[Financial Summary](index=3&type=section&id=Financial%20Summary) [Overview](index=3&type=section&id=Financial%20Summary-Overview) The Group's unaudited results for the six months ended June 30, 2025, show a decline in revenue and profit, primarily due to lower revenue from building materials trading Key Financial Indicators | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 103,672 | 120,374 | (13.9%) | | Gross Profit | 25,106 | 25,422 | (1.2%) | | Profit for the period | 6,938 | 7,436 | (6.7%) | - The decrease in revenue and profit was mainly due to reduced revenue from the building materials trading business[6](index=6&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) [Overview](index=4&type=section&id=Management%20Discussion%20and%20Analysis-Overview) The Group primarily engages in port, logistics, and supply chain operations in Xiamen, Quanzhou, and Chengdu, with stable port and logistics services but a significant decline in supply chain revenue during the period - The Group is principally engaged in providing port services, logistics services, and supply chain operation businesses in Xiamen, Quanzhou, and Chengdu in mainland China[7](index=7&type=chunk) - For the six months ended June 30, 2025, the port and logistics services businesses were generally stable, while revenue from the supply chain business **decreased significantly** year-on-year[7](index=7&type=chunk) - Business segments include: Port Services (in-port logistics, in-port container transport), Logistics Services (import/export agency, land transport), and Supply Chain Operations (building materials trading, auto parts trading)[10](index=10&type=chunk) [Financial Review](index=4&type=section&id=Management%20Discussion%20and%20Analysis-Financial%20Review) The Group's revenue decreased by 13.9% to RMB 103,672,000, mainly due to a sharp decline in building materials trading, while staff costs and administrative expenses slightly increased, leading to a 6.7% drop in profit Group Revenue Comparison | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 103,672 | 120,374 | (13.9%) | - Staff costs increased to **RMB 47,436,000**, while the number of employees slightly decreased to **861**[17](index=17&type=chunk)[31](index=31&type=chunk) - Administrative expenses increased to **RMB 16,124,000**[18](index=18&type=chunk) - Profit for the period was **RMB 6,938,000**, a year-on-year decrease of **6.7%**[23](index=23&type=chunk) [Revenue](index=4&type=section&id=Management%20Discussion%20and%20Analysis-Financial%20Review-Revenue) The Group's total revenue fell by 13.9%, primarily driven by a 36.0% decrease in building materials trading revenue within the supply chain operations segment Port Services Revenue Comparison | Category | 2025 (RMB in thousands) | 2024 (RMB in thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | In-port logistics services | 27,008 | 26,843 | 0.6 | | In-port container transportation services | 35,862 | 35,967 | (0.3) | | Total | 62,870 | 62,810 | 0.1 | Logistics Services Revenue Comparison | Category | 2025 (RMB in thousands) | 2024 (RMB in thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Land transportation services | 8,539 | 8,641 | (1.2) | | Import and export agency services | 2,636 | 3,079 | (14.4) | | Total | 11,175 | 11,720 | (4.7) | Supply Chain Operations Revenue Comparison | Category | 2025 (RMB in thousands) | 2024 (RMB in thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Heavy-duty vehicle parts and tire trading | 755 | 766 | (1.4) | | Building materials trading | 28,872 | 45,078 | (36.0) | | Total | 29,627 | 45,844 | (35.4) | - The decline in logistics services revenue was mainly due to the scrapping of some heavy-duty container trucks and the impact of trade wars on the imported leather business[13](index=13&type=chunk) - Supply chain operations revenue dropped significantly as high-value building material transactions from the prior year period did not recur, despite an increase in trade volume at lower average unit prices[16](index=16&type=chunk) [Staff Costs](index=7&type=section&id=Management%20Discussion%20and%20Analysis-Financial%20Review-Staff%20Costs) For the six months ended June 30, 2025, the Group's staff costs were approximately RMB 47,436,000, a slight increase from the prior year period, while the total number of employees slightly decreased Staff Costs Comparison | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Staff Costs | 47,436 | 45,839 | - As of June 30, 2025, the Group had **861 employees**, a decrease from 879 on June 30, 2024[17](index=17&type=chunk) [Administrative Expenses](index=7&type=section&id=Management%20Discussion%20and%20Analysis-Financial%20Review-Administrative%20Expenses) Administrative expenses for the period were approximately RMB 16,124,000, an increase from the prior year period, mainly comprising costs of consumables, depreciation, and auditor's remuneration Administrative Expenses Comparison | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Administrative Expenses | 16,124 | 15,219 | [Taxation](index=7&type=section&id=Management%20Discussion%20and%20Analysis-Financial%20Review-Taxation) The Group is not subject to income tax in the Cayman Islands, BVI, or Hong Kong, while Chinese subsidiaries are subject to a 25% corporate income tax rate, with some small low-profit enterprises enjoying a preferential rate of 2.5% - The Group is not required to pay income tax or capital gains tax in the Cayman Islands and the British Virgin Islands, and no withholding tax is payable on dividend distributions[19](index=19&type=chunk) - No provision for Hong Kong profits tax was made during the period as there were no assessable profits[20](index=20&type=chunk) - Chinese subsidiaries are subject to a **25% tax rate**, with some small low-profit enterprises enjoying a preferential rate of **2.5%**[22](index=22&type=chunk) Income Tax Expense Comparison | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Income tax expense | 2,974 | 2,863 | [Profit for the period](index=8&type=section&id=Management%20Discussion%20and%20Analysis-Financial%20Review-Profit%20for%20the%20period) For the six months ended June 30, 2025, the Group's profit was approximately RMB 6,938,000, a decrease from RMB 7,436,000 in the same period last year Profit for the Period Comparison | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Profit for the period | 6,938 | 7,436 | [Liquidity and Financial Resources](index=8&type=section&id=Management%20Discussion%20and%20Analysis-Liquidity%20and%20Financial%20Resources) The Group's operations are primarily funded by cash generated from its own business operations, with net current assets and cash equivalents increasing as of June 30, 2025, alongside new bank borrowings of RMB 7,012,000 - The Group's operations are primarily funded by cash generated from its own business operations[24](index=24&type=chunk) Liquidity and Financial Resources Comparison | Indicator | June 30, 2025 (RMB in thousands) | December 31, 2024 (RMB in thousands) | | :--- | :--- | :--- | | Net current assets | 178,437 | 174,313 | | Cash and cash equivalents | 38,514 | 31,250 | | Bank borrowings | 7,012 | — | [Credit Risk](index=8&type=section&id=Management%20Discussion%20and%20Analysis-Credit%20Risk) The Group measures loss allowances for trade receivables based on an expected credit loss model, differentiating by customer groups and their overdue status, with balances over 360 days typically fully provided for - The Group measures the loss allowance for trade receivables individually or collectively at an amount equal to lifetime expected credit losses calculated using a provision matrix[26](index=26&type=chunk) - The general credit period is **30 to 180 days**, with most trade receivables collected within 360 days, and balances overdue for more than 360 days are generally fully provided for[26](index=26&type=chunk) [Currency