Financial Performance - The group's revenue for the six months ended June 30, 2025, was approximately HKD 330.3 million, a decrease of about 22.6% compared to HKD 426.6 million in the same period of 2024[7]. - The loss attributable to equity holders for the six months ended June 30, 2025, was approximately HKD 35.7 million, an increase of about 223.3% from HKD 11.1 million in 2024[7]. - Basic and diluted loss per share for the six months ended June 30, 2025, was approximately HKD 11.91, compared to HKD 3.68 in 2024[8]. - The group recorded a gross loss of HKD 11.7 million for the six months ended June 30, 2025, compared to a gross profit of HKD 10.5 million in 2024[8]. - The company recorded a total comprehensive loss of HKD 34,194,000 for the six months ended June 30, 2025, compared to a loss of HKD 8,136,000 for the same period in 2024[11]. - The company reported a loss before tax of HKD 35,734 for the six months ended June 30, 2025, compared to a loss of HKD 11,054 in the same period of 2024[22][23]. - The company recorded a net loss of approximately HKD 35,700,000 for the six months ended June 30, 2025, significantly higher than the net loss of HKD 11,100,000 in 2024[54]. Revenue Breakdown - The air freight forwarding service generated revenue of HKD 325,683,000, down 22% from HKD 417,952,000 in the previous year[17]. - The sea freight forwarding service revenue decreased to HKD 4,614,000, down 46.7% from HKD 8,652,000 in the same period last year[17]. - Air freight revenue was HKD 325,683, down 22.5% from HKD 417,952 in the previous year, while sea freight revenue increased to HKD 4,614 from HKD 8,652[22][23]. Assets and Liabilities - Total assets less current liabilities as of June 30, 2025, amounted to HKD 92.7 million, down from HKD 127.2 million as of December 31, 2024[9]. - Current assets net worth as of June 30, 2025, was HKD 63.2 million, a decrease from HKD 96.9 million as of December 31, 2024[9]. - Trade and other receivables decreased to HKD 106.6 million as of June 30, 2025, from HKD 203.9 million as of December 31, 2024[9]. - Trade and other payables decreased to HKD 69.4 million as of June 30, 2025, from HKD 125.4 million as of December 31, 2024[9]. - The company's total equity as of June 30, 2025, was HKD 92,461,000, down from HKD 126,655,000 at the beginning of the year, reflecting a decrease of 26.9%[11]. - Total debt as of June 30, 2025, was approximately HKD 53,600,000, an increase from HKD 48,200,000 as of December 31, 2024[55]. - The current ratio as of June 30, 2025, was approximately 1.5, slightly down from 1.6 as of December 31, 2024[55]. Cash Flow - For the six months ended June 30, 2025, the company reported a net cash inflow from operating activities of HKD 11,171,000, compared to HKD 6,453,000 for the same period in 2024, representing a 73% increase[13]. - Cash and cash equivalents increased to HKD 49,474,000 as of June 30, 2025, compared to HKD 27,986,000 at the end of June 2024, marking a 77% increase[13]. - The net cash generated from operating activities for the six months ended June 30, 2025, was approximately HKD 11,200,000, compared to HKD 6,500,000 for the same period in 2024, representing a year-over-year increase of 72.3%[57]. - The impact of exchange rate changes resulted in an increase of HKD 1,540,000 in cash and cash equivalents for the current period[13]. Financing and Costs - The group's financing costs for the six months ended June 30, 2025, were HKD 1.9 million, compared to HKD 1.8 million in 2024[8]. - The company incurred a loss of HKD 35,734,000 during the period, which contributed to the overall comprehensive loss[11]. - The company had financing costs of HKD 1,933 for the six months ended June 30, 2025, compared to HKD 1,829 in 2024[29]. - Interest-bearing borrowings amounted to approximately HKD 52,600,000 as of June 30, 2025, up from HKD 46,900,000 as of December 31, 2024, indicating an increase of 12.5%[57]. Corporate Governance - The company has applied the corporate governance code principles and complied with all applicable code provisions during the reporting period[78]. - Mr. Zhao serves as both Chairman and CEO, a decision supported by the board for effective leadership and strategic planning[79]. - The board will regularly review the necessity of appointing different individuals for the roles of Chairman and CEO to maintain good corporate governance[80]. - All directors have confirmed compliance with the trading standards set forth in the company's securities trading code during the reporting period[81]. - The unaudited consolidated financial statements for the six months ended June 30, 2025, have been reviewed by the Audit Committee[82]. - The financial statements are prepared in accordance with applicable accounting standards and GEM listing rules, ensuring full disclosure[82]. Shareholder Information - As of June 30, 2025, Mr. Zhao holds 225,000,000 shares, representing 75% ownership in the company[71]. - Ms. Wang, as Mr. Zhao's spouse, also holds 225,000,000 shares, equating to 75% ownership[71]. - Peak Connect International Limited and Profit Virtue Worldwide Limited each hold 112,500,000 shares, accounting for 37.5% of the total shares[74]. - The total number of issued ordinary shares remained at 300,000,000 shares as of June 30, 2025, unchanged from December 31, 2024[60]. - The company has a stock option plan effective for 10 years since December 11, 2020, with a maximum of 30,000,000 shares available for issuance, representing 10% of the total shares as of June 30, 2025[76]. - No stock options have been granted or exercised since the adoption of the stock option plan[76]. Strategic Outlook - The group aims to enhance its market position in Hong Kong and China by purchasing more cargo space to meet customer demand[70]. - The group plans to improve its cargo space acquisition capabilities through closer collaboration with airlines[70]. - The group is adapting to economic uncertainties and regulatory changes in the global environment, focusing on flexibility and digital innovation for future growth[68]. - The group had no significant investments, acquisitions, or disposals of subsidiaries or joint ventures during the six months ended June 30, 2025[58].

Financial Performance - Total revenue for the six months ended June 30, 2025, was approximately RMB 12.0 million, a decrease of RMB 19.3 million or 61.7% compared to RMB 31.3 million in the same period of 2024[6][9] - The company recorded a loss of approximately RMB 16.9 million during the review period, a decrease of RMB 15.6 million compared to a profit of RMB 0.7 million in the same period of 2024[6][14] - Gross profit for the review period was approximately RMB 10.0 million, a decrease of RMB 4.3 million or 75.5% compared to RMB 5.7 million in the same period of 2024[11] - Revenue for the six months ended June 30, 2025, was RMB 11,995,000, a decrease of 61.7% compared to RMB 31,297,000 for the same period in 2024[59] - The company reported a net loss of RMB 16,906,000 for the period, compared to a profit of RMB 661,000 in 2024[60] - The group reported a net loss of approximately RMB 16,906,000 for the six months ended June 30, 2025[68] - The group incurred a loss before tax of RMB 16,906,000 for the six months ended June 30, 2025[77] Cost and Expenses - Cost of sales for the review period was approximately RMB 2.0 million, a decrease of RMB 23.6 million or 92.3% compared to RMB 25.6 million in the same period of 2024[10] - Financing costs increased to approximately RMB 14.6 million, an increase of RMB 8.6 million or 143.1% compared to RMB 6.0 million in the same period of 2024[12] - The total cost for employee compensation, benefits, and social security for the six months ended June 30, 2025, is approximately RMB 5.2 million[36] - The total short-term employee benefits for key management personnel for the six months ended June 30, 2025, amounted to RMB 878,000, a decrease from RMB 891,000 in the same period of 2024[115] Debt and Liabilities - Total debt as of June 30, 2025, was approximately RMB 449.7 million, a decrease from RMB 552.9 million as of December 31, 2024[18] - Net debt as of June 30, 2025, was approximately RMB 445.1 million, down from RMB 543.3 million as of December 31, 2024[18] - The total liabilities as of June 30, 2025, amounted to approximately RMB 592,693,000, with net liabilities at RMB 276,877,000[68] - Total liabilities, including trade and other payables, amounted to RMB 171,556,000 as of June 30, 2025, compared to RMB 180,221,000 at the end of 2024[92] Share Capital and Equity - The total number of issued shares as of June 30, 2025, is 674,246,015, with no consideration for any unexercised options or convertible preferred shares[50] - The company has agreed to issue 410,156,509 new shares to repay part of the outstanding principal and accrued interest amounting to HKD 87,000,000 and approximately RMB 44,000,000 for the release of the financial guarantee contract[20] - The company completed the capitalization of loans on February 21, 2025, agreeing to issue 146,520,146 new shares, which relates to the release of the financial guarantee contract[21] - The total issued share capital as of June 30, 2025, was 674,246,000 shares, following a share consolidation that reduced the total from 2,640,895,000 shares[102] Business Strategy and Future Plans - The company plans to expand its business through acquisitions in the field of AI bone health diagnostic and testing robots, and to establish a smart health management center in collaboration with a state-owned enterprise in China[7] - The company aims to create a closed-loop business model in the bone health sector, focusing on detection, treatment, and rehabilitation services[7] - The group aims to develop a comprehensive smart health ecosystem platform focusing on bone health, including diagnostic and treatment services[71] Financial Guarantees and Claims - The company has provided financial guarantees for bank loans amounting to approximately RMB 348,073,000 and RMB 58,030,000 for its subsidiary Suzhou First Pharmaceutical Co., Ltd.[20] - As of June 30, 2025, the company has not faced any claims from lenders regarding the financial guarantees[25] - The company has confirmed that there are no other individuals holding significant interests in the company's shares as of June 30, 2025, apart from those disclosed[52] Cash Flow and Assets - Cash and cash equivalents at the end of the period were RMB 4,634,000, down from RMB 9,623,000 at the beginning of the year[63] - The company experienced a net cash outflow from operating activities of RMB 19,236,000, compared to RMB 5,741,000 in the previous year[63] - Total assets decreased to RMB 28,219,000 from RMB 16,185,000, while total liabilities decreased from RMB 725,065,000 to RMB 620,912,000[61] Shareholder Information - The major shareholders include Golden Base Investment Limited, holding 303,925,563 shares, representing approximately 45.12% of the company's equity[50] - The company has not proposed any interim dividend for the six months ended June 30, 2025[42] - The company did not declare or pay any dividends for the six months ended June 30, 2025, consistent with the previous year[101] Audit and Compliance - The audit committee reviewed the unaudited interim results for the six months ending June 30, 2025, and recommended adoption by the board, confirming compliance with applicable accounting standards and listing rules[44] - The company maintains a sufficient public float, with over 25% of its issued share capital held by the public as of the report date[45]

Financial Performance - Net interest income for the first half of 2025 was RMB 3,777.26 million, a decrease of 5.27% compared to RMB 3,987.32 million in 2024[10] - Total operating income decreased by 19.91% to RMB 4,603.65 million from RMB 5,748.29 million in the previous year[10] - The net profit for the period was RMB 582.64 million, down 9.64% from RMB 644.80 million in 2024[10] - The average return on total assets was 0.20%, down from 0.23% in 2024, indicating reduced profitability[10] - The bank's basic earnings per share decreased to RMB 0.09, down 10.00% from RMB 0.10 in the previous year[10] - The cost-to-income ratio increased to 27.98% from 23.13%, reflecting higher operational costs relative to income[10] - The liquidity coverage ratio decreased significantly to 357.49% from 403.22%, indicating a decline in liquidity position[12] - The group recorded a financial investment income of RMB 4,610 million, a decrease of RMB 8,890 million or 65.73% compared to the previous year, primarily due to market interest rate fluctuations[51] - Operating expenses for the period were RMB 13,571 million, a decrease of RMB 540 million or 3.81% from the previous year, reflecting ongoing cost reduction efforts[52] Asset Quality - The non-performing loan ratio increased to 2.36% from 2.15% in the previous year, indicating a deterioration in asset quality[12] - The capital adequacy ratio decreased to 13.08% from 13.47% at the end of 2024, showing a decline in capital strength[12] - The group reported a decrease in impairment losses on assets of RMB 900.53 million or 24.52% year-on-year, amounting to RMB 2,772.62 million for the reporting period[54] - The total amount of loans and advances was RMB 364.90307 billion, with a non-performing loan ratio of 2.36%[84] - The proportion of normal loans was 93.90%, while the amount of non-performing loans was RMB 8.61727 billion[84] Loan and Deposit Growth - The total loans and advances issued reached RMB 364.903 billion, reflecting a growth of 3.39% year-on-year[20] - Total deposits amounted to RMB 396.770 billion, showing a year-on-year increase of 1.49%[20] - The total amount of corporate loans was RMB 249,992.20 million, accounting for 68.51% of total loans, with NPLs amounting to RMB 6,265.01 million, representing 2.51%[88] - Personal loans totaled RMB 79,191.92 million, making up 21.70% of total loans, with NPLs of RMB 2,352.26 million, or 2.97%[88] - The balance of inclusive loans for small and micro enterprises reached RMB 55.669 billion, increasing by RMB 3.067 billion, a growth of 5.83%[120] Shareholder Information - As of June 30, 2025, the total issued share capital of the company is RMB 6,024,276,901, consisting of 1,345,500,000 H-shares and 4,678,776,901 domestic shares[181] - The largest shareholder, Jiangxi Provincial Transportation Investment Group, holds 937,651,339 shares, representing 15.56% of the total share capital[185] - The company has a diverse shareholder base, with several state-owned enterprises holding substantial stakes, reflecting strong government support[10] - The company has no controlling shareholders or actual controllers[181] Risk Management - The bank is enhancing its credit risk management capabilities by establishing a credit risk monitoring mechanism and improving the identification and prevention of potential risks[154] - The bank has implemented measures to strengthen operational risk management, including the establishment of an operational risk management system and enhancing capital measurement accuracy[165] - The bank's market risk management includes strict monitoring of interest rate and exchange rate risks, ensuring that exposures remain within acceptable limits[161][162] - The bank is actively optimizing liquidity risk management policies and expanding its core liabilities to maintain a stable asset-liability structure[156] Digital Transformation and Customer Engagement - The company has completed 10 out of 22 planned digital transformation projects, enhancing its digital capabilities across various business lines[145] - The bank has implemented a digital management transformation plan to improve operational efficiency and customer service through various digital platforms[145] - The total number of registered personal electronic banking customers increased by 8.67% year-on-year, with average monthly active users growing by 17.41%[143] - The bank has established 90 new inclusive financial service stations in rural areas in the first half of 2025[177] Corporate Strategy - The group aims to enhance its corporate deposit business by focusing on low-cost deposit marketing and optimizing the deposit structure, targeting key local construction projects and quality clients[105] - The company aims to enhance credit structure and innovate financial products to support economic development under the "Four Stabilizations" policy[180] - The company plans to increase credit investment and improve financial services to achieve high-quality development[180]

Company Information [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) This section details the composition of the company's Board of Directors and its Audit, Remuneration, and Nomination Committees - The Board members include Mr. Liu Haitao (Vice Chairman and CEO), Ms. Wang Yan (Executive Director), Mr. Sun Juqing (Chairman), Ms. Lu Hongyan, Mr. Shao Zhangguang (Non-executive Directors), and Mr. Gao Xiangnong, Mr. Yin Jun, Mr. Li Guodong (Independent Non-executive Directors)[5](index=5&type=chunk) - The Audit Committee Chairman is Mr. Li Guodong, the Remuneration Committee Chairman is Mr. Yin Jun, and the Nomination Committee Chairman is Mr. Gao Xiangnong[5](index=5&type=chunk) [Professional Advisors and Banks](index=3&type=section&id=Professional%20Advisors%20and%20Banks) The company appointed KPMG as auditor, Chow & Cheung, Solicitors as Hong Kong legal advisor, and lists its principal bankers - The auditor is KPMG, and the legal advisor is Chow & Cheung, Solicitors in association with Beijing Tongshang Law Firm[5](index=5&type=chunk) - Principal bankers include Bank of China (Hong Kong) Limited, China Everbright Bank Changchun Branch, China Merchants Bank Changchun Branch, and Industrial Bank Changchun Branch[5](index=5&type=chunk) [Offices and Share Information](index=4&type=section&id=Offices%20and%20Share%20Information) This section provides details on the company's offices, stock code, website, and share registrar - The company's stock code is **1855**, and its website is **www.zonqing.net**[6](index=6&type=chunk) - The registered office is in the Cayman Islands, and the Hong Kong share registrar is Boardroom Share Registrars (HK) Limited[6](index=6&type=chunk) Management Discussion and Analysis [Business Review](index=5&type=section&id=Business%20Review) In H1 2025, the Group expanded urban renewal, operation, planning, and cultural tourism services, securing RMB 715.26 million in new contracts - In the first half of 2025, the Group submitted **427 bids**, with a successful bid rate of approximately **18.97%**[8](index=8&type=chunk) New Contract Value in H1 2025 | Indicator | Amount (RMB million) | | :--- | :--- | | New Contract Value | 715.26 | - The Group achieved **7 invention patents**, **15 utility model patents**, and **3 software copyrights** in technological innovation, enhancing its core competitiveness[9](index=9&type=chunk) [Risk Management](index=5&type=section&id=Risk%20Management) Management assists the Board in assessing and implementing risk management and internal controls, with no significant financial reporting deficiencies in H1 2025 - The Group's management assists the Board in assessing significant risks such as investment risk, interest rate risk, and liquidity risk[10](index=10&type=chunk) - There were no material internal control deficiencies in financial reporting for the first half of 2025[10](index=10&type=chunk) [Prospects](index=6&type=section&id=Prospects) Despite reduced new orders, China's economic resilience and urban renewal policies offer growth opportunities for the Group to focus on urban ecology, infrastructure, and cultural tourism - In the first half of 2025, China's GDP grew by **5.3%** year-on-year, and infrastructure investment increased by **4.6%** year-on-year[13](index=13&type=chunk) - National policies support urban renewal initiatives, promoting the transformation of old urban communities, industrial areas, and urban ecological systems, providing broad development space for the Group's business[13](index=13&type=chunk)[14](index=14&type=chunk) - The Group will focus on three key areas: "urban ecology + infrastructure + cultural tourism landscape" to enhance its integrated project solution capabilities[14](index=14&type=chunk) [Financial Review](index=7&type=section&id=Financial%20Review) H1 2025 saw a slight revenue decrease, lower gross and net profits, but reduced expected credit losses and increased net current assets and total equity Key Financial Indicators for H1 2025 | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 761.9 | 775.6 | -1.8% | | Gross Profit | 151.0 | 175.4 | -13.9% | | Operating Profit | 73.9 | 72.0 | +2.6% | | Profit for the Period | 36.3 | 43.4 | -16.4% | | Basic Earnings Per Share (RMB cents) | 4 | 4 | 0% | | Net Current Assets | 339.8 | 321.4 (Dec 31, 2024) | +5.7% | | Gearing Ratio | 1.08 | 1.11 (Dec 31, 2024) | -2.7% | [Revenue](index=7&type=section&id=Revenue) The Group's H1 2025 revenue slightly decreased by 1.8% to RMB 761.9 million, impacted by macroeconomic fluctuations and intensified competition Revenue Overview | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 761.9 | 775.6 | -13.7 | -1.8% | [Segment Revenue](index=7&type=section&id=Segment%20Revenue) Urban renewal services revenue decreased by 5.3%, while other segments like cultural tourism saw significant growth Segment Revenue Changes | Segment | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Urban Renewal Services | 580.5 | 613.0 | -32.5 | -5.3% | | Urban Operation and Maintenance Services | 121.6 | 115.6 | +6.0 | +5.2% | | Urban Planning and Design Services | 42.8 | 39.0 | +3.8 | +9.8% | | Cultural Tourism | 17.0 | 8.0 | +9.0 | +112.5% | [Gross Profit and Gross Profit Margin](index=7&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit decreased by 13.9% to RMB 151.0 million in H1 2025, mainly due to reduced operating income from slowing market demand and increased competition Gross Profit Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross Profit | 151.0 | 175.4 | -24.4 | -13.9% | [Net Other Income](index=7&type=section&id=Net%20Other%20Income) Net other income decreased by 47.2% to RMB 3.8 million, primarily due to lower interest income Net Other Income Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Other Income | 3.8 | 7.2 | -3.4 | -47.2% | [Selling Expenses](index=8&type=section&id=Selling%20Expenses) Selling expenses increased by 17.6% to RMB 14.7 million, driven by increased investment in market promotion and new business development Selling Expenses Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 14.7 | 12.5 | +2.2 | +17.6% | [Administrative Expenses](index=8&type=section&id=Administrative%20Expenses) Administrative expenses remained relatively stable, at approximately RMB 37.4 million in H1 2025 Administrative Expenses Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Administrative Expenses | 37.4 | 38.0 | -0.6 | -1.6% | [Impairment Losses under Expected Credit Loss Model](index=8&type=section&id=Impairment%20Losses%20under%20Expected%20Credit%20Loss%20Model) Impairment losses significantly decreased by 52.0% to RMB 28.8 million, attributed to improved client financial health, faster repayments, and optimized collection management Impairment Losses Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Impairment Losses | 28.8 | 60.0 | -31.2 | -52.0% | [Finance Costs](index=8&type=section&id=Finance%20Costs) Finance costs increased by 26.8% to RMB 31.7 million, mainly due to higher average balances of bank and other loans supporting core projects and operating cash flow Finance Costs Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Finance Costs | 31.7 | 25.0 | +6.7 | +26.8% | [Share of (Losses)/Profits of Associates](index=8&type=section&id=Share%20of%20(Losses)%2FProfits%20of%20Associates) Share of associates' results shifted from a RMB 0.4 million profit in H1 2024 to a RMB 1.8 million loss in H1 2025 Share of Associates' Results Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (RMB million) | | :--- | :--- | :--- | :--- | | Share of Associates' Results | -1.8 (Loss) | 0.4 (Profit) | -2.2 | [Share of Profits/(Losses) of a Joint Venture](index=9&type=section&id=Share%20of%20Profits%2F(Losses)%20of%20a%20Joint%20Venture) Share of a joint venture's results turned from a RMB 0.3 million loss in H1 2024 to a RMB 0.1 million profit in H1 2025, driven by reduced expected credit losses Share of Joint Venture's Results Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Share of Joint Venture's Results | 0.1 (Profit) | -0.3 (Loss) | +0.4 | +133.3% | [Income Tax](index=9&type=section&id=Income%20Tax) Income tax increased by RMB 0.5 million to RMB 4.2 million, mainly due to reduced deferred tax credits from decreased credit losses Income Tax Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (RMB million) | | :--- | :--- | :--- | :--- | | Income Tax | 4.2 | 3.7 | +0.5 | [Net Current Assets](index=9&type=section&id=Net%20Current%20Assets) Net current assets increased by 5.7% to RMB 339.8 million, primarily due to profit for the period Net Current Assets Changes | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Current Assets | 339.8 | 321.4 | +18.4 | +5.7% | [Liquidity and Financial Resources](index=9&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, cash and cash equivalents decreased to RMB 47.2 million, with most of the RMB 889.5 million total borrowings repayable within one year Liquidity Overview | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 47.2 | 122.8 | | Total Borrowings | 889.5 | 884.6 | [Gearing Ratio](index=10&type=section&id=Gearing%20Ratio) The gearing ratio decreased from 1.11 times (Dec 31, 2024) to 1.08 times (June 30, 2025), driven by increased equity from retained earnings Gearing Ratio Changes | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing Ratio | 1.08 times | 1.11 times | Decrease | [Material Acquisitions and Disposals](index=10&type=section&id=Material%20Acquisitions%20and%20Disposals) The Group had no material acquisitions or disposals of subsidiaries, associates, and joint ventures in H1 2025 - In the first half of 2025, the Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures[36](index=36&type=chunk) [Material Investments Held](index=10&type=section&id=Material%20Investments%20Held) As of June 30, 2025, the Group held no material investments other than its associates and joint ventures - As of June 30, 2025, the Group held no other material investments apart from its associates and joint ventures[37](index=37&type=chunk) [Contingent Liabilities](index=10&type=section&id=Contingent%20Liabilities) The Group provided financial guarantees for bank loans of its joint venture Tianjun Tourism and associate Changchun Xianbang, with outstanding balances of RMB 22.775 million and RMB 9.513 million respectively as of June 30, 2025 - The Group provided a bank loan guarantee of **RMB 310 million** for its joint venture Tianjun Tourism, with an outstanding bank loan balance of **RMB 270 million** as of June 30, 2025[38](index=38&type=chunk) - The Group provided a bank loan guarantee of **RMB 330 million** for its associate Changchun Xianbang, with an outstanding bank loan balance of **RMB 106.5 million** as of June 30, 2025[39](index=39&type=chunk) Outstanding Balances of Financial Guarantees Issued | Guaranteed Party | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Tianjun Tourism | 22,775 | 24,000 | | Changchun Xianbang | 9,513 | 10,600 | | **Total** | **32,288** | **34,600** | [Future Plans for Material Investments or Capital Assets](index=11&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of the report date, the Group has no specific plans for material investments or capital assets - As of the date of this report, the Group has no specific plans for any material investments or capital assets[42](index=42&type=chunk) Other Information [Dividends](index=11&type=section&id=Dividends) The Board recommends not to declare an interim dividend for the first half of 2025 - The Board recommends not to declare an interim dividend for the first half of 2025[43](index=43&type=chunk) [Employees and Remuneration Policy](index=11&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 806 employees and a "Remuneration Management Policy" to ensure fair compensation, with the Remuneration Committee reviewing policies for directors, senior management, and employees Number of Employees | Indicator | Number | | :--- | :--- | | Total Employees (June 30, 2025) | 806 | - The Group has formulated a "Remuneration Management Policy" and welfare system to establish a systematic remuneration structure, ensuring transparency and fairness[44](index=44&type=chunk) [Directors' and Substantial Shareholders' Interests](index=12&type=section&id=Directors'%20and%20Substantial%20Shareholders'%20Interests) This