk) - Executive Committee Chairperson: Mr. Zhang Siyuan[9](index=9&type=chunk)[10](index=10&type=chunk) - Remuneration Committee Chairperson: Ms. Ng Lai Yin[10](index=10&type=chunk) - Nomination Committee Chairperson: Mr. Zhang Siyuan[10](index=10&type=chunk) [Other Corporate Details](index=4&type=section&id=Other%20Corporate%20Details) This section provides essential corporate contact and registration details, including auditor, share registrar, and website - Auditor: BDO Limited[11](index=11&type=chunk)[12](index=12&type=chunk) - Stock Code: **8162**[11](index=11&type=chunk)[12](index=12&type=chunk) - Company Website: www.locohkholdings.com[11](index=11&type=chunk)[12](index=12&type=chunk) [Notes on Director Changes](index=4&type=section&id=Notes%20on%20Director%20Changes) This section outlines director appointments and resignations, with changes effective from April and July 2025 - Mr. Yeung Chun Wah was appointed as an Independent Non-executive Director and Audit Committee member on April 3, 2025, and as a Nomination Committee member on July 2, 2025[14](index=14&type=chunk) - Mr. Tian Yuan was appointed as an Independent Non-executive Director and a member of several committees on July 2, 2025[14](index=14&type=chunk) - Ms. Ng Lai Yin was appointed as the Chairperson of the Audit Committee on April 3, 2025[14](index=14&type=chunk) - Ms. Wong Chui Shan and Mr. Chow Tin Shu resigned as Independent Non-executive Directors on April 3, 2025, and July 2, 2025, respectively[14](index=14&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated financial performance, position, equity changes, and cash flows for the reporting period [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The company reported significant growth in revenue and profit for the period, primarily driven by robust performance in its metal sales business Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Six Months Ended June 30, 2025 | Metric | H1 2025 (HK$'000) | H1 2024 (HK$'000) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 10,166,072 | 8,451,583 | +20.3% | | - Sales of metals | 10,150,481 | 8,437,963 | +20.3% | | - Education management services | 15,591 | 13,620 | +14.5% | | Other income | 3,396 | 30 | +11220% | | Profit before income tax expense | 24,729 | 9,411 | +162.8% | | Income tax expense | (7,351) | (4,643) | +58.3% | | Profit for the period | 17,378 | 4,768 | +264.5% | | Profit for the period attributable to owners of the Company | 17,378 | 4,768 | +264.5% | | Basic and diluted earnings per share (HK Cents) | 1.78 | 0.58 | +206.9% | [Condensed Consolidated Statement of Financial Position](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's net assets significantly increased, driven by higher equity and reserves, alongside a notable rise in net current assets Key Data from Condensed Consolidated Statement of Financial Position as of June 30, 2025 | Metric | June 30, 2025 (HK$'000) | Dec 31, 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Non-current assets | 7,224 | 7,862 | (638) | | Current assets | 3,140,823 | 958,564 | +2,182,259 | | - Inventories | 338 | 291 | +47 | | - Trade and other receivables and prepayments | 2,806,551 | 937,010 | +1,869,541 | | - Cash and cash equivalents | 333,934 | 21,263 | +312,671 | | Current liabilities | 2,974,883 | 891,410 | +2,083,473 | | - Trade and other payables and accruals | 2,958,134 | 823,602 | +2,134,532 | | - Loans | – | 26,052 | (26,052) | | Net current assets | 165,940 | 67,154 | +98,786 | | Net assets | 168,726 | 70,375 | +98,351 | | Share capital | 267,171 | 188,348 | +78,823 | | Reserves | (98,445) | (117,973) | +19,528 | | Total equity | 168,726 | 70,375 | +98,351 | [Condensed Consolidated Statement of Changes in Equity](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, the company's total equity significantly increased, primarily due to profit for the period and new share issuance Key Data from Condensed Consolidated Statement of Changes in Equity as of June 30, 2025 | Metric | June 30, 2025 (HK$'000) | Jan 1, 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Share capital | 267,171 | 188,348 | +78,823 | | Reserves | (98,445) | (147,474) | +49,029 | | Equity attributable to owners of the Company | 168,726 | 39,964 | +128,762 | | Profit for the period | 17,378 | 4,768 | +12,610 | | Exchange differences arising from translation of overseas operations | 2,150 | (1,058) | +3,208 | | New shares issued by placing | 79,623 | – | +79,623 | | Transaction costs attributable to share issue | (800) | – | (800) | [Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) During the reporting period, the company's operating cash flow turned positive, investment cash flow remained a small net inflow, and financing cash flow was influenced by new share issuance and loan repayments, leading to a substantial increase in cash and cash equivalents at period-end Key Data from Condensed Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2025 | Metric | H1 2025 (HK$'000) | H1 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 261,095 | (4,199) | +265,294 | | Net cash from investing activities | 756 | 11 | +745 | | Net cash from financing activities | 51,315 | 54,802 | (3,487) | | Net increase in cash and cash equivalents | 313,166 | 50,614 | +262,552 | | Cash and cash equivalents at end of period | 333,934 | 66,987 | +266,947 | [Notes to the Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [General Information](index=13&type=section&id=General%20Information) The company is a Hong Kong-registered investment holding company primarily engaged in metal business, education management services, and money lending services, with interim financial statements approved for publication on August 29, 2025 - The company's principal businesses include metal business, education management services business, and money lending services business[24](index=24&type=chunk)[29](index=29&type=chunk) - The interim financial statements are unaudited and were approved and authorized for issue by the directors on August 29, 2025[25](index=25&type=chunk)[29](index=29&type=chunk) [Basis of Preparation and Accounting Policies](index=13&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules, applying the same accounting policies as the 2024 annual financial statements, with no significant impact from new standards or interpretations - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the GEM Listing Rules[26](index=26&type=chunk)[30](index=30&type=chunk) - The accounting policies adopted are consistent with those used in the 2024 annual financial statements, and new standards or amendments have no significant impact on the amounts or disclosures in these statements[31](index=31&type=chunk)[34](index=34&type=chunk) - The interim financial statements are unaudited but have been reviewed by the Audit Committee[32](index=32&type=chunk)[34](index=34&type=chunk) [Use of Judgements and Estimates](index=15&type=section&id=Use%20of%20Judgements%20and%20Estimates) The significant judgments and estimates used in preparing these interim financial statements are consistent with those applied in the 2024 annual financial statements - The significant judgments made by management in applying the accounting policies and the key sources of estimation uncertainty are the same as those applied in the 2024 annual financial statements[35](index=35&type=chunk)[37](index=37&type=chunk) [Segment Information](index=15&type=section&id=Segment%20Information) The company's operations are divided into three reportable segments: metal business, education management services, and money lending services, each managed independently, with both metal business and education management services showing revenue growth, while money lending services recorded no revenue - The Group's operations are divided into three reportable segments: metal business, education management services, and money lending services, based on reports reviewed by the executive directors[36](index=36&type=chunk)[38](index=38&type=chunk) Reportable Segment Revenue and Profit/(Loss) for the Six Months Ended June 30, 2025 | Segment | H1 2025 Revenue (HK$'000) | H1 2024 Revenue (HK$'000) | Y-o-Y Revenue Change (%) | H1 2025 Profit/(Loss) (HK$'000) | H1 2024 Profit/(Loss) (HK$'000) | Y-o-Y Profit Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Metal Business | 10,150,481 | 8,437,963 | +20.3% | 22,325 | 12,285 | +81.7% | | Education Management Services | 15,591 | 13,620 | +14.5% | 12,249 | 9,895 | +23.8% | | Money Lending Services | – | – | N/A | (75) | (73) | +2.7% | | **Total** | **10,166,072** | **8,451,583** | **+20.3%** | **34,499** | **22,107** | **+56.0%** | Revenue by Major Geographical Market for the Six Months Ended June 30, 2025 | Geographical Market | H1 2025 Revenue (HK$'000) | H1 2024 Revenue (HK$'000) | | :--- | :--- | :--- | | Hong Kong | 2,165,271 | 1,050,711 | | Mainland China | 21,936 | 21,479 | | Singapore | 7,866,890 | 7,272,448 | | United Kingdom | 111,975 | 106,945 | | **Total** | **10,166,072** | **8,451,583** | - Revenue recognized over time amounted to **HK$15,591 thousand** (primarily education management services), while revenue recognized at a point in time amounted to **HK$10,150,481 thousand** (primarily metal business)[46](index=46&type=chunk) [Finance Costs](index=19&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, the company's finance costs significantly decreased to HK$131 thousand from HK$413 thousand in the prior year Finance Costs for the Six Months Ended June 30, 2025 | Finance Cost | H1 2025 (HK$'000) | H1 2024 (HK$'000) | Y-o-Y Change (HK$'000) | | :--- | :--- | :--- | :--- | | Interest expense on loans | 38 | 285 | (247) | | Interest expense on lease liabilities | 93 | 128 | (35) | | **Total** | **131** | **413** | **(282)** | [Income Tax Expense](index=20&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense increased to HK$7,351 thousand, primarily comprising current and deferred tax Income Tax Expense for the Six Months Ended June 30, 2025 | Income Tax Type | H1 2025 (HK$'000) | H1 2024 (HK$'000) | | :--- | :--- | :--- | | Current tax | 6,886 | 4,643 | | Deferred tax | 465 | – | | **Total Income Tax Expense** | **7,351** | **4,643** | - Hong Kong profits tax rate is **16.5%**, with the first **HK$2 million** of assessable profits taxed at **8.25%**; Mainland China subsidiaries are taxed at **25%**[51](index=51&type=chunk)[52](index=52&type=chunk)[54](index=54&type=chunk) [Dividends](index=20&type=section&id=Dividends) The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of any dividend for the six months ended June 30, 2025 (2024: nil)[53](index=53&type=chunk)[54](index=54&type=chunk) [Earning Per Share](index=21&type=section&id=Earning%20Per%20Share) For the six months ended June 30, 2025, basic and diluted earnings per share significantly increased to **1.78 HK Cents** from **0.58 HK Cents** in the prior year Earnings Per Share for the Six Months Ended June 30, 2025 | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (HK$'000) | 17,378 | 4,768 | | Weighted average number of ordinary shares (thousand shares) | 974,206 | 829,404 | | **Basic and Diluted Earnings Per Share (HK Cents)** | **1.78** | **0.58** | - For the six months ended June 30, 2025, diluted earnings per share were the same as basic earnings per share due to the absence of dilutive shares outstanding[58](index=58&type=chunk)[59](index=59&type=chunk) [Trade and Other Receivables and Prepayments](index=22&type=section&id=Trade%20and%20Other%20Receivables%20and%20Prepayments) As of June 30, 2025, net trade and other receivables and prepayments significantly increased to **HK$2,806,551 thousand**, primarily driven by trade receivables Trade and Other Receivables and Prepayments as of June 30, 2025 | Metric | June 30, 2025 (HK$'000) | Dec 31, 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Trade receivables – net | 2,697,083 | 868,108 | +1,828,975 | | Other receivables and deposits – net | 69,434 | 27,035 | +42,399 | | Prepayments | 40,034 | 41,867 | (1,833) | | **Total** | **2,806,551** | **937,010** | **+1,869,541** | - The credit period granted to customers generally ranges from **1 to 3 months**[63](index=63&type=chunk)[64](index=64&type=chunk) Ageing Analysis of Trade Receivables as of June 30, 2025 | Ageing | June 30, 2025 (HK$'000) | Dec 31, 2024 (HK$'000) | | :--- | :--- | :--- | | 0 – 30 days | 2,648,686 | 859,777 | | 31 – 90 days | 48,397 | 7,082 | | 91 – 180 days | – | 1,249 | [Trade and Other Payables and Accruals](index=23&type=section&id=Trade%20and%20Other%20Payables%20and%20Accruals) As of June 30, 2025, total trade and other payables and accruals significantly increased to **HK$2,958,134 thousand**, primarily driven by trade payables Trade and Other Payables and Accruals as of June 30, 2025 | Metric | June 30, 2025 (HK$'000) | Dec 31, 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Trade payables | 2,945,424 | 818,541 | +2,126,883 | | Other payables and accruals | 12,710 | 5,061 | +7,649 | | **Total** | **2,958,134** | **823,602** | **+2,134,532** | - The credit period for purchases of goods generally ranges from **1 to 3 months**[69](index=69&type=chunk)[71](index=71&type=chunk) [Related Party Transactions](index=23&type=section&id=Related%20Party%20Transactions) For the six months ended June 30, 2025, the Group had no significant related party transactions other than those disclosed, and remuneration for key management members increased - For the six months ended June 30, 2025, the Group had no significant related party transactions (2024: nil)[70](index=70&type=chunk)[72](index=72&type=chunk) Key Management Personnel Remuneration for the Six Months Ended June 30, 2025 | Remuneration Type | H1 2025 (HK$'000) | H1 2024 (HK$'000) | | :--- | :--- | :--- | | Salaries and short-term employee benefits | 3,474 | 2,904 | | Contributions to retirement benefit schemes | 36 | 36 | | **Total** | **3,510** | **2,940** | [Financial Instruments](index=24&type=section&id=Financial%20Instruments) The company's financial instruments include cash and cash equivalents, receivables, payables, loans, and lease liabilities not measured at fair value, whose carrying amounts approximate fair value, while fair values of financial instruments measured at fair value are determined by market quotes or discounted cash flow analysis - Financial instruments not measured at fair value include cash and cash equivalents, trade and other receivables, loans receivable, trade and other payables and accruals, loans, and lease liabilities, whose carrying amounts approximate their fair values[76](index=76&type=chunk)[80](index=80&type=chunk) - The fair values of financial instruments measured at fair value are determined by reference to market quotations or pricing models based on discounted cash flow analysis[81](index=81&type=chunk) [Management Discussion and Analysis](index=26&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's operational performance, financial position, and future outlook [Business Review](index=26&type=section&id=Business%20Review) In H1 2025, the Group's core businesses (metal and education management services) achieved stable growth, with significant increases in total revenue and net profit, while money lending services recorded no revenue due to risk considerations - In H1 2025, the Group's total revenue was approximately **HK$10,166.1 million**, a **20.3%** year-on-year increase; net profit was approximately **HK$17.4 million**, a substantial **262.5%** year-on-year increase[86](index=86&type=chunk)[87](index=87&type=chunk) - The Group adheres to a "seek progress while maintaining stability" strategy, focusing on its core metal business, deepening customer cooperation networks, strengthening bargaining power, and improving mechanisms for responding to commodity price fluctuations[85](index=85&type=chunk)[87](index=87&type=chunk) [Metal Business](index=27&type=section&id=Metal%20Business) As the Group's core business, the metal business saw revenue grow by **20.3%** to approximately **HK$10,150.5 million** in H1 2025, with segment profit increasing by **81.7%** to approximately **HK$22.3 million**, driven by structural market opportunities and expanded product and client networks Key Financial Data for Metal Business | Metric | H1 2025 (HK$'000) | H1 2024 (HK$'000) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 10,150,481 | 8,437,963 | +20.3% | | Segment profit | 22,325 | 12,285 | +81.7% | - The business covers metal raw materials such as copper, aluminum, nickel, and iron ore, as well as metal consumer goods, continuously reviewing market conditions to diversify product areas and promote business diversification[90](index=90&type=chunk)[93](index=93&type=chunk) - The Group will continue to focus on metal commodity and consumer goods businesses with relatively transparent prices and controllable risks in international and domestic markets, and expand cooperation with large state-owned enterprises and key integrated enterprise clients[97](index=97&type=chunk)[98](index=98&type=chunk)[100](index=100&type=chunk) [Education Management Services Business](index=29&type=section&id=Education%20Management%20Services%20Business) The education management services business has performed well since its launch in 2019, with H1 2025 revenue growing by **14.7%** to approximately **HK$15.6 million**, primarily serving arts and sports education, humanities quality education, and other fields, with clients including training institutions and kindergartens Key Financial Data for Education Management Services Business | Metric | H1 2025 (HK$'000) | H1 2024 (HK$'000) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 15,591 | 13,620 | +14.7% | - Key clients include 9 educational institutions such as arts and sports education training institutions, kindergartens, humanities quality and nature experience education bases, and educational materials and book distributors[102](index=102&type=chunk)[106](index=106&type=chunk)[109](index=109&type=chunk) - Regarding market outlook, the primary market is in Chengdu, Sichuan Province, and the Group will strive to maintain healthy and stable development by closely following policy adjustments and optimizing service content[107](index=107&type=chunk)[110](index=110&type=chunk) [Provision of Money Lending Services](index=30&type=section&id=Provision%20of%20Money%20Lending%20Services) Given increasing global economic uncertainty, the Group believes the credit risk-reward level for money lending services remains unacceptable in the short term, resulting in no revenue recorded for this business segment during the reporting period - For the six months ended June 30, 2025, the money lending services business segment recorded no revenue (H1 2024: nil)[108](index=108&type=chunk)[111](index=111&type=chunk) - The Group believes that the credit risk-reward level in money lending services remains unacceptable in the short term[108](index=108&type=chunk)[111](index=111&type=chunk) [Financial Review](index=31&type=section&id=Financial%20Review) In H1 2025, total revenue increased by **20.3%** year-on-year to approximately **HK$10,166.1 million**, and net profit grew by **262.5%** to approximately **HK$17.4 million**, primarily due to increased revenue, recognition of cost of inventories sold, higher other income, and reduced other operating expenses - Total revenue increased by approximately **HK$1,714.5 million**[117](index=117&type=chunk) - Cost of inventories sold