Risk](index=9&type=section&id=Management%20Discussion%20and%20Analysis-Currency%20Risk) As the majority of the Group's revenue is denominated in RMB, no significant currency risk is expected to materially affect its operating results - As the majority of the Group's revenue is denominated in RMB, the functional currency of the Group's operating subsidiaries is RMB[27](index=27&type=chunk) - The Group does not anticipate any significant currency risk that could have a material impact on its operating results[27](index=27&type=chunk) [Capital Commitments](index=9&type=section&id=Management%20Discussion%20and%20Analysis-Capital%20Commitments) As of June 30, 2025, the Group did not have any capital commitments - As at 30 June 2025, the Group had no capital commitments (31 December 2024: Nil)[28](index=28&type=chunk) [Capital Structure](index=9&type=section&id=Management%20Discussion%20and%20Analysis-Capital%20Structure) The Company's capital structure remained unchanged during the six months ended June 30, 2025, consisting mainly of equity attributable to equity shareholders, and is reviewed regularly by the Board - The capital structure of the Company remained unchanged during the six months ended 30 June 2025[29](index=29&type=chunk) - The Group's capital structure consists of equity attributable to the Company's equity shareholders, including issued share capital and reserves[29](index=29&type=chunk) [Material Acquisitions and Disposals](index=9&type=section&id=Management%20Discussion%20and%20Analysis-Material%20Acquisitions%20and%20Disposals) The Group did not conduct any material acquisitions or disposals of subsidiaries during the six months ended June 30, 2025 - During the six months ended 30 June 2025, the Group did not have any material acquisitions or disposals of subsidiaries[30](index=30&type=chunk) [Employees and Remuneration Policy](index=9&type=section&id=Management%20Discussion%20and%20Analysis-Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 861 staff, with a remuneration policy determined based on factors such as qualifications, responsibilities, contributions, and experience - As at 30 June 2025, the Group employed **861** (30 June 2024: 879) employees[31](index=31&type=chunk) - The Group determines employee remuneration based on factors such as qualifications, responsibilities, contributions, and experience[31](index=31&type=chunk) [Use of Proceeds](index=9&type=section&id=Management%20Discussion%20and%20Analysis-Use%20of%20Proceeds) The net proceeds of approximately HK$40.2 million from the listing were fully utilized during the period for the purchase of electric tractors, following reallocations due to delays in the empty container yard development - The net proceeds from the listing of approximately **HK$40.2 million** were originally intended for investment in container handling equipment and the development of an empty container yard[32](index=32&type=chunk) - Due to delays in the empty container yard development, the unutilized funds were reallocated twice in 2021 and 2022, ultimately being fully used for the purchase of electric tractors[33](index=33&type=chunk) Use of Net Proceeds | Use | Unutilized as of Jan 1, 2025 (HKD in millions) | Utilized during the six months ended June 30, 2025 (HKD in millions) | Unutilized as of June 30, 2025 (HKD in millions) | | :--- | :--- | :--- | :--- | | Purchase of electric tractors | 8.6 | 8.6 | — | [Pledge of Group's Assets and Contingent Liabilities](index=10&type=section&id=Management%20Discussion%20and%20Analysis-Pledge%20of%20Group's%20Assets%20and%20Contingent%20Liabilities) As of June 30, 2025, the Group's bank borrowings of approximately RMB 7,012,000 were secured by a corporate guarantee from a wholly-owned subsidiary and personal guarantees from an executive director and his spouse - Bank borrowings of approximately **RMB 7,012,000** were secured by a corporate guarantee from the Company's wholly-owned subsidiary, Xiamen Xiangxing International Logistics Services Co, Ltd, and personal guarantees from an executive director and his spouse[36](index=36&type=chunk) - As at 30 June 2025, the Group did not have any contingent liabilities[37](index=37&type=chunk) [Recent Developments and Business Outlook](index=11&type=section&id=Management%20Discussion%20and%20Analysis-Recent%20Developments%20and%20Business%20Outlook) The Group will expand its supply chain operations and stabilize port services to achieve full-year growth, despite challenges from macroeconomic pressures and unstable external environments - In the first half of the year, China's GDP was **RMB 66,053.6 billion**, a year-on-year increase of **5.3%**[38](index=38&type=chunk) - Final consumption expenditure contributed **52%** to economic growth, serving as the main driver for GDP growth[39](index=39&type=chunk) - Macroeconomic downward pressure, unstable external market structures, and insufficient domestic demand persist, requiring consolidation of the economic recovery's foundation[40](index=40&type=chunk) - The Group's future focus will be on: 1) Expanding supply chain operations, particularly in the sand and gravel building materials market in the Sichuan-Chongqing economic circle; 2) Stabilizing port services by upgrading equipment like new energy vehicles to enhance competitiveness[40](index=40&type=chunk)[41](index=41&type=chunk) - The Group aims to achieve dual growth in revenue and efficiency for the full year of 2025[42](index=42&type=chunk) [Macroeconomic Review](index=11&type=section&id=Management%20Discussion%20and%20Analysis-Recent%20Developments%20and%20Business%20Outlook-Macroeconomic%20Review) In the first half of 2025, China's GDP grew by 5.3% year-on-year, with the service and industrial sectors growing by 5.5% and 6.4% respectively, and consumption being the main driver of economic growth - In the first half of the year, China's GDP grew by **5.3%** year-on-year, with the primary, secondary, and tertiary industries growing by 3.7%, 5.3%, and 5.5% respectively[38](index=38&type=chunk) - The value-added of industrial enterprises above designated size increased by **6.4%** year-on-year, with strong growth in equipment manufacturing and high-tech manufacturing[38](index=38&type=chunk) - The value-added of the service industry grew by **5.5%** year-on-year, with information transmission, software, and IT services growing by 11.1%[38](index=38&type=chunk) - National per capita disposable income grew by **5.3%** nominally and 5.4% in real terms year-on-year, with rural residents' income growing faster than that of urban residents[38](index=38&type=chunk) - Final consumption expenditure contributed **52%** to economic growth, making it the main driver of GDP growth[39](index=39&type=chunk) [Real Estate Market](index=12&type=section&id=Management%20Discussion%20and%20Analysis-Recent%20Developments%20and%20Business%20Outlook-Real%20Estate%20Market) The year-on-year decline in commercial property sales narrowed in the first half of the year, indicating an improvement in market transaction volume and the effectiveness of related policy measures - The year-on-year decline in commercial property sales narrowed, and market transaction volume improved[40](index=40&type=chunk) - Various regions and departments implemented city-specific policies to stabilize the real estate market, with noticeable positive effects[40](index=40&type=chunk) [Future Business Strategy](index=12&type=section&id=Management%20Discussion%20and%20Analysis-Recent%20Developments%20and%20Business%20Outlook-Future%20Business%20Strategy) The Group will focus on expanding its supply chain operations and stabilizing its port services to achieve full-year growth in both revenue and efficiency - The Group's port and logistics services, which are highly dependent on foreign trade, will continue to face comprehensive pressure[40](index=40&type=chunk) - **Strategy 1**: Closely monitor market