section discloses directors' and substantial shareholders' interests and short positions in the company's shares and associated corporations Directors' Long Positions in Shares (June 30, 2025) | Director's Name | Nature of Interest | Related Company | Number of Shares | Approximate % of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Sun Juqing | Spouse's Interest | Zhongqing International Investment Co., Ltd. | 181,202,166 | 65.89% | | Mr. Liu Haitao | Interest in Controlled Corporation | Zhongbang International Investment Co., Ltd. | 14,054,104 | 5.11% | Substantial Shareholders' Long Positions in Shares (June 30, 2025) | Shareholder's Name/Name | Nature of Interest | Number of Shares | Approximate % of Issued Share Capital | | :--- | :--- | :--- | :--- | | Zhongqing International | Beneficial Owner | 181,202,166 | 65.89% | | Ms. Zhao Hongyu | Interest in Controlled Corporation | 181,202,166 | 65.89% | | Mr. Sun Juqing | Spouse's Interest | 181,202,166 | 65.89% | | Zhongbang International | Beneficial Owner | 14,054,104 | 5.11% | | Mr. Liu Haitao | Interest in Controlled Corporation | 14,054,104 | 5.11% | | Ms. Wang Tiannv | Spouse's Interest | 14,054,104 | 5.11% | [Sufficiency of Public Float](index=14&type=section&id=Sufficiency%20of%20Public%20Float) The company maintained a sufficient public float in the first half of 2025 in accordance with the Listing Rules - The company maintained a sufficient public float in the first half of 2025[55](index=55&type=chunk) [Competing Business](index=14&type=section&id=Competing%20Business) The Group and Zhongqing Investment Group have a clear division in municipal construction business and a non-competition undertaking, with no material conflict of interest - The Group's municipal construction business and that of Zhongqing Investment Group are distinguishable by geographical location and nature of services[56](index=56&type=chunk) - The ultimate controlling shareholder and Zhongqing Investment Group have provided a non-competition undertaking to the company[56](index=56&type=chunk) [Shareholders' Rights and Meetings](index=14&type=section&id=Shareholders'%20Rights%20and%20Meetings) To protect shareholder interests, all resolutions are voted by poll, and shareholders with at least one-tenth voting rights can request extraordinary general meetings or agenda items - Each substantially separate issue should be presented as a separate resolution at general meetings and voted on by poll[57](index=57&type=chunk) - Shareholders holding not less than one-tenth of the voting rights in the company's share capital are entitled to request an extraordinary general meeting[58](index=58&type=chunk) [Share Option Scheme](index=15&type=section&id=Share%20Option%20Scheme) The company's share option scheme incentivizes employees and consultants, with no options granted, exercised, expired, cancelled, or lapsed since listing up to June 30, 2025 - The Share Option Scheme aims to provide incentives or rewards to individuals who have contributed to the company and/or any of its subsidiaries[62](index=62&type=chunk) - Since its listing and up to June 30, 2025, no share options have been granted under the Share Option Scheme, nor are there any outstanding share options[62](index=62&type=chunk) [Purchase, Sale and Redemption of Listed Securities](index=15&type=section&id=Purchase%2C%20Sale%20and%20Redemption%20of%20Listed%20Securities) The company held no treasury shares and did not purchase, sell, or redeem any listed securities in the first half of 2025 - In the first half of 2025, the company held no treasury shares and did not purchase, sell, or redeem any listed securities[63](index=63&type=chunk)[64](index=64&type=chunk) [Related Party Transactions](index=16&type=section&id=Related%20Party%20Transactions) Material related party transactions in H1 2025 are detailed in Note 19, complying with Listing Rules disclosure, with no other significant arrangements - Material related party transactions entered into by the Group in the first half of 2025 are set out in Note 19 and comply with the disclosure requirements of the Listing Rules[65](index=65&type=chunk) [Corporate Governance Practices](index=16&type=section&id=Corporate%20Governance%20Practices) The company adopted the Corporate Governance Code in Appendix C1 of the Listing Rules and will continue to strengthen its corporate governance - The company has adopted the Corporate Governance Code in Appendix C1 of the Listing Rules and will continue to review and strengthen its corporate governance[68](index=68&type=chunk) [Review of Interim Financial Information](index=16&type=section&id=Review%20of%20Interim%20Financial%20Information) The Group's unaudited interim results and financial statements for the six months ended June 30, 2025, have been reviewed by the Audit Committee - The Group's unaudited interim results and financial statements for the six months ended June 30, 2025, have been reviewed by the Audit Committee[69](index=69&type=chunk) [Consolidated Statement of Profit or Loss](index=16&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) This statement presents the Group's H1 2025 financial performance, with profit for the period decreasing to RMB 36.332 million from RMB 43.412 million YoY Key Data from Consolidated Statement of Profit or Loss | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Change (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 761,932 | 775,648 | -13,716 | -1.8% | | Cost of Sales | (610,937) | (600,287) | -10,650 | +1.8% | | Gross Profit | 150,995 | 175,361 | -24,366 | -13.9% | | Operating Profit | 73,889 | 72,036 | +1,853 | +2.6% | | Profit Before Tax | 40,483 | 47,141 | -6,658 | -14.1% | | Profit for the Period | 36,332 | 43,412 | -7,080 | -16.3% | | Profit Attributable to Equity Holders of the Company | 29,333 | 34,259 | -4,926 | -14.4% | | Basic and Diluted Earnings Per Share (RMB cents) | 4 | 4 | 0 | 0% | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=17&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement shows the Group's H1 2025 total comprehensive income decreased to RMB 35.592 million from RMB 43.916 million YoY Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Change (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Profit for the Period | 36,332 | 43,412 | -7,080 | -16.3% | | Other Comprehensive Income for the Period | (740) | 504 | -1,244 | -246.8% | | Total Comprehensive Income for the Period | 35,592 | 43,916 | -8,324 | -18.9% | | Total Comprehensive Income Attributable to Equity Holders of the Company | 28,593 | 34,763 | -6,170 | -17.8% | [Consolidated Statement of Financial Position](index=18&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This statement presents the Group's financial position as of June 30, 2025, with total assets less current liabilities of RMB 827.034 million and total equity of RMB 820.880 million Key Data from Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current Assets | 487,185 | 483,674 | +3,511 | +0.7% | | Current Assets | 4,026,934 | 3,899,855 | +127,079 | +3.3% | | Current Liabilities | 3,687,085 | 3,578,496 | +108,589 | +3.0% | | Net Current Assets | 339,849 | 321,359 | +18,490 | +5.7% | | Total Assets Less Current Liabilities | 827,034 | 805,033 | +22,001 | +2.7% | | Non-current Liabilities | 6,154 | 9,841 | -3,687 | -37.5% | | Net Assets | 820,880 | 795,192 | +25,688 | +3.2% | | Total Equity | 820,880 | 795,192 | +25,688 | +3.2% | [Consolidated Statement of Changes in Equity](index=20&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement shows the Group's equity movements for H1 2025, with total equity increasing from RMB 795.192 million to RMB 820.880 million Key Data from Consolidated Statement of Changes in Equity | Indicator | January 1, 2025 (RMB thousand) | June 30, 2025 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Total Equity Attributable to Equity Holders of the Company | 668,974 | 700,732 | +31,758 | | Non-controlling Interests | 126,218 | 120,148 | -6,070 | | Total Equity | 795,192 | 820,880 | +25,688 | | Profit for the Period | - | 36,332 | +36,332 | | Other Comprehensive Income | - | (740) | -740 | | Acquisition of Non-controlling Interests | - | (9,904) | -9,904 | [Condensed Consolidated Statement of Cash Flows](index=23&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement presents the Group's H1 2025 cash flows, with cash and cash equivalents significantly decreasing to RMB 47.159 million at period-end Key Data from Condensed Consolidated Statement of Cash Flows | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Net Cash From/(Used In) Operating Activities | 18,722 | (182,791) | +201,513 | | Net Cash Used In Investing Activities | (38,597) | (36,366) | -2,231 | | Net Cash (Used In)/From Financing Activities | (55,732) | 69,938 | -125,670 | | Net Decrease in Cash and Cash Equivalents | (75,607) | (149,219) | +73,612 | | Cash and Cash Equivalents at June 30 | 47,159 | 61,190 | -14,031 | [Notes to the Unaudited Interim Financial Report](index=24&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) [1 Company Information](index=25&type=section&id=1%20Company%20Information) The company, incorporated in the Cayman Islands and listed in Hong Kong, primarily provides construction, maintenance, and environmental sanitation services, ultimately controlled by Mr. Sun Juqing and Ms. Zhao Hongyu - The company was incorporated in the Cayman Islands on March 8, 2019, and listed on the Hong Kong Stock Exchange on January 6, 2021[87](index=87&type=chunk) - The Group primarily engages in construction and maintenance services for landscaping, ecological restoration, and public works projects, provides environmental sanitation services, and other related projects[87](index=87&type=chunk) [2 Basis of Preparation](index=25&type=section&id=2%20Basis%20of%20Preparation) This interim financial report is prepared under HKEX Listing Rules and IAS 34, authorized for issue on August 21, 2025 - This interim financial report is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and was authorized for issue on August 21, 2025[88](index=88&type=chunk) [3 Changes in Accounting Policies](index=25&type=section&id=3%20Changes%20in%20Accounting%20Policies) The Group applied IAS 21 (Amendment) "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability," with no material impact due to no non-exchangeable foreign currency transactions - The Group has applied IAS 21 (Amendment) "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability," but it has no material impact on this interim financial report[90](index=90&type=chunk) [4 Revenue and Segment Reporting](index=26&type=section&id=4%20Revenue%20and%20Segment%20Reporting) The Group manages four segments: urban renewal, urban operation, urban planning, and cultural tourism, with H1 2025 total revenue of RMB 761.932 million, primarily from urban renewal, and significant growth in cultural tourism - The Group's business is divided into four reportable segments: urban renewal services, urban operation and maintenance services, urban planning and design services, and cultural tourism[92](index=92&type=chunk) Revenue Breakdown by Major Product or Service Item | Segment | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Urban Renewal Services Revenue | 580,505 | 613,016 | | Urban Operation and Maintenance Services Revenue | 121,635 | 115,586 | | Urban Planning and Design Services Revenue | 42,841 | 39,015 | | Cultural Tourism Revenue | 16,951 | 8,031 | | **Total** | **761,932** | **775,648** | [5 Profit Before Tax](index=29&type=section&id=5%20Profit%20Before%20Tax) This section details profit before tax components, including H1 2025 finance costs of RMB 31.688 million and R&D costs of RMB 52.264 million Finance Costs | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on bank and other loans and related party loans | 31,578 | 24,847 | | Interest on lease liabilities | 110 | 113 | | **Total** | **31,688** | **24,960** | Other Items | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Research and Development Costs | 52,264 | 36,677 | | Cost of Inventories | 176,987 | 242,873 | | Depreciation of Property, Plant and Equipment | 4,429 | 4,773 | [6 Income Tax](index=30&type=section&id=6%20Income%20Tax) The Group's H1 2025 income tax was RMB 4.151 million, with Chinese subsidiaries subject to 25% CIT, and four high-tech enterprises enjoying a 15% preferential rate and 100% R&D deduction Income Tax Components | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax | 9,575 | 14,102 | | Deferred Tax | (5,424) | (10,373) | | **Total** | **4,151** | **3,729** | - Four of the Group's subsidiaries established in China enjoy a preferential tax rate of **15%** as high-tech enterprises and a **100%** additional deduction for eligible R&D costs[105](index=105&type=chunk) [7 Earnings Per Share](index=31&type=section&id=7%20Earnings%20Per%20Share) Basic earnings per share for H1 2025 remained at RMB 4 cents, consistent with prior year, following a share split on August 1, 2024 Earnings Per Share | Indicator | H1 2025 (RMB cents) | H1 2024 (RMB cents) | | :--- | :--- | :--- | | Basic and Diluted Earnings Per Share | 4 | 4 | - On August 1, 2024, the company split each share of HKD 0.001 par value into three shares of HKD 0.0003 par value, adjusting the number of issued ordinary shares to **825,000,000**[107](index=107&type=chunk) [8 Contract Assets and Contract Liabilities](index=31&type=section&id=8%20Contract%20Assets%20and%20Contract%20Liabilities) As of June 30, 2025, total contract assets were RMB 1,149.451 million and liabilities RMB 1,105.062 million, with most assets billed after one year and all liabilities recognized as revenue within one year Contract Assets and Contract Liabilities | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Contract Assets | 1,149,451 | 1,132,150 | | Contract Liabilities | 1,105,062 | 726,695 | - Despite contractual terms, the directors believe that **RMB 509,304,000** of contract assets are expected to be billed after one year as of the end of the reporting period[110](index=110&type=chunk) - All contract liabilities are expected to be recognized as revenue within one year[113](index=113&type=chunk) [9 Trade and Bills Receivables](index=33&type=section&id=9%20Trade%20and%20Bills%20Receivables) As of June 30, 2025, net trade and bills receivables totaled RMB 2,283.132 million, with RMB 995.621 million due within one year Trade and Bills Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Gross Trade and Bills Receivables | 2,707,289 | 2,710,091 | | Less: Loss Allowance | (424,157) | (408,413) | | **Net Amount** | **2,283,132** | **2,301,678** | Ageing Analysis of Trade and Bills Receivables | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 995,621 | 1,014,258 | | 1 to 2 years | 646,937 | 719,257 | | 2 to 3 years | 334,395 | 203,285 | | 3 to 4 years | 147,891 | 229,910 | | 4 to 5 years | 55,292 | 47,957 | | Over 5 years | 102,996 | 87,011 | | **Total** | **2,283,132** | **2,301,678** | [10 Cash and Cash Equivalents](index=34&type=section&id=10%20Cash%20and%20Cash%20Equivalents) As of June 30, 2025, cash and cash equivalents were RMB 47.159 million, including RMB 27.500 million in restricted bank deposits Cash and Cash Equivalents | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash and bank balances | 74,659 | 138,379 | | Less: Restricted bank deposits | (27,500) | (15,600) | | **Net Cash and Cash Equivalents** | **47,159** | **122,779** | - Restricted bank deposits are primarily held as collateral for notes and bank loans issued by the Group[116](index=116&type=chunk) [11 Trade and Bills Payables](index=35&type=section&id=11%20Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables amounted to RMB 1,285.561 million, with RMB 297.827 million due within one year Trade and Bills Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 1,266,061 | 1,568,645 | | Bills Payables | 19,500 | 9,500 | | **Total** | **1,285,561** | **1,578,145** | Ageing Analysis of Trade and Bills Payables | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 297,827 | 721,926 | | 1 to 3 years | 858,080 | 713,244 | | Over 3 years | 129,654 | 142,975 | | **Total** | **1,285,561** | **1,578,145** | [12 Accruals and Other Payables](index=36&type=section&id=12%20Accruals%20and%20Other%20Payables) As of June 30, 2025, total accruals and other payables were RMB 380.688 million, including RMB 32.288 million in financial guarantees issued Accruals and Other Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Amounts due to Zhongqing Investment and its subsidiaries, joint ventures and associates | 83,553 | 78,512 | | Amounts due to third parties | 28,473 | 41,473 | | Staff-related costs payable | 60,758 | 68,495 | | Financial guarantees issued | 32,288 | 34,600 | | Other taxes payable | 114,693 | 76,780 | | **Total** | **380,688** | **353,986** | [13 Bank and Other Borrowings](index=37&type=section&id=13%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, total bank and other borrowings were RMB 889.480 million, mostly repayable within one year, with some loans guaranteed by related parties or secured by Group assets Composition of Bank and Other Borrowings | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank Loans | 832,500 | 873,715 | | Other Loans | 56,980 | 10,946 | | **Total** | **889,480** | **884,661** | Bank and Other Borrowings Repayable | Term | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year or on demand | 889,480 | 882,813 | | After 1 year but within 2 years | — | 1,848 | | **Total** | **889,480** | **884,661** | Pledged Assets | Pledged Assets | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade and Contract Assets | 23,106 | 17,473 | | Bank Deposits | 21,900 | 15,000 | [14 Deferred Tax Assets and Liabilities](index=39&type=section&id=14%20Deferred%20Tax%20Assets%20and%20Liabilities) As of June 30, 2025, net deferred tax assets were RMB 110.617 million and net deferred tax liabilities RMB 1.915 million, totaling RMB 108.702 million Reconciliation of Deferred Tax Assets and Liabilities | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Deferred Tax Assets | 110,617 | 105,214 | | Net Deferred Tax Liabilities | (1,915) | (1,930) | | **Total** | **108,702** | **103,284** | [15 Capital, Reserves and Dividends](index=40&type=section&id=15%20Capital%2C%20Reserves%20and%20Dividends) As of June 30, 2025, issued ordinary shares totaled 825,000,000 (HKD 0.0003 par value each), and no interim dividend is recommended for H1 2025 Share Capital | Item | Number of Shares | HKD thousand | | :--- | :--- | :--- | | Authorized Ordinary Shares (HKD 0.0003 each) | 30,000,000,000 | 10,000 | | Issued and Fully Paid Ordinary Shares (June 30, 2025) | 825,000,000 | 230 | - The directors do not recommend the payment of a dividend for the six months ended June 30, 2025[130](index=130&type=chunk) [16 Fair Value Measurement of Financial Instruments](index=41&type=section&id=16%20Fair%20Value%20Measurement%20of%20Financial%20Instruments) This section presents the fair value of the Group's financial instruments, categorized into IFRS 13's three fair value hierarchy levels, with other equity investments primarily classified as Level 3 Fair Value Measurements Categorized within Level 3 | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Other Equity Investments | 68,312 | 68,351 | - Valuation techniques for other equity investments include the market comparable company approach (with a **20.4%** discount for lack of marketability) and the discounted cash flow method (with discount rates of **7%** and **9.3%**)[133](index=133&type=chunk) [17 Commitments](index=43&type=section&id=17%20Commitments) As of June 30, 2025, the Group's authorized but not contracted capital commitments amounted to RMB 7.253 million Capital Commitments | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Authorized but not contracted | 7,253 | 15,824 | [18 Contingent Liabilities](index=44&type=section&id=18%20Contingent%20Liabilities) The Group provided financial guarantees for bank loans of its joint venture Tianjun Tourism and associate Changchun Xianbang, with outstanding balances of RMB 22.775 million and RMB 9.513 million respectively as of June 30, 2025 - The Group provided a guarantee for Tianjun Tourism's bank loan, with an outstanding bank loan balance of **RMB 270 million** and an unamortized guarantee balance of **RMB 22.775 million** as of June 30, 2025[140](index=140&type=chunk) - The Group provided a guarantee for Changchun Xianbang's bank loan, with an outstanding bank loan balance of **RMB 106.5 million** and an unamortized guarantee balance of **RMB 9.513 million** as of June 30, 2025[141](index=141&type=chunk) [19 Material Related Party Transactions](index=45&type=section&id=19%20Material%20Related%20Party%20Transactions) This section details the Group's material related party transactions, including key management compensation and transactions/balances with Zhongqing Investment and its affiliates Key Management Personnel Compensation | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries and other emoluments | 5,854 | 6,045 | | Contributions to defined contribution retirement plans | 591 | 509 | | **Total** | **6,445** | **6,554** | - Transactions with Zhongqing Investment and its subsidiaries, joint ventures, and associates include providing construction, surveying, design, technical consulting, and other services, as well as receiving services, purchasing goods, lease expenses, loans, and advances[144](index=144&type=chunk) - As of June 30, 2025, balances with related parties include contract assets, trade receivables, trade payables, contract liabilities, accruals and other payables, prepayments, bank and other borrowings, and guarantees provided by related parties for bank loans[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) [Definitions and Glossary of Technical Terms](index=48&type=section&id=Definitions%20and%20Glossary%20of%20Technical%20Terms) This section provides definitions for key terms, abbreviations, and technical jargon used in this interim report - This glossary defines key terms used in the report, such as "the Group," "H1 2025," and "Listing Rules"[154](index=154&type=chunk)[155](index=155&type=chunk)[157](index=157&type=chunk)

[Company Overview](index=1&type=section&id=Company%20Overview) [Company Information](index=3&type=section&id=Company%20Information) This section provides Hong Bridge Group Limited's basic company information, highlighting board and committee member changes, auditors, bankers, and key corporate details - Board members underwent multiple changes during the reporting period, including the resignation of Executive Director Mr. Liu Wei, Non-executive Director Mr. Yan Weimin, and the appointment and resignation of several Independent Non-executive Directors such as Dr. Wang Jiwei, Mr. Wang Baogang, Mr. Huang Yongzhong appointed, and Mr. Chen Zhenwei, Mr. Ma Gang, Mr. Xia Jun resigned. Company Secretary and authorized representatives also changed[6](index=6&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) Company Basic Information | Indicator | Content | | :--- | :--- | | Stock Code | 8137 | | Company Website | www.8137.hk | | Auditor | BDO Limited, Hong Kong | | Principal Bankers | Bank of China (Hong Kong) Limited, Nanyang Commercial Bank Limited | [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [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 Group's H1 2025 continuing operations revenue sharply declined by 66.4%, reducing gross profit, though total comprehensive income turned profitable due to favorable exchange differences Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (HKD Thousands) | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue (Continuing Operations) | 15,487 | 46,054 | -66.4% | | Gross Profit | 213 | 12,506 | -98.3% | | Loss before income tax from continuing operations | (40,092) | (44,385) | -9.7% (Loss narrowed) | | Loss for the period | (43,146) | (53,123) | -18.8% (Loss narrowed) | | Total comprehensive income╱(loss) for the period | 489,154 | (710,140) | From loss to profit | | Loss for the period attributable to owners of the Company | (32,562) | (42,484) | -23.3% (Loss narrowed) | | Basic loss per share (Continuing and Discontinued Operations) | (0.27) HK cents | (0.44) HK cents | -38.6% (Loss narrowed) | - The exchange difference on translation of financial statements of overseas operations in other comprehensive income changed from **(HKD 657,377 thousand)** in H1 2024 to **HKD 534,563 thousand** in H1 2025, which is the main reason for the total comprehensive income for the period turning from a loss to a profit[11](index=11&type=chunk) [Condensed Consolidated Statement of Financial Position](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets and net assets significantly grew, driven by exploration assets and expanded equity, with substantial improvement in net current assets and cash Summary of Condensed Consolidated Statement of Financial Position (HKD Thousands) | Indicator | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total non-current assets | 6,259,043 | 5,465,255 | +14.5% | | Exploration and evaluation assets | 6,189,942 | 5,367,781 | +15.3% | | Total current assets | 522,492 | 222,166 | +135.2% | | Cash and cash equivalents | 410,975 | 65,784 | +524.7% | | Total current liabilities | 128,478 | 154,630 | -16.9% | | Net current assets | 394,014 | 67,536 | +483.4% | | Total assets less current liabilities | 6,653,057 | 5,532,791 | +20.2% | | Net assets | 4,383,857 | 3,513,948 | +24.7% | | Equity attributable to owners of the Company | 4,437,275 | 3,559,289 | +24.7% | - The significant growth in **exploration and evaluation assets** (+15.3%) is the primary driver of total asset growth, reflecting continuous investment in the Brazil iron ore project[12](index=12&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) The Group's H1 2025 total equity significantly increased, mainly from HKD 376 million in share capital from placing and HKD 534 million in currency translation gains Summary of Condensed Consolidated Statement of Changes in Equity (HKD Thousands) | Indicator | Jan 1, 2025 | Change | June 30, 2025 | | :--- | :--- | :--- | :--- | | Total Equity | 3,513,948 | +869,909 | 4,383,857 | | Shares issued through placing | – | 376,000 | 376,000 | | Loss for the period | – | (43,146) | (43,146) | | Currency translation (Other comprehensive income) | – | 534,563 | 534,563 | - **Shares issued through placing** brought a **HKD 376,000 thousand increase in share capital**, significantly improving the equity structure[13](index=13&type=chunk) - Exchange reserve changed from **(HKD 6,665,899 thousand)** as of January 1, 2025, to **(HKD 6,133,641 thousand)** as of June 30, 2025, primarily affected by currency translation, reflecting exchange rate changes of overseas operations[13](index=13&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) The Group achieved a significant net increase in cash and cash equivalents in H1 2025, primarily from substantial financing cash inflow via shares placing, despite operating cash outflow Summary of Condensed Consolidated Statement of Cash Flows (HKD Thousands) | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (9,943) | (18,382) | Loss narrowed | | Net cash (used in)╱generated from investing activities | (5,253) | 18,505 | From inflow to outflow | | Net cash generated from╱(used in) financing activities | 362,156 | (11,861) | From outflow to inflow | | Net increase╱(decrease) in cash and cash equivalents | 346,960 | (11,738) | From decrease to increase | | Cash and cash equivalents at end of period | 410,975 | 151,282 | +171.6% | - **Shares placing** brought **HKD 376,000 thousand in cash inflow**, which is the main reason for the significant increase in cash and cash equivalents during the period[14](index=14&type=chunk) - Cash flow from investing activities turned from a net inflow last year to a net outflow, primarily due to the disposal of a subsidiary (net of cash disposed) and the purchase of exploration and evaluation assets[14](index=14&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Basis of Presentation and Changes in Accounting Policies](index=10&type=section&id=Basis%20of%20Presentation%20and%20Changes%20in%20Accounting%20Policies) These unaudited consolidated financial statements, reviewed by the Audit Committee, adhere to HKFRS and GEM Listing Rules, with consistent accounting policies and no significant impact from new standards - These financial statements are unaudited by the auditor but have been reviewed by the Audit Committee[15](index=15&type=chunk) - The accounting policies adopted in the preparation of these financial statements are consistent with those adopted in the preparation of the financial statements for the year 2024, and