recognized was approximately **HK$10,127.4 million**[117](index=117&type=chunk) - Other income increased by approximately **HK$3.4 million**[117](index=117&type=chunk) - Other operating expenses decreased by approximately **HK$2.4 million**[117](index=117&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=31&type=section&id=Capital%20Structure,%20Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's cash and bank balances significantly increased to approximately **HK$333.9 million**, net current assets rose to approximately **HK$165.9 million**, and the current ratio remained at **1.1 times**, with no outstanding loans, indicating sufficient financial resources Key Data for Capital Structure and Liquidity | Metric | June 30, 2025 (HK$'000) | Dec 31, 2024 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Cash and bank balances | 333,934 | 21,263 | +312,671 | | Net current assets | 165,940 | 67,154 | +98,786 | | Current ratio | 1.1 times | 1.1 times | No change | | Outstanding loans | – | 26,052 | (26,052) | - The increase in cash and bank balances was primarily attributable to profit for the period, an increase in trade and other payables, and net proceeds from new share issuance, offset by an increase in trade and other receivables and loan repayments[118](index=118&type=chunk)[125](index=125&type=chunk) - The Group has no outstanding loans and no bank financing, and the directors consider its financial resources to be adequate[119](index=119&type=chunk)[120](index=120&type=chunk)[125](index=125&type=chunk) [Gearing Ratio](index=32&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was zero, a significant decrease from **12.1%** as of December 31, 2024 - As of June 30, 2025, the gearing ratio was **zero** (December 31, 2024: **12.1%**)[121](index=121&type=chunk)[126](index=126&type=chunk) [Charge on the Group's Assets](index=32&type=section&id=Charge%20on%20the%20Group's%20Assets) As of June 30, 2025, the Group had not pledged any assets as security - As of June 30, 2025, the Group had not pledged any assets as security (December 31, 2024: nil)[122](index=122&type=chunk)[127](index=127&type=chunk) [Future Plan for Material Investments and Capital Assets](index=32&type=section&id=Future%20Plan%20for%20Material%20Investments%20and%20Capital%20Assets) As of June 30, 2025, the Group had no specific plans for material investments or capital assets - As of June 30, 2025, the Group had no specific plans for material investments or capital assets[123](index=123&type=chunk)[128](index=128&type=chunk) [Significant Investments, Acquisitions and Disposals](index=32&type=section&id=Significant%20Investments,%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the Group had no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the Group had no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures[124](index=124&type=chunk)[129](index=129&type=chunk) [Placing of New Shares Under General Mandate](index=33&type=section&id=Placing%20of%20New%20Shares%20Under%20General%20Mandate) The company completed the placing of **165,880,800** new shares on January 24, 2025, raising net proceeds of approximately **HK$78.82 million**, which were fully utilized for repaying shareholder loans and developing the metal business - The company completed the placing of **165,880,800** ordinary shares at **HK$0.48** per share on January 24, 2025[130](index=130&type=chunk)[133](index=133&type=chunk) - The placing price represented a discount of approximately **15.79%** to the closing price on the date of the placing agreement and approximately **8.4%** to the average closing price for the preceding five trading days[131](index=131&type=chunk)[133](index=133&type=chunk) - Net proceeds of approximately **HK$78.82 million** were fully utilized for repaying shareholder loans (**HK$26.052 million**) and developing the metal business (**HK$52.771 million**)[132](index=132&type=chunk)[135](index=135&type=chunk) [Capital Commitment and Capital Expenditure](index=33&type=section&id=Capital%20Commitment%20and%20Capital%20Expenditure) As of June 30, 2025, the Group had no significant capital commitments or capital expenditures - As of June 30, 2025, the Group had no significant capital commitments or capital expenditures (December 31, 2024: nil)[136](index=136&type=chunk)[137](index=137&type=chunk) [Foreign Exchange Exposure](index=34&type=section&id=Foreign%20Exchange%20Exposure) The Group faces foreign exchange risk from USD and RMB, but USD transaction risk is not significant due to the HKD peg to the USD; currently, the Group has no foreign currency hedging policy but monitors and considers hedging significant risks - The Group is exposed to foreign exchange risk from USD and RMB, but USD transaction risk is not significant[139](index=139&type=chunk)[145](index=145&type=chunk) - The Group currently has no foreign currency hedging policy but closely monitors and considers hedging significant foreign currency risks[139](index=139&type=chunk)[145](index=145&type=chunk) [Contingent Liabilities](index=34&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities, guarantees, or material litigation or claims - As of June 30, 2025, the Group had no significant contingent liabilities, guarantees, or any pending or material litigation or claims against any member of the Group[140](index=140&type=chunk)[146](index=146&type=chunk) [Employees and Remuneration Policy](index=34&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed **25** staff with total remuneration of approximately **HK$6.2 million**, regularly reviewing its remuneration policy, providing benefits, and discretionarily granting share options and bonuses - As of June 30, 2025, the Group employed **25** staff (December 31, 2024: **24** staff)[141](index=141&type=chunk)[147](index=147&type=chunk) - For the six months ended June 30, 2025, total employee remuneration (including directors' emoluments) was approximately **HK$6.2 million** (H1 2024: approximately **HK$6.0 million**)[141](index=141&type=chunk)[147](index=147&type=chunk) - The Group regularly reviews its remuneration policy, providing benefits such as medical and provident funds in addition to salaries, and may discretionarily grant share options and bonuses[142](index=142&type=chunk)[147](index=147&type=chunk) [Dividends](index=34&type=section&id=Dividends) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[143](index=143&type=chunk)[148](index=148&type=chunk) [Events After the Reporting Period](index=34&type=section&id=Events%20After%20the%20Reporting%20Period) The Group had no significant events after the reporting period - The Group had no significant events after the reporting period[144](index=144&type=chunk)[149](index=149&type=chunk) [Other Information](index=35&type=section&id=Other%20Information) This section provides additional disclosures regarding directors' and substantial shareholders' interests, share options, corporate governance, and other relevant details [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=35&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, Executive Director Mr. Zhang Siyuan held **19.39%** of the company's shares through his wholly-owned company, with no directors or chief executives holding short positions - Executive Director Mr. Zhang Siyuan held **192,980,000** ordinary shares, representing approximately **19.39%** of the share capital, through his wholly-owned company FIAS (HONG KONG) CO., LIMITED[153](index=153&type=chunk)[154](index=154&type=chunk) - As of June 30, 2025, no directors or chief executives held short positions in the shares of the Company or its associated corporations[155](index=155&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=36&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, besides the directors, FIAS (HONG KONG) CO., LIMITED, Hon Pok, and Fortune Way Corporation Limited were substantial shareholders, holding **19.39%**, **7.64%**, and **6.95%** of the shares, respectively Substantial Shareholders' Shareholdings as of June 30, 2025 | Name/Entity | Nature of Interest | Number of Ordinary Shares Held (shares) | Approximate Percentage of Shareholding (%) | | :--- | :--- | :--- | :--- | | FIAS (HONG KONG) CO., LIMITED | Beneficial owner | 192,980,000 | 19.39% | | Hon Pok | Beneficial owner | 76,000,000 | 7.64% | | Fortune Way Corporation Limited | Beneficial owner | 69,188,882 | 6.95% | - FIAS (HONG KONG) CO., LIMITED is wholly owned by Executive Director Mr. Zhang Siyuan[158](index=158&type=chunk) [Share Options](index=37&type=section&id=Share%20Options) The company's share option scheme expired on April 9, 2025, and as of June 30, 2025, all granted share options had lapsed, with no share options available for grant - The last exercise date for share options granted under the share option scheme expired on April 9, 2025[161](index=161&type=chunk)[162](index=162&type=chunk) - As of June 30, 2025, all **280,000** share options granted on April 10, 2015, had lapsed, with no outstanding share options[163](index=163&type=chunk) - As of June 30, 2025, the total number of share options available for grant under the share option scheme was **zero** shares[169](index=169&type=chunk)[173](index=173&type=chunk) - The Group did not recognize any employee costs related to share options granted by the company for the six months ended June 30, 2025, and 2024[169](index=169&type=chunk)[173](index=173&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=38&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[170](index=170&type=chunk)[174](index=174&type=chunk) - As of June 30, 2025, the company held no treasury shares[170](index=170&type=chunk)[174](index=174&type=chunk) [Competition and Conflict of Interest](index=39&type=section&id=Competition%20and%20Conflict%20of%20Interest) For the six months ended June 30, 2025, to the best knowledge of the directors, no directors, management, shareholders, or substantial shareholders and their associates engaged in any business competing or potentially competing with the Group's business, nor were there any other conflicts of interest - For the six months ended June 30, 2025, no directors, management, shareholders, or substantial shareholders or their respective associates engaged in any business directly or indirectly competing or potentially competing with the Group's business, nor were there any other conflicts of interest[175](index=175&type=chunk)[179](index=179&type=chunk) [Corporate Governance](index=39&type=section&id=Corporate%20Governance) For the six months ended June 30, 2025, the company complied with all provisions of the GEM Listing Rules Corporate Governance Code, and its Audit, Remuneration, Nomination, and Executive Committees were properly constituted - The company has complied with all code provisions of Part 2 of Appendix C1 to the GEM Listing Rules Corporate Governance Code[176](index=176&type=chunk)[180](index=180&type=chunk) - The directors have confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers throughout the reporting period[177](index=177&type=chunk)[181](index=181&type=chunk) [Audit Committee](index=39&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing financial reports, risk management, and internal control systems, and has reviewed this interim report - The Audit Committee comprises three Independent Non-executive Directors: Ms. Ng Lai Yin (Chairperson), Mr. Yeung Chun Wah, and Mr. Tian Yuan[183](index=183&type=chunk)[187](index=187&type=chunk) - Its responsibilities include reviewing drafts of annual, interim, and quarterly reports, providing advice and recommendations to the Board, and reviewing financial reporting procedures, risk management, and internal control systems[178](index=178&type=chunk)[182](index=182&type=chunk) - The Audit Committee has reviewed this interim report, including the unaudited condensed consolidated interim financial statements[183](index=183&type=chunk)[187](index=187&type=chunk) [Remuneration Committee](index=40&type=section&id=Remuneration%20Committee) The Remuneration Committee, comprising one executive director and two independent non-executive directors, primarily advises the Board on the remuneration packages of executive directors and senior management - The Remuneration Committee comprises one Executive Director, Mr. Wang Wendong, and two Independent Non-executive Directors, Ms. Ng Lai Yin (Chairperson) and Mr. Tian Yuan[185](index=185&type=chunk)[188](index=188&type=chunk) - Its primary responsibility is to make recommendations to the Board on the remuneration packages of all executive directors and senior management[184](index=184&type=chunk)[188](index=188&type=chunk) [Nomination Committee](index=40&type=section&id=Nomination%20Committee) The Nomination Committee, composed of two executive directors and three independent non-executive directors, is responsible for director appointments and succession planning, striving for board diversity - The Nomination Committee comprises two Executive Directors, Mr. Zhang Siyuan (Chairman) and Mr. Wang Wendong, and three Independent Non-executive Directors, Ms. Ng Lai Yin, Mr. Yeung Chun Wah, and Mr. Tian Yuan[190](index=190&type=chunk)[195](index=195&type=chunk) - Its primary responsibility is to make recommendations to the Board on director appointments and succession planning, and to ensure a balanced board in terms of skills, experience, and diversity of perspectives[186](index=186&type=chunk)[189](index=189&type=chunk) [Executive Committee](index=41&type=section&id=Executive%20Committee) The Executive Committee, comprising three executive directors and one independent non-executive director, is primarily responsible for overseeing the formulation, revision, and implementation of the company's strategic plans and the operations of its subsidiaries - The Executive Committee comprises three Executive Directors, Mr. Zhang Siyuan (Chairman), Mr. Wang Wendong, and Mr. Fung Chi Kin, and one Independent Non-executive Director, Mr. Tian Yuan[192](index=192&type=chunk)[196](index=196&type=chunk) - Its primary responsibility is to oversee the formulation, revision, and implementation of the company's strategic plans and the operations of its subsidiaries[191](index=191&type=chunk)[196](index=196&type=chunk) [Changes in Directors' Information](index=41&type=section&id=Changes%20in%20Directors'%20Information) Mr. Fung Chi Kin was appointed as an independent non-executive director of Huatong Financial Limited on March 31, 2025 - Mr. Fung Chi Kin was appointed as an Independent Non-executive Director of Huatong Financial Limited (stock code: WTF, listed on NASDAQ in the US) on March 31, 2025[193](index=193&type=chunk)[197](index=197&type=chunk) - Since the publication of the 2024 annual report, no other changes in directors' information requiring disclosure under Rule 17.50A(1) of the GEM Listing Rules have occurred, apart from the aforementioned disclosure[194](index=194&type=chunk)[197](index=197&type=chunk)

[Financial Highlights](index=2&type=section&id=Financial%20Highlights) Binhai Investment Company Limited announced its unaudited consolidated results for the six months ended June 30, 2025, with revenue decreasing by 17% and gross profit by 10%, while profit for the period increased by 3% and basic earnings per share by 1%, alongside growth in total assets, equity, and liabilities Key Financial Data for H1 2025 (Unaudited) | Metric | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | Change % | | :--- | :--- | :--- | :--- | | **Profit or Loss Statement:** | | | | | Revenue | 2,931,118 | 3,530,446 | -17% | | Gross profit | 310,051 | 343,366 | -10% | | Profit for the period | 176,506 | 171,176 | 3% | | Basic Earnings Per Share | 12.54 HK cents | 12.41 HK cents | 1% | | **Balance Sheet:** | | | | | Total assets | 7,997,546 | 7,749,788 | 3% | | Total equity | 2,400,459 | 2,304,146 | 4% | | Total liabilities | 5,597,087 | 5,445,642 | 3% | [Interim Condensed Consolidated Financial Statements](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the interim condensed consolidated financial statements for the six months ended June 30, 2025, including statements of profit or loss, comprehensive income, financial position, changes in equity, and cash flows, detailing the Group's financial performance, asset and liability status, equity structure, and cash flow [Interim Condensed Consolidated Statement of Profit or Loss](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's revenue decreased by 17% to HK$2,931,118 thousand, yet profit for the period increased by 3% to HK$176,506 thousand due to a significant rise in other net gains and a reduction in net finance costs Interim Condensed Consolidated Statement of Profit or Loss for H1 2025 (Summary) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,931,118 | 3,530,446 | -17% | | Cost of sales and services | (2,621,067) | (3,187,080) | -18% | | Gross profit | 310,051 | 343,366 | -10% | | Other income | 13,016 | 25,568 | -49% | | Administrative expenses | (90,086) | (81,603) | +10% | | Research and development expenses | (50,447) | (57,506) | -12% | | Net reversal of impairment losses on financial and contract assets | 11,153 | 21,296 | -48% | | Other gains – net | 64,072 | 4,024 | +1492% | | Operating profit | 257,759 | 255,145 | +1% | | Net finance costs | (43,419) | (59,450) | -27% | | Profit before income tax | 221,785 | 203,772 | +9% | | Income tax expense | (45,279) | (32,596) | +39% | | Profit for the period | 176,506 | 171,176 | +3% | | Profit attributable to owners of the Company | 172,815 | 167,924 | +3% | | Basic earnings per share (HK cents) | 12.54 | 12.41 | +1% | [Interim Condensed Consolidated Statement of Comprehensive Income](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total comprehensive income significantly increased by 120% to HK$244,612 thousand from HK$111,216 thousand in the prior year, primarily driven by other comprehensive income turning from loss to profit Interim Condensed Consolidated Statement of Comprehensive Income for H1 2025 (Summary) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Profit for the period | 176,506 | 171,176 | +3% | | Other comprehensive income/(loss) | 68,106 | (59,960) | from loss to profit | | Total comprehensive income for the period | 244,612 | 111,216 | +120% | | Total comprehensive income attributable to owners of the Company | 239,096 | 109,640 | +118% | | Total comprehensive income attributable to non-controlling interests | 5,516 | 1,576 | +250% | [Interim Condensed Consolidated Statement of Financial Position](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets increased by 3% to HK$7,997,546 thousand, with significant growth in property, plant and equipment within non-current assets, while current borrowings substantially increased, resulting in current liabilities exceeding current assets by approximately HK$2,536,894 thousand Interim Condensed Consolidated Statement of Financial Position as of June 30, 2025 (Summary) | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | **Assets:** | | | | | Non-current assets | 6,941,308 | 6,628,479 | +5% | | Property, plant and equipment | 6,304,670 | 5,985,500 | +5% | | Current assets | 1,056,238 | 1,121,309 | -6% | | Cash and cash equivalents | 325,767 | 384,045 | -15% | | Total assets | 7,997,546 | 7,749,788 | +3% | | **Equity and Liabilities:** | | | | | Share capital | 258,292 | 282,325 | -8.5% | | Retained earnings | 2,088,511 | 2,020,124 | +3.4% | | Total equity | 2,400,459 | 2,304,146 | +4% | | Non-current liabilities | 2,003,955 | 2,422,971 | -17% | | Current liabilities | 3,593,132 | 3,022,671 | +19% | | Current borrowings | 1,856,964 | 1,071,352 | +73% | | Total liabilities | 5,597,087 | 5,445,642 | +3% | | Total equity and liabilities | 7,997,546 | 7,749,788 | +3% | [Interim Condensed Consolidated Statement of Changes in Equity](index=9&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the Group's total equity increased to HK$2,400,459 thousand, driven by profit for the period and significantly increased other comprehensive income, alongside share repurchases, preference share redemptions, and dividends paid to non-controlling interests Interim Condensed Consolidated Statement of Changes in Equity for H1 2025 (Summary) | Metric | June 30, 2025 (HK$ Thousand) | January 1, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Total equity at beginning of period | 2,304,146 | 2,320,551 | -0.7% | | Profit for the period | 176,506 | 171,176 | +3% | | Other comprehensive income/(loss) for the period | 68,106 | (59,960) | from loss to profit | | Total comprehensive income for the period | 244,612 | 111,216 | +120% | | Dividends approved for prior year | (104,428) | (102,827) | +1.6% | | Repurchase of treasury shares | (3,424) | — | N/A | | Redemption of preference shares approved | (24,033) | — | N/A | | Total equity at end of period | 2,400,459 | 2,318,108 | +3.6% | [Interim Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash inflow from operating activities decreased by 43% to HK$37,619 thousand, while net cash outflow from investing activities increased, and financing activities shifted from net outflow to net inflow, primarily due to increased borrowings, partially offset by share repurchases and dividend payments Interim Condensed Consolidated Statement of Cash Flows for H1 2025 (Summary) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Net cash inflow from operating activities | 37,619 | 66,306 | -43% | | Net cash outflow from investing activities | (205,469) | (138,207) | +49% | | Net cash inflow/(outflow) from financing activities | 89,906 | (48,378) | from outflow to inflow | | Net decrease in cash and cash equivalents | (77,944) | (120,279) | -35% | | Cash and cash equivalents at end of period | 325,767 | 662,189 | -51% | [Notes to the Condensed Consolidated Interim Financial Statements](index=13&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes to the condensed consolidated interim financial statements, covering general information, accounting policies, financial risk management, segment information, revenue and expense breakdowns, taxation, dividends, earnings per share, balance sheet items, and related party transactions, offering supplementary explanations for understanding the financial statements [1. GENERAL INFORMATION](index=13&type=section&id=1.