dynamics and expand supply chain operations, especially leveraging opportunities in the sand and gravel building materials market from the construction of the Sichuan-Chongqing economic circle[40](index=40&type=chunk) - **Strategy 2**: Continue to tap into internal potential to stabilize port services by upgrading port service vehicles and introducing new energy vehicles to achieve energy savings, emission reductions, and increased operational efficiency[41](index=41&type=chunk) - The Group aims to achieve dual growth in revenue and efficiency for the full year of 2025[42](index=42&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=14&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) [Key Financial Data](index=14&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income-Key%20Financial%20Data) For the six months ended June 30, 2025, the Group's revenue was RMB 103,672 thousand, gross profit was RMB 25,106 thousand, and profit for the period was RMB 6,938 thousand, all showing a year-on-year decline Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Revenue from contracts with customers | 103,672 | 120,374 | | Cost of sales and services provided | (78,566) | (94,952) | | Gross profit | 25,106 | 25,422 | | Other income | 1,364 | 803 | | Administrative expenses | (16,124) | (15,219) | | Operating profit | 9,962 | 10,333 | | Profit before tax | 9,912 | 10,299 | | Income tax | (2,974) | (2,863) | | Profit for the period | 6,938 | 7,436 | | Total comprehensive income for the period | 6,307 | 7,623 | | Basic and diluted earnings per share (RMB cents) | 0.55 | 0.63 | [Consolidated Statement of Financial Position](index=15&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) [Key Financial Data](index=15&type=section&id=Consolidated%20Statement%20of%20Financial%20Position-Key%20Financial%20Data) As of June 30, 2025, the Group's total assets less current liabilities stood at RMB 217,222 thousand, with net assets of RMB 210,911 thousand Summary of Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB in thousands) | December 31, 2024 (RMB in thousands) | | :--- | :--- | :--- | | Property, plant and equipment | 38,740 | 30,364 | | Trade and other receivables | 157,598 | 160,033 | | Cash and cash equivalents | 38,514 | 31,250 | | Current assets | 200,709 | 195,370 | | Current liabilities | 22,272 | 21,057 | | Net current assets | 178,437 | 174,313 | | Total assets less current liabilities | 217,222 | 204,728 | | Bank borrowings (non-current) | 6,311 | — | | Net assets | 210,911 | 204,604 | | Total equity attributable to equity holders of the Company | 209,666 | 203,299 | [Consolidated Statement of Changes in Equity](index=16&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) [Key Changes](index=16&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity-Key%20Changes) For the six months ended June 30, 2025, total equity attributable to the Company's equity holders increased to RMB 209,666 thousand, mainly due to a profit of RMB 6,998 thousand, partially offset by other comprehensive losses Summary of Consolidated Statement of Changes in Equity | Indicator | June 30, 2025 (RMB in thousands) | January 1, 2024 (RMB in thousands) | | :--- | :--- | :--- | | Share capital | 11,171 | 10,428 | | Total reserves | 198,495 | 188,716 | | Total equity attributable to equity holders of the Company | 209,666 | 199,144 (as at Jan 1, 2024) | | Profit for the period (attributable to equity holders of the Company) | 6,998 | 7,576 | | Other comprehensive loss (attributable to equity holders of the Company) | (631) | 187 | | Transfer to statutory reserve | 46 | — | - Total equity attributable to the Company's equity holders increased from **RMB 199,144 thousand** on January 1, 2024, to **RMB 209,666 thousand** on June 30, 2025[45](index=45&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=17&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) [Key Cash Flows](index=17&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows-Key%20Cash%20Flows) For the six months ended June 30, 2025, net cash generated from operating activities increased significantly to RMB 12,781 thousand, while net cash from financing activities was mainly from new bank borrowings and advances from a director Summary of Condensed Consolidated Statement of Cash Flows | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 12,781 | 613 | | Net cash used in investing activities | (12,853) | (12,568) | | Net cash generated from financing activities | 7,967 | 8,110 | | Net increase/(decrease) in cash and cash equivalents | 7,895 | (3,845) | | Cash and cash equivalents at 30 June | 38,514 | 46,136 | - Net cash generated from operating activities increased significantly from **RMB 613 thousand** in 2024 to **RMB 12,781 thousand** in 2025[46](index=46&type=chunk) - Net cash from financing activities was mainly from new bank borrowings of **RMB 7,012 thousand** and advances from a director of **RMB 1,462 thousand**[46](index=46&type=chunk) [Notes to the Unaudited Interim Financial Statements](index=18&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements) [General Information](index=18&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-General%20Information) The Company was incorporated in the Cayman Islands in 2015 and transferred its listing to the Main Board of the Hong Kong Stock Exchange in 2019, with its consolidated financial statements presented in RMB - The Company was incorporated as an exempted company with limited liability in the Cayman Islands on 22 September 2015[47](index=47&type=chunk) - The Company successfully transferred its listing from GEM to the Main Board of The Stock Exchange of Hong Kong Limited on 6 September 2019[48](index=48&type=chunk) - The functional currencies of the Company and its principal subsidiaries are HKD and RMB respectively, and the consolidated financial statements are presented in RMB[48](index=48&type=chunk) [Basis of Preparation](index=18&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Basis%20of%20Preparation) This interim financial report has been prepared in accordance with the Listing Rules of the Hong Kong Stock Exchange and Hong Kong Accounting Standard 34 issued by the HKICPA, and has been reviewed by the Audit Committee - This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and in compliance with Hong Kong Accounting Standard 34, "Interim Financial Reporting," issued by the Hong Kong Institute of Certified Public Accountants[49](index=49&type=chunk) - The interim financial report is unaudited but has been reviewed by the Company's Audit Committee[50](index=50&type=chunk) [Changes in Accounting Policies](index=19&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Changes%20in%20Accounting%20Policies) The Group has applied the amendments to HKAS 21 regarding lack of exchangeability, which had no material impact on its financial position and performance for the current and prior periods - The Group has applied the amendments to HKAS 21, "Lack of Exchangeability," in the interim financial report for the current accounting period[51](index=51&type=chunk) - The amendments had no material impact on the Group's financial position and performance for the current and prior periods[51](index=51&type=chunk) - The Group has not applied any new standards or interpretations that are not yet effective for the current accounting period[52](index=52&type=chunk) [Segment Reporting](index=19&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Segment%20Reporting) The Group is organized into five reportable operating segments, with a significant revenue decline in the building materials and auto parts trading segment in H1 2025, while port services remained stable - The Group's operating segments are determined based on the information reported to the chief operating decision-maker, focusing on the types of services performed and goods delivered[53](index=53&type=chunk) - The