new or revised HKFRS accounting standards have had no significant impact on the Group's accounting policies[16](index=16&type=chunk) [Revenue](index=10&type=section&id=Revenue) The Group's H1 2025 total revenue significantly decreased by 68.7%, mainly due to sharp declines in lithium battery sales and discontinued ride-hailing services revenue Revenue Composition (HKD Thousands) | Business Type | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Continuing Operations** | | | | | Lithium battery sales | 11,600 | 44,666 | -74.0% | | Battery testing service income | 3,887 | 1,388 | +180.0% | | **Total Continuing Operations** | **15,487** | **46,054** | **-66.4%** | | **Discontinued Operations** | | | | | Ride-hailing services and related income | 6,899 | 25,393 | -72.8% | | **Total Revenue** | **22,386** | **71,447** | **-68.7%** | - **Lithium battery sales**, the main source of revenue from continuing operations, significantly **decreased by 74.0%** in H1 2025[18](index=18&type=chunk) - Revenue from discontinued ride-hailing services also significantly decreased by 72.8%, reflecting the exit strategy for this business[18](index=18&type=chunk) [Segment Information](index=10&type=section&id=Segment%20Information) The Group's H1 2025 saw a significant revenue drop and increased loss in lithium battery production, with non-current assets concentrated in Brazil's mineral exploration and China as the main revenue source Continuing Operations Segment Revenue and Loss (HKD Thousands) | Segment | H1 2025 Revenue | H1 2024 Revenue | H1 2025 Loss | H1 2024 Loss | | :--- | :--- | :--- | :--- | :--- | | Mineral resources exploration and trading | – | – | (6,778) | (3,987) | | Lithium battery production | 15,487 | 46,054 | (17,499) | (10,453) | | **Total** | **15,487** | **46,054** | **(24,277)** | **(14,440)** | - **Lithium battery production segment revenue decreased by 66.4%** year-on-year, and segment loss increased by 67.4% year-on-year[21](index=21&type=chunk)[22](index=22&type=chunk) Revenue from External Customers by Geographical Location (HKD Thousands) | Region | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | China | 15,487 | 9,868 | +56.9% | | United Kingdom | – | 36,186 | -100% | | **Total** | **15,487** | **46,054** | **-66.4%** | Non-current Assets by Geographical Location (HKD Thousands) | Region | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Brazil | 6,190,664 | 5,368,755 | +15.3% | | China | 58,503 | 65,950 | -11.3% | | Hong Kong | 4,380 | 4,117 | +6.4% | | France | – | 26,184 | -100% | | **Total** | **6,253,547** | **5,465,006** | **+14.4%** | - **Non-current assets in Brazil** (primarily exploration and evaluation assets) account for an extremely high proportion and continue to grow, indicating the Group's focused investment in the SAM iron ore project[24](index=24&type=chunk) Revenue Contribution from Major Customers (HKD Thousands) | Customer | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Customer A | – | 38,836 | | Customer B | 3,887 | – | | Customer C | 2,634 | – | - The revenue contribution from **major customer A** in H1 2024 disappeared in H1 2025, replaced by contributions from customers B and C, indicating a change in customer structure[25](index=25&type=chunk) [Other Operating Income, Gains and Losses](index=14&type=section&id=Other%20Operating%20Income%2C%20Gains%20and%20Losses) The Group's H1 2025 other operating losses narrowed, mainly due to the absence of prior-period impairment losses, partially offset by increased losses from fair value financial assets Other Operating Income, Gains and Losses (HKD Thousands) | Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Bank interest income | 2,143 | 1,611 | +33.0% | | Net (loss)╱gain from financial assets measured at fair value through profit or loss | (13,376) | 1,759 | From gain to loss | | Impairment loss on amounts due from an associate | – | (25,955) | Impairment loss disappeared | | Miscellaneous income | 318 | 7,920 | -96.0% | | Gain on lease modification | 2,204 | – | New | | **Total Continuing Operations** | **(8,707)** | **(13,993)** | **Loss narrowed** | - The **impairment loss on amounts due from an associate** of HKD 25,955 thousand recorded in H1 2024 disappeared in H1 2025, which is the main reason for the narrowed loss[26](index=26&type=chunk) - **Financial assets measured at fair value through profit or loss** turned from a gain of HKD 1,759 thousand in H1 2024 to a **loss of HKD 13,376 thousand** in H1 2025, negatively impacting current period results[26](index=26&type=chunk) [Finance Costs](index=14&type=section&id=Finance%20Costs) The Group's H1 2025 total finance costs decreased, driven by reduced borrowing interest and lease finance costs from continuing operations, and the absence of discontinued operations' finance costs Finance Costs Composition (HKD Thousands) | Item | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Continuing Operations** | | | | | Interest expense on borrowings | 3,139 | 3,290 | -4.7% | | Finance costs on lease liabilities | 63 | 400 | -84.25% | | **Total Continuing Operations** | **3,202** | **3,690** | **-13.2%** | | **Discontinued Operations** | | | | | Interest expense on borrowings | – | 365 | -100% | | Interest on other financial liabilities | 381 | 906 | -57.9% | | **Total Finance Costs** | **3,583** | **4,961** | **-27.8%** | - Interest expense on borrowings from discontinued operations disappeared in H1 2025, reflecting the disposal of that business[27](index=27&type=chunk) [Loss Before Income Tax](index=15&type=section&id=Loss%20Before%20Income%20Tax) The Group's H1 2025 loss before income tax was primarily influenced by depreciation and amortization, which slightly decreased for continuing operations and significantly for discontinued operations Depreciation and Amortization (HKD Thousands) | Item | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Depreciation and amortization from continuing operations | 3,742 | 3,780 | -1.0% | | Depreciation and amortization from discontinued operations | 1,304 | 4,734 | -72.5% | - **Depreciation and amortization from discontinued operations significantly decreased**, related to the disposal of that business[28](index=28&type=chunk) [Income Tax](index=15&type=section&id=Income%20Tax) The Group made no Hong Kong profits tax provision due to no assessable profits, while overseas taxes are based on local rates, including 34% for Brazil and 25% for China and France - The Group generated no assessable profits in Hong Kong, thus no provision for Hong Kong profits tax was made[29](index=29&type=chunk) - The corporate income tax rate for the Brazilian subsidiary SAM is **34%**, for Chinese subsidiaries is **25%**, and for French subsidiaries is **25%**[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [Dividends](index=15&type=section&id=Dividends) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Company did not declare an interim dividend in H1 2025, consistent with H1 2024[32](index=32&type=chunk) [Loss Per Share](index=16&type=section&id=Loss%20Per%20Share) The Group's H1 2025 basic loss per share (continuing and discontinued operations) narrowed to 0.27 HK cents, with basic and diluted figures being identical Loss Per Share (HK cents) | Item | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Basic loss per share from continuing and discontinued operations | (0.27) | (0.44) | Loss narrowed | | Basic loss per share from continuing operations | (0.26) | (0.41) | Loss narrowed | | Basic loss per share from discontinued operations | (0.01) | (0.03) | Loss narrowed | - The weighted average number of ordinary shares used to calculate basic and diluted loss per share increased from 9,737,501 thousand shares in H1 2024 to **12,296,469 thousand shares** in H1 2025[34](index=34&type=chunk) - Basic and diluted loss per share are the same because there were no issued potential ordinary shares in H1 2025, and the exercise of share options in H1 2024 had an anti-dilutive effect[37](index=37&type=chunk)[38](index=38&type=chunk) [Discontinued Operations](index=17&type=section&id=Discontinued%20Operations) The Company completed the disposal of its ride-hailing services business on April 3, 2025, re-presenting it as a discontinued operation, which recorded a narrowed loss - The Company completed the disposal of the entire issued share capital of Jihang International Technology Co., Ltd., which primarily engages in the research, development of mobile and online applications, and provision of transportation services, on April 3, 2025[39](index=39&type=chunk) Loss for the Period and Cash Flows from Discontinued Operations (HKD Thousands) | Item | H1 2025* | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 6,899 | 25,393 | -72.8% | | Loss before income tax | (4,857) | (8,738) | Loss narrowed | | Loss for the period from discontinued operations | (3,054) | (8,738) | Loss narrowed | | Cash flows from operating activities | (1,324) | (6,315) | Loss narrowed | | Net cash flows | 485 | (6,315) | From outflow to inflow | - Exchange reserve of HKD 1,803 thousand was released upon disposal of Jihang International and recognized in the consolidated loss for the period from discontinued operations[40](index=40&type=chunk) - Net cash flows from discontinued operations turned from a net outflow of HKD 6,315 thousand in H1 2024 to a **net inflow of HKD 485 thousand** in H1 2025[40](index=40&type=chunk) [Exploration and Evaluation Assets](index=18&type=section&id=Exploration%20and%20Evaluation%20Assets) Exploration and evaluation assets primarily represent the Group's exploration rights and expenditures for prospective iron ore reserves in Minas Gerais, Brazil - Exploration and evaluation assets are primarily related to the exploration and identification of iron ore resources in Minas Gerais, Brazil[42](index=42&type=chunk) [Financial Assets Measured at Fair Value Through Other Comprehensive Income](index=18&type=section&id=Financial%20Assets%20Measured%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) The Group's H1 2025 financial assets measured at fair value through other comprehensive income significantly decreased, mainly due to a decline in the fair value of its strategic investment in Luokung Technology Corp Financial Assets Measured at Fair Value Through Other Comprehensive Income (HKD Thousands) | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Listed equity instruments | 9 | 249 | -96.4% | - The balance represents the Group's strategic investment in **Luokung Technology Corp. (NASDAQ: LKCO)**, whose fair value significantly declined during the reporting period[43](index=43&type=chunk) [Interests in an Associate](index=18&type=section&id=Interests%20in%20an%20Associate) The Group's H1 2025 interest in an associate slightly decreased, primarily due to an increased share of post-acquisition losses and other comprehensive losses Interests in an Associate (HKD Thousands) | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Interests in an associate | 5,502 | 5,810 | -5.47% | | Share of post-acquisition losses and other comprehensive losses | (105,420) | (105,112) | Loss increased | - The associate is **Shandong Hengyuan New Energy Technology Co., Ltd.**, primarily engaged in research, production, and sales of lithium batteries, in which the Group indirectly holds a **24.5% interest**[45](index=45&type=chunk) - The share of results of the associate for the period was a loss of HKD 88 thousand, and the share of other comprehensive loss was HKD 220 thousand[45](index=45&type=chunk) [Right-of-use Assets](index=19&type=section&id=Right-of-use%20Assets) The Group's H1 2025 right-of-use assets slightly increased, comprising prepaid land leases and property leases, influenced by modifications and exchange differences Movement of Right-of-use Assets (HKD Thousands) | Item | Amount | | :--- | :--- | | As at Jan 1, 2025 | 34,595 | | Amortization | (1,090) | | Lease modification | 982 | | Exchange differences | 898 | | As at June 30, 2025 | 35,385 | - Right-of-use assets include prepaid long-term land use rights in China and leases for properties and offices, with lease terms ranging from one to ten years[46](index=46&type=chunk) [Trade and Bills Receivables](index=20&type=section&id=Trade%20and%20Bills%20Receivables) The Group's H1 2025 total trade and bills receivables significantly decreased, driven by reduced trade receivables and impairment losses, though older receivables increased proportionally Trade and Bills Receivables (HKD Thousands) | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Trade receivables — Gross | 10,582 | 37,217 | -71.6% | | Less: Impairment loss | (375) | (794) | -52.8% | | Trade receivables — Net | 10,207 | 36,423 | -72.0% | | Bills receivables | – | 170 | -100% | | **Total** | **10,207** | **36,593** | **-72.1%** | Ageing Analysis of Trade Receivables (HKD Thousands) | Ageing | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | 5,191 | 8,079 | | 31 to 90 days | 1,521 | 8,088 | | 91 to 180 days | 2,782 | 19,198 | | Over 180 days | 1,088 | 2,022 | - The Group does not hold any collateral as security or credit enhancement for trade receivables[47](index=47&type=chunk) [Financial Assets Measured at Fair Value Through Profit or Loss](index=21&type=section&id=Financial%20Assets%20Measured%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) The Group's H1 2025 financial assets measured at fair value through profit or loss decreased, mainly due to a decline in the fair value of its listed equity investment in Yuxing InfoTech Financial Assets Measured at Fair Value Through Profit or Loss (HKD Thousands) | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Listed equity investments (Hong Kong) | 35,890 | 49,261 | -27.1% | | Listed equity investments (Overseas) | 107 | 112 | -4.5% | | **Total** | **35,997** | **49,373** | **-27.1%** | - The balance primarily refers to a **14.14% equity interest in Yuxing InfoTech Investment Holdings Limited** (Hong Kong Stock Code: 8005), whose fair value is determined by reference to the quoted market price at the reporting date[48](index=48&type=chunk)[49](index=49&type=chunk) [Trade and Bills Payables](index=21&type=section&id=Trade%20and%20Bills%20Payables) The Group's H1 2025 total trade and bills payables slightly decreased, primarily due to reduced bills payables, with a lower proportion of older trade payables Trade and Bills Payables (HKD Thousands) | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Trade payables | 25,481 | 23,980 | +6.3% | | Bills payables | 9,902 | 14,520 | -31.8% | | **Total** | **35,383** | **38,500** | **-8.1%** | Ageing Analysis of Trade and Bills Payables (HKD Thousands) | Ageing | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | 19,543 | 9,488 | | 31 to 60 days | 10,187 | 9,617 | | 61 to 90 days | 1,166 | 7,395 | | 91 to 180 days | 2,062 | 835 | | Over 180 days | 2,425 | 11,165 | [Provisions](index=22&type=section&id=Provisions) The Group's subsidiary, Zhejiang Hengyuan New Energy, entered an installment agreement to repay RMB 144.1 million in government grants, with additional provisions recognized in 2024 - Zhejiang Hengyuan New Energy Technology Co., Ltd. is required to repay approximately **RMB 144.1 million** in government grants to the government, in installments until December 31, 2027, with an annual interest rate of **2.00%**[51](index=51&type=chunk)[52](index=52&type=chunk) - This repayment obligation is guaranteed by Zhejiang Geely Holding Group Co., Ltd[52](index=52&type=chunk) - Further provisions of approximately **RMB 9.9 million** (approximately **HKD 10.7 million**) were recognized for the year ended December 31, 2024[52](index=52&type=chunk) [Borrowings](index=23&type=section&id=Borrowings) The Group's H1 2025 total bank borrowings slightly decreased, primarily RMB-denominated loans secured by assets and guarantees, bearing 3.5% to 3.6% annual interest Borrowings Composition (HKD Thousands) | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Bank overdrafts (Euro) | – | 90 | -100% | | Bank loans (RMB) | 98,513 | 105,357 | -6.5% | | **Total** | **98,513** | **105,447** | **-6.6%** | - Bank loans are secured by the Group's right-of-use assets, property, plant and equipment, and a corporate guarantee from Zhejiang Geely Holding Group Co., Ltd[53](index=53&type=chunk) - Bank loans are repayable in installments by June 3, 2029, and bear interest at annual rates ranging from **3.5% to 3.6%**[53](index=53&type=chunk) [Deferred Tax Liabilities](index=23&type=section&id=Deferred%20Tax%20Liabilities) The Group's H1 2025 deferred tax liabilities significantly increased, mainly due to fair value adjustments and translation differences of exploration and evaluation assets Deferred Tax Liabilities (HKD Thousands) | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Deferred tax liabilities | 1,982,618 | 1,706,319 | +16.2% | - Deferred tax liabilities primarily arise from fair value adjustments and/or translation differences of exploration and evaluation assets[54](index=54&type=chunk) [Disposal of a Subsidiary](index=24&type=section&id=Disposal%20of%20a%20Subsidiary) On April 3, 2025, the Company disposed of 35.56% of Jihang International to a related party for RMB 1, resulting in HKD 2,530 thousand net liabilities treated as a deemed shareholder contribution - The Company completed the disposal of approximately **35.56% equity interest in Jihang International** on April 3, 2025, for a consideration of RMB 1 (approximately HKD 1)[55](index=55&type=chunk) - The buyer, Zhejiang Zuozhongyou Electric Vehicle Services Co., Ltd., is a related party controlled by Mr. Li Shufu, the Company's controlling shareholder[55](index=55&type=chunk) Net Liabilities Disposed of Jihang International (HKD Thousands) | Item | Amount | | :--- | :--- | | Net liabilities disposed of | (2,530) | | Cash consideration | – | | Deemed contribution arising from disposal of a subsidiary | 2,530 | | Accumulated exchange reserve reclassified to profit or loss on disposal | 1,803 | | Net cash outflow | (4,364) | - This disposal resulted in **net liabilities of HKD 2,530 thousand** and was treated as a deemed contribution from shareholders, while also reclassifying accumulated exchange reserve of HKD 1,803 thousand to profit or loss[56](index=56&type=chunk)[57](index=57&type=chunk) [Contingent Consideration Payable](index=25&type=section&id=Contingent%20Consideration%20Payable) The Group is committed to paying up to USD 60 million in contingent consideration for the SAM acquisition upon specific events, with a fair value of HKD 117,471 thousand Contingent Consideration Payable (HKD Thousands) | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Contingent consideration payable | 117,471 | 117,471 | No change | - Contingent consideration payable refers to the fair value of contingent additional amounts and conditional mining production payments up to a total of **USD 60,000,000** to be paid to the seller upon the occurrence of certain events, as per the settlement agreement related to the acquisition of SAM[58](index=58&type=chunk)[59](index=59&type=chunk) [Fair Value and Fair Value Hierarchy of Financial Instruments](index=25&type=section&id=Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) The Group discloses financial instrument fair values using a three-level hierarchy, with listed shares in Level 1 and contingent consideration in Level 3, showing no inter-level transfers in H1 2025 Fair Value Hierarchy of Financial Instruments (HKD Thousands) | Item | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | **Assets (June 30, 2025)** | | | | | | Financial assets measured at fair value through other comprehensive income (Listed shares) | 9 | – | – | 9 | | Financial assets measured at fair value through profit or loss (Listed shares) | 35,997 | – | – | 35,997 | | **Liabilities (June 30, 2025)** | | | | | | Contingent consideration payable | – | – | 117,471 | 117,471 | - Fair value measurements for **Level 1** financial instruments are based on quoted prices in active markets for identical assets or liabilities, while **Level 3** is based on valuation techniques using unobservable inputs[60](index=60&type=chunk) - There were no transfers between different levels of the fair value hierarchy for the six months ended June 30, 2025[62](index=62&type=chunk) [Management Discussion and Analysis](index=27&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=27&type=section&id=Business%20Review) The Group's H1 2025 saw declining lithium battery revenue, disposal of the ride-hailing business, continued advancement of the SAM iron ore project, and losses from equity investments - **Lithium-ion battery segment revenue decreased by approximately 66.4% to HKD 15.5 million** year-on-year in H1 2025, primarily due to reduced orders from major customers and unsatisfactory new product sales, leading to an increased segment loss of **HKD 17.5 million**[67](index=67&type=chunk)[68](index=68&type=chunk) - The ride-hailing business (Caocao brand) was disposed of through the sale of Jihang International on April 3, 2025, due to high operating costs and failure to find a sustainable business model, exiting the business to avoid further losses[69](index=69&type=chunk)[71](index=71&type=chunk) - The **SAM iron ore project** is optimizing concept engineering, evaluating alternatives, and has initiated a new Environmental Impact Assessment (EIA-RIMA), aiming to obtain the preliminary environmental license by 2027. The Group has acquired Lotus Fortune, regaining full control over the project's logistics chain[73](index=73&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - The Group holds a **14.14% equity interest in Yuxing InfoTech Investment Holdings Limited** as a strategic investment, but its share price **decreased by approximately 27.1%** in H1 2025, resulting in a loss on related financial assets[78](index=78&type=chunk)[80](index=80&type=chunk) [Financial Review](index=31&type=section&id=Financial%20Review) The Group's H1 2025 revenue significantly decreased by 66.4%, with gross profit margin falling to 1.4%, while cash and cash equivalents surged due to shares placing, improving the gearing ratio Key Financial Indicators (HKD Thousands) | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 15,500 | 46,100 | -66.4% | | Gross Profit | 200 | 12,500 | -98.4% | | Gross Profit Margin | 1.4% | 27.2% | -25.8 percentage points | | Loss for the period from continuing operations | (40,100) | (44,400) | Loss narrowed | | Loss attributable to owners of the Company (excluding discontinued operations) | (31,800) | (39,400) | Loss narrowed | | Cash and cash equivalents balance | 411,000 | 65,800 (Dec 31, 2024) | +524.6% | | Gearing Ratio | 2.2% | 3.0% (Dec 31, 2024) | Improved | - **Gross profit margin declined** primarily due to reduced sales of high-margin products in the lithium battery production segment and increased fixed direct costs per unit[80](index=80&type=chunk) - The narrowing of loss from continuing operations was mainly due to the absence of an impairment loss on amounts due from an associate of approximately **HKD 26,000 thousand** in H1 2025, partially offset by a loss of approximately **HKD 13,400 thousand** from financial assets measured at fair value through profit or loss[79](index=79&type=chunk)[81](index=81&type=chunk) - **Cash and cash equivalents significantly increased** primarily due to net proceeds of approximately **HKD 375,000 thousand** from the placing of 4,700,000,000 shares[81](index=81&type=chunk) [Financial Policies and Exchange Rate Fluctuation Risk](index=33&type=section&id=Financial%20Policies%20and%20Exchange%20Rate%20Fluctuation%20Risk) Operating across multiple currencies in Hong Kong, China, France, and Brazil, the Group adopts a conservative, unhedged approach to foreign exchange risk, with regular reviews - The Group operates in Hong Kong, China, France, and Brazil, using multiple currencies including HKD, RMB, Euro, and Brazilian Real[83](index=83&type=chunk) - The Group adopts a conservative approach to foreign exchange risk and has not formulated a foreign currency hedging policy, but regularly reviews foreign exchange risk[83](index=83&type=chunk) [Employees and Remuneration Policy](index=33&type=section&id=Employees%20and%20Remuneration%20Policy) The Group significantly reduced its workforce and employee remuneration in H1 2025 through strategic adjustments, with remuneration policies based on expertise and formulated by the Remuneration Committee Employee Count and Remuneration (HKD Thousands) | Indicator | June 30, 2025 | June 30, 2024 | Dec 31, 2024 | | :--- | :--- | :--- | :--- | | Employee Count | 101 | 193 | 164 | | Employee Remuneration (H1) | 13,300 | 28,800 | N/A | - **Employee count decreased from 193** as of June 30, 2024, to **101** as of June 30, 2025, and **employee remuneration decreased by 53.8%** year-on-year[84](index=84&type=chunk) - Remuneration policy is formulated by the Remuneration Committee based on employees' expertise, qualifications, capabilities, and corporate objectives, and provides internal and external training for employees[84](index=84&type=chunk) [Outlook](index=34&type=section&id=Outlook) The Group plans to leverage its controlling shareholder's background to deepen cooperation, focus on the resources sector, advance the Brazil iron ore project, expand trading, and seek new sustainable businesses - The Group will deepen cooperation with its indirect controlling shareholder, Geely Technology Group Co., Ltd., and Zhejiang Geely Holding Group Co., Ltd., to leverage synergies[85](index=85&type=chunk) - The company will gradually establish a clearer business model focused on the resources sector, exit projects inconsistent with its vision, and identify resilient and stable investment opportunities[85](index=85&type=chunk) - Actively advance the environmental assessment for the **Brazil iron ore project** and gradually expand international and domestic iron ore trading businesses, with the ore trading business expected to contribute in H2 2025[86](index=86&type=chunk) - The company's vision is to become a trusted green and environmentally friendly mineral resource supplier, committed to strengthening internal management, improving operational efficiency, and risk management capabilities[85](index=85&type=chunk) [Corporate Governance and Shareholder Information](index=34&type=section&id=Corporate%20Governance%20and%20Shareholder%20Information) [Corporate Governance](index=34&type=section&id=Corporate%20Governance) The Company complied with GEM Listing Rules' corporate governance provisions in H1 2025, except for combined Chairman/CEO roles and the absence of an internal audit function, which the Board annually reviews - The Company complied with all code provisions of Appendix 15 to the GEM Listing Rules, except for code provisions C.2.1 (roles of chairman and chief executive should be separate) and D.2.2 (establishment of an internal audit function)[87](index=87&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive enhances governance and strategy implementation, and the existing internal control system is effective; the Audit Committee will annually review the need for an internal audit function[87](index=87&type=chunk) [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%2C%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, Chairman Mr. Xu Zhihao held a 2.90% long position in the Company's ordinary shares, with no other directors or chief executives holding disclosable interests Directors' Long Positions in Ordinary Shares of the Company (June 30, 2025) | Director Name | Beneficial Owner (Number of Shares) | Total (Number of Shares) | Approximate Percentage of Shareholding (%) | | :--- | :--- | :--- | :--- | | Xu Zhihao | 422,000,000 | 422,000,000 | 2.90 | - No other directors or chief executives of the Company had any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations[89](index=89&type=chunk) [Subscription of 4,700,000,000 Shares of the Company](index=36&type=section&id=Subscription%20of%204%2C700%2C000%2C000%20Shares%20of%20the%20Company) The Company completed a HKD 375 million share subscription by its controlling shareholder and Chairman on March 27, 2025, funding Brazil iron ore development, Zhejiang Hengyuan, and Hong Kong headquarters working capital - The Company completed the allotment and issue of **4,700,000,000 shares** to its controlling shareholder, Hongqiao Capital Co., Ltd., and Chairman Mr. Xu Zhihao on March 27, 2025, at a subscription price of **HKD 0.08 per share**[90](index=90&type=chunk)[91](index=91&type=chunk) - The total proceeds from the subscription were HKD 376,000,000, with net proceeds of approximately **HKD 375,000,000**[90](index=90&type=chunk) Use of Proceeds from Subscription (HKD Million) | Purpose | Planned Use | Utilized (as of June 30, 