%20GENERAL%20INFORMATION) The Company was incorporated in Bermuda with its principal place of business in Hong Kong, and its ordinary shares are listed on the Hong Kong Stock Exchange; it is an investment holding company with major shareholders TEDA (42.18% stake) and Sinopec (29.52% stake), and its financial statements are presented in HKD while its functional currency is RMB - Company incorporated in Bermuda on October 8, 1999, with ordinary shares listed on the Hong Kong Stock Exchange[17](index=17&type=chunk) - TEDA Hong Kong (an indirect subsidiary of TEDA) holds approximately **42.18%** of the Company's total issued ordinary shares, making it the largest ultimate shareholder[19](index=19&type=chunk) - Great Wall Gas Investment (Hong Kong) Co., Ltd. (a wholly-owned subsidiary of Sinopec) holds approximately **29.52%** of the Company's total issued ordinary shares, making it the second largest ultimate shareholder[19](index=19&type=chunk) - The Group's condensed consolidated interim financial statements are presented in HKD, while the functional currency of the Company and its subsidiaries is RMB[20](index=20&type=chunk) [2. BASIS OF PREPARATION](index=14&type=section&id=2.%20BASIS%20OF%20PREPARATION) These condensed consolidated interim financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, using the historical cost convention; despite current liabilities exceeding current assets by approximately HK$2.537 billion as of June 30, 2025, management believes the Group has the ability to continue as a going concern based on profitability and secured loans - Financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Hong Kong Stock Exchange Listing Rules[22](index=22&type=chunk) - Financial statements are prepared on the historical cost basis, with certain financial assets measured at fair value[23](index=23&type=chunk) - As of June 30, 2025, the Group's current liabilities exceeded current assets by approximately **HK$2,536,894 thousand**[24](index=24&type=chunk) - Management and the Board believe the Group will maintain profitability and secure sufficient financing to continue as a going concern[28](index=28&type=chunk)[29](index=29&type=chunk) [3. ACCOUNTING POLICIES](index=15&type=section&id=3.%20ACCOUNTING%20POLICIES) The accounting policies adopted in these condensed consolidated interim financial statements are consistent with those of the annual consolidated financial statements for the year ended December 31, 2024, and the amendments to HKAS 21 have been adopted without significant impact on the Group - Accounting policies are consistent with the annual consolidated financial statements for the year ended December 31, 2024[30](index=30&type=chunk) - The Group has adopted amendments to HKAS 21, which did not have a significant impact on the Group[31](index=31&type=chunk)[34](index=34&type=chunk) - Certain new and amended standards and interpretations not yet adopted are not expected to have a significant impact on the Group[35](index=35&type=chunk) [4. ESTIMATES](index=16&type=section&id=4.%20ESTIMATES) The preparation of interim financial information involves management making judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses; the key sources of estimation uncertainty made in the current period are the same as those in the 2024 annual consolidated financial statements - Preparation of interim financial information requires management to make judgments, estimates, and assumptions, and actual results may differ from these estimates[36](index=36&type=chunk) - Key sources of significant judgments and estimation uncertainty made by management in applying accounting policies during the period are the same as those in the consolidated financial statements for the year ended December 31, 2024[37](index=37&type=chunk) [5. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS](index=17&type=section&id=5.%20FINANCIAL%20RISK%20MANAGEMENT%20AND%20FINANCIAL%20INSTRUMENTS) The Group faces market risks (including foreign exchange, interest rates), credit risk, and liquidity risk, focusing on minimizing potential adverse effects; no derivative financial instruments were used for hedging during the period, liquidity risk showed no significant changes, and financial instruments are analyzed by fair value measurement hierarchy (Level 1, 2, 3) - The Group's operations are exposed to market risks (foreign exchange risk, cash flow and fair value interest rate risk), credit risk, and liquidity risk[40](index=40&type=chunk) - As of June 30, 2025, the Group did not use any derivative financial instruments to hedge financial risks[40](index=40&type=chunk) - There were no significant changes in the contractual undiscounted cash outflows of financial liabilities compared to the end of 2024[42](index=42&type=chunk) - Financial instruments are analyzed by fair value measurement hierarchy (Level 1, Level 2, Level 3), with no transfers between levels during the period[46](index=46&type=chunk)[47](index=47&type=chunk) [6. SEGMENT INFORMATION](index=19&type=section&id=6.%20SEGMENT%20INFORMATION) The Group's chief operating decision maker (executive directors) assesses operating segment performance based on internal reports; a new "Value-added Services" segment has been added, covering gas appliance sales, minor installations, maintenance, and insurance agency services, with other main operating segments including piped natural gas sales, construction and gas pipeline installation services, and gas transmission services - The chief operating decision maker has been identified as the Company's executive directors who make strategic decisions[49](index=49&type=chunk) - A new "Value-added Services" segment has been added, covering gas appliance sales, minor installation services, maintenance services, and insurance agency services[54](index=54&type=chunk) - The Group's operating and reportable segments are sales of piped natural gas, construction and gas pipeline installation services, gas transmission services, and value-added services[54](index=54&type=chunk) Segment Revenue and Results for H1 2025 (Summary) | Segment | 2025 Revenue (HK$ Thousand) | 2024 Revenue (HK$ Thousand) | Revenue Change | 2025 Results (HK$ Thousand) | 2024 Results (HK$ Thousand) | Results Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales of Piped Natural Gas | 2,741,373 | 3,295,229 | -17% | 189,140 | 188,923 | +0.1% | | Construction and Gas Pipeline Installation Services | 124,976 | 167,572 | -25% | 71,909 | 102,248 | -30% | | Gas Transmission Services | 27,099 | 32,391 | -16% | 23,603 | 28,436 | -17% | | Value-added Services | 37,670 | 35,254 | +7% | 25,399 | 23,759 | +7% | | **Total** | **2,931,118** | **3,530,446** | **-17%** | **310,051** | **343,366** | **-10%** | [7. OTHER INCOME](index=23&type=section&id=7.%20OTHER%20INCOME) For the six months ended June 30, 2025, the Group's total other income amounted to HK$13,016 thousand, a 49% decrease from the prior year, primarily due to a significant reduction in government grants Other Income Details for H1 2025 | Income Source | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Government grants | 9,665 | 22,644 | -57% | | Repair and renovation service income | 2,924 | 2,638 | +11% | | Rental income | 427 | 286 | +49% | | **Total** | **13,016** | **25,568** | **-49%** | [8. OTHER GAINS – NET](index=23&type=section&id=8.%20OTHER%20GAINS%20%E2%80%93%20NET) For the six months ended June 30, 2025, the Group's other net gains significantly increased by 1492% to HK$64,072 thousand, primarily due to a substantial rise in net compensation gains from natural gas pipeline relocation and net exchange gains turning from loss to profit Other Net Gains Details for H1 2025 | Source | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Net compensation gains from natural gas pipeline relocation | 54,538 | 19,031 | +187% | | Net loss on disposal of property, plant and equipment | (69) | (327) | -79% | | Net exchange gains/(losses) | 11,444 | (23,696) | from loss to profit | | Net gain on disposal of subsidiaries | 487 | 2,853 | -83% | | Others | (2,328) | 6,163 | from profit to loss | | **Total** | **64,072** | **4,024** | **+1492%** | [9. EXPENSES BY NATURE](index=24&type=section&id=9.%20EXPENSES%20BY%20NATURE) For the six months ended June 30, 2025, the Group's total cost of sales and services, administrative expenses, and research and development expenses amounted to HK$2,761,600 thousand, a 17% decrease from the prior year, primarily due to a significant reduction in natural gas purchase costs Expenses by Nature Details for H1 2025 | Expense Type | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Natural gas purchase costs | 2,385,024 | 2,942,825 | -19% | | Employee benefit expenses | 139,370 | 121,200 | +15% | | Depreciation | 104,347 | 103,993 | +0.3% | | Subcontracting and other costs | 28,521 | 27,907 | +2% | | Safety production expenses | 21,931 | 21,787 | +0.7% | | Changes in inventories of pipelines and other materials | 8,243 | 8,898 | -7% | | Purchase costs of pipelines and other materials | 14,692 | 27,677 | -47% | | Repair and maintenance expenses | 7,507 | 11,824 | -37% | | Other professional fees | 4,395 | 7,011 | -37% | | Expenses relating to short-term leases | 1,882 | 2,191 | -14% | | Amortisation | 2,203 | 2,410 | -9% | | Others | 43,485 | 48,466 | -10% | | **Total** | **2,761,600** | **3,326,189** | **-17%** | [10. FINANCE INCOME AND COSTS](index=25&type=section&id=10.%20FINANCE%20INCOME%20AND%20COSTS) For the six months ended June 30, 2025, the Group's net finance costs decreased by 27% to HK$43,419 thousand, primarily due to reduced interest expenses, partially offset by lower interest income from bank deposits Finance Income and Costs Details for H1 2025 | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Finance income: | | | | | - Interest income from bank deposits | 2,071 | 15,179 | -86% | | Finance costs: | | | | | - Interest expenses | (83,544) | (110,409) | -24% | | Less: Amount capitalised into construction in progress | 38,054 | 35,780 | +6% | | **Net finance costs** | **(43,419)** | **(59,450)** | **-27%** | [11. INCOME TAX EXPENSE](index=25&type=section&id=11.%20INCOME%20TAX%20EXPENSE) For the six months ended June 30, 2025, the Group's income tax expense increased by 39% to HK$45,279 thousand, primarily due to higher current income tax and deferred income tax expense shifting from positive to negative; some of the Group's subsidiaries enjoy a preferential tax rate of 15% as high-tech enterprises Income Tax Expense Details for H1 2025 | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Current income tax | 45,524 | 30,980 | +47% | | Deferred income tax expense | (245) | 1,616 | from positive to negative | | **Total** | **45,279** | **32,596** | **+39%** | - Eligible Group entities are taxed at **8.25%** for the first HK$2 million of profits and **16.5%** for the remainder[72](index=72&type=chunk) - Dividends declared by PRC-incorporated subsidiaries to overseas holding companies are subject to a **10%** withholding income tax rate, with Binhai Hong Kong potentially enjoying a reduced rate due to its resident status certificate[74](index=74&type=chunk)[75](index=75&type=chunk) - Tianjin Clean Energy and Tianjin Bintou Xinzhi Technology Co., Ltd. enjoy a preferential income tax rate of **15%** as high-tech enterprises[77](index=77&type=chunk) [12. DIVIDEND](index=27&type=section&id=12.%20DIVIDEND) The Board recommended a final dividend of HK$0.076 per ordinary share for the year ended December 31, 2024, totaling approximately HK$104,428 thousand, which was paid on June 10, 2025; the Board decided not to declare an interim dividend for the six months ended June 30, 2025 - The Board recommended a final dividend of **HK$0.076 per ordinary share** for the year ended December 31, 2024, totaling approximately **HK$104,428 thousand**[79](index=79&type=chunk) - Approximately **HK$104,426 thousand** of the 2024 final dividend was paid on June 10, 2025[79](index=79&type=chunk) - The Board decided not to declare an interim dividend for the six months ended June 30, 2025[80](index=80&type=chunk) [13. EARNINGS PER SHARE](index=28&type=section&id=13.%20EARNINGS%20PER%20SHARE) For the six months ended June 30, 2025, basic earnings per share attributable to owners of the Company were **12.54 HK cents**, and diluted earnings per share were **12.54 HK cents**, both showing a slight increase from the prior year Earnings Per Share for H1 2025 | Metric | 2025 (HK cents) | 2024 (HK cents) | Change | | :--- | :--- | :--- | :--- | | Basic earnings per share | 12.54 | 12.41 | +1% | | Diluted earnings per share | 12.54 | 12.41 | +1% | - Basic earnings per share are calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the period[84](index=84&type=chunk) - Diluted earnings per share adjust the amounts used to determine basic earnings per share to account for the conversion of all dilutive potential ordinary shares[86](index=86&type=chunk) [14. PROPERTY, PLANT AND EQUIPMENT](index=29&type=section&id=14.%20PROPERTY,%20PLANT%20AND%20EQUIPMENT) As of June 30, 2025, the Group's net book value of property, plant and equipment increased by 6% to HK$6,304,670 thousand from the prior year, with additions of HK$224,477 thousand during the period and an impact from exchange differences Changes in Property, Plant and Equipment for H1 2025 | Metric | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Net book value at beginning of period | 5,985,500 | 6,007,569 | -0.4% | | Additions | 224,477 | 163,149 | +38% | | Disposals | (2,760) | (281) | +882% | | Depreciation expense | (95,745) | (95,578) | +0.2% | | Exchange differences | 193,198 | (123,319) | from negative to positive | | **Net book value at end of period** | **6,304,670** | **5,951,540** | **+6%** | [15. TRADE AND OTHER RECEIVABLES](index=30&type=section&id=15.%20TRADE%20AND%20OTHER%20RECEIVABLES) As of June 30, 2025, the Group's total trade and other receivables increased by 15% to HK$351,028 thousand from the end of 2024, with a significant increase in trade receivables from third-party piped natural gas sales and a decrease in impairment provisions Trade and Other Receivables Details as of June 30, 2025 | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Amounts due from third parties (unimpaired) | 324,078 | 298,762 | +8% | | Less: Impairment provision | (88,922) | (95,950) | -7% | | Amounts due from third parties (impaired) | 235,156 | 202,812 | +16% | | Amounts due from related parties (impaired) | 4,667 | 6,210 | -25% | | Other receivables (impaired) | 111,205 | 95,580 | +16% | | **Total** | **351,028** | **304,602** | **+15%** | Ageing Analysis of Trade Receivables as of June 30, 2025 (based on revenue recognition date) | Ageing | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | 0-90 days | 88,075 | 65,725 | +34% | | 91-180 days | 5,249 | 20,059 | -74% | | 181-365 days | 35,033 | 27,778 | +26% | | Over 365 days | 201,738 | 196,293 | +3% | | **Total** | **330,095** | **309,855** | **+6.5%** | - The Group provides a **90-day** credit period to piped natural gas sales customers and gas transmission service customers, and a **180-day** credit period to construction and gas pipeline installation service customers[93](index=93&type=chunk) - The Group applies the simplified approach under HKFRS 9 to measure expected credit losses, applying a lifetime expected loss allowance for all trade receivables and contract assets[97](index=97&type=chunk) [16. SHARE CAPITAL](index=32&type=section&id=16.%20SHARE%20CAPITAL) As of June 30, 2025, the Company's total issued and fully paid share capital decreased by 8.5% to HK$258,292 thousand from the end of 2024, primarily due to the redemption of redeemable preference shares Share Capital Composition as of June 30, 2025 | Share Capital Type | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Ordinary shares | 138,325 | 138,325 | 0% | | Redeemable preference shares | 119,967 | 144,000 | -16.7% | | **Total** | **258,292** | **282,325** | **-8.5%** | [17. TRADE AND OTHER PAYABLES](index=33&type=section&id=17.%20TRADE%20AND%20OTHER%20PAYABLES) As of June 30, 2025, the Group's total trade and other payables increased by 1.8% to HK$1,226,107 thousand from the end of 2024, with slight increases in both trade payables and other payables Trade and Other Payables Details as of June 30, 2025 | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Trade payables | 661,493 | 647,310 | +2.2% | | Other payables | 562,151 | 550,485 | +2.1% | | Accrued expenses | 2,463 | 6,617 | -63% | | **Total** | **1,226,107** | **1,204,412** | **+1.8%** | Ageing Analysis of Trade Payables as of June 30, 2025 (based on invoice date from suppliers) | Ageing | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | 0-90 days | 113,751 | 174,303 | -35% | | 91-180 days | 64,790 | 51,766 | +25% | | 181-365 days | 124,697 | 101,772 | +22.5% | | Over 365 days | 358,255 | 319,469 | +12% | | **Total** | **661,493** | **647,310** | **+2.2%** | [18. BORROWINGS](index=34&type=section&id=18.