reportable operating segments include: import and export agency services, land container and stone block transportation services, in-port logistics services, in-port container transportation services, and trading of building materials and auto parts[54](index=54&type=chunk) [Segment Revenue and Results](index=20&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Segment%20Reporting-Segment%20Revenue%20and%20Results) In H1 2025, revenue from the building materials and auto parts trading segment decreased by 35.4% year-on-year to RMB 29,627 thousand, which was the main reason for the decline in total revenue Segment Revenue and Results for H1 2025 | Segment | Revenue from external customers (RMB in thousands) | Segment results (RMB in thousands) | | :--- | :--- | :--- | | Import and export agency services | 2,636 | 939 | | Land container and stone block transportation services | 8,539 | 788 | | In-port logistics services | 27,008 | 10,468 | | In-port container transportation services | 35,862 | 10,153 | | Trading of building materials and auto parts | 29,627 | 2,758 | | **Total** | **103,672** | **25,106** | Segment Revenue and Results for H1 2024 | Segment | Revenue from external customers (RMB in thousands) | Segment results (RMB in thousands) | | :--- | :--- | :--- | | Import and export agency services | 3,079 | 1,175 | | Land container and stone block transportation services | 8,641 | 671 | | In-port logistics services | 26,843 | 10,888 | | In-port container transportation services | 35,967 | 9,230 | | Trading of building materials and auto parts | 45,844 | 3,458 | | **Total** | **120,374** | **25,422** | [Other Segment Information](index=22&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Segment%20Reporting-Other%20Segment%20Information) In H1 2025, the Group added non-current assets of RMB 13,095 thousand, primarily in in-port container transportation services, with depreciation expenses totaling RMB 4,544 thousand Other Segment Information for H1 2025 | Indicator | In-port container transportation services (RMB in thousands) | Total (RMB in thousands) | | :--- | :--- | :--- | | Additions to non-current assets | 13,095 | 13,095 | | Amortisation | — | 6 | | Interest income from bank deposits | 22 | 242 | | Interest expense | 29 | 50 | | Depreciation | 2,533 | 4,544 | | Loss on disposal of property, plant and equipment | 167 | 167 | | Net impairment loss recognised/(reversed) on trade receivables | (47) | 336 | | Reversal of impairment loss on prepayments | — | 364 | Other Segment Information for H1 2024 | Indicator | In-port container transportation services (RMB in thousands) | Total (RMB in thousands) | | :--- | :--- | :--- | | Additions to non-current assets | 13,253 | 13,781 | | Amortisation | — | 17 | | Interest income from bank deposits | 5 | 426 | | Interest expense | 1 | 34 | | Depreciation | 1,812 | 3,881 | | Loss on disposal of property, plant and equipment | 2 | 2 | | Net impairment loss recognised/(reversed) on trade receivables | (48) | 425 | [Major Customers](index=23&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Segment%20Reporting-Major%20Customers) The Group has three major customers (A, B, and C) whose revenue accounts for 10% or more of the total, with stable revenue from Customers A and B but a sharp decline from Customer C Major Customer Revenue Comparison | Customer | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Customer A | 46,020 | 43,396 | | Customer B | 16,903 | 16,867 | | Customer C | 15,666 | 44,917 | - Revenue from Customers A and B was mainly derived from land container and stone block transportation services, in-port logistics services, and in-port container transportation services[61](index=61&type=chunk) - Revenue from Customer C was mainly derived from the trading of building materials, which decreased significantly in 2025[62](index=62&type=chunk) [Geographical Information](index=24&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Segment%20Reporting-Geographical%20Information) The Group's operations are primarily conducted in China, with profit before tax from these activities amounting to RMB 10,568 thousand in H1 2025, slightly lower than the prior year period - The Group's operating activities are mainly conducted in China, and therefore, no analysis of revenue from external customers and non-current assets by geographical location is presented[63](index=63&type=chunk) Financial Performance of China Operations | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Revenue from contracts with customers | 103,524 | 120,374 | | Gross profit | 24,958 | 25,422 | | Operating profit | 10,611 | 11,681 | | Profit before tax from China operations | 10,568 | 11,652 | [Revenue and Other Income](index=25&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Revenue%20and%20Other%20Income) The Group's principal activities are providing import/export agency, transportation, and trading services, with total revenue of RMB 103,672 thousand and other income of RMB 1,364 thousand in H1 2025 - The Group's principal activities are providing import and export agency services, land container and stone block transportation services, in-port logistics services, in-port container transportation services, and trading of building materials and auto parts[64](index=64&type=chunk) Revenue from Contracts with Customers and Other Income | Category | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Total revenue from contracts with customers | 103,672 | 120,374 | | Bank interest income | 242 | 426 | | Government grants | 43 | 340 | | Net foreign exchange gain | 853 | 24 | | Sundry income | 226 | 13 | | Total other income | 1,364 | 803 | - During the period, the Group received government grants from the PRC government to encourage enterprises to improve their production capacity, efficiency, and hygiene standards[65](index=65&type=chunk) [Profit Before Tax](index=26&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Profit%20Before%20Tax) Profit before tax for the period was RMB 9,912 thousand, with increased finance costs due to new bank borrowings, and higher employee benefit expenses, depreciation, and loss on disposal of assets - Profit before tax was **RMB 9,912 thousand**, a decrease from RMB 10,299 thousand in the prior year period[43](index=43&type=chunk) [Finance Costs](index=26&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Profit%20Before%20Tax-Finance%20Costs) Finance costs for the period were RMB 50 thousand, mainly comprising interest on bank loans and lease liabilities, reflecting an increase due to new bank borrowings Finance Costs Comparison | Category | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Interest on bank loans and overdrafts | 29 | — | | Interest on lease liabilities | 21 | 34 | | **Total** | **50** | **34** | [Employee Benefit Expenses](index=26&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Profit%20Before%20Tax-Employee%20Benefit%20Expenses) Total employee benefit expenses for the period were RMB 47,436 thousand, a slight increase from the prior year period, mainly consisting of salaries, wages, and retirement benefit scheme contributions Employee Benefit Expenses Comparison | Category | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Salaries, wages and other benefits | 40,686 | 39,672 | | Retirement benefit scheme contributions | 6,706 | 6,084 | | Staff welfare | 44 | 83 | | **Total** | **47,436** | **45,839** | [Other Items](index=27&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Profit%20Before%20Tax-Other%20Items) During the period, amortisation of intangible assets was RMB 6 thousand, cost of inventories was RMB 27,845 thousand, depreciation was RMB 4,544 thousand, and loss on disposal of property, plant and equipment was RMB 167 thousand Other Items Comparison | Category | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Amortisation of intangible assets | 6 | 17 | | Cost