2025) | Unutilized (as of June 30, 2025) | | :--- | :--- | :--- | :--- | | Development and investment in mining-related projects | 306.4 | 8.2 | 298.2 | | — Brazil iron ore project development | 207.1 | 8.2 | 198.9 | | — Investment in mineral-related projects | 99.3 | – | 99.3 | | Working capital for Zhejiang Hengyuan New Energy Technology Co., Ltd. | 25.0 | – | 25.0 | | Working capital for the Group's Hong Kong headquarters | 43.6 | 9.8 | 33.8 | | **Total** | **375.0** | **18.0** | **357.0** | - The subscription aims to support existing business development, improve financial position, and provide support for future development and working capital[90](index=90&type=chunk) [Strategic Cooperation Memorandum](index=37&type=section&id=Strategic%20Cooperation%20Memorandum) The Company signed a non-binding strategic cooperation memorandum with a related party to explore financializing valuable timber assets through RWA, stablecoins, and blockchain for a green economic closed loop - The Company entered into a strategic cooperation memorandum with Oriental Yilin Industrial Co., Ltd. (an indirect non-wholly owned subsidiary of Geely Technology Group Co., Ltd., the Company's indirect controlling shareholder)[94](index=94&type=chunk) - The memorandum aims to explore the financialization path of valuable timber assets, using Hainan Huanghuali standing timber as underlying assets, combining RWA, stablecoins, and compliant digital currency issuance to build a **"valuable timber industry resources + finance + blockchain" green economic closed loop**[94](index=94&type=chunk) - The goal is to empower the transformation and upgrading of the traditional valuable timber industry, activate a market of hundreds of billions in timber rights trading, and promote rural revitalization and common prosperity[94](index=94&type=chunk) [Share Option Scheme](index=37&type=section&id=Share%20Option%20Scheme) The Company's share option scheme, adopted in May 2022, aims to reward and retain talent, with 985,453,360 shares (6.8% of issued capital) available as of June 30, 2025, and no activity during the period - The share option scheme aims to reward participants for their contributions to the Group and to recruit and retain high-caliber employees[96](index=96&type=chunk) - Participants include directors, eligible employees, consultants, advisors, agents, contractors, customers, and suppliers of the Group's member companies or investment entities[97](index=97&type=chunk) - As of June 30, 2025, the total number of shares that may be issued under the scheme was **985,453,360 shares**, representing approximately **6.8%** of the Company's issued share capital[98](index=98&type=chunk) - The maximum number of share options that may be granted to any one participant in any 12-month period is **1%** of the total number of issued shares at that time[100](index=100&type=chunk) - The exercise price of share options shall not be less than the highest of the closing price on the offer date, the average closing price for the five business days immediately preceding the offer date, and the nominal value of the shares[102](index=102&type=chunk)[105](index=105&type=chunk) - For the period ended June 30, 2025, no share options were granted, exercised, cancelled, or lapsed under the scheme, and there were no outstanding share options[99](index=99&type=chunk)[104](index=104&type=chunk) [Interests and Short Positions of Substantial Shareholders and Other Persons in Shares and Underlying Shares](index=40&type=section&id=Interests%20and%20Short%20Positions%20of%20Substantial%20Shareholders%20and%20Other%20Persons%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, Mr. Li Shufu and his controlled entities were substantial shareholders, collectively holding 67.70% of the Company's shares, with Hongqiao Capital holding 53.93% Substantial Shareholders' Interests in Shares of the Company (June 30, 2025) | Shareholder Name╱Name | Total Number of Shares Held | Approximate Percentage of Shareholding (%) | | :--- | :--- | :--- | | Li Shufu | 9,853,438,675 | 67.70 | | Hongqiao Capital Co., Ltd. | 7,849,699,000 | 53.93 | | Geely International (Hong Kong) Limited | 1,850,675,675 | 12.72 | | Zhejiang Geely Holding Group Co., Ltd. | 1,850,675,675 | 12.72 | - Mr. Li Shufu indirectly controls the Company through Zhejiang Geely Holding Group Co., Ltd. and Geely Group Co., Ltd[106](index=106&type=chunk) - Hongqiao Capital Co., Ltd. is an indirect subsidiary of Geely Technology Group Co., Ltd., which is ultimately controlled by Mr. Li Shufu[106](index=106&type=chunk) [Continuing Connected Transactions](index=41&type=section&id=Continuing%20Connected%20Transactions) [Sales Framework Agreement with Zhejiang Geely Holding Group Co., Ltd.](index=41&type=section&id=Sales%20Framework%20Agreement%20with%20Zhejiang%20Geely%20Holding%20Group%20Co.%2C%20Ltd.) The Group entered a sales framework agreement with related party Zhejiang Geely Holding Group to supply lithium-ion battery products, with H1 2025 sales totaling approximately RMB 900 thousand - The Group entered into a sales framework agreement with **Zhejiang Geely Holding Group Co., Ltd.** (ultimately controlled by Mr. Li Shufu, the Company's controlling shareholder) to supply lithium-ion battery packs and related products[107](index=107&type=chunk) - The agreement period is from October 23, 2023, to October 22, 2026; product prices are determined by fair negotiation with reference to market prices; payment terms are cash within 75 days of receiving the invoice[109](index=109&type=chunk) Annual Sales Caps (RMB Thousands) | Period | Oct 23 to Dec 31, 2023 | Year ended Dec 31, 2024 | Year ended Dec 31, 2025 | Jan 1 to Oct 22, 2026 | | :--- | :--- | :--- | :--- | :--- | | Annual Sales Cap | 50,000 | 235,000 | 155,000 | 97,000 | - Sales under the sales framework agreement in H1 2025 were approximately **RMB 900 thousand** (approximately **HKD 1,000 thousand**)[123](index=123&type=chunk) [Purchase Framework Agreement with Zhejiang Yaoning Technology Group Co., Ltd.](index=42&type=section&id=Purchase%20Framework%20Agreement%20with%20Zhejiang%20Yaoning%20Technology%20Group%20Co.%2C%20Ltd.) The Group entered a purchase framework agreement with related party Zhejiang Yaoning Technology to procure lithium-ion battery products, with H1 2025 purchases totaling approximately RMB 10,900 thousand - The Group entered into a purchase framework agreement with **Zhejiang Yaoning Technology Group Co., Ltd.** (indirectly owned by Mr. Li Xingxing, son of Mr. Li Shufu) to purchase lithium-ion batteries, modules, and related products[113](index=113&type=chunk) - The agreement period is from September 11, 2023, to September 10, 2026; product prices are determined by fair negotiation with reference to market prices; payment terms are cash within 60 days of receiving the invoice[114](index=114&type=chunk)[117](index=117&type=chunk) Annual Purchase Caps (RMB Thousands) | Period | Sep 11 to Dec 31, 2023 | Year ended Dec 31, 2024 | Year ended Dec 31, 2025 | Jan 1 to Sep 10, 2026 | | :--- | :--- | :--- | :--- | :--- | | Annual Purchase Cap | 42,000 | 103,000 | 129,000 | 72,000 | - Purchases under the purchase framework agreement in H1 2025 were approximately **RMB 10,900 thousand** (approximately **HKD 11,800 thousand**)[124](index=124&type=chunk) [Bauxite Procurement Framework Agreement with Geely Technology Group Co., Ltd.](index=44&type=section&id=Bauxite%20Procurement%20Framework%20Agreement%20with%20Geely%20Technology%20Group%20Co.%2C%20Ltd.) The Company entered a bauxite procurement framework agreement with related party Geely Technology Group to procure bauxite products, with no transactions recorded in H1 2025 - The Company entered into a bauxite procurement framework agreement with **Geely Technology Group Co., Ltd.** (ultimately controlled by Mr. Li, the Company's controlling shareholder) to procure bauxite-related products[118](index=118&type=chunk) - Geely Technology Group owns a bauxite mining area in Baise City, Guangxi Province, China, with an estimated annual production capacity of **2 million tonnes** of bauxite[119](index=119&type=chunk) - The agreement period is from January 27, 2025, to December 31, 2027; product prices are determined by fair negotiation with reference to market prices; payment terms are cash prepayment five days before delivery[120](index=120&type=chunk) Annual Procurement Caps (RMB Thousands) | Period | Jan 27 to Dec 31, 2025 | Year ended Dec 31, 2026 | Year ended Dec 31, 2027 | | :--- | :--- | :--- | :--- | | Annual Procurement Cap | 300,000 | 370,000 | 370,000 | - There were no procurement transactions under the bauxite procurement framework agreement in H1 2025[125](index=125&type=chunk) [Other Information](index=45&type=section&id=Other%20Information) [Company's Constitutional Documents](index=45&type=section&id=Company's%20Constitutional%20Documents) The Company's constitutional documents remained unchanged in H1 2025 - There were no changes to the Company's constitutional documents in H1 2025[127](index=127&type=chunk) [Interests in Competing Business](index=45&type=section&id=Interests%20in%20Competing%20Business) In H1 2025, no directors, controlling shareholders, or their associates held interests in competing businesses or had conflicts of interest with the Group - In H1 2025, no directors, controlling shareholders, or their associates held any interests in businesses that compete or may compete with the Group's business, nor were there any conflicts of interest[128](index=128&type=chunk) [Directors' Interests in Contracts](index=46&type=section&id=Directors'%20Interests%20in%20Contracts) No directors held material direct or indirect interests in any significant contracts of the Company, its holding company, or subsidiaries during the review period - No directors had a material direct or indirect interest in any significant contract entered into by the Company, its holding company, or subsidiaries that was subsisting at the end of the period or at any time during the review period[129](index=129&type=chunk) [Standard Code for Securities Transactions by Directors](index=46&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the GEM Listing Rules' standard for directors' securities transactions, with all directors confirming compliance with both the standard and the company's code of conduct in H1 2025 - The Company has adopted the required standard for directors' securities transactions as set out in Rules 5.48 to 5.67 of the GEM Listing Rules[130](index=130&type=chunk) - All directors confirmed that they have complied with the required standard for securities transactions and the Company's code of conduct for directors' securities transactions in H1 2025[130](index=130&type=chunk) [Audit Committee](index=46&type=section&id=Audit%20Committee) The Audit Committee reviewed the Group's unaudited H1 2025 results, confirming their preparation according to applicable accounting standards and adequate disclosures - The Audit Committee has reviewed the Group's unaudited results for H1 2025 and believes they are prepared in accordance with applicable accounting standards and requirements, with adequate disclosures[131](index=131&type=chunk) - The Audit Committee has established its terms of reference in writing in accordance with Rule 5.28 of the GEM Listing Rules and Code Provision D.3.3 of the Corporate Governance Code[131](index=131&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=46&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) In H1 2025, neither the Company, its ultimate holding company, nor any subsidiaries purchased, sold, or redeemed any of the Company's listed securities - In H1 2025, neither the Company, its ultimate holding company, nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[132](index=132&type=chunk) [Directors](index=47&type=section&id=Directors) This section lists the directors during the period and up to the report date, with appointment and resignation details disclosed in company announcements - The list of directors during the period and up to the report date includes Executive Directors Mr. Xu Zhihao (Chairman and Chief Executive Officer), Mr. Xu Bing, Mr. Chen Shengjie, Ms. Gu Wenting, and Independent Non-executive Directors Dr. Wang Jiwei, Mr. Wang Baogang, Mr. Huang Yongzhong, among others[133](index=133&type=chunk) - Mr. Liu Wei, Mr. Yan Weimin, Mr. Chen Zhenwei, Mr. Ma Gang, and Mr. Xia Jun resigned or retired during the reporting period[133](index=133&type=chunk)

[Summary](index=4&type=section&id=Summary) This summary outlines the company's H1 2025 operating performance, showing growth in both revenue and net profit, with a slight decrease in gross profit margin. The company actively addresses market challenges, seizes digital economy and AI opportunities, and drives steady development across its three business segments and three customer markets, with non-telecom operator enterprise and overseas markets' revenue share exceeding half for the first time H1 2025 Key Financial Data | Metric | 2025 (RMB million) | 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Operating Revenue | 76,939 | 74,412 | 3.4% | | Gross Profit | 7,888 | 8,116 | -2.8% | | Profit Attributable to Equity Holders of the Company | 2,129 | 2,125 | 0.2% | | Basic Earnings Per Share (RMB) | 0.307 | 0.307 | 0.2% | | Free Cash Flow | (7,627) | (2,165) | – | - The Group's operating performance showed steady progress, with operating revenue increasing by **3.4% year-over-year** and net profit by **0.2% year-over-year**. The gross profit margin was **10.3%**, and the net profit margin was **2.8%**[7](index=7&type=chunk) - The Group's three major customer markets developed steadily, with combined revenue from domestic non-telecommunications operator enterprise customers and overseas markets exceeding **half of operating revenue** for the first time[7](index=7&type=chunk) - The Group's three business segments achieved comprehensive growth, with deepening AI application scenarios and accelerated digital transformation driving the continuous rapid development of applications, content, and other services, becoming the core driver of revenue growth[7](index=7&type=chunk) [Chairman's Report](index=5&type=section&id=Chairman's%20Report) The Chairman's Report outlines the company's strategic positioning as a 'new-generation integrated smart service provider' in H1 2025, emphasizing stable operating performance growth through technological innovation, market expansion, and strategic emerging business cultivation amidst the rapid evolution of the digital economy and AI technologies. The report also covers the company's ESG practices and future outlook [Operating Performance and Financial Results](index=5&type=section&id=Operating%20Performance%20and%20Financial%20Results) The company maintained steady growth in operating revenue and net profit in H1, with service revenue increasing by **2.9% year-over-year**. Despite a decline in gross profit margin, the company achieved comprehensive growth across its three business segments and steady development in its three customer markets by transitioning old and new drivers and seizing digital intelligence opportunities - H1 operating revenue reached **RMB 76,939 million**, a **3.4% year-over-year increase**; service revenue was **RMB 74,981 million**, a **2.9% year-over-year increase**[9](index=9&type=chunk) - Operating gross profit was **RMB 7,888 million**, a **2.8% year-over-year decrease**; gross profit margin was **10.3%**, down **0.6 percentage points year-over-year**[9](index=9&type=chunk) - Net profit was **RMB 2,129 million**, a **0.2% year-over-year increase**; net profit margin was **2.8%**, down **0.1 percentage points year-over-year**[9](index=9&type=chunk) [Business Segment Performance](index=5&type=section&id=Business%20Segment%20Performance) All three of the company's business segments maintained a positive trend. Revenue from applications, content, and other services increased by **11.7% year-over-year**, accounting for **21.2%** of total revenue, and has been the core driver of revenue growth for several consecutive years, benefiting from deepening AI applications and accelerated digital transformation across various industries H1 2025 Business Segment Revenue | Business Segment | Revenue (RMB million) | YoY Growth | | :--- | :--- | :--- | | Telecommunications Infrastructure Services | 38,272 | 1.6% | | Business Process Outsourcing Services | 22,383 | 1.0% | | Applications, Content and Other Services | 16,284 | 11.7% | - Revenue from applications, content, and other services continuously increased its share to **21.2%**, serving as the core driver of revenue growth for several consecutive years[10](index=10&type=chunk) [Customer Market Performance](index=6&type=section&id=Customer%20Market%20Performance) The company's three major customer markets developed steadily. Domestic non-telecommunications operator enterprise customer market revenue grew by **12.9% year-over-year**, strongly supporting overall revenue growth; overseas market revenue grew by **8.7% year-over-year**; domestic telecommunications operator market revenue decreased by **4.6% year-over-year**, but the company maintained resilience through its 'CAPEX+OPEX+Smart Applications' strategy H1 2025 Customer Market Revenue | Customer Market | Revenue (RMB million) | YoY Growth | | :--- | :--- | :--- | | Domestic Telecommunications Operators | 38,203 | -4.6% | | Domestic Non-Telecommunications Operator Enterprise Customers | 36,585 | 12.9% | | Overseas Market | 2,151 | 8.7% | - The domestic non-telecommunications operator enterprise customer market achieved **double-digit growth**, primarily benefiting from opportunities in computing infrastructure construction and integrated service capabilities[13](index=13&type=chunk) - The overseas market integrated into the 'Belt and Road' initiative, expanded high-value projects, and extended into new sectors such as industrial digitalization and new energy services[13](index=13&type=chunk) [Strategic Emerging Business Development](index=7&type=section&id=Strategic%20Emerging%20Business%20Development) The company's strategic emerging businesses showed strong momentum in H1, with new contract value accounting for over **40% of total new contract value**. The company deeply cultivates digital infrastructure, green and low-carbon, smart city, and emergency safety sectors, focusing on key industries like government, energy, and transportation, to create benchmark projects and facilitate industrial upgrading through technological innovation and full-chain service capabilities - Strategic emerging businesses maintained rapid growth in H1, with new contract value from this segment accounting for over **40% of total new contract value**[15](index=15&type=chunk) [Digital Infrastructure Sector](index=7&type=section&id=Digital%20Infrastructure%20Sector) The company seized the computing power market opportunities brought by AI technological transformation, undertaking smart computing center construction, data center renovation, and cloud platform/5G+ projects in multiple locations, providing intelligent, agile, green, energy-efficient, secure, and controllable integrated digital infrastructure construction and service assurance for government, internet, finance, energy, and other industry clients - Seized the computing power market opportunities driven by AI technological transformation, undertaking smart computing center construction, data center renovation, cloud platform, and 5G+ projects in multiple locations domestically and internationally[16](index=16&type=chunk) - New contract value from this sector maintained rapid growth in H1[16](index=16&type=chunk) [Green and Low-Carbon Sector](index=7&type=section&id=Green%20and%20Low-Carbon%20Sector) The company actively engaged in the green and low-carbon industry, adopting a 'green energy + energy-saving technology' dual-driven model to create benchmark projects such as low-carbon smart computing centers and 5G green base stations, and participated in drafting the first national standard for green data center evaluation, demonstrating its industry influence - Adopted a 'green energy + energy-saving technology' dual-driven model to create a series of benchmark projects, including low-carbon smart computing centers, 5G green base stations, green and low-carbon parks, and virtual power plant platforms[17](index=17&type=chunk) - Participated in drafting the first national standard for green data center evaluation, 'Green Data Center Evaluation,' demonstrating cutting-edge technological wisdom and industry influence[17](index=17&type=chunk) [Smart City Sector](index=8&type=section&id=Smart%20City%20Sector) The company seized opportunities in new urban infrastructure construction, leveraging its 'planning + design + implementation + delivery + operation' full-chain service capabilities, deeply integrating digital technologies such as AI, IoT, and big data, achieving rapid growth in new contract value in digital government, smart education, and smart water conservancy sectors - Leveraged 'planning + design + implementation + delivery + operation' full-chain service capabilities, deeply integrating digital technologies such as AI, IoT, and big data[19](index=19&type=chunk) - In H1, new contract value in digital government, smart education, smart water conservancy, smart cultural tourism, smart healthcare, and enterprise digital transformation sectors all achieved rapid growth[19](index=19&type=chunk) [Emergency Safety Sector](index=8&type=section&id=Emergency%20Safety%20Sector) The company assists in building a modern emergency management system, leveraging AI large models to empower industry applications and enhance disaster prevention, mitigation, and relief capabilities. In cybersecurity, it developed multiple independently controllable products, undertook major national cybersecurity projects, and provided integrated security services - Leveraged AI large models to empower industry applications, assisting clients in key sectors such as mining, chemical, water conservancy, and fire protection to achieve intelligent transformation of emergency management[20](index=20&type=chunk) - Developed multiple independently controllable cybersecurity products, undertook major national cybersecurity projects, and provided integrated security services covering cybersecurity planning, design, implementation, integration, delivery, and operation and maintenance[20](index=20&type=chunk) [Technological Innovation and New Productive Forces](index=9&type=section&id=Technological%20Innovation%20and%20New%20Productive%20Forces) The company strengthened technology-driven innovation in H1, increasing R&D investment in cutting-edge fields like AI, developing nearly a hundred innovative products, and fully implementing the 'AI+' initiative to strategically deploy AI businesses and build core competitiveness. Concurrently, it activated new development momentum through scientific and technological innovation system reforms - Focused on cutting-edge fields to strengthen technological innovation, centralized R&D efforts, built differentiated core competitiveness, deepened industrial cooperation, and promoted deep integration of technological and industrial innovation[22](index=22&type=chunk) [Technological Innovation Leadership](index=9&type=section&id=Technological%20Innovation%20Leadership) The company adheres to self-reliance in technological innovation, increasing R&D investment in core areas, forming nearly a hundred innovative products for emerging technologies such as AI, security, and low-carbon. It has accumulated over **4,100 authorized patents**, over **10,900 software copyrights**, and participated in **48 national standards** - Formed a product innovation library with nearly a hundred products for emerging technologies such as AI, security, and low-carbon[23](index=23&type=chunk) - Accumulated over **4,100 authorized patents**, over **10,900 software copyrights**, and participated in **48 national standards**[23](index=23&type=chunk) [AI Business Layout](index=9&type=section&id=AI%20Business%20Layout) The company fully implemented the 'AI+' initiative, strategically deploying AI businesses from three aspects: integrated innovation, deep scenario cultivation, and ecological collaboration, with an AI delivery team of over **1,400 people**. In H1, new contract value in the AI sector exceeded **RMB 1.3 billion**, covering over **200 clients** - Fully implemented the 'AI+' initiative, strategically deploying AI businesses from three aspects: integrated innovation, deep scenario cultivation, and ecological collaboration[24](index=24&type=chunk) - Possesses an AI delivery team of over **1,400 people**, providing customized services such as smart computing infrastructure construction and operation, data governance, and scenario-based application R&D[24](index=24&type=chunk) - In H1, new contract value in the AI sector exceeded **RMB 1.3 billion**, covering over **200 clients**[24](index=24&type=chunk) [Scientific and Technological Innovation System Reform](index=9&type=section&id=Scientific%20and%20Technological%20Innovation%20System%20Reform) The company continuously deepened its scientific and technological innovation system reform, optimizing R&D intensive operation and promotion mechanisms and achievement transformation mechanisms to improve R&D resource utilization efficiency, and perfecting mechanisms for cultivating, introducing, and selecting scientific and technological innovation experts to stimulate innovation and development vitality - Optimized R&D intensive operation and promotion mechanisms and achievement transformation mechanisms, improving R&D resource utilization efficiency[25](index=25&type=chunk) - Perfected mechanisms for cultivating, introducing, and selecting scientific and technological innovation experts, adopting multi-dimensional incentive methods to stimulate innovation and development vitality[25](index=25&type=chunk) [Environmental, Social, and Governance (ESG)](index=10&type=section&id=Environmental,%20Social,%20and%20Governance%20(ESG)) The company actively fulfills its environmental and social responsibilities, implements the 'dual carbon' strategy, promotes green and low-carbon development, and actively participates in social welfare activities such as emergency rescue and rural revitalization. In corporate governance, the company continuously enhances governance capabilities, improves its risk and internal control management system, and has received multiple capital market awards - Implemented the national 'dual carbon' strategy, steadily executed green and low-carbon development plans, established an energy-saving and emission-reduction assessment and reward/punishment mechanism, and reduced total energy consumption[27](index=27&type=chunk) - Completed construction and communication assurance tasks related to emergency rescue, major events, and rural revitalization, becoming a strong support for emergency relief and livelihood protection[28](index=28&type=chunk) - Received honors such as 'Most Respected Company,' 'Best CFO,' 'Best Investor Relations Company,' 'Best ESG,' and 'Best Company Board' in the Extel 'Asia's Best Management Team 2025' awards[29](index=29&type=chunk) [Future Outlook](index=11&type=section&id=Future%20Outlook) Looking ahead, the company will firmly adhere to its positioning as a 'new-generation integrated smart service provider,' fully embrace AI, deeply advance the 'AI+' initiative, and build a distinctive technology-driven enterprise with AI at its core. The company will continuously enhance its full-chain, integrated delivery capabilities, actively deploy in emerging markets such as smart computing centers, smart operations and maintenance, and new energy, to achieve high-quality development and high-level security - Firmly adhered to the positioning as a 'new-generation integrated smart service provider,' continuously enhancing the 'four capabilities,' strengthening technological innovation leadership, and fully embracing AI[31](index=31&type=chunk) - Deeply advanced the 'AI+' initiative, internally empowering corporate governance and externally strengthening service capabilities, to build a distinctive technology-driven enterprise with AI at its core, driving comprehensive smart services[31](index=31&type=chunk) - Actively deployed in emerging markets, focusing on areas such as smart computing centers, smart operations and maintenance, and new energy, continuously innovating business models, and creating industry-leading products[31](index=31&type=chunk) [Financial Overview](index=12&type=section&id=Financial%20Overview) This financial overview provides a detailed analysis of the company's H1 2025 financial performance, including operating revenue, operating costs, gross