%20BORROWINGS) As of June 30, 2025, the Group's total borrowings increased by 11.3% to HK$3,706,434 thousand from the end of 2024, with current borrowings significantly increasing by 73% while non-current borrowings decreased; borrowings are primarily denominated in RMB, partly secured, and include syndicated loans Total Borrowings and Composition as of June 30, 2025 | Borrowing Type | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Total non-current borrowings | 1,849,470 | 2,258,172 | -18% | | Total current borrowings | 1,856,964 | 1,071,352 | +73% | | **Total borrowings** | **3,706,434** | **3,329,524** | **+11.3%** | - The RMB tranche of the syndicated loan was repaid in April 2025, with the remaining principal due in June 2026[104](index=104&type=chunk) - Secured bank borrowings are guaranteed by charging rights and trade receivables of certain subsidiaries[109](index=109&type=chunk) - Other borrowings are secured by equity interests and natural gas pipeline assets of a subsidiary[111](index=111&type=chunk) Borrowings Repayment Schedule as of June 30, 2025 | Repayment Period | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Within one year | 1,856,964 | 1,071,352 | +73% | | Over one year but not exceeding two years | 986,190 | 1,430,495 | -31% | | Over two years but not exceeding five years | 337,793 | 309,582 | +9% | | Over five years | 525,487 | 518,095 | +1.4% | | **Total** | **3,706,434** | **3,329,524** | **+11.3%** | [19. DEFERRED INCOME](index=38&type=section&id=19.%20DEFERRED%20INCOME) As of June 30, 2025, the Group's total deferred income slightly decreased to HK$142,627 thousand from the end of 2024, primarily comprising government grants and construction project grants related to natural gas pipeline construction and heating projects, which are recognized in profit or loss on a straight-line basis over the estimated useful lives of the related assets Deferred Income Details as of June 30, 2025 | Deferred Income Type | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Government grants | 52,260 | 57,433 | -9% | | Construction project grants | 90,367 | 87,832 | +3% | | **Total** | **142,627** | **145,265** | **-1.8%** | - Government grants related to natural gas pipeline construction projects are recognized in profit or loss on a straight-line basis over their estimated useful life of **30 years**[118](index=118&type=chunk) - Construction project grants related to natural gas pipeline and heating projects are recognized in profit or loss on a straight-line basis over the estimated useful lives of the related assets[118](index=118&type=chunk) [20. DEFERRED TAXATION](index=39&type=section&id=20.%20DEFERRED%20TAXATION) As of June 30, 2025, the Group's net deferred tax assets decreased to HK$26,617 thousand from the end of 2024, primarily arising from deferred income and impairment provisions, while deferred tax liabilities mainly stemmed from accelerated depreciation of equipment Deferred Tax Assets as of June 30, 2025 | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Total deferred tax assets | 51,905 | 53,375 | -2.7% | | Offsetting deferred tax liabilities | (25,288) | (22,602) | +12% | | **Net deferred tax assets** | **26,617** | **30,773** | **-13.5%** | Changes in Deferred Tax Assets for H1 2025 | Source | January 1, 2025 (HK$ Thousand) | Charged to profit or loss (HK$ Thousand) | Currency translation differences (HK$ Thousand) | June 30, 2025 (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Deferred income | 27,235 | (756) | 778 | 27,257 | | Impairment provision | 13,550 | (2,491) | 357 | 11,416 | | Accrued expenses | 3,646 | — | 382 | 4,028 | | Tax losses | 8,944 | — | 260 | 9,204 | | **Total** | **53,375** | **(3,247)** | **1,777** | **51,905** | Deferred Tax Liabilities as of June 30, 2025 | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Total deferred tax liabilities | 32,335 | 34,866 | -7.3% | | Offsetting deferred tax assets | (25,288) | (22,602) | +12% | | **Net deferred tax liabilities** | **7,047** | **12,264** | **-42.6%** | Changes in Deferred Tax Liabilities for H1 2025 | Source | January 1, 2025 (HK$ Thousand) | (Credited)/charged to profit or loss (HK$ Thousand) | Currency translation differences (HK$ Thousand) | June 30, 2025 (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Withholding tax on unremitted earnings | 5,315 | (5,391) | 76 | — | | Accelerated depreciation of equipment | 29,105 | 1,899 | 872 | 31,876 | | Others | 446 | — | 13 | 459 | | **Total** | **34,866** | **(3,492)** | **961** | **32,335** | [21. COMMITMENTS](index=43&type=section&id=21.%20COMMITMENTS) As of June 30, 2025, the Group's contracted but unprovided capital commitments primarily relate to property, plant and equipment, amounting to HK$495,937 thousand, a significant increase from the end of 2024 Capital Commitments as of June 30, 2025 | Commitment Type | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Contracted but not provided for - property, plant and equipment | 495,937 | 307,959 | +61% | [22. RELATED PARTY TRANSACTIONS](index=43&type=section&id=22.%20RELATED%20PARTY%20TRANSACTIONS) This section details various transactions and balances between the Group and its major shareholders (TEDA and Sinopec) and their controlled entities, as well as other related parties, including piped natural gas sales, construction, natural gas purchases, rental income, interest expenses, and receivables/payables, all conducted in the ordinary course of business and adhering to market pricing principles - TEDA, the Company's largest ultimate shareholder, and its indirect subsidiaries hold a **42.18%** equity interest, while Sinopec, the second largest ultimate shareholder, and its wholly-owned subsidiaries hold a **29.52%** equity interest[132](index=132&type=chunk) Related Party Transactions for H1 2025 (Summary) | Transaction Type | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Sales of piped natural gas | 196,975 | 197,629 | -0.3% | | Construction and gas pipeline installation services | 2,554 | 2,783 | -8.2% | | Gas transmission service income | 50 | — | N/A | | Rental income | — | 115 | -100% | | Purchase of natural gas | 460,532 | 990,910 | -53.5% | | Purchase of gasoline and others | 10,593 | 787 | +1245% | | Interest expenses | 6,424 | 6,510 | -1.3% | | Other service fees | 7,900 | 8,029 | -1.6% | | Sales of meters and others | 809 | 1,036 | -22% | Related Party Balances as of June 30, 2025 (Summary) | Balance Type | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Trade and other receivables | 11,603 | 11,566 | +0.3% | | Prepayments | 24,404 | 47,224 | -48.3% | | Trade and other payables | 11,054 | 8,201 | +34.8% | | Contract liabilities | 10,652 | 16,412 | -35.1% | | Borrowings | 328,740 | 319,354 | +2.9% | - The pricing for the Group's sales of piped natural gas to related parties is based on reference prices issued by local governments[148](index=148&type=chunk) - The Group conducts various transactions with other state-controlled entities in China, including buying and selling piped natural gas, construction, asset leasing, and financing, with terms comparable to those with non-state-controlled entities[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) [Business Review and Management Discussion and Analysis](index=53&type=section&id=Business%20Review%20and%20Management%20Discussion%20and%20Analysis) This section comprehensively reviews the Group's business performance in H1 2025, including piped natural gas sales, construction, gas transmission, and value-added services, analyzing market conditions, financial position, financing strategies, and future outlook; despite revenue declines in some core businesses due to a warm winter and slow economic recovery, value-added services performed strongly, and the Group effectively reduced costs by optimizing its financing structure [Business Review](index=53&type=section&id=Business%20Review) The Group primarily engages in piped natural gas sales, construction and gas pipeline installation services, gas transmission services, and value-added services; revenue from piped natural gas sales and construction services decreased due to a warm winter and slow economic recovery, but value-added service revenue increased [Sales of Piped Natural Gas](index=53&type=section&id=Sales%20of%20Piped%20Natural%20Gas) Due to a warm winter and slow economic recovery, China's apparent natural gas consumption decreased by 0.9% year-on-year in H1 2025; the Group's total gas sales volume decreased by 14%, and piped natural gas sales revenue decreased by 17% to HK$2,741,373 thousand - In H1 2025, China's apparent natural gas consumption reached **211.97 billion cubic meters**, a year-on-year decrease of **0.9%**[165](index=165&type=chunk) - The Group's total gas sales volume in H1 was **1.14 billion cubic meters**, a year-on-year decrease of **14%**; piped gas sales volume was **0.83 billion cubic meters**, a year-on-year decrease of **12.4%**[165](index=165&type=chunk) Sales of Piped Natural Gas Revenue for H1 2025 | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Sales of piped natural gas revenue | 2,741,373 | 3,295,229 | -17% | [Construction and Gas Pipeline Installation Service](index=54&type=section&id=Construction%20and%20Gas%20Pipeline%20Installation%20Service) Affected by a weaker-than-expected recovery in China's real estate market, the Group's total user base grew by 1% to **2.47 million**; as of June 30, 2025, the urban medium-pressure gas pipeline network length increased by **38 kilometers**, and service revenue for the period decreased by 25% to HK$124,976 thousand - The Group's total user base increased to **2.47 million households**, a year-on-year increase of **1%**[170](index=170&type=chunk) - As of June 30, 2025, the urban medium-pressure gas pipeline network length was approximately **4,014 kilometers**, an increase of **38 kilometers** from the end of 2024[170](index=170&type=chunk) Construction and Gas Pipeline Installation Service Revenue for H1 2025 | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Service revenue | 124,976 | 167,572 | -25% | [Gas Transmission Service](index=55&type=section&id=Gas%20Passing%20Through%20Service) Natural gas, as a clean and efficient energy source, plays a crucial role in the Group's transmission services; during the period, the Group's gas transmission volume was approximately **311,520 thousand cubic meters**, and gas transmission service revenue decreased by 16% to HK$27,099 thousand - Natural gas as a clean and efficient energy source plays an indispensable role in addressing environmental pollution[172](index=172&type=chunk) - During the period, the Group's gas transmission volume was approximately **311,520 thousand cubic meters**[173](index=173&type=chunk) Gas Transmission Service Revenue for H1 2025 | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Service revenue | 27,099 | 32,391 | -16% | [Value-added Service](index=56&type=section&id=Value-added%20Service) The Group offers various value-added services including gas appliance sales, minor installations, maintenance, and insurance agency; during the period, total value-added service revenue increased by 7% to HK$37,670 thousand, with significant growth in gas appliance sales, maintenance, and insurance agency service revenues - Value-added services include gas appliance sales, minor installation services, maintenance services, and insurance agency services[175](index=175&type=chunk) Value-added Service Revenue Details for H1 2025 | Service Type | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Total value-added service revenue | 37,670 | 35,254 | +7% | | Gas appliance sales revenue | 9,931 | 7,167 | +39% | | Minor installation service revenue | 18,464 | 20,652 | -11% | | Maintenance service revenue | 4,177 | 3,195 | +31% | | Insurance agency service revenue | 5,098 | 4,240 | +20% | [Property Development](index=56&type=section&id=Property%20Development) As of June 30, 2025, the Group held a commercial development land parcel of approximately **15,899.6 square meters** in Tianjin Airport Economic Area; given the Group's strategic focus on gas business development, it plans to dispose of this property under construction - The Group holds a commercial development land parcel of approximately **15,899.6 square meters** in Tianjin Airport Economic Area[176](index=176&type=chunk) - The Group plans to dispose of this property under construction to focus on gas business development[179](index=179&type=chunk) [Management Discussion and Analysis](index=57&type=section&id=Management%20Discussion%20and%20Analysis) Management discussed the challenges and opportunities in the natural gas market during H1 2025, highlighting the Group's strategies in diversified gas sources, upstream-downstream integration, value-added service expansion, and integrated energy transition; it also detailed the Group's financial performance, liquidity, borrowing structure, and risk management, expressing confidence in future profit growth [Prospects](index=57&type=section&id=Prospects) In H1 2025, China's natural gas market experienced insufficient demand due to a warm winter and slow economic recovery; the Group's total gas sales volume decreased by 14% year-on-year, but Q2 sales volume increased by 13%, indicating continued rapid business development, and the Group will persist in its diversified gas source strategy, deepen cooperation with upstream suppliers, and accelerate the development of value-added services and integrated energy projects - In H1 2025, the natural gas market in mainland China generally operated weakly, with apparent consumption decreasing by **0.9%** year-on-year[182](index=182&type=chunk) - The Group's total gas sales volume decreased by **14%** year-on-year in H1, but total gas sales volume in Q2 increased by **13%** year-on-year, indicating rapid development of the gas sales business[182](index=182&type=chunk) - Local governments have issued natural gas retail price adjustment policies, improving the inverted residential gas price situation and helping city gas companies restore gross profit margins[184](index=184&type=chunk) - The Group will continue to adhere to a diversified gas source strategy, deepen cooperation with major upstream gas suppliers, and leverage its integrated upstream and downstream industrial chain layout[186](index=186&type=chunk) - Value-added service revenue and gross profit both increased by **7%** year-on-year, with self-branded "Taiyuejia" gas appliance sales revenue and gross profit increasing by **39%** and **91%** year-on-year, respectively[187](index=187&type=chunk) - The Group plans to expand the scope of value-added services, enrich the "Taiyuejia" product range, launch kitchen renovation services, and complete the establishment of an e-commerce platform in the second half of the year[187](index=187&type=chunk) [Financial Review](index=61&type=section&id=Financial%20Review) During the period, the Group's consolidated gross profit margin increased to **10.6%**, primarily due to an improved gross profit margin from piped natural gas sales; administrative expenses increased by 10% year-on-year, and profit attributable to owners of the Company grew by 3% year-on-year, mainly driven by higher other income and lower finance costs Financial Review Summary for H1 2025 | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Consolidated gross profit | 310,000 | 343,000 | -10% | | Consolidated gross profit margin | 10.6% | 9.7% | +0.9 percentage points | | Administrative expenses | 90,000 | 82,000 | +10% | | Profit attributable to owners of the Company | 173,000 | 168,000 | +3% | | Basic earnings per share | 12.54 HK cents | 12.41 HK cents | +0.13 HK cents | - The increase in consolidated gross profit margin was primarily due to an increase in the gross profit margin from sales of piped natural gas[193](index=193&type=chunk) - The increase in profit attributable to owners of the Company was mainly due to an increase in other income and a decrease in finance costs[195](index=195&type=chunk) [Liquidity and Financial Resources](index=62&type=section&id=Liquidity%20and%20Financial%20Resources) The Group primarily meets its liquidity needs through operating cash flows and interest-bearing bank loans and other borrowings; as of June 30, 2025, total borrowings were HK$3,706,434 thousand, cash and bank deposits were approximately HK$391,851 thousand, the current ratio was **0.29**, and the gearing ratio was approximately **58%** - The Group primarily finances its capital liquidity needs through cash flows generated from operating activities and interest-bearing bank loans and other borrowings[201](index=201&type=chunk) Liquidity and Financial Resources Summary as of June 30, 2025 | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Total borrowings | 3,706,434 | 3,329,524 | +11.3% | | Cash and bank deposits | 391,851 | 415,125 | -5.6% | | Consolidated current assets | 1,056,238 | — | N/A | | Current ratio | 0.29 | — | N/A | | Gearing ratio | 58% | 56% | +2 percentage points | - The Group's current liabilities exceeded current assets by approximately **HK$2,536,894 thousand**, but the Board believes the Group has sufficient working capital to meet its financial obligations[208](index=208&type=chunk)[210](index=210&type=chunk) [Borrowings Structure](index=63&type=section&id=Borrowings%20Structure) As of June 30, 2025, the Group's total borrowings amounted to HK$3,706,434 thousand, with **18%** denominated in USD and **82%** in RMB; **25%** were at fixed interest rates and **75%** at floating rates, and the total current portion of short-term and long-term borrowings was HK$1,856,964 thousand - As of June 30, 2025, **18%** of total borrowings were denominated in USD and **82%** in RMB[205](index=205&type=chunk) - Syndicated loans are in USD with an interest rate of SOFR plus **2.35%** per annum; domestic bank secured RMB borrowings have annual interest rates ranging from **3.20% to 5.00%**[206](index=206&type=chunk) - **25%** of borrowings are at fixed interest rates, and **75%** are at floating interest rates[206](index=206&type=chunk) - The total current portion of short-term and long-term borrowings amounted to **HK$1,856,964 thousand**[206](index=206&type=chunk) [Exposure to Exchange Rate Fluctuations](index=64&type=section&id=Exposure%20to%20Exchange%20Rate%20Fluctuations) The Group's deposits and bank borrowings denominated in HKD and USD expose it to foreign exchange risk; for the six months ended June 30, 2025, financing activities generated approximately **HK$11 million** in net exchange gains, and while the Group currently has no foreign exchange hedging policy, management continuously monitors this risk - The Group's deposits and bank borrowings denominated in HKD and USD expose it to foreign exchange risk[211](index=211&type=chunk) - For the six months ended June 30, 2025, financing activities generated approximately **HK$11 million** in net exchange gains[211](index=211&type=chunk) - The Group currently has no foreign exchange hedging policy, but management monitors