of inventories | 27,845 | 44,877 | | Depreciation | 4,544 | 3,881 | | Loss on disposal of property, plant and equipment | 167 | 2 | | Net foreign exchange gain | (853) | (24) | [Income Tax in the Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=27&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Income%20Tax%20in%20the%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Income tax expense for the period was RMB 2,974 thousand, primarily PRC Enterprise Income Tax, with no tax provisions in Hong Kong, the Cayman Islands, or the BVI Income Tax Expense Comparison | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Current tax — PRC Enterprise Income Tax | 2,974 | 2,863 | - The tax rate for PRC subsidiaries was **25%** for both periods, except for three subsidiaries recognised as small low-profit enterprises in China, which enjoyed a preferential rate of **5%**[70](index=70&type=chunk) - No provision for Hong Kong Profits Tax has been made as the Group had no assessable profits arising in or derived from Hong Kong during the reporting period[71](index=71&type=chunk) - The Group is not subject to any income tax in the Cayman Islands and the British Virgin Islands under their respective rules and regulations[71](index=71&type=chunk) [Dividend](index=28&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Dividend) No dividend was paid or declared by the Company for the six months ended June 30, 2025, and no dividend has been proposed since the end of the reporting period - No dividend was paid or declared by the Company for the six months ended 30 June 2025 and 2024, and no dividend has been proposed since the end of the reporting period[72](index=72&type=chunk) [Earnings Per Share](index=28&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share attributable to the Company's equity holders was 0.55 RMB cents, down from 0.63 RMB cents in the prior year period Basic Earnings Per Share Calculation | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Profit for the period attributable to equity holders of the Company for basic EPS calculation | 6,998 | 7,576 | | Weighted average number of ordinary shares | 1,280,000,000 | 1,207,472,527 | | Basic earnings per share (RMB cents) | 0.55 | 0.63 | - There were no dilutive potential ordinary shares in issue during both periods, and diluted earnings per share were the same as basic earnings per share[74](index=74&type=chunk) [Basic Earnings Per Share](index=28&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Earnings%20Per%20Share-Basic%20Earnings%20Per%20Share) Profit attributable to the Company's equity holders for the period was RMB 6,998 thousand, resulting in a basic earnings per share of 0.55 RMB cents based on a weighted average of 1,280,000,000 ordinary shares Basic Earnings Per Share Data | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Profit for the period attributable to equity holders | 6,998 | 7,576 | | Weighted average number of ordinary shares | 1,280,000,000 | 1,207,472,527 | [Diluted Earnings Per Share](index=28&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Earnings%20Per%20Share-Diluted%20Earnings%20Per%20Share) As there were no dilutive potential ordinary shares in issue during either period, the Group's diluted earnings per share were the same as its basic earnings per share - There were no dilutive potential ordinary shares in issue during both periods, and diluted earnings per share were the same as basic earnings per share[74](index=74&type=chunk) [Property, Plant and Equipment](index=29&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Property,%20Plant%20and%20Equipment) In H1 2025, the Group acquired property, plant and equipment at a cost of approximately RMB 13,095 thousand and disposed of assets with a net book value of approximately RMB 167 thousand Changes in Property, Plant and Equipment | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Cost of acquisition of property, plant and equipment | 13,095 | 12,967 | | Net book value of disposals | 167 | 7 | | Loss on disposal | 167 | 2 | - During the six months ended 30 June 2025, the Group recognised an addition of right-of-use assets of approximately RMB nil[76](index=76&type=chunk) [Acquisition and Disposal of Owned Assets](index=29&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Property,%20Plant%20and%20Equipment-Acquisition%20and%20Disposal%20of%20Owned%20Assets) During the period, the Group acquired property, plant and equipment of approximately RMB 13,095 thousand and disposed of assets with a net book value of approximately RMB 167 thousand, resulting in a loss on disposal of RMB 167 thousand Acquisition and Disposal of Owned Assets | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Cost of acquisition | 13,095 | 12,967 | | Net book value of disposals | 167 | 7 | | Loss on disposal | 167 | 2 | [Right-of-use Assets](index=29&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Property,%20Plant%20and%20Equipment-Right-of-use%20Assets) For the six months ended June 30, 2025, the Group did not add any new right-of-use assets - During the six months ended 30 June 2025, the Group recognised an addition of right-of-use assets of approximately RMB nil[76](index=76&type=chunk) [Trade and Other Receivables](index=29&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables were RMB 157,598 thousand, with a high proportion of trade receivables overdue for more than 360 days Trade and Other Receivables | Indicator | June 30, 2025 (RMB in thousands) | December 31, 2024 (RMB in thousands) | | :--- | :--- | :--- | | Trade receivables | 148,628 | 152,124 | | Less: Allowance for credit losses | (26,495) | (26,159) | | Net trade receivables | 122,133 | 125,965 | | Prepayments | 30,269 | 29,805 | | Deposits | 3,400 | 2,563 | | Other receivables | 1,281 | 644 | | Other tax recoverable | 515 | 1,056 | | **Total** | **157,598** | **160,033** | [Ageing Analysis](index=30&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Trade%20and%20Other%20Receivables-Ageing%20Analysis) As of June 30, 2025, trade receivables overdue for more than 360 days amounted to RMB 70,556 thousand, indicating a risk in the collection of long-term receivables Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (RMB in thousands) | December 31, 2024 (RMB in thousands) | | :--- | :--- | :--- | | 0 to 30 days | 20,319 | 20,372 | | 31 to 60 days | 6,089 | 7,031 | | 61 to 90 days | 2,553 | 10,782 | | 91 to 180 days | 10,376 | 23,810 | | 181 to 360 days | 12,240 | 6,797 | | Over 360 days | 70,556 | 57,173 | | **Total** | **122,133** | **125,965** | [Impairment Allowance Provision](index=30&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Trade%20and%20Other%20Receivables-Impairment%20Allowance%20Provision) The Group assesses impairment provisions based on an expected credit loss model, with a total loss allowance of RMB 26,495 thousand against a gross trade receivable balance of RMB 148,628 thousand as of June 30, 2025 - The Group measures the loss allowance for trade receivables individually or collectively at an amount equal to lifetime expected credit losses calculated using a provision matrix[79](index=79&type=chunk) - Customer groups are divided into three categories: import and export agency services, land container and stone block transportation services; in-port logistics services, in-port container transportation services; and trading of building materials and auto parts[79](index=79&type=chunk) Impairment Provision for Trade Receivables as of June 30, 2025 | Customer Group | Gross carrying amount (RMB in thousands) | Loss allowance (RMB in thousands) | Net carrying amount (RMB in thousands) | | :--- | :--- | :--- | :--- | | Group 1 customers | 5,995 | 587 | 5,408 | | Group 2 customers | 6,536 | 37 | 6,499 | | Group 3 customers | 51,223 | 16,058 | 35,165 | | Individually impaired | 84,874 | 9,813 | 75,061 | | **Total** | **148,628** | **26,495** | **122,133** | Impairment