profit, selling and administrative expenses, profit attributable to shareholders, cash flow, and asset-liability status. The report indicates stable revenue growth but a decline in gross profit margin due to reduced customer capital expenditure, while emphasizing the importance of cost control and working capital management [Operating Revenue Analysis](index=12&type=section&id=Operating%20Revenue%20Analysis) The company's H1 2025 operating revenue was **RMB 76,939 million**, a **3.4% year-over-year increase**, with service revenue growing by **2.9% year-over-year**. Revenue from applications, content, and other services maintained rapid growth, domestic non-operator enterprise customer market revenue achieved faster growth, and overseas market revenue grew steadily - H1 2025 operating revenue reached **RMB 76,939 million**, a **3.4% increase** compared to H1 2024; service revenue reached **RMB 74,981 million**, a **2.9% increase** compared to H1 2024[34](index=34&type=chunk) H1 2025 Revenue by Business Segment | Business Type | Revenue (RMB million) | YoY Growth | | :--- | :--- | :--- | | Telecommunications Infrastructure Services | 38,272 | 1.6% | | Business Process Outsourcing Services | 22,383 | 1.0% | | Applications, Content and Other Services | 16,284 | 11.7% | H1 2025 Revenue by Market | Market Type | Revenue (RMB million) | YoY Growth | | :--- | :--- | :--- | | Domestic Telecommunications Operators | 38,203 | -4.6% | | Domestic Non-Telecommunications Operator Enterprise Customers | 36,585 | 12.9% | | Overseas Market | 2,151 | 8.7% | [Operating Costs Analysis](index=13&type=section&id=Operating%20Costs%20Analysis) H1 2025 operating costs increased by **4.2% year-over-year**. Subcontracting costs rose by **4.1%**, and material costs increased by **8.1%**, primarily driven by large projects undertaken under the general contracting model. Direct employee costs decreased by **2.6%**, reflecting the company's reasonable control over total employment and optimization of employment structure - H1 2025 operating costs were **RMB 69,051 million**, a **4.2% year-over-year increase**[38](index=38&type=chunk) - Direct employee costs decreased by **2.6%**, subcontracting costs increased by **4.1%**, and material costs grew by **8.1%**[38](index=38&type=chunk) - The company will further strengthen subcontracting management, enhance independent delivery capabilities, and reinforce general contracting project management and material cost control[38](index=38&type=chunk) [Gross Profit Analysis](index=13&type=section&id=Gross%20Profit%20Analysis) H1 2025 gross profit was **RMB 7,888 million**, a **2.8% year-over-year decrease**, with a gross profit margin of **10.3%**, down **0.6 percentage points year-over-year**, primarily affected by reduced customer capital expenditure. The company is improving its gross profit margin by selecting high-margin projects, increasing the proportion of high-value businesses, and strengthening cost control - H1 2025 gross profit was **RMB 7,888 million**, a **2.8% year-over-year decrease**; gross profit margin was **10.3%**, down **0.6 percentage points year-over-year**[39](index=39&type=chunk) - The change in gross profit margin was primarily influenced by factors such as reduced customer capital expenditure[39](index=39&type=chunk) - The company, through performance assessments, guides subsidiaries to select and expand high-margin projects, increase the proportion of high-value businesses, and optimize R&D mechanisms, expecting a positive trend in overall gross profit margin[39](index=39&type=chunk) [Selling, General and Administrative Expenses Analysis](index=14&type=section&id=Selling,%20General%20and%20Administrative%20Expenses%20Analysis) H1 2025 selling, general and administrative expenses were **RMB 6,182 million**, a **5.5% year-over-year decrease**, accounting for **8.0% of operating revenue**, down **0.8 percentage points year-over-year**. This was due to the company's active cost control, strict implementation of quality and efficiency improvement measures, and precise investment of R&D resources in AI and digital infrastructure - H1 2025 selling, general and administrative expenses were **RMB 6,182 million**, a **5.5% year-over-year decrease**[41](index=41&type=chunk) - Selling, general and administrative expenses accounted for **8.0% of operating revenue**, a **0.8 percentage point decrease** from the same period last year[41](index=41&type=chunk) - The company actively controlled expenses, strictly implemented quality and efficiency improvement measures, and precisely invested R&D resources, focusing on cultivating capabilities related to AI and digital infrastructure[41](index=41&type=chunk) [Profit Attributable to Equity Holders of the Company](index=14&type=section&id=Profit%20Attributable%20to%20Equity%20Holders%20of%20the%20Company) In H1 2025, profit attributable to equity holders of the company was **RMB 2,129 million**, a **0.2% increase** compared to **RMB 2,125 million** in H1 2024 - In H1 2025, profit attributable to equity holders of the company was **RMB 2,129 million**, a **0.2% increase** compared to H1 2024[42](index=42&type=chunk) [Cash Flow Analysis](index=14&type=section&id=Cash%20Flow%20Analysis) In H1 2025, the company's net cash outflow was **RMB 8,073 million**, an improvement compared to the **RMB 9,123 million** outflow in H1 2024. The company continues to prioritize working capital management to maintain healthy cash flow levels - In H1 2025, the Group's net cash outflow was **RMB 8,073 million**, compared to a net cash outflow of **RMB 9,123 million** in H1 2024[43](index=43&type=chunk) - The company consistently prioritizes working capital management and will continue to strengthen related efforts to maintain healthy cash flow levels[43](index=43&type=chunk) [Assets and Liabilities Status](index=14&type=section&id=Assets%20and%20Liabilities%20Status) As of June 30, 2025, the company's financial position remained stable. Total assets were **RMB 138,248 million**, total liabilities were **RMB 90,598 million**, and the asset-liability ratio was **65.5%**, a slight decrease from the end of 2024 Key Assets and Liabilities Data | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Total Assets | 138,248 | 136,618 | | Total Liabilities | 90,598 | 90,004 | | Asset-Liability Ratio | 65.5% | Slightly decreased | [Interim Financial Report Review Report](index=15&type=section&id=Interim%20Financial%20Report%20Review%20Report) KPMG reviewed the company's interim financial report for the six months ended June 30, 2025. Based on the review, no matters were identified that indicate the interim financial report was not prepared in all material respects in accordance with International Accounting Standard 34 'Interim Financial Reporting' - KPMG has reviewed the interim financial report in accordance with International Standard on Review Engagements 2410[48](index=48&type=chunk) - Review conclusion: Nothing has come to our attention that causes us to believe that the interim financial report as at June 30, 2025, is not prepared, in all material respects, in accordance with International Accounting Standard 34 'Interim Financial Reporting'[49](index=49&type=chunk) [Consolidated Income Statement](index=16&type=section&id=Consolidated%20Income%20Statement) This consolidated income statement presents the company's financial performance for the six months ended June 30, 2025. Operating revenue increased by **3.4% year-over-year** to **RMB 76,939 million**, and gross profit decreased by **2.8% year-over-year** to **RMB 7,888 million**. Profit for the period attributable to equity holders of the company was **RMB 2,129 million**, with basic earnings per share of **RMB 0.307** Consolidated Income Statement (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Operating Revenue | 76,939,251 | 74,411,953 | | Operating Costs | (69,051,641) | (66,296,374) | | Gross Profit | 7,887,610 | 8,115,579 | | Other Income | 839,173 | 879,847 | | Selling, General and Administrative Expenses | (6,181,999) | (6,541,835) | | Other Expenses | (104,888) | (56,832) | | Finance Costs | (43,911) | (59,026) | | Share of Profits of Associates and Joint Ventures | 44,741 | 67,372 | | Profit Before Tax | 2,440,726 | 2,405,105 | | Income Tax | (234,123) | (207,155) | | Profit for the Period | 2,206,603 | 2,197,950 | | Profit for the Period Attributable to Equity Holders of the Company | 2,128,715 | 2,124,984 | | Basic/Diluted Earnings Per Share (RMB) | 0.307 | 0.307 | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=17&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This consolidated statement of profit or loss and other comprehensive income presents the company's comprehensive income for the six months ended June 30, 2025. Profit for the period was **RMB 2,206,603 thousand**, and total other comprehensive income was **RMB 410,871 thousand**, primarily comprising net fair value changes of equity instruments measured at fair value through other comprehensive income. Total comprehensive income for the period was **RMB 2,617,474 thousand** Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period | 2,206,603 | 2,197,950 | | Other Comprehensive Income for the Period (After tax) | | | | Equity instruments measured at fair value through other comprehensive income: Net change in fair value reserve | 394,782 | 501,997 | | Exchange differences on translation of financial statements of subsidiaries outside mainland China | 16,089 | (14,030) | | Total Other Comprehensive Income for the Period | 410,871 | 487,967 | | Total Comprehensive Income for the Period | 2,617,474 | 2,685,917 | | Total Comprehensive Income for the Period Attributable to Equity Holders of the Company | 2,539,573 | 2,612,916 | [Consolidated Statement of Financial Position](index=18&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This consolidated statement of financial position presents the company's assets, liabilities, and equity as of June 30, 2025. Total assets were **RMB 138,248,212 thousand**, an increase from the end of 2024. Term deposits with financial institutions for over one year significantly increased within non-current assets. Net current assets were **RMB 14,791,857 thousand**, total liabilities were **RMB 90,598,314 thousand**, and equity attributable to equity holders of the company was **RMB 46,460,941 thousand** Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Non-Current Assets** | | | | Property, Plant and Equipment, Net | 5,986,579 | 5,910,252 | | Term deposits with financial institutions for over one year | 15,163,324 | 12,170,901 | | Total Non-Current Assets | 35,007,293 | 31,944,591 | | **Current Assets** | | | | Inventories | 2,110,075 | 1,183,231 | | Trade and Bills Receivables, Net | 29,588,202 | 25,296,205 | | Contract Assets, Net | 42,559,871 | 37,767,809 | | Cash and Cash Equivalents | 11,580,258 | 19,638,036 | | Total Current Assets | 103,240,919 | 104,672,985 | | **Total Assets** | 138,248,212 | 136,617,576 | | **Current Liabilities** | | | | Trade and Bills Payables | 67,577,549 | 65,894,889 | | Contract Liabilities | 7,147,578 | 9,190,050 | | Total Current Liabilities | 88,449,062 | 87,954,679 | | **Total Liabilities** | 90,598,314 | 90,004,424 | | **Equity Attributable to Equity Holders of the Company** | 46,460,941 | 45,435,871 | | **Total Equity** | 47,649,898 | 46,613,152 | [Consolidated Statement of Changes in Equity](index=20&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) This consolidated statement of changes in equity presents the company's equity movements for the six months ended June 30, 2025. Equity attributable to equity holders of the company increased from **RMB 45,435,871 thousand** at the beginning of the period to **RMB 46,460,941 thousand** at the end, primarily due to contributions from profit for the period and total other comprehensive income for the period, as well as the impact of dividend distribution Consolidated Statement of Changes in Equity (For the six months ended June 30) | Metric | January 1, 2025 (RMB thousand) | June 30, 2025 (RMB thousand) | | :--- | :--- | :--- | | Total Equity Attributable to Equity Holders of the Company | 45,435,871 | 46,460,941 | | Non-Controlling Interests | 1,177,281 | 1,188,957 | | Total Equity | 46,613,152 | 47,649,898 | | Profit for the Period Attributable to Equity Holders of the Company | 2,128,715 | | | Other Comprehensive Income for the Period Attributable to Equity Holders of the Company | 410,858 | | | Dividend Distribution | (1,514,720) | | [Condensed Consolidated Statement of Cash Flows](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This condensed consolidated statement of cash flows presents the company's cash flows for the six months ended June 30, 2025. Net cash used in operating activities was **RMB (7,565,828) thousand**, net cash used in investing activities was **RMB (241,440) thousand**, and net cash used in financing activities was **RMB (266,107) thousand**. Cash and cash equivalents at the end of the period were **RMB 11,580,258 thousand** Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (7,565,828) | (2,406,974) | | Net Cash Used in Investing Activities | (241,440) | (6,454,076) | | Net Cash Used in Financing Activities | (266,107) | (262,125) | | Net Decrease in Cash and Cash Equivalents | (8,073,375) | (9,123,175) | | Cash and Cash Equivalents at End of Period | 11,580,258 | 13,807,171 | [Notes to the Unaudited Interim Financial Report](index=22&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) These notes provide detailed supplementary information to the unaudited interim financial report, covering the company's principal activities, basis of preparation, changes in accounting policies, segment reporting, specific composition and changes of various financial statement items, and significant related party transactions. These notes are crucial for understanding the specific details and context of the company's financial statements [Principal Activities](index=22&type=section&id=Principal%20Activities) The company and its subsidiaries are leading service providers in China, offering integrated smart solutions for informatization and digitalization, including telecommunications infrastructure services, business process outsourcing services, and applications, content, and other services - The Group provides integrated smart solutions for informatization and digitalization[59](index=59&type=chunk) - Principal activities include telecommunications infrastructure services, business process outsourcing services, and applications, content, and other services[59](index=59&type=chunk) [Basis of Preparation](index=22&type=section&id=Basis%20of%20Preparation) This interim financial report is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and complies with the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The report is unaudited but has been reviewed by KPMG - This interim financial report is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and complies with the disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[60](index=60&type=chunk) - The interim financial report is unaudited but has been reviewed by KPMG in accordance with International Standard on Review Engagements 2410[60](index=60&type=chunk) [Changes in Accounting Policies](index=22&type=section&id=Changes%20in%20Accounting%20Policies) During this interim period, the company first applied the amended International Accounting Standard 21 'The Effects of Changes in Foreign Exchange Rates 'Lack of Exchangeability'', but this amendment had no significant impact on the Group's interim financial report - The amendment to International Accounting Standard 21 'The Effects of Changes in Foreign Exchange Rates 'Lack of Exchangeability'' was first applied during this interim period[61](index=61&type=chunk) - The adoption of the above amendment had no significant impact on the Group's interim financial report[61](index=61&type=chunk) [Segment Reporting](index=23&type=section&id=Segment%20Reporting) The company primarily has one business segment, which is providing integrated smart solutions for informatization and digitalization, thus no other segment information is disclosed. Information regarding major customers and operating regions can be found in Note 5 - The Group primarily has one business segment, which is providing integrated smart solutions for informatization and digitalization[63](index=63&type=chunk) - No other segment information is disclosed; information regarding major customers and operating regions can be found in Note 5[63](index=63&type=chunk) [Operating Revenue](index=23&type=section&id=Operating%20Revenue) The company's operating revenue is derived from providing integrated smart solutions. In H1 2025, revenue from telecommunications infrastructure services was **RMB 38,272,609 thousand**, business process outsourcing services revenue was **RMB 22,382,937 thousand**, and applications, content, and other services revenue was **RMB 16,283,705 thousand**. Operating revenue from regions outside mainland China was **RMB 2,151 million** Operating Revenue by Nature of Business (For the six months ended June 30) | Nature of Business | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Telecommunications Infrastructure Services Revenue | 38,272,609 | 37,666,188 | | Business Process Outsourcing Services Revenue | 22,382,937 | 22,162,474 | | Applications, Content and Other Services Revenue | 16,283,705 | 14,583,291 | | Total | 76,939,251 | 74,411,953 | - Revenue from China Telecom Group accounted for **33.6% of total operating revenue**, and revenue from China Mobile Communications Group accounted for **8.3%**[65](index=65&type=chunk) - Operating revenue from regions outside mainland China was **RMB 2,151 million**[65](index=65&type=chunk) [Operating Costs](index=24&type=section&id=Operating%20Costs) H1 2025 total operating costs were **RMB 69,051,641 thousand**. Of this, subcontracting costs were **RMB 42,932,050 thousand**, material costs were **RMB 13,341,575 thousand**, and direct employee costs were **RMB 3,707,393 thousand** Composition of Operating Costs (For the six months ended June 30) | Cost Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Subcontracting Costs | 42,932,050 | 41,233,277 | | Material Costs | 13,341,575 | 12,336,999 | | Direct Employee Costs | 3,707,393 | 3,807,665 | | Direct Costs of Goods Distributed | 1,560,609 | 1,098,458 | | Short-Term Leases and Leases of Low-Value Assets Expenses | 609,940 | 604,986 | | Depreciation and Amortization | 498,208 | 505,257 | | Others | 6,401,866 | 6,709,732 | | Total | 69,051,641 | 66,296,374 | [Other Income](index=24&type=section&id=Other%20Income) H1 2025 total other income was **RMB 839,173 thousand**. This primarily included interest income of **RMB 270,299 thousand**, dividend income from equity instruments measured at fair value through other comprehensive income of **RMB 211,712 thousand**, and management fee income of **RMB 166,948 thousand** Composition of Other Income (For the six months ended June 30) | Income Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest Income | 270,299 | 325,641 | | Dividend Income | 211,712 | 191,435 | | Management Fee Income | 166,948 | 165,747 | | Government Grants | 93,034 | 87,807 | | Write-off of Debts Not Required to be Paid | 27,869 | 11,116 | | Gains on Disposal of Property, Plant and Equipment, etc | 9,840 | 7,688 | | Additional Deduction for Input VAT | 2,750 | 29,241 | | Others | 56,721 | 61,172 | | Total | 839,173 | 879,847 | [Finance Costs](index=25&type=section&id=Finance%20Costs) H1 2025 total finance costs were **RMB 43,911 thousand**, a decrease from **RMB 59,026 thousand** in H1 2024. The main components were interest on bank and other loans and interest on lease liabilities Composition of Finance Costs (For the six months ended June 30) | Expense Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on Bank and Other Loans | 20,419 | 31,503 | | Interest on Lease Liabilities | 23,492 | 27,523 | | Total | 43,911 | 59,026 | [Profit Before Tax](index=25&type=section&id=Profit%20Before%20Tax) H1 2025 profit before tax was **RMB 2,440,726 thousand**. Of this, total employee costs were **RMB 7,987,519 thousand**, amortization was **RMB 99,633 thousand**, depreciation was **RMB 709,824 thousand**, and net impairment losses on trade receivables and others were **RMB 161,577 thousand** Deductions from Profit Before Tax (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries, Wages and Other Benefits | 6,833,056 | 7,308,835 | | Contributions to Defined Contribution Retirement Benefit Plans | 1,154,463 | 1,108,808 | | Total Employee Costs | 7,987,519 | 8,417,643 | | Amortization | 99,633 | 98,587 | | Depreciation | 709,824 | 729,391 | | Net Impairment Losses and Reversals on Inventories | 27,729 | 18,604 | | Net Impairment Losses and Reversals on Trade Receivables, Other Receivables, Contract Assets and Others | 161,577 | 118,914 | [Income Tax](index=26&type=section&id=Income%20Tax) H1 2025 total income tax was **RMB 234,123 thousand**. The actual tax expense differed from the estimated income tax expense calculated at the statutory tax rate of **25%**, primarily due to factors such as subsidiary tax rate concessions, non-taxable income, and additional deductions for R&D expenses Composition of Income Tax (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax | 244,762 | 296,994 | | Deferred Tax | (10,639) | (89,839) | | Total Income Tax | 234,123 | 207,155 | - The actual tax expense differed from the estimated income tax expense calculated at the statutory tax rate of **25%**, primarily due to factors such as subsidiary tax rate concessions, non-taxable income, and additional deductions for R&D expenses[70](index=70&type=chunk) - Entities qualified as high-tech enterprises, those in the Western Development region, and small low-profit enterprises may calculate income tax at preferential rates of **15%**, **15%**, and **20%**, respectively[70](index=70&type=chunk) [Earnings Per Share](index=27&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share were **RMB 0.307**. As there were no potentially dilutive ordinary shares issued during either period, diluted earnings per share were the same as basic earnings per share - Basic earnings per share for the six months ended June 30, 2025, were **RMB 0.307**[71](index=71&type=chunk) - As there were no potentially dilutive ordinary shares issued during either period, diluted earnings per share were the same as basic earnings per share[72](index=72&type=chunk) [Other Comprehensive Income](index=27&type=section&id=Other%20Comprehensive%20Income) H1 2025 total other comprehensive income was **RMB 410,871 thousand**. This primarily included fair value changes of equity instruments measured at fair value through other comprehensive income recognized during the period of **RMB 526,396 thousand**, and exchange differences on financial statements of **RMB 16,089 thousand** Composition of Other Comprehensive Income (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Fair value changes of equity instruments measured at fair value through other comprehensive income recognized during the period | 526,396 | 670,820 | | Net deferred tax recognized in other comprehensive income | (131,614) | (168,823) | | Exchange differences on financial statements | 16,089 | (14,030) | | Total Other Comprehensive Income for the Period | 410,871 | 487,967 | [Dividends](index=27&type=section&id=Dividends) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025. The final dividend pertaining to the previous financial year and approved during this period was **RMB 0.2187 per share**, totaling **RMB 1,514,720 thousand** - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[74](index=74&type=chunk) Approved Final Dividends (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Final dividend pertaining to the previous financial year, approved during the period (RMB 0.2187 per share) | 1,514,720 | 1,505,716 | [Other Non-Current Assets](index=28&type=section&id=Other%20Non-Current%20Assets) As of June 30, 2025, total other non-current assets were **RMB 824,323 thousand**, primarily comprising long-term receivables of **RMB 505,086 thousand** and other items of **RMB 319,237 thousand** Composition of Other Non-Current Assets | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Long-Term Receivables | 505,086 | 521,668 | | Others | 319,237 | 318,344 | | Total | 824,323 | 840,012 | [Trade and Bills Receivables, Net](index=28&type=section&id=Trade%20and%20Bills%20Receivables,%20Net) As of June 30, 2025, trade and bills receivables, net, amounted to **RMB 29,588,202 thousand**. Of this, trade receivables were **RMB 31,479,179 thousand**, and bills receivables were **RMB 869,866 thousand**. The aging analysis shows that trade and bills receivables within one year accounted for the largest proportion Composition of Trade and Bills Receivables, Net | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bills Receivables | 869,866 | 1,410,736 | | Trade Receivables | 31,479,179 | 26,509,784 | | Less: Provision for Credit Losses | (2,760,843) | (2,624,315) | | Net Amount | 29,588,202 | 25,296,205 | Aging Analysis of Trade and Bills Receivables (Net of credit loss provision) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current | 2,301,124 | 2,089,253 | | Within 1 Year | 23,185,072 | 19,334,238 | | Over 1 Year but Less Than 2 Years | 2,995,918 | 2,900,914 | | Over 2 Years but Less Than 3 Years | 843,399 | 718,462 | | Over 3 Years but Less Than 4 Years | 163,930 | 161,188 | | Over 4 Years but Less Than 5 Years | 49,564 | 43,676 | | Over 5 Years | 49,195 | 48,474 | | Total | 29,588,202 | 25,296,205 | [Contract Assets, Net](index=29&type=section&id=Contract%20Assets,%20Net) As of June 30, 2025, contract assets, net, amounted to **RMB 42,559,871 thousand**, primarily from telecommunications infrastructure services. Contract assets represent unbilled amounts receivable by the company for construction, design, and other services provided, where the right to receive payment is conditional on future performance reaching specific milestones Composition of Contract Assets, Net | Service Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Telecommunications Infrastructure Services | 36,472,255 | 32,552,493 | | Business Process Outsourcing Services | 1,610,953 | 1,469,655 | | Applications, Content and Other Services | 5,015,331 | 4,271,528 | | Less: Provision for Credit Losses | (538,668) | (525,867) | | Net Amount | 42,559,871 | 37,767,809 | - Contract assets represent unbilled amounts receivable by the Group for construction, design, and other services provided, where the right to receive payment is conditional on the Group's future performance not yet reaching specific milestones[79](index=79&type=chunk) [Cash and Cash Equivalents](index=29&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, total cash and cash equivalents were **RMB 11,580,258 thousand**, comprising bank balances and cash of **RMB 7,534,055 thousand** and deposits with China Telecom Group Finance Co., Ltd. of **RMB 4,046,203 thousand** Composition of Cash and Cash Equivalents | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank Balances and Cash | 7,534,055 | 15,634,788 | | Deposits with China Telecom Group Finance Co., Ltd. | 4,046,203 | 4,003,248 | | Total | 11,580,258 | 19,638,036 | [Interest-Bearing Loans](index=30&type=section&id=Interest-Bearing%20Loans) As of June 30, 2025, total short-term interest-bearing loans were **RMB 763,847 thousand**, primarily unsecured bank loans. RMB loans had annual interest rates ranging from **2.50%-3.10%**, and other bank loans had annual interest rates ranging from **4.44%-6.96%**. All loans are repayable within one year Composition of Short-Term Interest-Bearing Loans | Loan Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | RMB Bank Loans (Unsecured) | 90,800 | 82,050 | | USD Bank Loans (Unsecured) | – | 178,991 | | Other Bank Loans (Unsecured) | 666,588 | 437,046 | | Interest Payable | 6,459 | 8,162 | | Total | 763,847 | 706,249 | Annual Interest Rates for Short-Term Loans | Loan Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | RMB Bank Loans (Unsecured) | 2.50%-3.10% | 3.40%-3.70% | | Other Bank Loans (Unsecured) | 4.44%-6.96% | 6.91%-7.12% | - All short-term loans are repayable within one year[82](index=82&type=chunk) [Trade and Bills Payables](index=31&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables were **RMB 67,577,549 thousand**. Of this, trade payables were **RMB 62,688,302 thousand**, and bills payables were **RMB 4,889,247 thousand**. The aging analysis shows that trade and bills payables within one year accounted for the largest proportion Composition of Trade and Bills Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 62,688,302 | 59,837,140 | | Bills Payables | 4,889,247 | 6,057,749 | | Total | 67,577,549 | 65,894,889 | Aging Analysis of Trade and Bills Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 Year | 64,920,272 | 63,309,727 | | Over 1 Year but Less Than 2 Years | 1,449,837 | 1,319,642 | | Over 2 Years but Less Than 3 Years | 439,340 | 492,037 | | Over 3 Years | 768,100 | 773,483 | | Total | 67,577,549 | 65,894,889 | [Contract Liabilities](index=32&type=section&id=Contract%20Liabilities) As of June 30, 2025, total contract liabilities were **RMB 7,147,578 thousand**, primarily from telecommunications infrastructure services and other services. Contract liabilities represent customer prepayments received by the company before fulfilling performance obligations Composition of Contract Liabilities | Service Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Telecommunications Infrastructure Services | 4,951,610 | 6,700,059 | | Other Services | 2,195,968 | 2,489,991 | | Total | 7,147,578 | 9,190,050 | - Contract liabilities represent customer prepayments received by the Group before fulfilling performance obligations, until the relevant contractual performance obligations are completed[84](index=84&type=chunk) [Accruals and Other Payables](index=32&type=section&id=Accruals%20and%20Other%20Payables) As of June 30, 2025, total accruals and other payables were **RMB 12,279,640 thousand**. This primarily included deposits and guarantees, salaries and welfare payable, output VAT to be transferred, and amounts payable to China Telecom Group and other related parties Composition of Accruals and Other Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Deposits and Guarantees | 2,196,229 | 2,559,838 | | Salaries and Welfare Payable | 1,992,991 | 1,648,393 | | Output VAT to be Transferred | 1,380,924 | 1,335,552 | | Amounts Payable to China Telecom Group and Other Related Parties | 1,315,784 | 563,047 | | Dividends Payable | 781,206 | 4,761 | | Other Taxes Payable Apart from Income Tax | 688,871 | 897,915 | | Lease Prepayments | 30,114 | 35,740 | | Payables Related to Construction and Acquisition of Property, Plant and Equipment | 3,498 | 2,756 | | Others | 3,890,023 | 4,372,955 | | Total | 12,279,640 | 11,420,957 | [Other Non-Current Liabilities](index=32&type=section&id=Other%20Non-Current%20Liabilities) Other non-current liabilities primarily refer to deferred income from government grants and termination benefits - Other non-current liabilities primarily refer to deferred income from government grants and termination benefits[86](index=86&type=chunk) [Share Capital](index=33&type=section&id=Share%20Capital) As of June 30, 2025, the company's total registered, issued, and paid-up share capital was **RMB 6,926,018 thousand**, comprising **4,534,598,160 domestic shares** and **2,391,420,240 H shares**, each with a par value of **RMB 1.00** Composition of Share Capital | Share Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Domestic Shares (4,534,598,160 shares) | 4,534,598 | 4,534,598 | | H Shares (2,391,420,240 shares) | 2,391,420 | 2,391,420 | | Total | 6,926,018 | 6,926,018 | [Capital Commitments and Contingent Liabilities](index=33&type=section&id=Capital%20Commitments%20and%20Contingent%20Liabilities) As of June 30, 2025, the company's contracted but unexecuted capital commitments for the purchase and construction of property, plant, and equipment and other non-current assets amounted to **RMB 56,863 thousand**. The company had no significant contingent liabilities or provided significant financial guarantees - As of June 30, 2025, the Group's contracted but unexecuted capital commitments for the purchase and construction of property, plant, and equipment and other non-current assets amounted to **RMB 56,863 thousand**[88](index=88&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities or provided significant financial guarantees[89](index=89&type=chunk) [Fair Value Measurement of Financial Instruments](index=34&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) The company uses a three-level classification for fair value measurement of financial instruments. As of June 30, 2025, equity instruments measured at fair value through other comprehensive income were **RMB 5,027,214 thousand**, and equity instruments measured at fair value through profit or loss were **RMB 416,345 thousand**. The fair value of Level 3 financial instruments is determined based on discounted cash flows Fair Value Measurement of Financial Assets (June 30, 2025) | Item | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Level 3 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Equity instruments measured at fair value through other comprehensive income | 5,026,161 | – | 1,053 | 5,027,214 | | Equity instruments measured at fair value through profit or loss | – | – | 416,345 | 416,345 | - Level 3 investee entities are non-public interest entities, and their fair values are determined based on discounted cash flows[91](index=91&type=chunk) Reconciliation of Level 3 Fair Value Measurements (For the six months ended June 30) | Item | Equity instruments measured at fair value through other comprehensive income (RMB thousand) | Equity instruments measured at fair value through profit or loss (RMB thousand) | | :--- | :--- | :--- | | As of January 1, 2025 | 1,053 | 385,070 | | Purchases | – | 16,162 | | Gains – in profit or loss | – | 15,113 | | As of June 30, 2025 | 1,053 | 416,345 | [Related Party Transactions](index=36&type=section&id=Related%20Party%20Transactions) This note details significant related party transactions between the company and China Telecom Group, the Group's associates/joint ventures, China Telecom Group's associates/joint ventures, and other state-owned enterprises, including various service revenues, expenses, and related receivable and payable balances [Transactions with China Telecom Group](index=36&type=section&id=Transactions%20with%20China%20Telecom%20Group) The company conducts several major transactions with China Telecom Group in its normal operations, including telecommunications infrastructure service revenue of **RMB 8,873,056 thousand**, IT application service revenue of **RMB 4,027,013 thousand**, and last-mile telecommunications service revenue of **RMB 9,483,198 thousand**. As of June 30, 2025, total amounts receivable from China Telecom Group were **RMB 37,355,614 thousand**, and total amounts payable to China Telecom Group were **RMB 5,287,312 thousand** Major Transactions with China Telecom Group (For the six months ended June 30) | Transaction Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Telecommunications Infrastructure Services Revenue | 8,873,056 | 10,859,686 | | IT Application Services Revenue | 4,027,013 | 3,318,436 | | Last-Mile Telecommunications Services Revenue | 9,483,198 | 9,193,971 | | Logistics Services Revenue | 2,055,761 | 2,074,889 | | Material Procurement Services Revenue | 1,309,231 | 1,553,999 | | Property Leasing Services Revenue | 77,332 | 80,548 | | Management Fee Income | 166,948 | 165,747 | | Property Leasing Services Expenses | 51,628 | 46,579 | | IT Application Services Expenses | 421,654 | 162,913 | | Logistics Services Expenses | 620,120 | 703,312 | | Material Procurement Services Expenses | 1,897,974 | 1,704,146 | | Interest Expenses | 12,612 | 11,663 | | Interest Income from Deposits with China Telecom Finance Co., Ltd. | 57,741 | 67,583 | Receivables/Payables with China Telecom Group (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Amounts Receivable from China Telecom Group | 37,355,614 | 37,482,178 | | Total Amounts Payable to China Telecom Group | 5,287,312 | 3,139,364 | [Transactions with Associates, Joint Ventures and Other Related Parties](index=39&type=section&id=Transactions%20with%20Associates,%20Joint%20Ventures%20and%20Other%20Related%20Parties) The company engaged in multiple transactions with the Group's and China Telecom Group's associates, joint ventures, and other related parties. In H1 2025, telecommunications infrastructure service revenue was **RMB 2,215,672 thousand**, and IT application service revenue was **RMB 236,908 thousand**. As of June 30, 2025, total receivables from these related parties were **RMB 3,407,696 thousand**, and total payables were **RMB 2,923,753 thousand** Transactions with Associates, Joint Ventures and Other Related Parties (For the six months ended June 30) | Transaction Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Telecommunications Infrastructure Services Revenue | 2,215,672 | 2,216,278 | | IT Application Services Revenue | 236,908 | 135,145 | | Last-Mile Telecommunications Services Revenue | 999,400 | 990,514 | | Logistics Services Revenue | 81,414 | 59,370 | | Material Procurement Services Revenue | 122,117 | 108,762 | | Property Leasing Services Revenue | 3,075 | 1,982 | | Property Leasing Services Expenses | 176 | 949 | | IT Application Services Expenses | 663,557 | 1,073,331 | | Logistics Services Expenses | 971,073 | 992,065 | | Material Procurement Services Expenses | 425,871 | 193,477 | | Interest Expenses | 5 | 5 | Receivables/Payables with Associates, Joint Ventures and Other Related Parties (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade and Bills Receivables, Net | 828,943 | 644,618 | | Contract Assets, Net | 1,005,070 | 664,640 | | Prepayments and Other Current Assets | 1,573,683 | 1,286,523 | | Total Receivables | 3,407,696 | 2,595,781 | | Trade and Bills Payables | 2,638,540 | 3,091,262 | | Contract Liabilities | 160,014 | 219,777 | | Lease Liabilities | 160 | 210 | | Lease Liabilities Due Within One Year | 90 | 79 | | Accruals and Other Payables | 124,949 | 111,692 | | Total Payables | 2,923,753 | 3,423,020 | [Transactions with Other State-Owned Enterprises in China](index=41&type=section&id=Transactions%20with%20Other%20State-Owned%20Enterprises%20in%20China) As a government-related enterprise, the company conducts transactions with other state-owned enterprises in China in its ordinary course of business, on terms similar to those with non-government-related enterprises, including providing and receiving services, selling and purchasing goods, leasing assets, deposits and borrowings, and utilizing public utilities - The Group conducts transactions with other state-owned enterprises in China in its ordinary course of business, on terms similar to those with non-government-related enterprises[105](index=105&type=chunk) - Transactions include providing and receiving services, selling and purchasing goods, leasing assets, deposits and borrowings, and utilizing public utilities[107](index=107&type=chunk) [Transactions with Key Management Personnel](index=41&type=section&id=Transactions%20with%20Key%20Management%20Personnel) In H1 2025, total remuneration received by key management personnel was **RMB 12,658 thousand**, including salaries and other emoluments, retirement benefits, and discretionary bonuses Key Management Personnel Remuneration (For the six months ended June 30) | Remuneration Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries and Other Emoluments | 3,321 | 3,806 | | Share Appreciation Rights | – | 3,434 | | Retirement Benefits | 1,598 | 1,590 | | Discretionary Bonuses | 7,739 | 5,678 | | Total | 12,658 | 14,508 | [Other Information](index=42&type=section&id=Other%20Information) This section provides other important information regarding changes in the company's Board and Supervisory Committee personnel, Audit Committee work, compliance with the Corporate Governance Code, compliance with the Model Code for Securities Transactions by Directors, compliance with Appendix D2 of the Listing Rules, share interests of directors/supervisors/chief executive, substantial interests and short positions in company shares, and purchase/sale/redemption of listed securities, along with a cautionary note on forward-looking statements [Changes in Directors and Supervisors and Their Biographies](index=42&type=section&id=Changes%20in%20Directors%20and%20Supervisors%20and%20Their%20Biographies) The term of the company's Sixth Board of Directors expired, and all directors except Mr. Xiao Weiqiang were re-elected. Mr. Cheng Jianjun and Mr. Chen Li were newly appointed as non-executive directors, and Ms. Zhao Minhui was newly appointed as an independent non-executive director. Additionally, Mr. Tang Yongbo's position was adjusted - Mr. Xiao Weiqiang retired as an independent non-executive director upon expiry of his term, and the remaining directors were re-elected to continue serving as directors of the Seventh Board of Directors[108](index=108&type=chunk) - Mr. Cheng Jianjun and Mr. Chen Li were newly appointed as non-executive directors, and Ms. Zhao Minhui was newly appointed as an independent non-executive director[108](index=108&type=chunk) - Non-executive Director Mr. Tang Yongbo, due to work adjustments, no longer serves as Deputy General Manager of China Unicom Group Co., Ltd. and other positions, and resigned as a non-executive director of China Tower Corporation Limited[109](index=109&type=chunk) [Audit Committee](index=42&type=section&id=Audit%20Committee) The Audit Committee has reviewed the accounting principles and practices adopted by the company with management and discussed matters related to risk management, internal control, and financial reporting, including the review of this report - The Audit Committee has reviewed the accounting principles and practices adopted by the Group with management personnel and discussed matters related to the Group's risk management, internal control, and financial reporting, including the review of this report[110](index=110&type=chunk) [Compliance with Corporate Governance Code](index=42&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company confirms that it has complied with all code provisions set out in the Corporate Governance Code in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the six months ended June 30, 2025 - The company has complied with all code provisions set out in the Corporate Governance Code in Appendix C1 of the Listing Rules for the six months ended June 30, 2025[111](index=111&type=chunk) [Compliance with Model Code for Securities Transactions by Directors](index=42&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and following specific enquiries, all directors and supervisors confirmed compliance with the Model Code for securities transactions of the company for the six months ended June 30, 2025 - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 of the Listing Rules, to regulate securities transactions by its directors and supervisors[112](index=112&type=chunk) - All directors and supervisors confirmed compliance with the Model Code for securities transactions of the company for the six months ended June 30, 2025[112](index=112&type=chunk) [Compliance with Appendix D2 of Listing Rules](index=42&type=section&id=Compliance%20with%20Appendix%20D2%20of%20Listing%20Rules) The company confirms that, except as disclosed in this interim report, there have been no material changes to the existing company information regarding matters listed in paragraph 32 of Appendix D2 of the Listing Rules compared to the information disclosed in the company's 2024 annual report - The company confirms that there have been no material changes to the existing company information regarding matters listed in paragraph 32 of Appendix D2 of the Listing Rules compared to the information disclosed in the company's 2024 annual report[113](index=113&type=chunk) [Directors', Supervisors' and Chief Executive's Interests in Shares](index=43&type=section&id=Directors',%20Supervisors'%20and%20Chief%20Executive's%20Interests%20in%20Shares) As of June 30, 2025, none of the company's directors, supervisors, and chief executive had any registrable interests or short positions in the shares, underlying shares of equity derivatives, or debentures of the company or its associated corporations - As of June 30, 2025, none of the company's directors, supervisors, and chief executive had any registrable interests or short positions in the shares, underlying shares of equity derivatives, or debentures of the company or its associated corporations[114](index=114&type=chunk) [Substantial Interests and Short Positions in Shares of the Company](index=43&type=section&id=Substantial%20Interests%20and%20Short%20Positions%20in%20Shares%20of%20the%20Company) As of June 30, 2025, in accordance with the Securities and Futures Ordinance, China Telecom Group Co., Ltd., China Mobile Communications Group Co., Ltd., and China Unicom Group Co., Ltd. held substantial interests in the company's shares Substantial Interests and Short Positions in Shares of the Company (As of June 30, 2025) | Shareholder Name | Description of Shares | Capacity | Number of Shares | Percentage of Domestic/

NEW CHINA LIFE INSURANCE COMPANY LTD. 股份代號: 01336 （於中華人民共和國註冊成立的股份有限公司） 中期報告 2025 新華保險服務號 新華保險服務號 投資者關係網站 New China Insurance Tower, A12 Jianguomenwai Avenue, Chaoyang District, Beijing 100022,P.R.C www.newchinalife.com NEW CHINA LIFE INSURANCE COMPANY LTD. 新華人壽保險股份有限公司 北京市朝陽區建國門外大街甲12號新華保險大廈 New China Life Insurance Company Ltd. 1. 董事會、監事會及董事、監事、高級管理人員保證本報告內容的真實、 準確、完整，不存在虛假記載、誤導性陳述或重大遺漏，並承擔個別和 連帶的法律責任。 2. 本公司第八屆董事會第三十六次會議於2025年8月28日審議通過了《2025 年中期報告》。會議應出席董事11人，親自出席董事11人。 3. 本公司2025年中期財務報告未經審計。 4. 本公司擬向全體股 ...

[Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME) For the six months ended June 30, 2025, the company's revenue decreased by 7.2% to 173,416 thousand RMB, but loss significantly narrowed to 3,488 thousand RMB, a substantial improvement from 11,985 thousand RMB in the prior period, with basic and diluted loss per share at 0.85 RMB cents Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Revenue | 173,416 | 186,910 | | Cost of sales | (157,497) | (168,464) | | Gross profit | 15,919 | 18,446 | | Other income and net other gains/(losses) | 9,371 | (1,368) | | Selling and distribution expenses | (8,304) | (7,851) | | Administrative expenses | (18,220) | (19,318) | | Finance costs | (1,735) | (1,886) | | Loss before tax | (2,969) | (11,977) | | Income tax expense | (519) | (8) | | Loss for the period | (3,488) | (11,985) | | Loss for the period attributable to owners of the Company | (3,488) | (11,985) | | Basic and diluted loss per share (RMB cents) | (0.85) | (2.91) | - Loss for the period significantly narrowed from approximately **12 million RMB** in H1 2024 to approximately **3 million RMB** in H1 2025[4](index=4&type=chunk)[77](index=77&type=chunk) - Basic and diluted loss per share decreased from **2.91 RMB cents** in H1 2024 to **0.85 RMB cents** in H1 2025[4](index=4&type=chunk)[77](index=77&type=chunk) [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) As of June 30, 2025, the Group's total assets slightly increased, while net current assets and total equity slightly decreased, driven by a significant increase in bank balances and cash, and a reduction in inventories and trade receivables Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 44,329 | 46,003 | | Right-of-use assets | 11,782 | 12,050 | | **Current assets** | | | | Inventories | 111,830 | 135,648 | | Financial assets at fair value through profit or loss | 12,268 | 6,427 | | Trade receivables | 102,053 | 114,156 | | Prepayments and other receivables | 58,328 | 47,907 | | Loan receivables | 10,101 | 10,398 | | Pledged time deposits | 23,030 | 22,843 | | Bank balances and cash | 38,644 | 4,145 | | **Current liabilities** | | | | Trade and bills payables | 58,414 | 51,398 | | Accruals, other payables and contract liabilities | 8,329 | 12,595 | | Bank borrowings | 96,120 | 81,470 | | Tax payable | 2,102 | 2,665 | | **Total equity** | 247,400 | 251,449 | - Bank balances and cash significantly increased from approximately **4.1 million RMB** as of December 31, 2024, to approximately **38.6 million RMB** as of June 30, 2025[7](index=7&type=chunk) - Inventories decreased by approximately **17.5%** to **111,830 thousand RMB**, and trade receivables decreased by approximately **10.5%** to **102,053 thousand RMB**[7](index=7&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CHANGES%20IN%20EQUITY) For the six months ended June 30, 2025, the Group's total equity decreased from 251,449 thousand RMB at the beginning of the year to 247,400 thousand RMB, primarily due to the loss for the period and negative exchange differences, partially offset by shareholder capital contributions Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | As at 1 January (audited) | 251,449 | 239,598 | | Loss for the period | (3,488) | (11,985) | | Exchange differences arising on translation of financial statements | (582) | 454 | | Total comprehensive expense for the period | (4,070) | (11,531) | | Capital contribution from shareholders | 21 | 194 | | Lapsed share options | – | – | | As at 30 June (unaudited) | 247,400 | 228,261 | - In H1 2025, loss for the period was **3,488 thousand RMB**, a significant narrowing from **11,985 thousand RMB** in H1 2024[9](index=9&type=chunk) - In H1 2025, exchange differences arising on translation of financial statements were a negative **582 thousand RMB**, compared to a positive **454 thousand RMB** in H1 2024[9](index=9&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, the Group generated net cash of 19,496 thousand RMB from operating activities, a significant improvement from a net outflow, resulting in a net increase of 34,532 thousand RMB in cash and cash equivalents Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 19,496 | (28,531) | | Net cash (used in)/generated from investing activities | (519) | 5,026 | | Net cash generated from financing activities | 15,555 | 21,306 | | Net increase/(decrease) in cash and cash equivalents | 34,532 | (2,199) | | Effect of foreign exchange rate changes | (33) | 125 | | Cash and cash equivalents at 1 January | 4,145 | 13,094 | | Cash and cash equivalents at 30 June | 38,644 | 11,020 | - Operating cash flow improved from a net outflow of **28,531 thousand RMB** in H1 2024 to a net inflow of **19,496 thousand RMB** in H1 2025, indicating improved operating conditions[13](index=13&type=chunk) - Bank balances and cash at period-end increased from **11,020 thousand RMB** in H1 2024 to **38,644 thousand RMB** in H1 2025[13](index=13&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=NOTES%20TO%20THE%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes provide detailed information on the Group's financial performance, position, and cash flows, including accounting policies, segment information, and key financial metrics, prepared in accordance with relevant accounting standards [1. General Information of the Group](index=7&type=section&id=1.%20GENERAL%20INFORMATION%20OF%20THE%20GROUP) China Integrated Holdings Limited, incorporated in the Cayman Islands and listed on the HKEX since February 13, 2015, primarily engages in investment holding, with its main subsidiaries focused on umbrella manufacturing and sales, using RMB as its functional and presentation currency - The Company was incorporated in the Cayman Islands on **June 12, 2014**, and listed on the Main Board of the Stock Exchange of Hong Kong on **February 13, 2015**[14](index=14&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) - The Company is engaged in investment holding, while its principal subsidiaries are engaged in the manufacturing and sale of umbrellas[14](index=14&type=chunk)[18](index=18&type=chunk) - The functional currency of the Company and its PRC subsidiaries is **RMB**, and the condensed consolidated financial statements are presented in **RMB**[15](index=15&type=chunk)[18](index=18&type=chunk) [2.1 Basis of Preparation](index=7&type=section&id=2.1%20BASIS%20OF%20PREPARATION) The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and Appendix D2 of the Listing Rules, using a historical cost basis consistent with the 2024 annual financial statements - The financial statements are prepared in accordance with **HKAS 34 "Interim Financial Reporting"** and **Appendix D2 of the Listing Rules**[16](index=16&type=chunk)[19](index=19&type=chunk) - The statements are prepared on a **historical cost basis**, with accounting policies and methods of computation consistent with those used in the 2024 annual consolidated financial statements[17](index=17&type=chunk)[19](index=19&type=chunk) [2.2 Principal Accounting Policies](index=8&type=section&id=2.2%20PRINCIPAL%20ACCOUNTING%20POLICIES) New and revised HKFRSs, including HKAS 21 (Amendments) – Lack of Exchangeability, were first applied in this interim period but had no material impact on the Group's financial performance or position - New and revised **HKFRSs**, including **HKAS 21 (Amendments) – Lack of Exchangeability**, were first applied in this period[23](index=23&type=chunk)[24](index=24&type=chunk) - The application of new and revised standards had **no material impact** on the Group's financial performance and position for the current and prior periods[23](index=23&type=chunk)[24](index=24&type=chunk) [3. Revenue](index=8&type=section&id=3.%20REVENUE) Group revenue primarily represents amounts received and receivable from the sale of goods in the ordinary course of business, net of discounts and sales returns, totaling 173,416 thousand RMB for the six months ended June 30, 2025 - Revenue represents amounts received and receivable from the sale of goods in the ordinary course of business, net of discounts and sales returns[25](index=25&type=chunk) Revenue from Contracts with Customers (For the six months ended June 30) | Revenue Source | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Sale of goods | 173,416 | 186,910 | [4. Segment Information](index=8&type=section&id=4.%20SEGMENT%20INFORMATION) The Group operates in a single segment, manufacturing and selling umbrellas, with revenue analysis provided by product category, geographical location, and major customers, showing growth in POE and nylon umbrellas and in the Japanese market, despite an overall revenue decline [Product Information](index=9&type=section&id=PRODUCT%20INFORMATION) The Group's main products include POE umbrellas, nylon umbrellas, and umbrella components; for the six months ended June 30, 2025, revenue from POE and nylon umbrellas increased, while umbrella components revenue significantly decreased, contributing to the overall revenue decline Revenue Analysis by Product Category (For the six months ended June 30) | Product Category | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | POE umbrellas | 37,026 | 28,662 | | Nylon umbrellas | 87,568 | 82,340 | | Umbrella components | 48,822 | 75,908 | - POE umbrella revenue increased by **29.2%** year-on-year, and nylon umbrella revenue increased by **6.3%** year-on-year[30](index=30&type=chunk) - Umbrella components revenue significantly decreased by **35.7%** year-on-year, which is the primary reason for the overall revenue decline[30](index=30&type=chunk)[78](index=78&type=chunk) [Geographical Information](index=9&type=section&id=GEOGRAPHICAL%20INFORMATION) The Group operates in China with customers primarily in Japan, Cambodia, and China; for the six months ended June 30, 2025, revenue from Japan significantly increased, while revenue from China and Cambodia decreased, impacting overall geographical revenue distribution Revenue Analysis by Geographical Location (For the six months ended June 30) | Region | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Japan | 76,587 | 59,827 | | China | 46,656 | 55,074 | | Cambodia | 41,151 | 59,070 | | Others | 9,022 | 12,939 | - Revenue from Japan increased by **28.0%** year-on-year, becoming the largest market[33](index=33&type=chunk) - Revenue from China and Cambodia decreased by **15.3%** and **30.3%** year-on-year, respectively[33](index=33&type=chunk) [Information About Major Customers](index=10&type=section&id=INFORMATION%20ABOUT%20MAJOR%20CUSTOMERS) For the six months ended June 30, 2025, revenue from Customer A slightly increased, while Customer B's revenue decreased, with both major customers collectively contributing approximately 37% of the Group's total revenue Major Customer Revenue (For the six months ended June 30) | Customer | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Customer A | 29,691 | 28,099 | | Customer B | 34,574 | 36,310 | - Customer A's revenue increased by **5.7%** year-on-year, while Customer B's revenue decreased by **4.8%** year-on-year[39](index=39&type=chunk) [5. Income Tax Expense](index=10&type=section&id=5.%20INCOME%20TAX%20EXPENSE) For the six months ended June 30, 2025, the Group's income tax expense was 519 thousand RMB, primarily from China corporate income tax at a 25% rate, with no income or profits tax payable by subsidiaries in Cayman Islands, BVI, and Hong Kong Income Tax Expense (For the six months ended June 30) | Tax Category | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | China corporate income tax | 519 | 8 | - The corporate income tax rate for PRC companies is **25%**[41](index=41&type=chunk) - Subsidiaries in the Cayman Islands, British Virgin Islands, and Hong Kong were **not subject to income or profits tax** for the period[41](index=41&type=chunk) [6. Loss for the Period](index=11&type=section&id=6.