foreign exchange risk and considers hedging when necessary[212](index=212&type=chunk) [Treasury Policies](index=64&type=section&id=Treasury%20Policies) For the six months ended June 30, 2025, the Group adopted a prudent financial approach to treasury policies, committed to cautious capital and cash flow management to maintain a robust liquidity position - The Group adopts a prudent financial approach to treasury policies and is committed to cautious capital and cash flow management[213](index=213&type=chunk) [Charge on the Group's Assets](index=64&type=section&id=Charge%20on%20the%20Group's%20Assets) As of June 30, 2025, **50%** of Tianjin Clean Energy's equity interest (approximately **HK$658,353 thousand**) was pledged as security for other borrowings; additionally, pipeline networks and equipment with a net book value of approximately **HK$347,729 thousand** were also pledged - As of June 30, 2025, **50%** of Tianjin Clean Energy's equity interest (approximately **HK$658,353 thousand**) was pledged as security for other borrowings[214](index=214&type=chunk) - As of June 30, 2025, pipeline networks and equipment with a net book value of approximately **HK$347,729 thousand** were pledged as security for other borrowings[215](index=215&type=chunk) - The Group's restricted bank deposits amounted to **HK$31,081 thousand**[214](index=214&type=chunk) [Final Dividend](index=65&type=section&id=Final%20Dividend) The Board recommended a final dividend of **HK$0.076 per ordinary share** for the year ended December 31, 2024, totaling approximately **HK$104,428 thousand**, which was paid on June 10, 2025 - The Board recommended a final dividend of **HK$0.076 per ordinary share** for the year ended December 31, 2024[219](index=219&type=chunk) - The total 2024 final dividend of approximately **HK$104,428 thousand** was paid on June 10, 2025[219](index=219&type=chunk) [Interim Dividend](index=65&type=section&id=Interim%20Dividend) The Board did not declare an 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[220](index=220&type=chunk) [Contingent Liabilities](index=65&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[221](index=221&type=chunk) [Significant Investments](index=65&type=section&id=Significant%20Investments) During the period, the Company held no significant investments - During the period, the Company held no significant investments[222](index=222&type=chunk) [Material Acquisitions and Disposals of Subsidiaries and Associated Companies](index=65&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associated%20Companies) During the period, the Group did not undertake any material acquisitions or disposals of subsidiaries and associated companies - During the period, the Group did not undertake any material acquisitions or disposals of subsidiaries and associated companies[223](index=223&type=chunk) [IMPORTANT EVENTS AFTER THE END OF THE FINANCIAL PERIOD](index=66&type=section&id=IMPORTANT%20EVENTS%20AFTER%20THE%20END%20OF%20THE%20FINANCIAL%20PERIOD) As of the date of this interim report, no significant events affecting the Group have occurred - As of the date of this interim report, no significant events affecting the Group have occurred[229](index=229&type=chunk) [FUTURE PLANS FOR MATERIAL INVESTMENTS AND CAPITAL ASSETS](index=66&type=section&id=FUTURE%20PLANS%20FOR%20MATERIAL%20INVESTMENTS%20AND%20CAPITAL%20ASSETS) The Group currently has no future plans for material investments or capital assets - The Group currently has no future plans for material investments or capital assets[230](index=230&type=chunk) [Employees](index=66&type=section&id=Employees) As of June 30, 2025, the Group had **1,740** employees, a slight decrease from the end of 2024; staff salaries and wages for the period amounted to approximately **HK$139 million**, of which approximately **HK$21 million** was charged to research and development expenses - As of June 30, 2025, the Group had **1,740** employees (December 31, 2024: 1,746 employees)[231](index=231&type=chunk) - Staff salaries and wages for the period amounted to approximately **HK$139 million** (H1 2024: HK$121 million)[231](index=231&type=chunk) - Approximately **HK$21 million** of this was charged to research and development expenses (H1 2024: HK$23 million)[231](index=231&type=chunk) [Remuneration Policy](index=66&type=section&id=Remuneration%20Policy) The Group is committed to providing competitive remuneration, fostering a fair, inclusive, and safe work environment, and motivating employees through training, performance evaluations, and a share option scheme; salaries are determined based on market rates, employee performance, qualifications, and experience, with benefits including pension, unemployment, work injury, medical, maternity insurance, and housing provident fund - The Group is committed to providing competitive remuneration and fostering a fair, inclusive, and safe work environment[232](index=232&type=chunk) - Salaries are determined with reference to market rates, employee performance, qualifications, and experience, with discretionary bonuses awarded[237](index=237&type=chunk) - The Group provides training opportunities and other benefits to employees, including pension insurance, unemployment insurance, work injury insurance, medical insurance, maternity insurance, and housing provident fund[237](index=237&type=chunk) - The Company adopted a share option scheme on January 13, 2021, as an incentive and reward program for directors, senior management, and eligible employees[238](index=238&type=chunk) [Other Information](index=68&type=section&id=Other%20Information) This section discloses the interests and short positions of directors, chief executives, substantial shareholders, and other persons in the Company's shares and underlying shares, along with details of the share option scheme; it also covers changes in directors' information, the audit committee, code of conduct for securities transactions by directors, corporate governance code, purchases, sales, and redemptions of listed securities, and the redemption of redeemable preference shares [INTERESTS AND SHORT POSITIONS OF DIRECTORS, CHIEF EXECUTIVES, SUBSTANTIAL SHAREHOLDERS AND OTHER PERSONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY](index=68&type=section&id=INTERESTS%20AND%20SHORT%20POSITIONS%20OF%20DIRECTORS,%20CHIEF%20EXECUTIVES,%20SUBSTANTIAL%20SHAREHOLDERS%20AND%20OTHER%20PERSONS%20IN%20THE%20SHARES%20AND%20UNDERLYING%20SHARES%20OF%20THE%20COMPANY) As of June 30, 2025, Mr. Gao Liang and Professor Luo Wenyu, directors, held interests in the Company's ordinary shares and underlying shares; substantial shareholders TEDA and Sinopec, through their controlled entities, held **41.89%** and **29.31%** of the Company's ordinary share interests, respectively Interests of Directors and Chief Executives in the Company's Ordinary Shares as of June 30, 2025 | Name of Director | Capacity | Interests in underlying ordinary shares by virtue of share options | Total Interests | Approximate % of total issued ordinary shares | | :--- | :--- | :--- | :--- | :--- | | Mr. Gao Liang | Beneficial owner | 1,969,281 | 1,969,281 | 0.14% | | Professor Luo Wenyu | Beneficial owner | — | 100,000 | 0.01% | Interests of Substantial Shareholders in the Company's Share Capital as of June 30, 2025 | Name of Shareholder | Capacity and Nature of Interest | Interests in the Company | Total Interests | Approximate % of total issued ordinary shares | | :--- | :--- | :--- | :--- | :--- | | TEDA | Interest in controlled corporations | 579,378,707 | 579,378,707 | 41.89% | | China Petrochemical Corporation | Interest in controlled corporations | 405,472,337 | 405,472,337 | 29.31% | | Sinopec | Interest in controlled corporations | 405,472,337 | 405,472,337 | 29.31% | - TEDA holds ordinary shares of the Company through its indirect subsidiaries TEDA Hong Kong, Santa Resources, and Leader Top[255](index=255&type=chunk) - China Petrochemical Corporation is the controlling shareholder of Sinopec and is deemed to have an interest in all shares held by Sinopec[255](index=255&type=chunk) [SHARE OPTION SCHEME](index=73&type=section&id=SHARE%20OPTION%20SCHEME) The Company adopted the 2021 Share Option Scheme on January 13, 2021, to improve governance, incentivize management and core employees, and attract and retain talent; participants include directors, senior management, and core technical personnel, with options having a seven-year exercise period and exercise prices determined by fair market value, and during the period, some first and second batch options lapsed, but no new options were granted or exercised - The 2021 Share Option Scheme aims to improve the Company's governance structure, incentivize management and core employees, and attract and retain core talent[257](index=257&type=chunk) - Participants include directors (excluding independent non-executive directors), senior management, and core technical and management personnel who directly influence the Company's overall operating performance and sustainable development[258](index=258&type=chunk) - The option exercise period is **seven years** from the grant date, and the exercise price is the higher of the closing price of ordinary shares on the grant date, the average closing price for the five trading days preceding the grant date, and the nominal value of ordinary shares on the grant date[262](index=262&type=chunk)[263](index=263&type=chunk) Share Option Movements as of June 30, 2025 (Summary) | Batch | Grantees | Outstanding as at January 1, 2025 (thousand shares) | Lapsed during the period (thousand shares) | Outstanding as at June 30, 2025 (thousand shares) | | :--- | :--- | :--- | :--- | :--- | | First Batch | Mr. Gao Liang | 1,174 | (352) | 822 | | First Batch | Employees | 17,547 | (5,509) | 12,038 | | Second Batch and Further Second Batch | Mr. Gao Liang | 1,912 | (765) | 1,147 | | Second Batch and Further Second Batch | Employees | 33,841 | (12,453) | 21,388 | | **Total** | | **54,474** | **(19,079)** | **35,395** | - The effectiveness of the Second Batch and Further Second Batch share options is linked to performance assessment indicators and individual performance assessment results[268](index=268&type=chunk) - No share options were granted, exercised, cancelled, or lapsed during the period ended June 30, 2025[272](index=272&type=chunk)[280](index=280&type=chunk) [CHANGE IN DIRECTORS' INFORMATION](index=82&type=section&id=CHANGE%20IN%20DIRECTORS'%20INFORMATION) As of the date of this report, the Company is unaware of any other changes in directors' information required to be disclosed under Rule 13.51B(1) of the Listing Rules - As of the date of this report, the Company is unaware of any other changes in directors' information required to be disclosed under Rule 13.51B(1) of the Listing Rules[291](index=291&type=chunk) [AUDIT COMMITTEE](index=82&type=section&id=AUDIT%20COMMITTEE) The Company has established an Audit Committee in accordance with the Listing Rules, comprising four independent non-executive directors, with Mr. Lau Siu Kee and Dr. Tang Lai Wah being qualified accountants; the Audit Committee has reviewed the Group's unaudited consolidated results for the period and provided advice on the interim report - The Audit Committee comprises four independent non-executive directors: Mr. Lau Siu Kee, Mr. Yip Sing Cheong, Professor Luo Wenyu, and Dr. Tang Lai Wah[292](index=292&type=chunk) - Mr. Lau Siu Kee, the Committee Chairman, and Dr. Tang Lai Wah are qualified accountants[292](index=292&type=chunk) - The Audit Committee has reviewed the Group's unaudited consolidated results for the period and provided advice and comments on the interim report[292](index=292&type=chunk) [CODE OF CONDUCT REGARDING SECURITIES TRANSACTIONS BY DIRECTORS](index=83&type=section&id=CODE%20OF%20CONDUCT%20REGARDING%20SECURITIES%20TRANSACTIONS%20BY%20DIRECTORS) The Company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than the Model Code; all directors have confirmed compliance with this code throughout the period - The Company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than the required standards for dealing as set out in the Model Code[296](index=296&type=chunk) - All directors have confirmed compliance with the required dealing standards set out in the Model Code and the Company's code of conduct throughout the period[297](index=297&type=chunk) [CORPORATE GOVERNANCE CODE](index=83&type=section&id=CORPORATE%20GOVERNANCE%20CODE) The Company has complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules throughout the period - The Company has complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules throughout the period[298](index=298&type=chunk) [PURCHASES, SALES OR REDEMPTION OF LISTED SECURITIES](index=83&type=section&id=PURCHASES,%20SALES%20OR%20REDEMPTION%20OF%20LISTED%20SECURITIES) For the six months ended June 30, 2025, the Company repurchased a total of **3,138,000** ordinary shares on the Stock Exchange for a total consideration of approximately **HK$3,417,520**, under a general mandate approved by shareholders, aiming to increase net asset value per share and/or earnings per share; the repurchased shares were subsequently held by the Company as treasury shares, totaling **9,660,000** shares - For the six months ended June 30, 2025, the Company repurchased a total of **3,138,000** ordinary shares for a total consideration of approximately **HK$3,417,520**[299](index=299&type=chunk) - The share repurchases aimed to increase the Company's net asset value per share and/or earnings per share[299](index=299&type=chunk) Details of Share Repurchases for H1 2025 | Month of Repurchase | Number of Shares Repurchased | Highest Price Paid (HK$) | Lowest Price Paid (HK$) | Total Consideration Paid (HK$) | | :--- | :--- | :--- | :--- | :--- | | January | 816,000 | 1.16 | 1.06 | 918,080 | | March | 1,060,000 | 1.12 | 1.05 | 1,155,020 | | April | 806,000 | 1.14 | 1.02 | 875,820 | | May | 256,000 | 1.04 | 1.01 | 262,620 | | June | 200,000 | 1.06 | 1.01 | 205,980 | | **Total** | **3,138,000** | | | **3,417,520** | - As of June 30, 2025, the Company held a total of **9,660,000** treasury shares[304](index=304&type=chunk) - The Board believes that repurchasing and holding treasury shares provides a more flexible approach to capital operations, helping to optimize the capital structure and reduce capital costs[305](index=305&type=chunk) [Redemption of Redeemable Preference Shares](index=85&type=section&id=Redemption%20of%20Redeemable%20Preference%20Shares) During the period, the Board resolved to redeem **480,650** redeemable preference shares from TEDA Hong Kong at a redemption price of **HK$50 per share**, totaling **HK$24,032,500**; as of the date of this interim report, the aforementioned redemption amount has not yet been paid, and the redeemable preference shares involved have not yet been redeemed - The Board resolved to redeem **480,650** redeemable preference shares from TEDA Hong Kong[307](index=307&type=chunk) - The redemption amount is **HK$50 per share**, totaling **HK$24,032,500**[307](index=307&type=chunk) - As of the date of this interim report, the aforementioned redemption amount has not yet been paid, and the redeemable preference shares involved have not yet been redeemed[307](index=307&type=chunk)

[GROUP PROFILE](index=2&type=section&id=GROUP%20PROFILE) The Group is one of the largest and longest-established knitwear manufacturers globally, offering vertically integrated services [About Fountain Set (Holdings) Limited](index=2&type=section&id=About%20Fountain%20Set%20%28Holdings%29%20Limited) Fountain Set Group is one of the world's largest and longest-established knitwear manufacturers, providing vertically integrated services from knitting to garment manufacturing - One of the largest and longest-established knitwear manufacturers globally, providing vertically integrated knitting, dyeing, printing, finishing, and garment manufacturing services[2](index=2&type=chunk)[5](index=5&type=chunk) - Headquartered in Hong Kong, with 8 production facilities in China, Sri Lanka, and Indonesia, and marketing/representative offices in 5 countries and regions[3](index=3&type=chunk)[5](index=5&type=chunk) - Total global workforce of approximately **5,600 employees**[3](index=3&type=chunk)[5](index=5&type=chunk) [REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=3&type=section&id=REPORT%20ON%20REVIEW%20OF%20INTERIM%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This report details the independent auditor's review of the interim condensed consolidated financial statements for the six months ended June 30, 2025 [INTRODUCTION](index=3&type=section&id=INTRODUCTION) The independent auditor has reviewed the interim condensed consolidated financial statements for the six months ended June 30, 2025, prepared in accordance with HKAS 34 - The firm has reviewed the interim condensed consolidated financial statements for the six months ended June 30, 2025, prepared in compliance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[8](index=8&type=chunk)[10](index=10&type=chunk) - The scope of review is substantially less than an audit conducted in accordance with Hong Kong Standards on Auditing, thus no audit opinion is expressed[9](index=9&type=chunk)[11](index=11&type=chunk) [CONCLUSION](index=4&type=section&id=CONCLUSION) Based on the review, the independent auditor found no matters suggesting that the interim condensed consolidated financial statements were not prepared in all material respects in accordance with HKAS 34 - Based on the review, nothing has come to our attention that causes us to believe that the interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[12](index=12&type=chunk)[13](index=13&type=chunk) - The review report was issued by Shinewing (HK) CPA Limited on August 21, 2025[14](index=14&type=chunk) [CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents the Group's condensed consolidated financial statements, including statements of profit or loss, financial position, changes in equity, and cash flows [CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME) For the six months ended June 30, 2025, Group revenue decreased by 12.7% to HK$1,937,026 thousand, while profit for the period significantly increased to HK$35,812 thousand from HK$4,243 thousand in the prior year Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,937,026 | 2,219,366 | (282,340) | -12.7% | | Gross profit | 227,441 | 244,814 | (17,373) | -7.1% | | Profit before income tax expense | 51,421 | 25,833 | 25,588 | 99.1% | | Profit for the period | 35,812 | 4,243 | 31,569 | 744.0% | | Profit/(Loss) for the period attributable to owners of the Company | 30,670 | (9,906) | 40,576 | N/A | | Basic earnings/(loss) per share (HK cents) | 2.5 | (0.8) | 3.3 | N/A | | Total comprehensive income for the period | 46,663 | 1,006 | 45,657 | 4538.5% | | Total comprehensive income for the period attributable to owners of the Company | 38,632 | (12,498) | 51,130 | N/A | - Exchange differences turned from a loss of HK$(3,237) thousand in the same period of 2024 to a gain of **HK$10,851 thousand** in 2025, positively impacting comprehensive income[17](index=17&type=chunk) [CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) As of June 30, 2025, the Group's total assets were HK$4,585,521 thousand, slightly lower than HK$4,614,618 thousand at December 31, 2024, maintaining a healthy asset-liability structure Condensed Consolidated