Provision for Trade Receivables as of December 31, 2024 | Customer Group | Gross carrying amount (RMB in thousands) | Loss allowance (RMB in thousands) | Net carrying amount (RMB in thousands) | | :--- | :--- | :--- | :--- | | Group 1 customers | 6,403 | 298 | 6,105 | | Group 2 customers | 14,747 | 84 | 14,663 | | Group 3 customers | 35,768 | 14,750 | 21,018 | | Individually impaired | 95,206 | 11,027 | 84,179 | | **Total** | **152,124** | **26,159** | **125,965** | [Trade and Other Payables](index=33&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables were RMB 17,533 thousand, slightly lower than the previous year-end, with trade payables at RMB 5,190 thousand and salaries payable at RMB 6,752 thousand Trade and Other Payables | Indicator | June 30, 2025 (RMB in thousands) | December 31, 2024 (RMB in thousands) | | :--- | :--- | :--- | | Trade payables | 5,190 | 5,217 | | Accruals and other payables | 5,038 | 4,657 | | Salaries payable | 6,752 | 7,088 | | Financial liabilities measured at amortised cost | 16,980 | 16,962 | | Other tax payables | 553 | 1,007 | | Contract liabilities — advance from performance | — | 50 | | **Total** | **17,533** | **18,019** | Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB in thousands) | December 31, 2024 (RMB in thousands) | | :--- | :--- | :--- | | 0 to 60 days | 3,619 | 3,061 | | 61 to 90 days | 429 | 440 | | 91 to 180 days | 241 | 389 | | Over 180 days | 901 | 1,327 | | **Total** | **5,190** | **5,217** | [Bank Borrowings](index=34&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Bank%20Borrowings) As of June 30, 2025, the Group had new bank borrowings of RMB 7,012 thousand, secured by corporate and personal guarantees and bearing interest at an annual rate of 2.85% Repayment Schedule of Bank Borrowings | Term | June 30, 2025 (RMB in thousands) | December 31, 2024 (RMB in thousands) | | :--- | :--- | :--- | | Within one year | 701 | — | | Over one year but within two years | 701 | — | | Over two years but within five years | 5,610 | — | | **Total** | **7,012** | **—** | | Less: Amount due within one year shown under current liabilities | (701) | — | | Amount shown under non-current liabilities | 6,311 | — | - The bank borrowings of approximately **RMB 7,012,000** were secured by a corporate guarantee from the Company's wholly-owned subsidiary, Xiamen Xiangxing International Logistics Services Co, Ltd, and personal guarantees from an executive director and his spouse[85](index=85&type=chunk) - The bank borrowings bear interest at an annual rate of **2.85%**[85](index=85&type=chunk) [Share Capital](index=35&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Share%20Capital) As of June 30, 2025, the Company's issued and fully paid ordinary shares stood at 1,280,000,000, unchanged from June 30, 2024, reflecting the placement of 80,000,000 new shares in June 2024 Share Capital Structure | Indicator | Number of shares | Amount (HKD) | Amount (RMB) | | :--- | :--- | :--- | :--- | | Authorised ordinary shares (par value HK$0.01) | 4,000,000,000 | 40,000,000 | — | | Issued and fully paid ordinary shares (par value HK$0.01) | 1,280,000,000 | 12,800,000 | 11,170,928 | - On 14 June 2024, a total of **80,000,000** placing shares were successfully placed at a placing price of HK$0.12 per placing share[86](index=86&type=chunk) [Related Party Transactions](index=36&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Related%20Party%20Transactions) As of June 30, 2025, the Group had an amount due to a director of RMB 1,462 thousand, which is unsecured, interest-free, and repayable on demand, with total key management personnel compensation at RMB 876 thousand Details of Balances with Related Parties | Indicator | June 30, 2025 (RMB in thousands) | December 31, 2024 (RMB in thousands) | | :--- | :--- | :--- | | Amount due to a director | 1,462 | — | - The amount is unsecured, interest-free, and repayable on demand[87](index=87&type=chunk) Key Management Personnel Remuneration | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Short-term employee benefits and bonuses | 806 | 799 | | Post-employment benefits | 70 | 70 | | **Total** | **876** | **869** | [Details of Balances with Related Parties](index=36&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Related%20Party%20Transactions-Details%20of%20Balances%20with%20Related%20Parties) As of June 30, 2025, the Group had an amount due to a director of RMB 1,462 thousand, which is unsecured, interest-free, and repayable on demand Amount due to a director | Indicator | June 30, 2025 (RMB in thousands) | December 31, 2024 (RMB in thousands) | | :--- | :--- | :--- | | Amount due to a director | 1,462 | — | - The amount is unsecured, interest-free, and repayable on demand[87](index=87&type=chunk) [Key Management Personnel Remuneration](index=36&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements-Related%20Party%20Transactions-Key%20Management%20Personnel%20Remuneration) Total remuneration for key management personnel during the period was RMB 876 thousand, including short-term employee benefits, bonuses, and post-employment benefits Key Management Personnel Remuneration Comparison | Indicator | 2025 (RMB in thousands) | 2024 (RMB in thousands) | | :--- | :--- | :--- | | Short-term employee benefits and bonuses | 806 | 799 | | Post-employment benefits | 70 | 70 | | **Total** | **876** | **869** | [Other Information](index=37&type=section&id=Other%20Information) [Interim Dividend](index=37&type=section&id=Other%20Information-Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended 30 June 2025[89](index=89&type=chunk) [Purchase, Sale or Redemption of the Company's Shares](index=37&type=section&id=Other%20Information-Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Shares) Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's shares during the six months ended June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, redeemed or sold any of the Company's shares during the six months ended 30 June 2025[90](index=90&type=chunk) [Directors' Dealings in Securities](index=37&type=section&id=Other%20Information-Directors'%20Dealings%20in%20Securities) The Group has adopted the Model Code in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions, and all directors have confirmed compliance - The Group has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules as its own code of conduct regarding directors' dealings in the Company's securities[91](index=91&type=chunk) - The directors have confirmed that they have complied with the required standards of dealing and the relevant code of conduct regarding directors' securities transactions, and no violations have been found[91](index=91&type=chunk) [Directors' and Chief Executive's Interests in Shares](index=37&type=section&id=Other%20Information-Directors'%20and%20Chief%20Executive's%20Interests%20in%20Shares) As of June 30, 2025, Executive Director Mr Cheng Youguo held 562,500,000 shares, representing 43.95% of the issued shares, through a controlled corporation, Rongxing Venture Capital Limited Directors' Long Positions in Shares | Director | Capacity/Nature of interest | Number of shares held | Percentage of interest in the Company | | :--- | :--- | :--- | :--- | | Mr Cheng Youguo | Interest of a controlled corporation | 562,500,000 shares (L) | 43.95% | - Rongxing Venture Capital Limited, wholly-owned by Mr Cheng Youguo, holds **562,500,000 shares**[92](index=92&type=chunk) - As at 30 June 2025, the Company had **1,280,000,000 shares** in issue[92](index=92&type=chunk) [Substantial Shareholders' Interests in Shares](index=38&type=section&id=Other%20Information-Substantial%20Shareholders'%20Interests%20in%20Shares) As of June 30, 2025, Rongxing Venture Capital Limited held 562,500,000 shares as a beneficial owner, representing 43.95% of the Company's interest Substantial Shareholders' Long Positions in