%20LOSS%20FOR%20THE%20PERIOD) The loss for the period is derived after deducting various expenses, where total staff costs, cost of materials used in production, and research and development expenses increased, while net exchange gains positively influenced the narrowing loss Loss for the Period Deducted/(Credited) Items (For the six months ended June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Total staff costs | 19,376 | 18,388 | | Cost of materials used in production | 164,696 | 183,332 | | Depreciation of property, plant and equipment | 2,410 | 2,142 | | Depreciation of right-of-use assets | 268 | 268 | | Net exchange (gains)/losses | (2,595) | 746 | | Finance costs – bank borrowings | 1,735 | 1,886 | | Loss on disposal of property, plant and equipment | 176 | 27 | | Research and development expenses | 6,637 | 6,409 | - Total staff costs increased by **5.4%** year-on-year, and research and development expenses increased by **3.6%** year-on-year[44](index=44&type=chunk) - Net exchange gains were **2,595 thousand RMB**, compared to net exchange losses of **746 thousand RMB** in the prior period, positively contributing to the narrowing loss for the current period[44](index=44&type=chunk) [7. Loss Per Share](index=11&type=section&id=7.%20LOSS%20PER%20SHARE) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the Company significantly narrowed to 0.85 RMB cents from 2.91 RMB cents in the prior period, with both being identical due to the anti-dilutive effect of share options Loss Per Share (For the six months ended June 30) | Indicator | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company for basic and diluted loss per share calculation | (3,488) | (11,985) | | Weighted average number of ordinary shares for basic and diluted loss per share calculation ('000 shares) | 412,550 | 412,550 | | Basic and diluted loss per share (RMB cents) | (0.85) | (2.91) | - Basic and diluted loss per share were identical for both periods due to the **anti-dilutive effect of share options**[49](index=49&type=chunk)[52](index=52&type=chunk) [8. Dividend](index=12&type=section&id=8.%20DIVIDEND) For the six months ended June 30, 2025, the Board of Directors did not recommend the payment of any interim dividend, consistent with the prior period - No dividends were paid, declared, or proposed for the six months ended **June 30, 2025**[50](index=50&type=chunk)[53](index=53&type=chunk) - The Directors did not recommend the payment of any interim dividend (2024: nil)[50](index=50&type=chunk)[53](index=53&type=chunk) [9. Property, Plant and Equipment](index=12&type=section&id=9.%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) For the six months ended June 30, 2025, the Group acquired approximately 912 thousand RMB in property, plant and equipment, a significant increase from the prior period, with no impairment losses recognized in either period - For the six months ended June 30, 2025, additions to property, plant and equipment amounted to approximately **912 thousand RMB**, a significant increase from **111 thousand RMB** in the prior period of 2024[51](index=51&type=chunk)[54](index=54&type=chunk) - No impairment losses were recognized for property, plant and equipment in either period[51](index=51&type=chunk)[54](index=54&type=chunk) [10. Trade Receivables](index=13&type=section&id=10.%20TRADE%20RECEIVABLES) The Group generally grants credit terms of 30 to 150 days to trade customers; as of June 30, 2025, total trade receivables decreased, with a significant reduction in receivables within 90 days and an increase in those over 91 days - The Group generally grants credit terms of **30 to 150 days** to trade customers[55](index=55&type=chunk)[56](index=56&type=chunk) Ageing Analysis of Trade Receivables (As of June 30) | Ageing | 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | 0 to 90 days | 42,976 | 74,237 | | 91 to 180 days | 20,660 | 15,030 | | 181 to 365 days | 16,165 | 6,762 | | Over 365 days | 22,252 | 18,127 | | **Total** | **102,053** | **114,156** | - Trade receivables within **0 to 90 days** decreased from approximately **74.2 million RMB** as of December 31, 2024, to approximately **43.0 million RMB** as of June 30, 2025[57](index=57&type=chunk) [11. Loan Receivables](index=13&type=section&id=11.%20LOAN%20RECEIVABLES) As of June 30, 2025, the Group's total loan receivables were 10,101 thousand RMB, slightly lower than December 31, 2024, comprising unsecured, fixed-rate loans denominated in HKD, bearing 8% annual interest, and repayable within one year Loan Receivables (As of June 30) | Item | 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Fixed-rate loan receivables | 13,234 | 13,623 | | Less: Provision for credit losses | (3,133) | (3,225) | | **Total** | **10,101** | **10,398** | - Loan receivables are unsecured, bear fixed interest at **8% per annum**, and are repayable within one year[59](index=59&type=chunk)[60](index=60&type=chunk) - Loan receivables are denominated in **HKD**, which is the functional currency of the relevant Group entity[60](index=60&type=chunk) [12. Trade and Bills Payables](index=14&type=section&id=12.%20TRADE%20AND%20BILLS%20PAYABLES) As of June 30, 2025, total trade and bills payables increased to 58,414 thousand RMB, with a significant rise in payables within 90 days and a substantial decrease in those between 181 and 365 days, while credit terms for goods purchased range from 30 to 120 days Trade and Bills Payables (As of June 30) | Item | 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Trade payables | 24,537 | 20,140 | | Bills payables | 33,877 | 31,258 | | **Total** | **58,414** | **51,398** | Ageing Analysis of Trade and Bills Payables (As of June 30) | Ageing | 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | 0 to 90 days | 41,269 | 33,097 | | 91 to 180 days | 16,327 | 15,375 | | 181 to 365 days | 818 | 2,926 | - Credit terms for goods purchased range from **30 to 120 days**[65](index=65&type=chunk) [13. Bank Borrowings](index=14&type=section&id=13.%20BANK%20BORROWINGS) As of June 30, 2025, the Group's bank borrowings increased to 96,120 thousand RMB, all secured and repayable within one year, bearing fixed annual interest rates from 3.40% to 4.55%, and collateralized by the Group's buildings, right-of-use assets, and personal guarantees from Director Mr. Wong and his spouse Bank Borrowings (As of June 30) | Item | 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Secured, repayable within one year | 96,120 | 81,470 | - Bank borrowings bear fixed annual interest rates ranging from **3.40% to 4.55%**[69](index=69&type=chunk)[71](index=71&type=chunk) - Borrowings are secured by the Group's buildings (carrying amount of approximately **33,160 thousand RMB**), right-of-use assets (carrying amount of approximately **11,782 thousand RMB**), and personal guarantees from Director Mr. Wong and his spouse[70](index=70&type=chunk)[71](index=71&type=chunk) [14. Share Capital](index=15&type=section&id=14.%20SHARE%20CAPITAL) As of June 30, 2025, the Company's authorized and issued share capital remained unchanged, with ordinary shares having a par value of 0.032 HKD per share, entitling holders to dividends, one vote per share, and equal interests in residual assets Share Capital (As of June 30) | Item | June 30, 2025 ('000 shares) | December 31, 2024 ('000 shares) | | :--- | :--- | :--- | | Number of authorized shares | 1,562,500 | 1,562,500 | | Number of issued and fully paid shares | 412,550 | 412,550 | | Amount of issued and fully paid shares (thousand HKD) | 13,201 | 13,201 | | Par value of ordinary shares (thousand RMB) | 10,818 | 10,818 | - Holders of ordinary shares are entitled to dividends declared from time to time and one vote per share at Company general meetings[74](index=74&type=chunk) - All ordinary shares have equal interests in the residual assets of the Company[74](index=74&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section provides an overview of the Group's financial performance, liquidity, and future outlook, highlighting key operational achievements, financial trends, and strategic initiatives for the period [Interim Dividend](index=16&type=section&id=INTERIM%20DIVIDEND) The Board of Directors does not recommend the payment of any interim dividend for the current period, consistent with the prior period - The Board of Directors does not recommend the payment of any interim dividend for the current period (2024: nil)[75](index=75&type=chunk)[80](index=80&type=chunk) [Business Review](index=16&type=section&id=BUSINESS%20REVIEW) The Group primarily manufactures and sells POE umbrellas, nylon umbrellas, and umbrella components, ranking among China's largest umbrella exporters and plastic umbrella manufacturers, and is actively exploring new business opportunities for diversification - The Group is principally engaged in the manufacturing and sale of **POE umbrellas, nylon umbrellas, and umbrella components** to customers[76](index=76&type=chunk)[81](index=81&type=chunk) - The Group is one of the largest umbrella and parasol exporters and plastic umbrella manufacturers in China by export volume and sales volume, and one of the largest plastic umbrella suppliers in Japan[76](index=76&type=chunk)[81](index=81&type=chunk) - To enrich its business and explore potential opportunities, the Group is actively exploring and developing business opportunities and projects[76](index=76&type=chunk)[81](index=81&type=chunk) [Financial Review](index=16&type=section&id=FINANCIAL%20REVIEW) The Group's revenue decreased by 7.5% to 173 million RMB, mainly due to reduced demand for umbrella components; despite this, loss attributable to owners significantly narrowed to 3 million RMB due to lower cost of sales and increased other income and gains [Results](index=16&type=section&id=RESULTS) For the period, the Group's revenue decreased by 7.5% year-on-year to approximately 173 million RMB, while loss attributable to owners significantly narrowed to approximately 3 million RMB, with basic loss per share at 0.85 RMB cents - For the period, the Group's revenue decreased to approximately **173 million RMB**, a decrease of approximately **7.5%** compared to H1 2024[77](index=77&type=chunk)[82](index=82&type=chunk) - Loss attributable to owners of the Company was approximately **3 million RMB**, compared to a loss of approximately **12 million RMB** in H1 2024[77](index=77&type=chunk)[82](index=82&type=chunk) - The Company's basic loss per share was **0.85 RMB cents**[77](index=77&type=chunk)[82](index=82&type=chunk) [Revenue](index=16&type=section&id=REVENUE) Revenue decreased by approximately 7.5% from 187 million RMB in H1 2024 to 173 million RMB in the current period, primarily due to reduced demand for umbrella components - Revenue decreased by approximately **7.5%** from approximately **187 million RMB** in H1 2024 to **173 million RMB** in the current period[78](index=78&type=chunk)[83](index=83&type=chunk) - The decrease in revenue was mainly due to reduced demand for umbrella components compared to the prior period[78](index=78&type=chunk)[83](index=83&type=chunk) [Cost of Sales](index=16&type=section&id=COST%20OF%20SALES) Cost of sales decreased by approximately 6.5% from 168 million RMB in H1 2024 to 157 million RMB in the current period, primarily due to reduced direct labor costs, consistent with the Group's revenue decline - Cost of sales decreased by approximately **6.5%** from approximately **168 million RMB** in H1 2024 to **157 million RMB** in the current period[79](index=79&type=chunk)[84](index=84&type=chunk) - The decrease in cost of sales was mainly due to a reduction in direct labor costs, consistent with the Group's revenue decrease during the same period[79](index=79&type=chunk)[84](index=84&type=chunk) [Gross Profit and Gross Margin](index=17&type=section&id=GROSS%20PROFIT%20AND%20GROSS%20MARGIN) Gross profit decreased by 11% from approximately 18 million RMB in H1 2024 to 16 million RMB in H1 2025, with the gross margin declining from approximately 9.6% to 9.3% - Gross profit decreased by approximately **2 million RMB** or **11%** from approximately **18 million RMB** in H1 2024 to **16 million RMB** in H1 2025[85](index=85&type=chunk)[91](index=91&type=chunk) - The Group's gross margin decreased from approximately **9.6%** in H1 2024 to **9.3%** in the current period[85](index=85&type=chunk)[91](index=91&type=chunk) [Other Income and Net Other Gains/(Losses)](index=17&type=section&id=OTHER%20INCOME%20AND%20NET%20OTHER%20GAINS%2F%28LOSSES%29) For the period, the Group recorded net other income and gains of approximately 9.4 million RMB, a significant improvement from a net loss of 1.4 million RMB in H1 2024, mainly driven by increased exchange gains and fair value gains on financial assets - For the period, the Group recorded net other income and gains of approximately **9.4 million RMB**, compared to net other income and losses of approximately **1.4 million RMB** in H1 2024[86](index=86&type=chunk)[92](index=92&type=chunk) - This was mainly due to an increase in exchange gains and gains on financial assets at fair value through profit or loss[86](index=86&type=chunk)[92](index=92&type=chunk) [Selling and Distribution Expenses](index=17&type=section&id=SELLING%20AND%20DISTRIBUTION%20EXPENSES) Selling and distribution expenses remained stable at approximately 8 million RMB in both H1 2024 and the current period - Selling and distribution expenses remained stable at approximately **8 million RMB** in both H1 2024 and the current period[87](index=87&type=chunk)[93](index=93&type=chunk) [Administrative Expenses](index=17&type=section&id=ADMINISTRATIVE%20EXPENSES) Administrative expenses remained stable at approximately 19 million RMB in H1 2024 and 18 million RMB in the current period - Administrative expenses remained stable at approximately **19 million RMB** in H1 2024 and **18 million RMB** in the current period[88](index=88&type=chunk)[94](index=94&type=chunk) [Liquidity and Financial Resources](index=17&type=section&id=LIQUIDITY%20AND%20FINANCIAL%20RESOURCES) As of June 30, 2025, the Group's bank and cash balances significantly increased to approximately 61.7 million RMB, short-term bank borrowings rose to 96 million RMB, the current ratio slightly decreased to 2.2 times, and the gearing ratio increased to 53% - As of June 30, 2025, the Group's bank and cash balances (including time deposits of approximately **23 million RMB**) amounted to approximately **61.7 million RMB** (December 31, 2024: approximately **27 million RMB**)[89](index=89&type=chunk)[95](index=95&type=chunk) - The Group's short-term bank borrowings amounted to **96 million RMB** (December 31, 2024: approximately **81 million RMB**), with annual interest rates ranging from **3.4% to 4.6%**[89](index=89&type=chunk)[95](index=95&type=chunk) - The current ratio was approximately **2.2 times** (December 31, 2024: **2.3 times**), and the gearing ratio was approximately **53%** (December 31, 2024: **45%**)[90](index=90&type=chunk)[95](index=95&type=chunk) [Principal Risks and Uncertainties](index=18&type=section&id=PRINCIPAL%20RISKS%20AND%20UNCERTAINTIES) The Group faces various risks, including loss of major customers, political and economic instability, foreign currency exchange rate fluctuations, raw material price volatility or supply instability, and labor shortages or rising labor costs, which could materially adversely affect its business, financial condition, and operating results - The loss of major customers could have a **material adverse effect** on the Group's business, financial condition, and operating results[96](index=96&type=chunk)[98](index=98&type=chunk) - The Group faces risks related to political and economic instability and foreign currency exchange rate fluctuations associated with sales to customers in Japan, China, and other overseas markets[96](index=96&type=chunk)[98](index=98&type=chunk) - Fluctuations in raw material prices or unstable supply, as well as labor shortages or continuously rising labor costs, could negatively impact business operations and profitability[97](index=97&type=chunk)[98](index=98&type=chunk) [Capital Commitments and Contingent Liabilities](index=19&type=section&id=CAPITAL%20COMMITMENTS%20AND%20CONTINGENT%20LIABILITIES) As of June 30, 2025, the Group had no significant capital commitments or contingent liabilities, consistent with the situation as of December 31, 2024 - As of June 30, 2025, the Group had **no significant capital commitments** (December 31, 2024: nil)[99](index=99&type=chunk)[105](index=105&type=chunk) - As of June 30, 2025, the Group had **no significant contingent liabilities** (December 31, 2024: nil)[99](index=99&type=chunk)[105](index=105&type=chunk) [Pledge of Assets](index=19&type=section&id=PLEDGE%20OF%20ASSETS) As of June 30, 2025, the Group's leasehold land and buildings with a carrying amount of approximately 44 million RMB, and time deposits of approximately 23 million RMB, were pledged to banks as security for bank borrowings - As of June 30, 2025, the Group's leasehold land and buildings with a carrying amount of approximately **44 million RMB** were pledged to banks[100](index=100&type=chunk)[106](index=106&type=chunk) - Time deposits with a carrying amount of approximately **23 million RMB** were pledged to banks as security for bank borrowings[100](index=100&type=chunk)[106](index=106&type=chunk) [Employees and Remuneration Policy](index=19&type=section&id=EMPLOYEES%20AND%20REMUNERATION%20POLICY) As of June 30, 2025, the Group employed 593 staff, an increase from late 2024, with remuneration policies based on experience, qualifications, and abilities, and benefits including statutory MPF, social insurance, and housing provident fund contributions - As of June 30, 2025, the Group employed a total of **593 employees** (December 31, 2024: **523 employees**)[101](index=101&type=chunk)[107](index=107&type=chunk) - Employee remuneration policy is established by the Board based on individual employee experience, qualifications, and abilities[101](index=101&type=chunk)[107](index=107&type=chunk) - Other employee benefits include statutory Mandatory Provident Fund contributions, social insurance, and housing provident fund contributions[101](index=101&type=chunk)[107](index=107&type=chunk) [Future Prospects](index=19&type=section&id=FUTURE%20PROSPECTS) The Group aims to consolidate its leading position in the Japanese and Chinese markets, expand market share in existing markets like Hong Kong, Cambodia, and Korea, and address global economic downturns, trade tensions, and slow market recovery by expanding capacity, promoting business development, enhancing R&D, and exploring diversification opportunities - The Group's primary objective is to maintain and consolidate its leading position as an umbrella manufacturer in the Japanese market and an own-brand umbrella manufacturer in the Chinese market, and to expand its market share in existing markets such as Hong Kong, Cambodia, and Korea[102](index=102&type=chunk)[108](index=108&type=chunk) - Facing challenges such as global economic downturns, threats from the Sino-US trade war, and slow market recovery, the Group will expand production capacity, promote business development, and enhance R&D capabilities[103](index=103&type=chunk)[108](index=108&type=chunk) - To enrich its business and explore potential opportunities, the Group is actively exploring and developing business opportunities and projects[103](index=103&type=chunk)[108](index=108&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=19&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20THE%20COMPANY'S%20LISTED%20SECURITIES) During the period, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities - During the period, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities[104](index=104&type=chunk)[109](index=109&type=chunk) [Directors' and Chief Executives' Interests in Securities](index=20&type=section&id=DIRECTORS'%20AND%20CHIEF%20EXECUTIVES'%20INTERESTS%20IN%20SECURITIES) As of June 30, 2025, directors and chief executives held long positions in the Company's shares, with Mr. Wong Man Chap holding 30.31% through a controlled corporation and other directors holding 0.46% as beneficial owners Long Positions in the Company (As of June 30) | Director's Name | Nature of Interest | Capacity | Number of Issued Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Mr. Wong Man Chap | Long Position | Interest in controlled corporation and beneficial owner | 125,030,900 | 30.31% | | Mr. Yang Guang | Long Position | Beneficial owner | 1,890,000 | 0.46% | | Mr. Lam Ching Sheung | Long Position | Beneficial owner | 1,890,000 | 0.46% | | Mr. Chung Kin Hung | Long Position | Beneficial owner | 1,890,000 | 0.46% | | Mr. Cao Siwei | Long Position | Beneficial owner | 1,890,000 | 0.46% | | Ms. Li Jieying | Long Position | Beneficial owner | 1,890,000 | 0.46% | - Mr. Wong Man Chap is deemed to have an interest in shares held by Jicheng Investment Limited, a controlled corporation[113](index=113&type=chunk)[115](index=115&type=chunk) [Interests and Short Positions of Substantial Shareholders](index=21&type=section&id=INTERESTS%20AND%20SHORT%20POSITIONS%20OF%20SUBSTANTIAL%20SHAREHOLDERS) As of the report date, Jicheng Investment Limited held 29.85% of shares, Mr. Wong Man Chap was deemed to hold 30.31% due to his full ownership of Jicheng Investment Limited, and his spouse, Ms. Chan Kai Yau, was also deemed to hold 29.85% Interests and Short Positions of Substantial Shareholders (As of the report date) | Shareholder Name/Designation | Nature of Interest | Capacity | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Jicheng Investment Limited | Long Position | Beneficial owner | 123,140,900 | 29.85% | | Mr. Wong Man Chap | Long Position | Interest in controlled corporation and beneficial owner | 125,030,900 | 30.31% | | Ms. Chan Kai Yau | Long Position | Spouse's interest | 123,140,900 | 29.85% | - Mr. Wong Man Chap wholly and beneficially owns Jicheng Investment Limited, and is therefore deemed to have an interest in the shares held by it[117](index=117&type=chunk)[121](index=121&type=chunk) - Ms. Chan Kai Yau is the spouse of Mr. Wong Man Chap, and is therefore deemed to have an interest in the shares in which Mr. Wong Man Chap has an interest[117](index=117&type=chunk)[121](index=121&type=chunk) [Share Option Scheme](index=21&type=section&id=SHARE%20OPTION%20SCHEME) The Company's share option scheme, adopted on January 23, 2015, expired on January 22, 2025, with no further options granted thereafter, aiming to reward and retain eligible individuals contributing to the Group's development, with 18,750,000 shares available for issuance as of the report date - The share option scheme expired on **January 22, 2025**, and no share options have been granted since its expiry[118](index=118&type=chunk)[120](index=120&type=chunk) - Eligible participants of the scheme include employees, directors, shareholders, consultants, advisors, suppliers, customers, and agents of the Company or any of its subsidiaries[122](index=122&type=chunk)[126](index=126&type=chunk) - As of the report date, the total number of securities available for issue under the share option scheme was **18,750,000 shares**, representing **4.54%** of the Company's total issued shares[131](index=131&type=chunk)[134](index=134&type=chunk) Share Option Movement (As of June 30) | Participant Category | Date of Grant | Exercise Period | Adjusted Exercise Price (HKD) | Outstanding as at 01.01.2025 | Granted during the period | Exercised during the period | Lapsed during the period | Outstanding as at 30.06.2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Employees | April 10, 2019 | April 10, 2019 to April 9, 2029 | 0.900 | 18,750,000 | – | – | – | 18,750,000 | [Corporate Governance](index=24&type=section&id=CORPORATE%20GOVERNANCE) The Company is committed to high corporate governance standards, adhering to the Corporate Governance Code in Appendix C1 of the Listing Rules, despite deviations like the combined Chairman and CEO role and some INEDs' absence from the AGM, which the Board believes supports strategy execution and decision-making - The Company has adopted and complied with the **Corporate Governance Code** as set out in **Appendix C1 of the Listing Rules**[138](index=138&type=chunk)[141](index=141&type=chunk) - The roles of Chairman and Chief Executive Officer are performed by Mr. Wong, which the Board believes facilitates the execution of business strategies and decision-making[138](index=138&type=chunk)[141](index=141&type=chunk) - Some Independent Non-executive Directors did not attend the Annual General Meeting held on **June 2, 2025**, due to other commitments, constituting a deviation from Code Provision F.1.3[139](index=139&type=chunk)[141](index=141&type=chunk) [Model Code for Securities Transactions by the Directors](index=25&type=section&id=MODEL%20CODE%20FOR%20SECURITIES%20TRANSACTIONS%20BY%20THE%20DIRECTORS) The directors have adopted and confirmed full compliance with the Model Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 of the Listing Rules, since the listing date - The Directors have adopted the **Model Code for Securities Transactions by Directors of Listed Issuers** as set out in **Appendix C3 of the Listing Rules**[143](index=143&type=chunk)[148](index=148&type=chunk) - All Directors have confirmed their full compliance with the required standards of dealing as set out in the Model Code since the listing date[143](index=143&type=chunk)[148](index=148&type=chunk) [Audit Committee](index=25&type=section&id=AUDIT%20COMMITTEE) Established on January 23, 2015, the Audit Committee, comprising three independent non-executive directors and chaired by Mr. Cao Siwei, has reviewed the Group's accounting principles, practices, and financial reporting matters, including the unaudited condensed interim financial statements for the period - The Audit Committee was established on **January 23, 2015**, comprising three independent non-executive directors, with Mr. Cao Siwei as the chairman[144](index=144&type=chunk)[149](index=149&type=chunk) - The Committee has reviewed the accounting principles and practices adopted by the Group and financial reporting matters with management, including the unaudited condensed interim financial statements for the period[144](index=144&type=chunk)[149](index=149&type=chunk) [Remuneration Committee](index=25&type=section&id=REMUNERATION%20COMMITTEE) Established on January 23, 2015, the Remuneration Committee comprises three independent non-executive directors and is chaired by Ms. Li Jieying - The Remuneration Committee was established on **January 23, 2015**, comprising three independent non-executive directors, with Ms. Li Jieying as the chairman[145](index=145&type=chunk)[150](index=150&type=chunk) [Nomination Committee](index=25&type=section&id=NOMINATION%20COMMITTEE) Established on January 23, 2015, the Nomination Committee comprises three independent non-executive directors and is chaired by Mr. Yang Xuetai - The Nomination Committee was established on **January 23, 2015**, comprising three independent non-executive directors, with Mr. Yang Xuetai as the chairman[146](index=146&type=chunk)[151](index=151&type=chunk) [Appreciation](index=25&type=section&id=APPRECIATION) Mr. Wong Man Chap, Chairman of the Board, on behalf of the Board, extends gratitude to all staff for their diligent work, dedication, loyalty, and integrity, and thanks shareholders, customers, bankers, and other business partners for their trust and support - Mr. Wong Man Chap, Chairman of the Board, on behalf of the Board, extends gratitude to all staff for their diligent work, dedication, loyalty, and integrity[147](index=147&type=chunk)[152](index=152&type=chunk) - Appreciation is also extended to shareholders, customers, bankers, and other business partners for their trust and support[147](index=147&type=chunk)[152](index=152&type=chunk)

中期報告 目錄 中期簡明合併損益表 中期簡明合併全面收益表 中期簡明合併財務狀況表 中期簡明合併股本權益變動表 中期簡明合併現金流量表 中期簡明合併財務資料附註 2 公司資料 3 管理層討論與分析 10 權益披露及其他資料 13 中期簡明合併財務資料審閱報告 15 中期財務報告 公司資料 董事會 執行董事 李伏京先生 （主席） （於2025年7月25日辭任執行董事及董事會主席） 黎青松先生 （主席兼行政總裁） （於2025年7月25日獲委任為董事會主席） 非執行董事 郝春梅女士 獨立非執行董事 浦炳榮先生 鄭啟泰先生 陳綺華博士 曹富國博士 委員會 審核委員會 陳綺華博士 （主席） 浦炳榮先生 鄭啟泰先生 提名委員會 李伏京先生 （主席）（於2025年7月25日辭任） 黎青松先生 （主席）（於2025年7月25日獲委任） 浦炳榮先生 鄭啟泰先生 陳綺華博士 薪酬委員會 浦炳榮先生 （主席） 鄭啟泰先生 李伏京先生 （於2025年7月25日辭任） 黎青松先生 （於2025年7月25日獲委任） 聯席公司秘書 郁紅女士 練少娥女士 授權代表 李伏京先生 （於2025年7月25日辭任） 黎青松先生 （於2025年7月 ...