Statement of Financial Position Summary (As of June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current assets | 1,495,112 | 1,518,322 | (23,210) | -1.5% | | Current assets | 3,090,409 | 3,096,296 | (5,887) | -0.2% | | Current liabilities | 960,344 | 972,989 | (12,645) | -1.3% | | Non-current liabilities | 190,117 | 185,856 | 4,261 | 2.3% | | Net assets | 3,435,060 | 3,455,773 | (20,713) | -0.6% | | Total equity | 3,435,060 | 3,455,773 | (20,713) | -0.6% | - Inventories increased to **HK$873,994 thousand** (December 31, 2024: HK$784,735 thousand), while prepayments, deposits, and other receivables decreased to **HK$155,781 thousand** (December 31, 2024: HK$210,366 thousand)[19](index=19&type=chunk) - Bank borrowings (due within one year) significantly decreased from HK$48,795 thousand to **HK$25,039 thousand**[19](index=19&type=chunk) [CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CHANGES%20IN%20EQUITY) For the six months ended June 30, 2025, the Group's total equity slightly decreased from HK$3,455,773 thousand at the beginning of the period to HK$3,435,060 thousand Condensed Consolidated Statement of Changes in Equity Summary (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total equity at beginning of period | 3,455,773 | 3,468,666 | | Total comprehensive income for the period | 46,663 | 1,006 | | Dividends recognized as distribution | (67,376) | (36,751) | | Total equity at end of period | 3,435,060 | 3,432,921 | - Retained earnings attributable to owners of the Company decreased from HK$2,290,902 thousand as of January 1, 2025, to **HK$2,254,196 thousand**, primarily due to dividend distribution of HK$67,376 thousand[22](index=22&type=chunk) - Exchange reserve improved from HK$(65,369) thousand as of January 1, 2025, to **HK$(57,407) thousand**, an increase of HK$7,962 thousand[22](index=22&type=chunk) [CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash used in operating activities significantly decreased to HK$731 thousand, while investing activities generated net cash inflow of HK$67,406 thousand Condensed Consolidated Statement of Cash Flows Summary (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (731) | (62,541) | 61,810 | | Net cash generated from/(used in) investing activities | 67,406 | (27,040) | 94,446 | | Net cash used in financing activities | (113,143) | (173,872) | 60,729 | | Net decrease in cash and cash equivalents | (46,468) | (263,453) | 216,985 | | Cash and cash equivalents at end of period | 1,251,535 | 1,114,470 | 137,065 | - Proceeds from land expropriation amounted to **HK$96,791 thousand**, a major contributor to net cash generated from investing activities[23](index=23&type=chunk) - Dividends paid amounted to **HK$67,376 thousand**, whereas no interim dividends were distributed in the prior year[23](index=23&type=chunk) [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=11&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed notes to the condensed consolidated financial statements, explaining the basis of preparation, accounting policies, and specific financial items [1. GENERAL INFORMATION](index=11&type=section&id=1.%20GENERAL%20INFORMATION) The Company is a public limited company incorporated in Hong Kong, with its shares listed on the Main Board of the Hong Kong Stock Exchange - The Company is a public limited company incorporated in Hong Kong, with its issued shares listed on the Main Board of The Stock Exchange of Hong Kong Limited[24](index=24&type=chunk)[28](index=28&type=chunk) - The 2024 annual consolidated financial statements were submitted to the Registrar of Companies, and the independent auditor's report was unqualified[25](index=25&type=chunk)[26](index=26&type=chunk)[28](index=28&type=chunk) [2. BASIS OF PREPARATION](index=11&type=section&id=2.%20BASIS%20OF%20PREPARATION) The interim condensed consolidated financial statements for the six months ended June 30, 2025, are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules - The financial statements are prepared in accordance with the applicable disclosure requirements of Appendix D2 of the Listing Rules of the Stock Exchange and Hong Kong Accounting Standard 34 Interim Financial Reporting[27](index=27&type=chunk)[29](index=29&type=chunk) [3. ACCOUNTING POLICIES](index=12&type=section&id=3.%20ACCOUNTING%20POLICIES) The interim condensed consolidated financial statements are prepared on a historical cost basis, applying the same accounting policies as the 2024 annual consolidated financial statements, except for new HKFRS amendments with no significant impact - The interim condensed consolidated financial statements are prepared on a historical cost basis, using the same accounting policies as those adopted for the preparation of the 2024 annual consolidated financial statements for the year ended December 31, 2024[30](index=30&type=chunk)[33](index=33&type=chunk) - The amendments to Hong Kong Accounting Standard 21 "Lack of Exchangeability" were first applied but had no significant impact on the Group's financial performance and position in the current and prior periods[31](index=31&type=chunk)[32](index=32&type=chunk)[34](index=34&type=chunk) - New Hong Kong Financial Reporting Standards and amendments (e.g., HKFRS 18, HKFRS 19) issued but not yet effective are not expected to have a significant impact on the Group's financial performance and position[32](index=32&type=chunk)[36](index=36&type=chunk) [4. SEASONALITY OF OPERATIONS](index=13&type=section&id=4.%20SEASONALITY%20OF%20OPERATIONS) Due to the seasonal nature of manufacturing and selling dyed fabrics and yarns, revenue and operating profit in the first half of the year are typically lower than in the second half - Due to the seasonal nature of manufacturing and selling dyed fabrics and yarns, revenue and operating profit in the first half of the year are generally expected to be lower than in the second half[37](index=37&type=chunk)[38](index=38&type=chunk) - Sales are lower during January to February, primarily due to reduced supply of dyed fabrics and yarns during the peak holiday season in the People's Republic of China[37](index=37&type=chunk)[38](index=38&type=chunk) [5. SIGNIFICANT EVENTS AND TRANSACTIONS](index=14&type=section&id=5.%20SIGNIFICANT%20EVENTS%20AND%20TRANSACTIONS) For the six months ended June 30, 2024, the Group decided to cease fabric dyeing and finishing production at Jiangyin Fuhui Textile Co., Ltd., retaining only its weaving capacity - For the six months ended June 30, 2024, the Group decided to cease fabric dyeing and finishing production at Jiangyin Fuhui Textile Co., Ltd., retaining only the weaving capacity of its operating fabric factory[40](index=40&type=chunk)[44](index=44&type=chunk) [6. REVENUE AND SEGMENT INFORMATION](index=14&type=section&id=6.%20REVENUE%20AND%20SEGMENT%20INFORMATION) The Group's operating segments are geographically defined, with total revenue of HK$1,937,026 thousand for the six months ended June 30, 2025, primarily from manufacturing and sales of dyed fabrics and yarns - Operating segments are classified by customer location, including Hong Kong, China, Taiwan, Korea, Sri Lanka, Americas, Europe, and other regions[41](index=41&type=chunk)[45](index=45&type=chunk) External Sales by Geographical Region (For the six months ended June 30) | Region | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 243,307 | 357,146 | (113,839) | -31.9% | | China | 700,113 | 729,890 | (29,777) | -4.1% | | Sri Lanka | 386,176 | 456,997 | (70,821) | -15.5% | | Americas | 16,481 | 103,163 | (86,682) | -84.0% | | Europe | 41,438 | 9,233 | 32,205 | 348.8% | | Other Regions | 384,666 | 363,710 | 20,956 | 5.8% | | **Total** | **1,937,026** | **2,219,366** | **(282,340)** | **-12.7%** | Revenue by Product (For the six months ended June 30) | Product | 2025 (HK$ thousand) | 2024 (HK$ thousand) | % of Total Revenue (2025) | | :--- | :--- | :--- | :--- | | Manufacturing and sales of dyed fabrics and yarns | 1,690,012 | 1,893,885 | 87.2% | | Manufacturing and sales of garments | 247,014 | 325,481 | 12.8% | | **Total** | **1,937,026** | **2,219,366** | **100.0%** | [7. FINANCE COSTS](index=16&type=section&id=7.%20FINANCE%20COSTS) For the six months ended June 30, 2025, the Group's finance costs decreased significantly by 34.7% to HK$5,235 thousand, primarily due to reduced bank borrowing costs Finance Costs Analysis (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Bank borrowings | 1,934 | 4,935 | (3,001) | -60.8% | | Lease liabilities | 3,301 | 3,079 | 222 | 7.2% | | **Total** | **5,235** | **8,014** | **(2,779)** | **-34.7%** | [8. INCOME TAX EXPENSE](index=17&type=section&id=8.%20INCOME%20TAX%20EXPENSE) For the six months ended June 30, 2025, the Group's income tax expense decreased by 27.7% to HK$15,609 thousand, with key tax rates including 8.25%/16.5% in Hong Kong, 25% in China, and 30% in Sri Lanka Income Tax Expense Analysis (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Current tax for the period | 15,494 | 22,255 | (6,761) | -30.4% | | (Over)/Under-provision in prior years | (54) | 645 | (699) | -108.4% | | Deferred tax | 169 | (1,310) | 1,479 | -112.9% | | **Total** | **15,609** | **21,590** | **(5,981)** | **-27.7%** | - Hong Kong profits tax rates are **8.25%** (for the first HK$2 million) and **16.5%**, China subsidiaries' tax rate is **25%**, and Sri Lanka subsidiaries' tax rate is **30%**[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) [9. OTHER REVENUE, OTHER GAINS AND LOSSES/PROFIT FOR THE PERIOD](index=18&type=section&id=9.%20OTHER%20REVENUE%2C%20OTHER%20GAINS%20AND%20LOSSES%2FPROFIT%20FOR%20THE%20PERIOD) For the six months ended June 30, 2025, other revenue increased to HK$40,621 thousand, and net other gains and losses were HK$9,288 thousand, driven by higher net exchange gains Other Revenue Analysis (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Amortisation of deferred income | 2,747 | 2,599 | 148 | 5.7% | | Compensation income | 4,141 | 5,600 | (1,459) | -26.1% | | Government grants | 877 | 538 | 339 | 63.0% | | Interest income | 13,763 | 14,843 | (1,080) | -7.3% | | Net rental income from investment properties | 4,206 | 3,826 | 380 | 9.9% | | Others | 14,887 | 8,662 | 6,253 | 72.2% | | **Total** | **40,621** | **36,068** | **4,581** | **12.7%** | Other Gains and Losses Analysis (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net exchange gains | 16,945 | 4,387 | 12,558 | 286.3% | | Gain on disposal/write-off of property, plant and equipment | 1,070 | 3,131 | (2,061) | -65.8% | | Net impairment loss allowance recognized on trade and bills receivables | (8,727) | (4,731) | (3,996) | 84.5% | | **Total** | **9,288** | **2,787** | **6,501** | **233.3%** | - Profit for the period is stated after deducting depreciation of property, plant and equipment of **HK$75,363 thousand** and employee costs of **HK$327,178 thousand**[68](index=68&type=chunk) [10. DIVIDENDS](index=20&type=section&id=10.%20DIVIDENDS) For the six months ended June 30, 2025, the Board decided not to declare an interim dividend, but approved final and special dividends for 2024 totaling HK$67,376 thousand - For the six months ended June 30, 2025, the Board did not propose to declare any interim dividend[71](index=71&type=chunk) Dividends Recognized as Distribution (For the six months ended June 30) | Dividend Type | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | 2024 Final and Special Dividends | 67,376 | 36,751 | 30,625 | 83.3% | - The 2024 final dividend of **1.16 HK cents per share** and special dividend of **4.34 HK cents per share** were approved at the Annual General Meeting held on June 6, 2025[72](index=72&type=chunk) [11. EARNINGS/(LOSS) PER SHARE](index=20&type=section&id=11.%20EARNINGS%2F%28LOSS%29%20PER%20SHARE) For the six months ended June 30, 2025, basic earnings per share significantly improved to 2.5 HK cents from a loss of 0.8 HK cents in the prior year Earnings/(Loss) Per Share Calculation Data (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit/(Loss) for the period attributable to owners of the Company (HK$ thousand) | 30,670 | (9,906) | | Weighted average number of ordinary shares | 1,225,026,960 | 1,225,026,960 | | Basic earnings/(loss) per share (HK cents) | 2.5 | (0.8) | - Diluted earnings/(loss) per share is equal to basic earnings/(loss) per share, as there were no potentially dilutive ordinary shares outstanding during the periods ended June 30, 2025, and 2024[79](index=79&type=chunk)[83](index=83&type=chunk) [12. MOVEMENTS IN PROPERTY, PLANT AND EQUIPMENT](index=21&type=section&id=12.%20MOVEMENTS%20IN%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) For the six months ended June 30, 2025, the Group incurred HK$60,720 thousand in capital expenditure for property, plant and equipment, with no impairment losses recognized - For the six months ended June 30, 2025, the Group incurred expenditure of **HK$60,720 thousand** on property, plant and equipment to expand and upgrade its production facilities[80](index=80&type=chunk)[84](index=84&type=chunk) - As of June 30, 2025, management reviewed the recoverable amounts of related property, plant and equipment and right-of-use assets under cash-generating units, and no impairment losses were identified[81](index=81&type=chunk)[85](index=85&type=chunk) - On June 30, 2024, an impairment loss of **HK$10,767 thousand** was recognized for idle equipment due to further reduction in fabric production capacity at Jiangyin Fuhui's operating fabric factory since February 2024[85](index=85&type=chunk) [13. MOVEMENTS IN RIGHT-OF-USE ASSETS AND LEASE LIABILITIES](index=22&type=section&id=13.%20MOVEMENTS%20IN%20RIGHT-OF-USE%20ASSETS%20AND%20LEASE%20LIABILITIES) As of June 30, 2025, the carrying value of right-of-use assets was HK$200,317 thousand and lease liabilities was HK$145,553 thousand, with new leases and lease modifications impacting these balances Carrying Value of Right-of-Use Assets (As of June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Leased land and buildings | 200,020 | 190,227 | | Equipment and machinery | 297 | 351 | | **Total** | **200,317** | **191,575** | Carrying Value of Lease Liabilities (As of June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Leased land and buildings | 145,247 | 133,512 | | Equipment | 306 | 360 | | **Total** | **145,553** | **133,872** | - For the six months ended June 30, 2025, the Group entered into new lease agreements for plant and office properties, recognizing an increase in right-of-use assets and lease liabilities of **HK$33,294 thousand** each[87](index=87&type=chunk)[89](index=89&type=chunk)[91](index=91&type=chunk) - For the six months ended June 30, 2025, lease liabilities decreased by **HK$6,333 thousand** due to modifications of lease terms, with a corresponding adjustment to right-of-use assets[92](index=92&type=chunk)[94](index=94&type=chunk) [14. INVENTORIES](index=23&type=section&id=14.%20INVENTORIES) As of June 30, 2025, the Group's total inventories increased to HK$873,994 thousand from HK$784,735 thousand at December 31, 2024, mainly due to increases in raw materials and finished goods Inventories Composition (As of June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Spare parts | 22,716 | 24,879 | (2,163) | -8.7% | | Raw materials | 292,910 | 217,545 | 75,365 | 34.6% | | Work-in-progress | 314,297 | 307,211 | 7,086 | 2.3% | | Finished goods | 244,071 | 235,100 | 8,971 | 3.8% | | **Total** | **873,994** | **784,735** | **89,259** | **11.4%** | [15. TRADE AND BILLS RECEIVABLES/PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES](index=24&type=section&id=15.%20TRADE%20AND%20BILLS%20RECEIVABLES%2FPREPAYMENTS%2C%20DEPOSITS%20AND%20OTHER%20RECEIVABLES) As of June 30, 2025, net trade and bills receivables slightly increased to HK$806,542 thousand, and other receivables totaled HK$155,781 thousand, with land expropriation compensation received Trade and Bills Receivables Ageing Analysis (As of June 30) | Ageing | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Within 1 month | 410,857 | 338,956 | 71,901 | 21.2% | | 1 to 2 months | 191,444 | 254,840 | (63,396) | -24.9% | | 2 to 3 months | 132,118 | 103,191 | 28,927 | 28.0% | | Over 3 months | 121,286 | 145,273 | (23,987) | -16.5% | | Total | 855,705 | 842,260 | 13,445 | 1.6% | | Less: Provision for expected credit losses | (49,163) | (40,191) | (8,972) | 22.3% | | **Net** | **806,542** | **802,069** | **4,473** | **0.6%** | - As of June 30, 2025, other receivables comprised recoverable value-added tax of **HK$9,653 thousand** and prepayments, deposits, and other receivables of **HK$146,128 thousand**[98](index=98&type=chunk) - Land expropriation compensation receivable of **HK$96,791 thousand** was received on January 2, 2025, with no significant increase in credit risk for these receivables[100](index=100&type=chunk)[101](index=101&type=chunk) [16. TRADE AND BILLS PAYABLES](index=25&type=section&id=16.%20TRADE%20AND%20BILLS%20PAYABLES) As of June 30, 2025, the Group's total trade and bills payables increased to HK$601,806 thousand from HK$562,544 thousand at December 31, 2024, driven by growth in both trade and bills payables Trade and Bills Payables Composition (As of June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade payables | 500,187 | 494,187 | 6,000 | 1.2% | | Bills payables | 101,619 | 68,357 | 33,262 | 48.7% | | **Total** | **601,806** | **562,544** | **39,262** | **7.0%** | Trade and Bills Payables Ageing Analysis (As of June 30) | Ageing | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Within 1 month | 399,385 | 346,916 | 52,469 | 15.1% | | 1 to 2 months | 101,675 | 122,921 | (21,246) | -17.3% | | 2 to 3 months | 43,619 | 40,917 | 2,702 | 6.6% | | Over 3 months | 57,127 | 51,790 | 5,337 | 10.3% | | **Total** | **601,806** | **562,544** | **39,262** | **7.0%** | [17. OTHER PAYABLES AND ACCRUALS](index=26&type=section&id=17.%20OTHER%20PAYABLES%20AND%20ACCRUALS) As of June 30, 2025, the Group's total other payables and accruals decreased to HK$240,899 thousand from HK$268,491 thousand at December 31, 2024, primarily due to a decrease in accrued expenses Other Payables and Accruals Composition (As of June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other payables | 149,823 | 155,281 | (5,458) | -3.5% | | Accruals | 91,076 | 113,210 | (22,134) | -19.6% | | **Total** | **240,899** | **268,491** | **(27,592)** | **-10.3%** | [18. BANK BORROWINGS](index=26&type=section&id=18.%20BANK%20BORROWINGS) For the six months ended June 30, 2025, the Group's bank borrowings decreased to HK$25,039 thousand, with an average effective annual interest rate of 3.67%, and all covenants were complied with - For the six months ended June 30, 2025, the Group obtained new bank borrowings of **HK$76,672 thousand** and repaid **HK$100,433 thousand**[109](index=109&type=chunk) - Total bank borrowings decreased to **HK$25,039 thousand** (December 31, 2024: HK$48,795 thousand), primarily consisting of floating and fixed-rate borrowings[19](index=19&type=chunk)[110](index=110&type=chunk) - The average effective annual interest rate for bank borrowings was **3.67%** (December 31, 2024: 6.24%), and all bank borrowings are unsecured and repayable within one year[110](index=110&type=chunk) - The Group complied with all covenant ratios during the six months ended June 30, 2025, and the year ended December 31, 2024[111](index=111&type=chunk)[112](index=112&type=chunk)[114](index=114&type=chunk) [19. SHARE CAPITAL](index=27&type=section&id=19.