Shares | Substantial Shareholder | Capacity/Nature of interest | Number of shares held | Percentage of interest in the Company | | :--- | :--- | :--- | :--- | | Rongxing Venture Capital Limited | Beneficial owner | 562,500,000 shares | 43.95% | | Ms Huang Meili | Interest of spouse | 562,500,000 shares | 43.95% | - Rongxing Venture Capital Limited is wholly-owned by Mr Cheng Youguo[98](index=98&type=chunk) - Ms Huang Meili is the spouse of Mr Cheng Youguo and is deemed to be interested in the shares in which Mr Cheng is interested under the Securities and Futures Ordinance[98](index=98&type=chunk) [Arrangements to Purchase Shares or Debentures](index=38&type=section&id=Other%20Information-Arrangements%20to%20Purchase%20Shares%20or%20Debentures) During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries entered into any arrangement that would enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate - During the six months ended 30 June 2025, neither the Company nor any of its subsidiaries entered into any arrangement that would enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate[96](index=96&type=chunk) [Directors' Interests in Material Contracts](index=38&type=section&id=Other%20Information-Directors'%20Interests%20in%20Material%20Contracts) As of June 30, 2025, no director had a material beneficial interest, either directly or indirectly, in any contract of significance to the Group's business to which the Company or any of its subsidiaries was a party - As at 30 June 2025, no director had a material beneficial interest, either directly or indirectly, in any contract of significance to the business of the Group to which the Company or any of its subsidiaries was a party[97](index=97&type=chunk) [Competing Interests](index=39&type=section&id=Other%20Information-Competing%20Interests) During the six months ended June 30, 2025, the directors were not aware of any business or interest of the directors, controlling shareholders, management shareholders, and their respective associates that competes or may compete with the Group's business - During the six months ended 30 June 2025, the directors were not aware of any business or interest of the directors, controlling shareholders, management shareholders and their respective associates that competes or may compete with the business of the Group, nor were they aware of any other conflict of interest that such persons have or may have with the Group[99](index=99&type=chunk) [Compliance with the Corporate Governance Code Practices](index=39&type=section&id=Other%20Information-Compliance%20with%20the%20Corporate%20Governance%20Code%20Practices) The directors believe that for the six months ended June 30, 2025, the Company has adopted and complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules - The directors believe that for the six months ended 30 June 2025, the Company has adopted the principles and complied with all applicable code provisions set out in the Corporate Governance Code in Appendix C1 to the Listing Rules[100](index=100&type=chunk) [Audit Committee](index=39&type=section&id=Other%20Information-Audit%20Committee) The Company's Audit Committee, comprising three independent non-executive directors, is responsible for ensuring an effective internal control and risk management framework and has reviewed the Group's unaudited interim results - The Company established an Audit Committee in accordance with Rule 3.21 of the Listing Rules, comprising three independent non-executive directors (Mr Zheng Shaoshan, Ms Li Zhao, and Mr Lin Guoquan), with Mr Zheng Shaoshan as the chairman[101](index=101&type=chunk) - The Audit Committee is responsible for ensuring that the Company has an effective internal control and risk management framework and has reviewed the Group's unaudited interim results for the six months ended 30 June 2025[101](index=101&type=chunk)

[Company Profile](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E7%B0%A1%E4%BB%8B) [Company Profile](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E7%B0%A1%E4%BB%8B) PICC Property and Casualty Company Limited is the largest P&C insurer in mainland China and was the first to be listed overseas - The company is the largest property and casualty insurer in mainland China, established in 2003 by PICC Group and listed on the Hong Kong Stock Exchange the same year, becoming the first overseas-listed financial enterprise from mainland China[3](index=3&type=chunk) Key Shareholding Structure | Indicator | Value | | :--- | :--- | | Total Share Capital | 22,242,765,303 shares | | PICC Group Shareholding | 68.98% | | H-Share Shareholders | 31.02% | [Main Business](index=2&type=section&id=%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99) The company engages in various RMB and foreign currency insurance businesses, reinsurance, and state-approved investment activities - The company's business scope is extensive, covering motor vehicle, corporate property, cargo, liability, accident, short-term health, agricultural, credit, guarantee, household property, and marine insurance in both RMB and foreign currencies[4](index=4&type=chunk) - The company also engages in related reinsurance businesses, as well as investment and fund utilization activities permitted by national laws and regulations[4](index=4&type=chunk) [Financial Summary](index=4&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Financial Summary](index=4&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) In H1 2025, the company achieved steady growth in premiums and revenue, with significant increases in underwriting and net profit, alongside an improved combined ratio Key Financial Performance | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Original Premium Income | 323,282 | 311,996 | 3.6 | | Insurance Service Revenue | 249,040 | 235,841 | 5.6 | | Underwriting Profit | 13,015 | 8,999 | 44.6 | | Net Profit | 24,455 | 18,491 | 32.3 | | Combined Ratio | 94.8% | 96.2% | Decreased by 1.4 pps | Key Financial Position | Indicator | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 804,605 | 778,244 | 3.4 | | Total Liabilities | 523,544 | 517,622 | 1.1 | | Total Equity | 281,061 | 260,622 | 7.8 | - A proposed interim dividend of **RMB 0.24 per share**, representing a year-on-year increase of 15.4%[12](index=12&type=chunk) [Discussion and Analysis of Operating Results and Financial Condition](index=6&type=section&id=%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE%E5%92%8C%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E7%9A%84%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [I. Performance Overview](index=6&type=section&id=%E4%B8%80%E3%80%81%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%BD) In H1 2025, the company maintained its leading market position with steady premium growth and significant increases in underwriting and net profit - The company actively implemented the decisions of the Party Central Committee and focused on the Group's "Building a First-Class" strategy to promote high-quality development[13](index=13&type=chunk) H1 2025 Performance Highlights | Indicator | H1 2025 (RMB in hundred millions) | YoY Growth (%) | Market Share (%) | | :--- | :--- | :--- | :--- | | Original Premium Income | 3,232.82 | 3.6 | 33.5 | | Insurance Service Revenue | 2,490.40 | 5.6 | - | | Underwriting Profit | 130.15 | 44.6 | - | | Combined Ratio | 94.8% | Decreased by 1.4 pps | - | | Total Investment Income | 172.60 | 26.6 | - | | Net Profit | 244.55 | 32.3 | - | - The company enhanced operational management, improved underwriting and claims efficiency, and optimized risk pricing models to drive business quality[14](index=14&type=chunk) - The company steadily expanded its overseas business, covering **122 countries and regions** and providing **RMB 1.28 trillion** in risk protection for China's overseas interests in the first half of the year[18](index=18&type=chunk) - The