Company Information [Board of Directors](index=3&type=section&id=Board%20of%20Directors) This section outlines the composition of the company's board of directors, including executive and independent non-executive directors, and the members and chairs of the audit, remuneration, and nomination committees - Executive Directors include Ms. Liu Sainan (Chairperson), Mr. Hu Yingxia (Chief Executive Officer), and Ms. Li Chunyang[3](index=3&type=chunk) - Independent Non-Executive Directors are Mr. Zhu Gaoming, Mr. Qiu Yiyong, and Mr. Deng Banghao[3](index=3&type=chunk) - Mr. Zhu Gaoming chairs the Audit Committee, Mr. Qiu Yiyong chairs the Remuneration Committee, and Ms. Liu Sainan chairs the Nomination Committee[3](index=3&type=chunk) [Company Secretary and Registration Information](index=3&type=section&id=Company%20Secretary%20and%20Registration%20Information) This section provides detailed information on the company secretary, deputy company secretary, share trading information (HKEX and SGX), registered office, principal place of business, principal bankers, auditor, share registrar, Singapore share transfer agent, and company website - Mr. Chan Shuk Ching is the Company Secretary, and Ms. Li Bik Ping is the Deputy Company Secretary[3](index=3&type=chunk) - Company shares are traded on the HKEX (Stock Code: 1145) and SGX (Stock Code: CIN)[3](index=3&type=chunk) - The auditor is Deloitte Touche Tohmatsu[3](index=3&type=chunk) Management Discussion and Analysis [Business Review](index=4&type=section&id=Business%20Review) During the reporting period, the group's main businesses were marine transportation and trading, with marine business facing significant pressure due to trade tensions and geopolitical events, leading to a 14% year-on-year revenue decrease and a shift from profit to loss 2025 H1 Business Overview | Metric | 2025 H1 (USD '000) | 2024 H1 (USD '000) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 4,381 | 5,070 | -14% | | Profit (Loss) Attributable to Owners of the Company | (1,708) | 1,278 | Shift from profit to loss | | Basic (Loss) Earnings Per Share | (0.16) US cents | 0.12 US cents | Shift from profit to loss | - The marine transportation business market faced immense pressure, primarily due to escalating trade tensions between the US and other countries leading to weak commodity demand, and ongoing geopolitical conflicts in Ukraine and Palestine[5](index=5&type=chunk) - The Group strategically relaunched its trading business to mitigate the cyclical impact on its marine transportation business[5](index=5&type=chunk) [Marine Transportation Business](index=4&type=section&id=Marine%20Transportation%20Business) The group's dry bulk fleet comprises three Supramax vessels with a total carrying capacity of approximately 171,000 DWT, experiencing a 34.1% year-on-year decrease in the average daily Baltic Supramax Index (BSI 58) in 2025 H1, leading to reduced revenue, further impacted by the Heroic vessel's dry-docking - The Group owns three Supramax dry bulk vessels with a carrying capacity of approximately **171,000 DWT**[6](index=6&type=chunk) BSI 58 Index and Marine Transportation Revenue Impact | Metric | 2025 H1 | 2024 H1 (Estimated) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | BSI 58 Average Daily Value | USD 9,202 | USD 13,975 | Decrease of USD 4,773 (-34.1%) | | Impact of Heroic Vessel Downtime | Reduced operating revenue by approximately USD 300,000 | N/A | N/A | - The BSI 58 fell to a five-year historical low of approximately **USD 5,600** in February 2025[6](index=6&type=chunk) [Trading Business](index=4&type=section&id=Trading%20Business) Leveraging the new controlling shareholder's expertise and network in the coal and other commodities industries, the group expanded into coal trading in 2025 H1, generating USD 551,000 in sales revenue and USD 13,000 in profit from 5,200 tons of coal sales - The Group expanded into coal trading in 2025 H1, benefiting from the new controlling shareholder's experience and business network[7](index=7&type=chunk) 2025 H1 Trading Business Performance | Metric | 2025 H1 (USD '000) | 2024 H1 (USD '000) | | :--- | :--- | :--- | | Sales Revenue | 551 | Nil | | Profit | 13 | Nil | | Coal Sales Volume (tons) | 5,200 | Nil | [Financial Review](index=5&type=section&id=Financial%20Review) The group primarily funds operations through cash generated from business and equity, maintaining a strong liquidity ratio despite a decrease due to increased contract liabilities from dry-docking cost provisions, while owners' equity decreased due to the period's loss, and bank interest income fell by 53% due to lower rates 2025 H1 Financial Resources Overview | Metric | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | Change | | :--- | :--- | :--- | :--- | | Current Assets | 18,603 | 19,660 | Decrease of 1,057 | | Quick Assets | 13,910 | 18,938 | Decrease of 5,028 | | Current Liabilities | 2,287 | 1,003 | Increase of 1,284 | | Current Ratio | 8.1 | 19.6 | Decrease | | Equity Attributable to Owners of the Company | 57,139 | 58,804 | Decrease of 1,665 | | Finance Costs | 8 | 19 | Decrease of 11 | | Bank Interest Income | 182 | 385 (2024 H1) | Decrease of 203 (-53%) | - The decrease in the current ratio was primarily due to provisions for dry-docking costs, leading to an increase in contract liabilities[8](index=8&type=chunk) - Management believes the Group has sufficient financial resources to meet its ongoing operational needs[10](index=10&type=chunk) [Foreign Currency Management](index=5&type=section&id=Foreign%20Currency%20Management) The group's monetary assets, liabilities, and business transactions are primarily denominated in USD or HKD, and no significant exchange rate fluctuation risks were encountered in 2025 H1, thus no hedging arrangements were entered into - The Group's monetary assets and liabilities, as well as business transactions, are primarily denominated in **USD or HKD**[11](index=11&type=chunk) - During 2025 H1, the Group did not experience significant exchange rate fluctuation risks and therefore did not enter into any financial arrangements for hedging purposes[11](index=11&type=chunk) [Contingent Liabilities and Capital Commitments](index=5&type=section&id=Contingent%20Liabilities%20and%20Capital%20Commitments) As of June 30, 2025, the group had no significant contingent liabilities or capital commitments - As of June 30, 2025, the Group had no significant contingent liabilities[12](index=12&type=chunk) - As of June 30, 2025, the Group had no significant capital commitments[13](index=13&type=chunk) [Employees and Remuneration Policy](index=6&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the group had 12 employees, with staff costs (including directors' emoluments) of USD 666,000, an increase year-on-year, and remuneration packages are reviewed annually based on market terms, individual capabilities, performance, and experience, with MPF schemes and other benefits for Hong Kong employees, and crew expenses also increased year-on-year Employee and Remuneration Overview | Metric | June 30, 2025 | December 31, 2024 | 2025 H1 (USD '000) | 2024 H1 (USD '000) | | :--- | :--- | :--- | :--- | :--- | | Number of Employees | 12 | 18 | N/A | N/A | | Staff Costs (incl. Directors' Emoluments) | N/A | N/A | 666 | 417 | | Number of Crew | Approx. 64 | 64 | N/A | N/A | | Crew Expenses | N/A | N/A | 1,458 | 961 | - Remuneration packages are typically reviewed annually, taking into account prevailing market terms, individual capabilities, performance, and experience[14](index=14&type=chunk) - The Group provides a Mandatory Provident Fund scheme for Hong Kong employees, along with medical insurance, subsidized training programs, and discretionary bonuses[14](index=14&type=chunk) [Outlook](index=6&type=section&id=Outlook) Management remains cautiously optimistic about the medium-to-long-term prospects of the marine transportation business, expecting strong short-term shipping demand, and will leverage the new controlling shareholder's resources to expand logistics and trading businesses in mainland China, Mongolia, and Belt and Road countries, aiming for new growth drivers and business diversification within the year, while continuing prudent operations, fleet expansion opportunities, cost reduction, efficiency improvement, and investment/M&A opportunities - The Group remains cautiously optimistic about the medium-to-long-term prospects of the marine transportation business, expecting strong short-term shipping demand influenced by the rebound in the BSI 58 index and the Red Sea crisis[15](index=15&type=chunk) - The Group will expand its logistics and trading businesses in mainland China, Mongolia, and other "Belt and Road" countries, striving to cultivate new business growth points and achieve business diversification within the year[15](index=15&type=chunk) - Management will continue to uphold a prudent operating philosophy, opportunistically expand the fleet, enhance professional and refined fleet management, implement cost reduction and efficiency improvement measures, and seek investment or merger and acquisition opportunities[15](index=15&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The group's total revenue decreased by 14% year-on-year, primarily due to reduced marine transportation service income, leading to a shift from profit to loss attributable to owners of the company, with a loss of USD 1,708 thousand and basic loss per share of 0.16 US cents, driven by a significant increase in total cost of sales and a decrease in other income Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 H1 (USD '000) | 2024 H1 (USD '000) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 4,381 | 5,070 | -14% | | Total Cost of Sales | (5,207) | (2,966) | Increase of 75.5% | | Other Income | 308 | 502 | -38.7% | | Profit (Loss) Before Tax | (1,708) | 1,278 | Shift from profit to loss | | Profit (Loss) for the Period Attributable to Owners of the Company | (1,708) | 1,278 | Shift from profit to loss | | Basic (Loss) Earnings Per Share Attributable to Owners of the Company | (0.16) US cents | 0.12 US cents | Shift from profit to loss | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the group's total assets slightly decreased, with non-current assets slightly increasing due to property, plant, and equipment, while current assets decreased but saw new inventory and trade receivables, and current liabilities significantly increased, mainly due to higher deposits received, other payables, and accrued expenses, particularly dry-docking cost provisions, leading to a decrease in total equity due to the period's loss Summary of Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 40,952 | 40,147 | Increase of 805 | | Current Assets | 18,603 | 19,660 | Decrease of 1,057 | | Inventories | 3,572 | – | New | | Trade Receivables | 133 | – | New | | Bank Deposits | 7,419 | 14,681 | Decrease of 7,262 | | Cash and Cash Equivalents | 6,491 | 4,257 | Increase of 2,234 | | Total Assets | 59,555 | 59,807 | Decrease of 252 | | Current Liabilities | 2,287 | 1,003 | Increase of 1,284 | | Deposits Received, Other Payables and Accrued Expenses | 2,033 | 775 | Increase of 1,258 | | Contract Liabilities | 69 | 219 | Decrease of 150 | | Lease Liabilities (Current) | 185 | 9 | Increase of 176 | | Total Equity | 57,139 | 58,804 | Decrease of 1,665 | - The significant increase in current liabilities was primarily due to a new provision of **USD 1,415 thousand** for dry-docking costs[19](index=19&type=chunk)[43](index=43&type=chunk) Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, total equity attributable to owners of the company decreased by USD 1,665 thousand, primarily due to a loss of USD 1,708 thousand for the period, partially offset by exchange differences arising from the translation of financial statements of overseas operations of USD 43 thousand Summary of Condensed Consolidated Statement of Changes in Equity | Metric | January 1, 2025 (USD '000) | June 30, 2025 (USD '000) | Change (USD '000) | | :--- | :--- | :--- | :--- | | Share Capital | 1,098 | 1,098 | 0 | | Share Premium | 8,072 | 8,072 | 0 | | Contributed Surplus | 41,029 | 41,029 | 0 | | Exchange Reserve | – | 43 | Increase of 43 | | Retained Profits | 8,605 | 6,897 | Decrease of 1,708 | | Total Equity | 58,804 | 57,139 | Decrease of 1,665 | - A loss of **USD 1,708 thousand** for the period was the primary reason for the decrease in equity[20](index=20&type=chunk) Condensed Consolidated Statement of Cash Flows In 2025 H1, net cash from operating activities shifted from an inflow to an outflow of USD 3,100 thousand, mainly due to the loss before tax, increased inventories, and increased trade receivables, while net cash from investing activities shifted to an inflow of USD 5,400 thousand, primarily from net withdrawals of bank deposits, and cash outflow from financing activities decreased, resulting in a net increase in cash and cash equivalents of USD 2,234 thousand at period-end Summary of Condensed Consolidated Statement of Cash Flows | Activity Type | 2025 H1 (USD '000) | 2024 H1 (USD '000) | Change | | :--- | :--- | :--- | :--- | | Net Cash (Used in) From Operating Activities | (3,100) | 2,924 | Shift from inflow to outflow | | Net Cash From (Used in) Investing Activities | 5,400 | (1,517) | Shift from outflow to inflow | | Cash Used in Financing Activities | (66) | (807) | Outflow decreased | | Net Increase in Cash and Cash Equivalents | 2,234 | 600 | Increase | | Cash and Cash Equivalents at End of Period | 6,491 | 1,914 | Increase | - Cash outflow from operating activities was primarily affected by the loss before tax, an increase in inventories of **USD 3,572 thousand**, and an increase in trade receivables of **USD 133 thousand**[21](index=21&type=chunk) - Cash inflow from investing activities primarily resulted from net withdrawals of bank deposits[21](index=21&type=chunk) Notes to the Condensed Consolidated Financial Statements [1. General Information](index=12&type=section&id=1.%20General%20Information) This section introduces the company's registration information, listing venues, functional currency, and primary businesses of marine transportation services and trading - The Company was incorporated in Bermuda and is primarily listed on the Main Board of the HKEX and secondarily listed on the Main Board of the SGX[22](index=22&type=chunk) - The condensed consolidated financial statements are presented in **USD**, which is the Company's functional currency[22](index=22&type=chunk) - The Company is an investment holding company, and the principal activities of its major subsidiaries are marine transportation services and trading[23](index=23&type=chunk) [2. Principal Accounting Policies](index=12&type=section&id=2.%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with IAS 34 and the HKEX Listing Rules, using the historical cost basis, with the first-time application of IFRS amendments in the current period having no significant impact on financial position and performance - The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 and the applicable disclosure requirements of Appendix D2 to the HKEX Listing Rules[24](index=24&type=chunk) - The financial statements have been prepared on a historical cost basis, and the accounting policies are consistent with those set out in the audited consolidated financial statements for the previous year, except for the application of amendments to International Financial Reporting Standards[25](index=25&type=chunk) - The first-time application of amendments to International Financial Reporting Standards (IAS 21 Amendment "Lack of Exchangeability") did not have a significant impact on the financial position and performance for the current and prior periods[26](index=26&type=chunk) [3. Revenue](index=13&type=section&id=3.%20Revenue) The group's revenue primarily derives from marine transportation services and trading, with marine transportation service revenue decreasing year-on-year in 2025 H1, while trading revenue contributed as a new business Revenue Breakdown (USD '000) | Revenue Source | 2025 H1 | 2024 H1 | Change | | :--- | :--- | :--- | :--- | | Marine Transportation Services | 3,830 | 5,070 | Decrease of 1,240 | | Trading | 551 | – | New | | **Total Revenue** | **4,381** | **5,070** | **Decrease of 689** | [4. Segment Information](index=14&type=section&id=4.%20Segment%20Information) The group re-evaluated and identified two operating segments: marine transportation services and trading, with the marine transportation services segment experiencing a decrease in both revenue and performance, turning into a loss in 2025 H1, while the trading segment contributed new revenue and profit, and segment assets and liabilities also reflected changes in the business structure - The Group has reclassified into two operating segments: marine transportation services and trading, for resource allocation and performance evaluation[28](index=28&type=chunk) Segment Revenue and Results (USD '000) | Metric | Marine Transportation Services (2025 H1) | Trading (2025 H1) | Total (2025 H1) | Marine Transportation Services (2024 H1) | Trading (2024 H1) | Total (2024 H1) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Segment Revenue | 3,830 | 551 | 4,381 | 5,070 | – | 5,070 | | Segment Results | (749) | 13 | (736) | 2,170 | – | 2,170 | Segment Assets and Liabilities (USD '000) | Metric | Marine Transportation Services (June 30, 2025) | Trading (June 30, 2025) | Total (June 30, 2025) | Marine Transportation Services (December 31, 2024) | Trading (December 31, 2024) | Total (December 31, 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Segment Assets | 44,116 | 4,202 | 48,318 | 43,153 | – | 43,153 | | Segment Liabilities | 1,919 | 1 | 1,920 | 789 | – | 789 | [5. Other Income](index=16&type=section&id=5.%20Other%20Income) Total other income for 2025 H1 was USD 308 thousand, a year-on-year decrease, primarily due to reduced bank interest income Other Income (USD '000) | Income Type | 2025 H1 | 2024 H1 | Change | | :--- | :--- | :--- | :--- | | Bank Interest Income | 182 | 385 | Decrease of 203 | | Other Income | 126 | 117 | Increase of 9 | | **Total** | **308** | **502** | **Decrease of 194** | [6. Profit (Loss) Before Tax](index=17&type=section&id=6.%20Profit%20%28Loss%29%20Before%20Tax) The loss before tax was primarily affected by increased employee benefit expenses, crew expenses, and depreciation, as well as decreased bank interest income Factors Affecting Profit (Loss) Before Tax (USD '000) | Item | 2025 H1 | 2024 H1 | Change | | :--- | :--- | :--- | :--- | | Employee Benefit Expenses (incl. Directors' Emoluments) | 666 | 417 | Increase of 249 | | Crew Expenses | 1,458 | 961 | Increase of 497 | | Depreciation of Property, Plant and Equipment | 1,353 | 992 | Increase of 361 | | Depreciation of Right-of-Use Assets | 67 | 49 | Increase of 18 | | Bank Interest Income | (182) | (385) | Decrease of 203 | [7. Income Tax Expense](index=17&type=section&id=7.%20Income%20Tax%20Expense) For the six months ended June 30, 2025 and 2024, the group incurred no taxable profits in Hong Kong or other jurisdictions, resulting in zero income tax expense - For the six months ended June 30, 2025 and 2024, no taxable profits arose in Hong Kong, and the Directors believe no tax was incurred in other jurisdictions[37](index=37&type=chunk) [8. (Loss) Earnings Per Share](index=17&type=section&id=8.%20%28Loss%29%20Earnings%20Per%20Share) Basic loss per share for 2025 H1 was 0.16 US cents, compared to basic earnings per share of 0.12 US cents in the prior year, primarily due to the shift from profit to loss for the period, with no diluted (loss) earnings per share presented as there were no potentially dilutive ordinary shares (Loss) Earnings Per Share (US cents) | Metric | 2025 H1 | 2024 H1 | Change | | :--- | :--- | :--- | :--- | | Profit (Loss) for the Period Attributable to Owners of the Company (USD '000) | (1,708) | 1,278 | Shift from profit to loss | | Basic (Loss) Earnings Per Share (US cents) | (0.16) | 0.12 | Shift from profit to loss | | Weighted Average Number of Ordinary Shares in Issue ('000 shares) | 1,097,704 | 1,097,704 | No change | - For the six months ended June 30, 2025 and 2024, no diluted (loss) earnings per share were presented as there were no potentially dilutive ordinary shares[38](index=38&type=chunk) [9. Dividends](index=18&type=section&id=9.%20Dividends) For the six months ended June 30, 2025, the Board of Directors resolved not to pay, declare, or propose any dividends - No dividends were paid, declared, or proposed for the six months ended June 30, 2025[39](index=39&type=chunk) - The Company's Directors decided not to pay dividends for this interim period[39](index=39&type=chunk) [10. Property, Plant and Equipment](index=18&type=section&id=10.%20Property,%20Plant%20and%20Equipment) In 2025 H1, the group's additions to property, plant, and equipment amounted to USD 1,862 thousand, a significant increase compared to the prior year Additions to Property, Plant and Equipment (USD '000) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Additions Amount | 1,862 | 2 | [11. Trade Receivables](index=18&type=section&id=11.%20Trade%20Receivables) Trade receivables primarily originate from marine transportation services, with credit terms of 0 to 30 days, and as of June 30, 2025, they were neither overdue nor impaired and have since been fully settled - Trade receivables arise from marine transportation services, with an aging of within **30 days** from the invoice date[41](index=41&type=chunk) - As of June 30, 2025, the Group's trade receivables were neither overdue nor impaired and have since been fully settled[41](index=41&type=chunk) [12. Other Receivables and Prepayments](index=18&type=section&id=12.%20Other%20Receivables%20and%20Prepayments) As of June 30, 2025, total other receivables and prepayments increased to USD 988 thousand from December 31, 2024, primarily due to increases in other receivables and prepayments for operating expenses Other Receivables and Prepayments (USD '000) | Item | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Other Receivables | 711 | 558 | Increase of 153 | | Prepayments for Operating Expenses and Other Deposits | 277 | 154 | Increase of 123 | | Account Balance with Brokers | – | 10 | Decrease of 10 | | **Total** | **988** | **722** | **Increase of 266** | [13. Deposits Received, Other Payables and Accrued Expenses](index=19&type=section&id=13.%20Deposits%20Received,%20Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2025, total deposits received, other payables, and accrued expenses significantly increased to USD 2,033 thousand, primarily due to a new provision of USD 1,415 thousand for dry-docking costs Deposits Received, Other Payables and Accrued Expenses (USD '000) | Item | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Accrued Operating Expenses and Other Payables | 618 | 625 | Decrease of 7 | | Provision for Dry-docking Costs | 1,415 | – | New 1,415 | | Deposits Received from Vessel Charterers | – | 150 | Decrease of 150 | | **Total** | **2,033** | **775** | **Increase of 1,258** | [14. Share Capital](index=19&type=section&id=14.%20Share%20Capital) As of June 30, 2025, the company's authorized and issued and fully paid share capital remained unchanged, with a par value of USD 0.001 per share, each carrying one voting right and the right to receive dividends Share Capital Structure | Item | Number of Shares ('000 shares) | Amount (USD '000) | | :--- | :--- | :--- | | Authorized Share Capital (par value USD 0.001 per share) | 180,000,000 | 180,000 | | Issued and Fully Paid Share Capital (par value USD 0.001 per share) | 1,097,704 | 1,098 | - All issued ordinary shares have a par value of **USD 0.001** per share, each carrying one voting right and the right to receive dividends when declared by the Company[44](index=44&type=chunk) [15. Related Party Disclosures](index=20&type=section&id=15.%20Related%20Party%20Disclosures) This section discloses the group's related party transactions, including property, plant, and equipment acquisition costs and office lease expenses payable to related companies, all entered into on normal commercial terms or better and classified as de minimis related party transactions, along with key management personnel emoluments Related Party Transactions (USD '000) | Transaction Type | 2025 H1 | 2024 H1 | Remarks | | :--- | :--- | :--- | :--- | | Property, Plant and Equipment acquisition costs payable to a related company | 69 | – | Controlled by a key management personnel of the Company | | Office lease expenses payable to a related company | – | 24 | Having a common principal shareholder with the Company | - All related party transactions were entered into on terms agreed between the relevant parties and constitute connected transactions as defined under Chapter 14A of the HKEX Listing Rules, fully exempt from reporting, announcement, and independent shareholders' approval requirements[47](index=47&type=chunk) Key Management Personnel Emoluments (USD '000) | Emolument Type | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Short-term Benefits | 351 | 202 | | Retirement Benefits | 11 | 8 | | **Total** | **362** | **210** | [16. Authorization for Issue of Unaudited Condensed Consolidated Financial Statements](index=20&type=section&id=16.%20Authorization%20for%20Issue%20of%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The unaudited condensed consolidated financial statements for the six months ended June 30, 2025, were approved and authorized for issue by the Board of Directors on August 20, 2025 - The unaudited condensed consolidated financial statements for the six months ended June 30, 2025, were approved and authorized for issue by the Board of Directors on **August 20, 2025**[49](index=49&type=chunk) Other Information [Interim Dividend](index=21&type=section&id=Interim%20Dividend) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025[51](index=51&type=chunk) [Changes in Directors' Information](index=21&type=section&id=Changes%20in%20Directors'%20Information) Independent Non-Executive Director Mr. Zhu Gaoming resigned as Vice President and Head of Overseas Business of CIFI Holdings (Group) Co. Ltd. and joined Fosun International Limited as Senior Assistant and Senior Expert in Gold Management on August 4, 2025 - Independent Non-Executive Director Mr. Zhu Gaoming resigned as Vice President and Head of Overseas Business of CIFI Holdings (Group) Co. Ltd. in July 2025[52](index=52&type=chunk) - Mr. Zhu Gaoming joined Fosun International Limited as Senior Assistant and Senior Expert in Gold Management on **August 4, 2025**[52](index=52&type=chunk) [Directors' Interests and Short Positions in Shares, Underlying Shares and Debentures](index=21&type=section&id=Directors'%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, none of the company's directors or chief executives had any interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations that were required to be recorded in the register kept under Section 352 of the SFO or notified to the company and the HKEX under the Model Code - As of June 30, 2025, none of the Company's directors or chief executives had any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations[53](index=53&type=chunk) [Share Option Scheme](index=21&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme in 2017 to provide participants with an opportunity to acquire ownership interests, with the scheme's authorized limit updated in 2021 to a total of 109,770,356 shares, representing approximately 10% of the company's issued shares at the time of approval, and no share options have been granted since the scheme's adoption date - The Company adopted a share option scheme on **June 28, 2017**, to provide participants with an opportunity to acquire ownership interests in the Company[54](index=54&type=chunk) - On **October 20, 2021**, shareholders approved an update to the share option scheme's authorized limit, allowing for the issuance of up to **109,770,356 shares**, representing approximately **10%** of the issued shares[54](index=54&type=chunk) - No share options have been granted under the share option scheme since its adoption date[54](index=54&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=22&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) Save for the disclosures under the share option scheme, at no time during the six months ended June 30, 2025, had the company or any of its subsidiaries entered into any arrangements that would enable the directors to acquire benefits by means of purchasing shares or debentures of the company or any other body corporate - Save for the disclosures under the share option scheme, during the reporting period, neither the Company nor any of its subsidiaries entered into any arrangements that would enable the directors to acquire benefits by means of purchasing shares or debentures of the Company or any other body corporate[55](index=55&type=chunk) [Shareholders' Interests and Short Positions Disclosable Under the SFO](index=22&type=section&id=Shareholders'%20Interests%20and%20Short%20Positions%20Disclosable%20Under%20the%20SFO) As of June 30, 2025, Ms. Liu Sainan, through her wholly-owned Huajian Limited, held 51.81% of the company's shares, making her a substantial shareholder Major Shareholders' Shareholding | Shareholder Name | Capacity and Nature of Interest | Number of Shares Held | Approximate Percentage of the Company's Issued Shares | | :--- | :--- | :--- | :--- | | Liu Sainan | Interest in Controlled Corporation | 568,768,963 | 51.81% | | Huajian Limited | Beneficial Owner | 568,768,963 | 51.81% | - Huajian Limited is wholly owned by Ms. Liu Sainan, and under the Securities and Futures Ordinance, Ms. Liu is deemed to be interested in the shares of the Company held by Huajian[56](index=56&type=chunk) [Corporate Governance](index=22&type=section&id=Corporate%20Governance) For the six months ended June 30, 2025, the company consistently complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules - The Company has consistently complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules[57](index=57&type=chunk) [Model Code for Securities Transactions by Directors of Listed Issuers](index=22&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the HKEX Listing Rules, and all directors, after specific inquiry, confirmed compliance with the required standards of the Model Code - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the HKEX Listing Rules[58](index=58&type=chunk) - After specific inquiry with the directors, all directors confirmed compliance with the standards required by the Model Code[58](index=58&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=22&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 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 its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[59](index=59&type=chunk) [Completion of Voluntary Conditional General Cash Offer](index=23&type=section&id=Completion%20of%20Voluntary%20Conditional%20General%20Cash%20Offer) The voluntary conditional general cash offer made by Huajian Limited, wholly owned by Ms. Liu, the company's Executive Director and Chairperson, was completed on February 18, 2025, after which Huajian became the direct and ultimate controlling company, holding 568,768,963 shares, approximately 51.81% of the company's issued share capital - The voluntary conditional general cash offer made by Huajian Limited was completed on **February 18, 2025**[61](index=61&type=chunk) - Upon completion of the general offer, Huajian became the direct and ultimate controlling company of the Company, holding approximately **51.81%** of the Company's issued share capital[61](index=61&type=chunk) [Audit Committee](index=23&type=section&id=Audit%20Committee) The company's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, were reviewed by the Audit Committee and formally approved by the Board of Directors upon the Audit Committee's recommendation - The unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, have been reviewed by the Company's Audit Committee[62](index=62&type=chunk) - The financial statements were formally approved by the Board of Directors upon the recommendation of the Audit Committee[62](index=62&type=chunk) [By Order of the Board](index=23&type=section&id=By%20Order%20of%20the%20Board) This interim report was issued by Chief Executive Officer Hu Yingxia on behalf of the Board of Directors on August 20, 2025 - This interim report was issued by Chief Executive Officer Hu Yingxia on behalf of the Board of Directors on **August 20, 2025**[63](index=63&type=chunk) Past Performance and Forward-Looking Statements The company's past performance and operating results contained in this interim report are historical data and do not guarantee future results, and this report may contain forward-looking statements and opinions involving risks and uncertainties, with no obligation for the company, directors, employees, or agents to correct or update such statements or assume liability for their non-realization or inaccuracy - The Company's past performance and operating results contained in this interim report are historical data only, and past performance does not guarantee the Company's future results[64](index=64&type=chunk) - This interim report may contain forward-looking statements and opinions, which therefore involve risks and uncertainties, and actual results may differ materially from expected performance[64](index=64&type=chunk) - The Company, its directors, employees, or agents assume no obligation to correct or update any forward-looking statements or opinions contained in this interim report, or any liability arising from the non-realization or inaccuracy of any such statements or opinions[64](index=64&type=chunk) Glossary This section provides a glossary of key abbreviations and their meanings used in this interim report, and states that the Chinese version of this interim report is a translation of the English version for reference only, with the English version prevailing in case of any discrepancy or inconsistency - This interim report lists key abbreviations and their meanings, unless the context otherwise requires[65](index=65&type=chunk) - The Chinese version of this interim report is a translation of the English version and is for reference only; in case of any discrepancy or inconsistency between the English and Chinese versions, the English version shall prevail[66](index=66&type=chunk)