%20SHARE%20CAPITAL) As of June 30, 2025, the Company's issued and fully paid ordinary shares remained unchanged at 1,225,026,960 shares, with share capital of HK$889,810 thousand Share Capital Information (As of June 30) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Number of issued and fully paid ordinary shares | 1,225,026,960 | 1,225,026,960 | | Share capital (HK$ thousand) | 889,810 | 889,810 | - In accordance with Section 135 of the Hong Kong Companies Ordinance (Chapter 622), the Company's ordinary shares have no par value[116](index=116&type=chunk) [20. CAPITAL COMMITMENTS](index=27&type=section&id=20.%20CAPITAL%20COMMITMENTS) As of June 30, 2025, the Group's contracted but unprovided capital expenditure for property, plant and equipment increased to HK$36,504 thousand Capital Commitments (As of June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Contracted but unprovided capital expenditure (purchase of property, plant and equipment) | 36,504 | 29,538 | 6,966 | 23.6% | [21. FINANCIAL INSTRUMENTS](index=28&type=section&id=21.%20FINANCIAL%20INSTRUMENTS) The Group's financial instruments, including cash, receivables, payables, and bank borrowings, have carrying values that do not materially differ from their fair values due to their short-term nature - Financial instruments not measured at fair value include cash and cash equivalents, restricted bank deposits, trade and bills receivables, deposits, other receivables, trade and bills payables, other payables and accruals, amounts due to non-controlling shareholders, amounts due to an associate, and bank borrowings[117](index=117&type=chunk)[120](index=120&type=chunk) - Due to their short-term nature, the carrying amounts of these financial instruments approximate their fair values, with no material differences[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) [22. RELATED PARTY DISCLOSURES](index=28&type=section&id=22.%20RELATED%20PARTY%20DISCLOSURES) The Group has various transactions and balances with related parties, including amounts due to non-controlling shareholders and an associate, and sales/purchases with associates and controlling shareholders Related Party Balances (As of June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Amounts due to non-controlling shareholders | 23,040 | 23,040 | | Amounts due to an associate | 7,334 | 6,397 | Related Party Transactions (For the six months ended June 30) | Related Party | Relationship | Nature of Transaction | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Dongguan Xinrun Water Co., Ltd. | Associate | Sewage treatment fees | 12,384 | 15,990 | | FM Group | Significant influence over non-wholly owned subsidiary | Sales of fabrics, grey yarns, fibers and garment accessories | 166,239 | 180,329 | | AH Group | Significant influence over non-wholly owned subsidiary | Sales of fabrics, grey yarns, fibers and garment accessories | 139,474 | 145,937 | | COFCO Group | Controlling shareholder | Purchase of grey yarns, cotton and other raw materials, garments, and food and oil products | 3,179 | 5,182 | - As of June 30, 2025, **HK$155,296 thousand** (December 31, 2024: HK$142,452 thousand) included in bank balances and cash was placed with COFCO Finance, a fellow subsidiary of the Group[134](index=134&type=chunk)[135](index=135&type=chunk) [BUSINESS REVIEW](index=32&type=section&id=BUSINESS%20REVIEW) This section provides an overview of the Group's business performance, strategies, and key developments during the reporting period [Overall Business Environment and Strategy](index=32&type=section&id=Overall%20Business%20Environment%20and%20Strategy) In 1H2025, the Group faced severe challenges from geopolitical tensions, global economic downturn, rising tariffs, and supply chain shifts, responding with strategies to enhance customer management, reduce costs, and promote intelligent automation - Faced challenges including geopolitical tensions, increased global economic downturn risks, generally rising tariff levels, increased uncertainty in the trade environment, and accelerated diversification and relocation of international textile and apparel supply chain procurement and production from China[137](index=137&type=chunk)[141](index=141&type=chunk) - Implemented a series of strategies and measures, including strengthening customer management, reducing procurement costs, deepening lean management and total quality management, accelerating intelligent and automated construction, and implementing strict cost control measures[138](index=138&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - Achieved operating profit before income tax expense in the first half of the year; despite external difficulties, the Group remains optimistic about the industry outlook and will actively respond[138](index=138&type=chunk)[141](index=141&type=chunk) [Financial Performance Highlights](index=32&type=section&id=Financial%20Performance%20Highlights) Despite a 12.7% decrease in total revenue to HK$1,937,026 thousand in 1H2025, profit attributable to owners of the Company significantly improved from a loss of HK$9,906 thousand to a profit of HK$30,670 thousand Financial Performance Highlights (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 1,937,026 | 2,219,366 | (282,340) | -12.7% | | Profit/(Loss) attributable to owners of the Company | 30,670 | (9,906) | 40,576 | N/A | | Profit before income tax expense | 51,421 | 25,833 | 25,588 | 99.1% | | Basic earnings/(loss) per share (HK cents) | 2.5 | (0.8) | 3.3 | 412.5% | | Total comprehensive income (attributable to owners of the Company) | 38,632 | (12,498) | 51,130 | 409.1% | - Cost control was effective, with administrative expenses decreasing by **2.4%** to HK$192,268 thousand, finance costs significantly decreasing by **34.7%** to HK$5,235 thousand, and cost of sales decreasing by **13.4%** to HK$1,709,585 thousand[145](index=145&type=chunk)[149](index=149&type=chunk) - Gross profit margin increased from **11.0%** in the same period of 2024 to **11.7%** in 2025, with gross profit reaching HK$227,441 thousand[145](index=145&type=chunk)[149](index=149&type=chunk) [Production and Sales of Dyed Fabrics and Yarns](index=34&type=section&id=Production%20and%20Sales%20of%20Dyed%20Fabrics%20and%20Yarns) In 1H2025, manufacturing and sales of dyed fabrics and yarns remained the Group's core business, contributing approximately HK$1,690,012 thousand, or 87.2% of total revenue - Manufacturing and sales of dyed fabrics and yarns is the Group's core business, generating approximately **HK$1,690,012 thousand** in revenue[151](index=151&type=chunk)[154](index=154&type=chunk) - This business accounted for **87.2%** of the Group's total revenue[151](index=151&type=chunk)[154](index=154&type=chunk) [Production and Sales of Garments](index=34&type=section&id=Production%20and%20Sales%20of%20Garments) In 1H2025, the garment manufacturing and sales business generated approximately HK$247,014 thousand in revenue, accounting for 12.8% of the Group's total revenue - In 1H2025, revenue from garment manufacturing and sales was approximately **HK$247,014 thousand**[152](index=152&type=chunk)[155](index=155&type=chunk) - This business accounted for **12.8%** of the Group's total revenue[152](index=152&type=chunk)[155](index=155&type=chunk) [Dividend](index=34&type=section&id=Dividend) The Board decided not to declare an interim dividend for 1H2025, but anticipates declaring a final dividend for the full year 2025, maintaining the payout ratio given strong cash flow and expected profitability - The Board decided and announced not to declare any interim dividend for the six months ended June 30, 2025[153](index=153&type=chunk)[156](index=156&type=chunk) - A final dividend for the twelve months ended December 31, 2025, is expected to be declared, maintaining the payout ratio as much as possible, given the Group's strong cash flow and anticipated profitability in the second half[153](index=153&type=chunk)[156](index=156&type=chunk) - The Group has maintained final dividend payouts in recent years, except for 2022, with payout ratios ranging from approximately **71.4% to 100%**[153](index=153&type=chunk)[156](index=156&type=chunk) [Awards and Certifications](index=35&type=section&id=Awards%20and%20Certifications) In 1H2025, several Group subsidiaries received various industry certifications and awards, demonstrating commitment to sustainability, quality, and environmental protection - Fountain Set Limited obtained Global Recycled Standard (GRS 4.0), Organic Content Standard (OCS 3.0), Global Organic Textile Standard (GOTS 6.0), and the U.S. Cotton Trust Protocol membership certificate[158](index=158&type=chunk) - Ocean Lanka (Private) Limited received the Presidential Export Award – Merit Award in the Knitted Fabric category[158](index=158&type=chunk) - Dongguan Shatian Lihai Textile Printing and Dyeing Co., Ltd. obtained multiple certifications, including GOTS 7.0, OCS 3.0, GRS 4.0, Oeko-Tex Standard 100, Higg Index FEM, and awards such as "Zero-Waste Factory" and "Clean Production Enterprise"[160](index=160&type=chunk)[162](index=162&type=chunk) - Yancheng Fuhui Textile Co., Ltd. obtained certifications including GRS 4.0, GOTS 6.0, OCS 3.0, ISO14001 Environmental Management System, ISO50001 Energy Management System, and ISO90001 Quality Management System[162](index=162&type=chunk)[164](index=164&type=chunk) [OUTLOOK](index=39&type=section&id=OUTLOOK) This section outlines the Group's future prospects and strategic initiatives in response to the evolving economic and industry landscape [Future Outlook and Strategy](index=39&type=section&id=Future%20Outlook%20and%20Strategy) The macroeconomic and textile industry outlook remains challenging, with ongoing global economic uncertainty and supply chain restructuring, yet the Group maintains cautious optimism for the second half of the year - The macroeconomic and textile and apparel industry outlook remains severe, with continued global economic growth uncertainty, complex trade conditions due to high tariffs imposed by the US, and accelerated restructuring of the global textile and apparel supply chain[167](index=167&type=chunk)[170](index=170&type=chunk) - Despite significant operational challenges in the second half and beyond, the Group maintains a relatively cautious optimistic outlook for the second half, with steady improvements in operational management, optimized capacity layout, and continuous effectiveness of lean management and quality cost control[167](index=167&type=chunk)[170](index=170&type=chunk) - In the future, the Group will continue to drive enterprise development through technological innovation, expand markets, increase operating scale, systematically promote international operations, accelerate the transformation of information technology, automation, intelligence, and green production technologies, strengthen lean management, improve product quality, streamline organizational structure, and strictly control costs and expenses[167](index=167&type=chunk)[170](index=170&type=chunk) [OUR APPRECIATION](index=39&type=section&id=OUR%20APPRECIATION) This section expresses gratitude to all stakeholders for their continued support and contributions to the Group [Gratitude to Stakeholders](index=39&type=section&id=Gratitude%20to%20Stakeholders) The Group extends sincere thanks to all shareholders, customers, business partners, suppliers, and employees for their continuous support, dedication, commitment, and contributions during a period of increased economic uncertainty - Expresses gratitude to all shareholders, customers, business partners, and suppliers for their continued support amidst increasing economic uncertainty[169](index=169&type=chunk)[172](index=172&type=chunk) - Appreciates the dedication, commitment, and contributions of all employees to the Group's success[169](index=169&type=chunk)[172](index=172&type=chunk) [FINANCIAL REVIEW](index=40&type=section&id=FINANCIAL%20REVIEW) This section provides a detailed analysis of the Group's financial performance and position, including key operating and financial indicators [Key Operating and Financial Indicators](index=40&type=section&id=Key%20Operating%20and%20Financial%20Indicators) In 1H2025, key operating and financial indicators show improved profitability despite decreased revenue, with higher EBITDA and EBITDA margin, and stable liquidity, though inventory turnover worsened Key Operating and Financial Indicators (For the six months ended June 30) | Indicator | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue (HK$ thousand) | 1,937,026 | 2,219,366 | -12.7% | | Gross profit (HK$ thousand) | 227,441 | 244,814 | -7.1% | | EBITDA (HK$ thousand) | 148,556 | 125,557 | 18.3% | | Profit for the period (HK$ thousand) | 35,812 | 4,243 | 744.0% | | Profit/(Loss) attributable to owners of the Company (HK$ thousand) | 30,670 | (9,906) | N/A | | Basic earnings/(loss) per share (HK cents) | 2.5 | (0.8) | 412.5% | | Gross profit margin (%) | 11.7% | 11.0% | +0.7pp | | EBITDA margin (%) | 7.7% | 5.7% | +2.0pp | | Distribution and selling expenses as % of revenue | 1.5% | 2.4% | -0.9pp | | Administrative expenses as % of revenue | 9.9% | 8.9% | +1.0pp | | Finance costs as % of revenue | 0.3% | 0.4% | -0.1pp | | Inventory turnover (days) | 93 | 79 | +14 days | | Trade and bills receivables turnover (days) | 75 | 73 | +2 days | | Trade and bills payables turnover (days) | 64 | 62 | +2 days | | Current ratio | 3.2 | 3.2 | 0.0 | | Net debt/EBITDA ratio (annualized) | (8.3) | (4.6) | N/A | | Total liabilities/Equity attributable to owners of the Company | 0.4 | 0.4 | 0.0 | [Revenue](index=41&type=section&id=Revenue) In 1H2025, the Group's total revenue was HK$1,937,026 thousand, a 12.7% decrease from the prior year, with dyed fabrics and yarns contributing 87.2% and garments 12.8% - The Group's revenue for the six months ended June 30, 2025, was approximately **HK$1,937,026 thousand**, a **12.7% decrease** from the prior year[179](index=179&type=chunk)[181](index=181&type=chunk) Revenue by Business Segment (For the six months ended June 30) | Business Segment | 2025 (HK$ thousand) | 2024 (HK$ thousand) | 2025 % of Total | 2024 % of Total | | :--- | :--- | :--- | :--- | :--- | | Manufacturing and sales of dyed fabrics and yarns | 1,690,012 | 1,893,885 | 87.2% | 85.3% | | Manufacturing and sales of garments | 247,014 | 325,481 | 12.8% | 14.7% | | **Total** | **1,937,026** | **2,219,366** | **100.0%** | **100.0%** | [Cost of Sales and Gross Profit](index=41&type=section&id=Cost%20of%20Sales%20and%20Gross%20Profit) In 1H2025, the Group's cost of sales was approximately HK$1,709,585 thousand, with the overall gross profit margin improving to 11.7% due to a greater decrease in production costs than in revenue - The Group's overall cost of sales for the six months ended June 30, 2025, was approximately **HK$1,709,585 thousand**[185](index=185&type=chunk)[189](index=189&type=chunk) - The overall gross profit margin was **11.7%** (six months ended June 30, 2024: 11.0%)[185](index=185&type=chunk)[189](index=189&type=chunk) - The improvement in gross profit margin was primarily due to a greater decrease in production costs than in revenue, despite a **13.6% decrease** in fabric sales volume[186](index=186&type=chunk)[189](index=189&type=chunk) [Distribution and Selling Expenses](index=41&type=section&id=Distribution%20and%20Selling%20Expenses) In 1H2025, the Group's distribution and selling expenses significantly decreased to approximately HK$28,904 thousand, representing 1.5% of total revenue Distribution and Selling Expenses (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Distribution and selling expenses | 28,904 | 53,494 | (24,590) | -46.0% | | As % of total revenue | 1.5% | 2.4% | -0.9pp | N/A | [Administrative Expenses](index=42&type=section&id=Administrative%20Expenses) In 1H2025, the Group's administrative expenses slightly decreased to approximately HK$192,268 thousand, representing 9.9% of total revenue Administrative Expenses (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Administrative expenses | 192,268 | 197,065 | (4,797) | -2.4% | | As % of total revenue | 9.9% | 8.9% | +1.0pp | N/A | [Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA)](index=42&type=section&id=Earnings%20before%20Interest%2C%20Tax%2C%20Depreciation%20and%20Amortisation%20%28EBITDA%29) In 1H2025, the Group's EBITDA increased by 18.3% to approximately HK$148,556 thousand, with the EBITDA margin improving from 5.7% to 7.7% EBITDA (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | EBITDA | 148,556 | 125,557 | 22,999 | 18.3% | | EBITDA margin | 7.7% | 5.7% | +2.0pp | N/A | [Finance Costs](index=42&type=section&id=Finance%20Costs) In 1H2025, the Group's finance costs decreased by 34.7% to approximately HK$5,235 thousand, representing 0.3% of total revenue Finance Costs (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Finance costs | 5,235 | 8,014 | (2,779) | -34.7% | | As % of total revenue | 0.3% | 0.4% | -0.1pp | N/A | [Capital Expenditure](index=42&type=section&id=Capital%20Expenditure) In 1H2025, the Group's capital expenditure on property, plant and equipment slightly increased to approximately HK$60,720 thousand, with contracted capital commitments of HK$36,504 thousand Capital Expenditure and Commitments (As of June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Capital expenditure on property, plant and equipment | 60,720 | 59,342 | 1,378 | 2.3% | | Contracted capital commitments (as of period end) | 36,504 | 29,538 | 6,966 | 23.6% | [Income Tax Expense](index=42&type=section&id=Income%20Tax%20Expense) In 1H2025, the Group's income tax expense decreased by 27.7% to approximately HK$15,609 thousand Income Tax Expense (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Income tax expense | 15,609 | 21,590 | (5,981) | -27.7% | [Liquidity and Financial Resources](index=43&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group demonstrated strong liquidity and a healthy financial position with net assets of HK$3,435,060 thousand, reduced bank borrowings, and a current ratio of 3.2 Financial Position Summary (As of June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total assets | 4,585,521 | 4,614,618 | (29,097) | -0.6% | | Total liabilities | 1,150,461 | 1,158,845 | (8,384) | -0.7% | | Net assets | 3,435,060 | 3,455,773 | (20,713) | -0.6% | | Bank borrowings | 25,039 | 48,795 | (23,756) | -48.7% | | Bank balances and cash (including short-term bank deposits) | 1,251,535 | 1,295,475 | (43,940) | -3.4% | Key Financial Covenant Ratios (As of June 30) | Ratio | 2025 | 2024 | | :--- | :--- | :--- | | Consolidated net tangible assets (HK$ thousand) | 3,094,598 | 3,118,670 | | Consolidated total bank indebtedness to consolidated net tangible assets ratio | 0.0 | 0.0 | | Consolidated EBITDA to consolidated interest expense ratio | 28.4 | 20.9 | | Consolidated current assets to consolidated current liabilities ratio | 3.2 | 3.2 | - The Group complied with all covenant ratios and undertakings during the period ended June 30, 2025, and the year ended December 31, 2024[206](index=206&type=chunk)[210](index=210&type=chunk) [Risk Management](index=44&type=section&id=Risk%20Management) The Group employs strict and prudent risk management policies to address foreign exchange and interest rate risks, closely monitoring currency fluctuations and interest rate movements - The Group addresses foreign exchange and interest rate risks with strict and prudent risk management policies[207](index=207&type=chunk)[211](index=211&type=chunk) - The Group's sales and raw material purchases are primarily denominated in HKD, USD, and RMB, with close monitoring of USD and RMB exchange rate movements and cautious approaches to mitigate foreign exchange risk[208](index=208&type=chunk)[211](index=211&type=chunk) - The Group's bank borrowings are denominated in HKD and RMB, with interest primarily calculated at floating and fixed rates, averaging an effective annual interest rate of **3.67%** (December 31, 2024: 6.24%), and will continue to monitor market interest rate fluctuations and implement appropriate measures to mitigate interest rate risk[209](index=209&type=chunk)[211](index=211&type=chunk) [EMPLOYEES AND REMUNERATION POLICIES](index=45&type=section&id=EMPLOYEES%20AND%20REMUNERATION%20POLICIES) This section details the Group's employee information and remuneration policies, emphasizing performance-based compensation and continuous skill development [Employee Information and Policies](index=45&type=section&id=Employee%20Information%20and%20Policies) As of June 30, 2025, the Group had approximately 5,600 full-time employees, with remuneration policies based on individual performance and regional trends, supported by regular training and education subsidies - As of June 30, 2025, the number of full-time employees was approximately **5,600** (June 30, 2024: approximately 5,700)[212](index=212&type=chunk)[214](index=214&type=chunk) - The Group's remuneration policy is based on individual employee performance and regional salary trends, reviewed regularly, with discretionary bonuses awarded based on profitability[212](index=212&type=chunk)[214](index=214&type=chunk) - The Group provides regular training courses and subsidies for further education programs to enhance employees' production, sales, and management skills[213](index=213&type=chunk)[215](index=215&type=chunk) [UPDATE ON DIRECTORS' INFORMATION UNDER RULE 13.51B(1) OF THE LISTING RULES](index=45&type=section&id=UPDATE%20ON%20THE%20DIRECTORS%27%20INFORMATION%20UNDER%20RULE%2013.51B%281%29%20OF%20THE%20LISTING%20RULES) This section provides updates on changes to the Board of Directors' information as required by Listing Rule 13.51B(1) [Changes in Directors' Information](index=45&type=section&id=Changes%20in%20Directors%27%20Information) Since the date of the 2024 Annual Report, Mr. Lam Wai Shing resigned as an independent non-executive director, while Dr. Lam Lin, Dr. Yan Zhenming, and Dr. Li Gang were appointed to various board and committee roles - Mr. Lam Wai Shing resigned as an independent non-executive director, a member of the Audit Committee, and a member of the Remuneration Committee, effective June 7, 2025[216](index=216&type=chunk) - Dr. Lam Lin was appointed as an independent non-executive director, effective June 7, 2025[216](index=216&type=chunk) - Dr. Yan Zhenming was appointed as a member of the Audit Committee, and Dr. Li Gang was appointed as a member of the Remuneration Committee, both effective June 7, 2025[216](index=216&type=chunk) [DIRECTORS' INTERESTS IN SECURITIES](index=46&type=section&id=DIRECTORS%27%20INTERESTS%20IN%20SECURITIES) This section discloses the long positions in the Company's shares held by directors and chief executives as of June 30, 2025 [Directors' Long Positions in Shares](index=46&type=section&id=Directors%27%20Long%20Positions%20in%20Shares) As of June 30, 2025, Dr. Yan Zhenming held 8,380,000 shares, and Mr. Qiu Hengda and his spouse collectively held 2,888,000 shares, with no other directors holding disclosable interests Directors' Long Positions in Shares (As of June 30) | Director Name | Capacity | Nature of Interest | Number of Shares Held | Total | Approximate % of Issued Shares | | :--- | :--- | :--- | :--- | :--- | :--- | | Dr. Yan Zhenming | Beneficial owner | Personal interest | 8,380,000 | 8,380,000 | 0.68% | | Mr. Qiu Hengda | Beneficial owner | Personal interest | 2,508,000 | 2,888,000 | 0.24% | | Spouse of Mr. Qiu Hengda | Spouse's interest | Family interest | 380,000 | | | - Save as disclosed above, as of June 30, 2025, none of the Company's directors and chief executives had any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations[220](index=220&type=chunk)[221](index=221&type=chunk) [SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTERESTS](index=47&type=section&id=SUBSTANTIAL%20SHAREHOLDERS%27%20AND%20OTHER%20PERSONS%27%20INTERESTS) This section details the long positions in the Company's shares held by substantial shareholders and other persons as of June 30, 2025 [Substantial Shareholders' Long Positions in Shares](index=47&type=section&id=Substantial%20Shareholders%27%20Long%20Positions%20in%20Shares) As of June 30, 2025, substantial shareholders included COFCO Group (39.60%), China National Textiles Group (39.60%), COFCO Yingfeng Investment Management (33.39%), Huafu Holdings and its associates (17.30%), and Mr. Xia Songfang and his spouse (8.24%) Substantial Shareholders' Long Positions in Shares (As of June 30) | Substantial Shareholder Name/Entity | Capacity | Nature of Interest | Number of Shares Held | Total | Approximate % of Issued Shares | | :--- | :--- | :--- | :--- | :--- | :--- | | COFCO Corporation | Interest of controlled corporation | Corporate interest | 485,092,000 | 485,092,000 | 39.60% | | China National Textiles Group Co., Ltd. | Interest of controlled corporation | Corporate interest | 485,092,000 | 485,092,000 | 39.60% | | COFCO Yingfeng Investment Management Co., Ltd. | Beneficial owner | Personal interest | 409,036,000 | 409,036,000 | 33.39% | | Mr. Sun Weiting | Interest of controlled corporation | Corporate interest | 211,966,000 | 211,966,000 | 17.30% | | Ms. Chen Lingfen | Interest of controlled corporation | Corporate interest | 211,966,000 | 211,966,000 | 17.30% | | Huafu Holdings Co., Ltd. | Interest of controlled corporation | Corporate interest | 211,966,000 | 211,966,000 | 17.30% | | Huafu Fashion Co., Ltd. | Interest of controlled corporation | Corporate interest | 211,966,000 | 211,966,000 | 17.30% | | Mr. Xia Songfang | Beneficial owner | Personal interest | 100,996,948 | 100,996,948 | 8.24% | | Ms. Deng Juanmei | Spouse's interest | Family interest | 100,996,948 | 100,996,948 | 8.24% | - COFCO Corporation and China National Textiles Group Co., Ltd. are each deemed to be interested in the shares held by COFCO Yingfeng Investment Management Co., Ltd[229](index=229&type=chunk) - Huafu Holdings Co., Ltd., Huafu Fashion Co., Ltd., Mr. Sun Weiting, and Ms. Chen Lingfen are all deemed to be interested in the shares held by Hong Kong Tiancheng Trading Co., Ltd[229](index=229&type=chunk) [PURCHASE, SALE AND REDEMPTION OF THE COMPANY'S LISTED SECURITIES](index=48&type=section&id=PURCHASE%2C%20SALE%20AND%20REDEMPTION%20OF%20THE%20COMPANY%27S%20LISTED%20SECURITIES) This section confirms that there were no purchases, sales, or redemptions of the Company's listed securities during the reporting period [Securities Transactions](index=48&type=section&id=Securities%20Transactions) During 1H2025, neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any listed securities - During 1H2025, the Company did not redeem its listed securities, nor did the Company or its subsidiaries purchase or sell such securities[226](index=226&type=chunk)[228](index=228&type=chunk) [CORPORATE GOVERNANCE CODE](index=49&type=section&id=CORPORATE%20GOVERNANCE%20CODE) This section outlines the Company's compliance with the Corporate Governance Code, noting an exception regarding the separation of Chairman and CEO roles [Compliance with Corporate Governance Code](index=49&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) In 1H2025, the Company complied with all mandatory disclosure requirements and code provisions of the Listing Rules' Corporate Governance Code, except for provision C.2.1 regarding the separation of Chairman and CEO roles - From January 1, 2025, to June 30, 2025, the Company applied and complied with the principles and all mandatory disclosure requirements and code provisions of the Corporate Governance Code set out in Appendix 14 of the Listing Rules, except for code provision C.2.1[230](index=230&type=chunk)[235](index=235&type=chunk) - Mr. Liu Xianfu, Chairman and Executive Director, also serves as the Company's Chief Executive Officer; the Board believes that having the same individual hold both positions allows the Group to more efficiently plan overall strategies and achieve budget targets[230](index=230&type=chunk)[235](index=235&type=chunk) - The Board, composed of experienced, professional, and high-quality individuals (including a sufficient number of independent non-executive directors), believes there is adequate capability to ensure a balance of functions and powers under this arrangement[231](index=231&type=chunk)[236](index=236&type=chunk) [MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS](index=49&type=section&id=MODEL%20CODE%20FOR%20SECURITIES%20TRANSACTIONS%20BY%20DIRECTORS) This section confirms the Company's adoption and directors' compliance with the Model Code for Securities Transactions by Directors of Listed Issuers [Compliance with Model Code](index=49&type=section&id=Compliance%20with%20Model%20Code) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix 10 of the Listing Rules, as its code of conduct for directors' securities transactions[233](index=233&type=chunk)[237](index=237&type=chunk) - Following specific inquiries by the Company to all directors, all directors confirmed that they had complied with the standards required by the Model Code during the period[233](index=233&type=chunk)[237](index=237&type=chunk) [AUDIT COMMITTEE'S REVIEW](index=49&type=section&id=AUDIT%20COMMITTEE%27S%20REVIEW) This section summarizes the Audit Committee's review of the Group's unaudited interim results and its role in financial reporting and risk management [Audit Committee Review Summary](index=49&type=section&id=Audit%20Committee%20Review%20Summary) The Audit Committee reviewed the Group's 1H2025 unaudited consolidated interim results and this interim report, overseeing financial reporting, risk management, and internal control systems - The Audit Committee has reviewed the Group's 1H2025 unaudited consolidated interim results and this 2025 interim report[234](index=234&type=chunk)[238](index=238&type=chunk) - The Audit Committee comprises one non-executive director and two independent non-executive directors[234](index=234&type=chunk)[238](index=238&type=chunk) - The Audit Committee is responsible for reviewing and monitoring the Company's financial reporting procedures, risk management, and internal control systems[234](index=234&type=chunk)[238](index=238&type=chunk) [CORPORATE INFORMATION](index=50&type=section&id=CORPORATE%20INFORMATION) This section provides essential corporate details, including the Board of Directors, registered office, principal bankers, legal advisors, and independent auditor [Company Details](index=50&type=section&id=Company%20Details) This section provides basic company information, including honorary chairman, board members (executive, non-executive, independent non-executive directors), company secretary, registered office, company website, principal bankers, solicitors, independent auditor, and share registrar - Board members include Executive Directors Liu Xianfu (Chairman and CEO), Li Gang, Qiu Hengda, Yin Jian, Zhang Zheng; Non-executive Directors Yan Zhenming (Non-executive Vice Chairman), Zhou Jing; Independent Non-executive Directors Wu Guodong, Ying Wei, Wang Ganzhi, Lam Lin[239](index=239&type=chunk)[241](index=241&type=chunk) - The Company's registered office and principal place of business are located at 6/F, Block A, Eastern Sea Industrial Building, 29-39 Kwai Cheong Road, Kwai Chung, New Territories, Hong Kong[240](index=240&type=chunk)[241](index=241&type=chunk) - Principal bankers include Bank of China (Hong Kong) Limited, The Hongkong and Shanghai Banking Corporation Limited, Hang Seng Bank Limited, etc. The independent auditor is Shinewing (HK) CPA Limited[240](index=240&type=chunk)[242](index=242&type=chunk) [SHAREHOLDER INFORMATION](index=51&type=section&id=SHAREHOLDER%20INFORMATION) This section provides information relevant to shareholders, including listing details, share trading units, and the financial calendar [Shareholder Details and Calendar](index=51&type=section&id=Shareholder%20Details%20and%20Calendar) This section provides shareholder-related information, including the Company's listing on the Main Board of the Hong Kong Stock Exchange (stock code 420), trading unit of 2,000 shares, and 1,225,026,960 issued shares as of June 30, 2025 - The Company has been listed on the Main Board of The Stock Exchange of Hong Kong Limited since April 20, 1988, with stock code **420**[243](index=243&type=chunk)[245](index=245&type=chunk) - As of June 30, 2025, the number of issued shares was **1,225,026,960**, with a trading unit of **2,000 shares**[243](index=243&type=chunk)[245](index=245&type=chunk) - The 2025 interim results were announced on August 21, 2025, and the 2025 annual results are expected to be announced in late March 2026[244](index=244&type=chunk)[246](index=246&type=chunk)

Kingland Group Holdings Limited 景 聯集團控股有限公司 (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立的有限公司) Corporate Information 公司資料 Stock Code股份代號：1751 BOARD OF DIRECTORS 2025 INTERIM REPORT 中期報告 Contents 目錄 | Corporate Information | 公司資料 | 2 | | --- | --- | --- | | Financial Highlight | 財務摘要 | 4 | | Condensed Consolidated Statement of Profit or | 簡明綜合損益及 | 5 | | Loss and Other Comprehensive Income | 其他全面收益表 | | | Condensed Consolidated Statement of | 簡明綜合財務狀況表 | 6 | | Financial Position | | ...

Revenue and Profitability - Total revenue for the first half of 2025 reached RMB 98.53 billion, a year-on-year increase of 14.1%[8] - Revenue from external customers amounted to RMB 66.1 billion, growing by 10.2% and accounting for 67.1% of total revenue[11] - Non-IFRS profit for the period was RMB 3.34 billion, reflecting a 7.1% increase year-on-year[8] - Integrated supply chain customer revenue reached RMB 50.1 billion, up 19.9% year-on-year, with external integrated supply chain customer revenue at RMB 17.6 billion, increasing by 14.7%[12] - Revenue from other customers, including express and freight services, reached RMB 48.4 billion in the first half of 2025, representing a year-on-year growth of 8.7%[22] - The company reported a pre-tax profit of RMB 3,298,755 thousand for the six months ended June 30, 2025, compared to RMB 2,889,199 thousand in the previous year[44] - Net profit for the six months ended June 30, 2025, was RMB 3 billion, up from RMB 2.6 billion in the same period of 2024[58] - Gross profit and gross margin for the six months ended June 30, 2025, were RMB 8.9 billion and 9.0%, respectively, compared to RMB 8.5 billion and 9.8% in 2024[54] Customer and Market Growth - The number of external integrated supply chain customers grew to 73,713, a 14.5% increase compared to the previous year[12] - The average revenue per external integrated supply chain customer was RMB 239,000[12] - The company operates over 1,600 warehouses and more than 19,000 delivery stations, employing over 660,000 self-operated staff, including full-time delivery riders[15] - Customer satisfaction for express services remains at the top tier of the industry, according to statistics from the State Post Bureau[16] - The company has enhanced its rural delivery network to support rural revitalization strategies by increasing service points and expanding delivery coverage[34] Technological and Operational Enhancements - The company continues to enhance its technological capabilities and optimize network layout to improve resource efficiency and profitability[11] - The company continues to invest in technology, employing over 4,700 R&D personnel to integrate automation and AI into logistics operations[15] - The logistics technology segment focuses on innovation, with over 5,000 authorized patents and software, including more than 3,000 related to automation and unmanned technology as of June 30, 2025[28] - The company has strengthened its logistics infrastructure, enhancing service capabilities and market competitiveness through investments in air and land transportation[15] Financial Position and Cash Flow - As of June 30, 2025, the total cash resources of the company amounted to RMB 44.3 billion[70] - The net cash inflow from operating activities for the six months ended June 30, 2025, was RMB 6,568,722 thousand, compared to RMB 7,382,334 thousand in 2024, indicating a decrease of approximately 11%[71][72] - The net cash used in investing activities for the six months ended June 30, 2025, was RMB 7,324,796 thousand, significantly higher than RMB 709,497 thousand in the same period of 2024[71][73] - The net cash used in financing activities for the six months ended June 30, 2025, was RMB 7,759,491 thousand, compared to RMB 5,995,724 thousand in 2024, reflecting an increase of approximately 29.4%[71][75] - The company's debt-to-equity ratio as of June 30, 2025, was approximately 11.1%[76] Shareholder and Equity Information - The total number of shares issued as of June 30, 2025, is 6,648,081,772[90] - The company has implemented pre-IPO employee stock incentive plans and post-IPO share option and reward plans[84] - Liu Qiangdong holds 345,605,330 shares, representing 12.1% of total voting rights in JD.com, with 72.2% of voting rights through controlled entities[95] - The total number of unexercised stock options granted under the pre-IPO employee stock incentive plan is 93,636,701 shares, with 5,691,130 shares exercised during the reporting period[103] Acquisitions and Investments - The company completed the first phase of the acquisition of 36.43% equity in KuaYue Express on June 11, 2025, for a total consideration of up to RMB 6,484 million[77] - The company acquired property and equipment totaling RMB 3,113.7 million, compared to RMB 2,224.2 million in the same period last year[166] - The company acquired an additional 6.62% equity interest in Deppon Logistics for a cash consideration of RMB 841.7 million during the reporting period[177] Governance and Compliance - The company remains committed to maintaining high standards of corporate governance and has complied with all applicable code provisions during the reporting period[122] - The company has established an audit committee to monitor risk management policies and ensure effective internal control systems[125] Other Financial Metrics - Basic earnings per share increased to RMB 0.41 from RMB 0.36, reflecting a growth of 13.9%[138] - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2025[127] - Total comprehensive income for the period was RMB 2,795,088 thousand, up from RMB 2,680,281 thousand in the previous year, reflecting a growth of 4.3%[140]

Interim Report 中期報告 2025 CONSOLIDATE THE FOUNDATION with inclusiveness and adaptability 謀定而動 順勢而為 www.chinavtmmining.com CHI NA VA N A DIU M TITA N O-M A G C O MPAN Y LIMITED 中 國 G NETITE MI NIN 釩 鈦 磁 鐵 礦 業 有 限 公 司 Interim Report 中期報告 2025 Our Presence ㎯撸㎬ A1 B1 A2 ꦴ 鞕䃹 ㍌䃷 ꄆ䜴 伬伺 䡗伬ꖺ饟 Yunnan Guizhou Sichuan Chongqing Kunming 䡗齉 Chengdu Chengdu-Kunming Railway 냖鵯 Expressway ꖺ饟 Railway 嬲鹡䊰 Processing plant 火 Mine 䢦畚杼錄亩 Facilities managed A. Mines 火 | | | | | | Resources | | | | --- | --- | --- | --- | --- | -- ...