company advanced its digital transformation by introducing the full-size DeepSeek large model and establishing a comprehensive AI application framework[19](index=19&type=chunk) - The company provided risk protection for **129 million individual customers** and **4.55 million group customers**, with total insured amounts reaching **RMB 1,649.95 trillion** in the first half of the year[21](index=21&type=chunk) [II. Analysis of Main Business Operations](index=9&type=section&id=%E4%BA%8C%E3%80%81%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99%E7%B6%93%E7%87%9F%E5%88%86%E6%9E%90) This section analyzes the performance of the company's insurance and investment businesses, highlighting growth in revenue and profit alongside shifts in business mix and investment strategy (I) Insurance Business This section details the performance of the insurance business, noting growth in revenue and underwriting profit, though the combined loss ratio increased 1. Business Overview In H1 2025, insurance service revenue and underwriting profit grew significantly, driven by key business lines and improved operational efficiency Insurance Business Performance | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Insurance Service Revenue | 249,040 | 235,841 | 5.6 | | Insurance Service Result | 16,885 | 13,495 | 25.1 | | Underwriting Profit | 13,015 | 8,999 | 44.6 | | Combined Loss Ratio | 71.8% | 70.1% | Increased by 1.7 pps | | Combined Expense Ratio | 23.0% | 26.1% | Decreased by 3.1 pps | | Combined Ratio | 94.8% | 96.2% | Decreased by 1.4 pps | - The increase in insurance service revenue was primarily driven by business growth in motor vehicle, accident & health, and corporate property insurance[22](index=22&type=chunk) Premiums by Insurance Type Motor vehicle insurance remained the largest segment, while accident & health and other insurance lines demonstrated strong growth Original Premium Income by Insurance Type | Insurance Type | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Motor Vehicle Insurance | 144,065 | 139,364 | 3.4 | | Accident & Health Insurance | 82,614 | 76,585 | 7.9 | | Agricultural Insurance | 43,790 | 45,587 | -3.9 | | Liability Insurance | 21,944 | 21,655 | 1.3 | | Corporate Property Insurance | 11,182 | 10,580 | 5.7 | | Other Insurance | 19,687 | 18,225 | 8.0 | | Total | 323,282 | 311,996 | 3.6 | Premiums by Sales Channel The agency channel remained dominant, though its proportion decreased as the direct sales channel experienced significant growth Original Premium Income by Sales Channel | Channel Category | H1 2025 Amount (RMB in millions) | H1 2025 Share (%) | Change (%) | H1 2024 Amount (RMB in millions) | H1 2024 Share (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Agency Sales Channel | 156,624 | 48.4 | -2.5 | 160,558 | 51.4 | | Of which: Individual Agents | 78,473 | 24.3 | -10.3 | 87,494 | 28.0 | | Part-time Agents | 12,439 | 3.8 | -4.7 | 13,048 | 4.2 | | Professional Agents | 65,712 | 20.3 | 9.5 | 60,016 | 19.2 | | Direct Sales Channel | 140,360 | 43.5 | 11.3 | 126,162 | 40.5 | | Insurance Brokerage Channel | 26,298 | 8.1 | 4.0 | 25,276 | 8.1 | | Total | 323,282 | 100.0 | 3.6 | 311,996 | 100.0 | Premiums by Region Guangdong province led premium income with 7.3% growth, followed by Jiangsu and Zhejiang provinces Original Premium Income by Region | Region | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Guangdong Province | 32,884 | 30,659 | 7.3 | | Jiangsu Province | 32,218 | 30,991 | 4.0 | | Zhejiang Province | 24,806 | 23,599 | 5.1 | | Shandong Province | 20,193 | 20,054 | 0.7 | | Hebei Province | 17,291 | 16,838 | 2.7 | | Hubei Province | 16,199 | 15,327 | 5.7 | | Sichuan Province | 14,680 | 14,185 | 3.5 | | Anhui Province | 14,124 | 13,460 | 4.9 | | Hunan Province | 14,020 | 14,546 | -3.6 | | Fujian Province | 12,088 | 12,076 | 0.1 | | Other Regions | 124,779 | 120,261 | 3.8 | | Total | 323,282 | 311,996 | 3.6 | 2. Operating Segment Data This section analyzes the operating data and financial indicators for each major insurance line (1) Motor Vehicle Insurance Underwriting profit for motor vehicle insurance grew substantially due to a lower combined ratio, despite a higher loss ratio from new energy vehicles and rising claims costs Motor Vehicle Insurance Performance | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Insurance Service Revenue | 150,276 | 145,157 | 3.5 | | Underwriting Profit | 8,726 | 5,202 | 67.7 | | Combined Loss Ratio | 73.1% | 71.2% | Increased by 1.9 pps | | Combined Expense Ratio | 21.1% | 25.2% | Decreased by 4.1 pps | | Combined Ratio | 94.2% | 96.4% | Decreased by 2.2 pps | - The proportion of private passenger vehicle business **increased by 1.0 percentage point to 73.4%**, as the company enhanced its channel capabilities and renewal management[29](index=29&type=chunk) - The rise in the combined loss ratio was mainly influenced by the **increasing proportion of new energy vehicles**, a significant rise in personal injury claims, and higher compensation standards[29](index=29&type=chunk) (2) Accident & Health Insurance This segment saw strong revenue growth but incurred an underwriting loss due to a higher combined loss ratio from business structure changes Accident & Health Insurance Performance | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Insurance Service Revenue | 30,975 | 24,751 | 25.1 | | Underwriting (Loss)/Profit | (569) | 13 | N/A | | Combined Loss Ratio | 71.1% | 64.8% | Increased by 6.3 pps | | Combined Expense Ratio | 30.7% | 35.1% | Decreased by 4.4 pps | | Combined Ratio | 101.8% | 99.9% | Increased by 1.9 pps | - The company consolidated its leading position in policy-based health insurance and actively expanded into new sectors like sports, tourism, education, and healthcare[30](index=30&type=chunk) - The underwriting loss was primarily due to a **higher combined loss ratio resulting from changes in business structure**, despite enhanced risk control measures[31](index=31&type=chunk) (3) Agricultural Insurance Agricultural insurance underwriting profit grew, supported by a lower combined ratio achieved through enhanced risk management and claims operations Agricultural Insurance Performance | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Insurance Service Revenue | 23,179 | 23,292 | -0.5 | | Underwriting Profit | 2,697 | 2,572 | 4.9 | | Combined Loss Ratio | 74.5% | 75.3% | Decreased by 0.8 pps | | Combined Expense Ratio | 13.9% | 13.7% | Increased by 0.2 pps | | Combined Ratio | 88.4% | 89.0% | Decreased by 0.6 pps | - The company expanded its "Greater Agricultural Insurance" layout, capitalizing on policy opportunities for major grain crops[32](index=32&type=chunk) - The company strengthened agricultural insurance underwriting risk management and optimized its claims operating system to actively respond to natural disasters[33](index=33&type=chunk) (4) Liability Insurance Liability insurance reduced its underwriting loss, as a significant drop in the expense ratio offset an increase in the loss ratio Liability Insurance Performance | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Insurance Service Revenue | 18,575 | 18,339 | 1.3 | | Underwriting Loss | (674) | (747) | N/A | | Combined Loss Ratio | 75.0% | 73.5% | Increased by 1.5 pps | | Combined Expense Ratio | 28.6% | 30.6% | Decreased by 2.0 pps | | Combined Ratio | 103.6% | 104.1% | Decreased by 0.5 pps | - The company optimized its underwriting policies and upgraded its exclusive product system for new urban residents, increasing its market share in internet-based business[34](index=34&type=chunk) - Despite a higher combined loss ratio, the company **reduced its underwriting loss by RMB 73 million** year-on-year through optimized strategies and enhanced risk control[35](index=35&type=chunk) (5) Corporate Property Insurance Corporate property insurance achieved a substantial increase in underwriting profit, driven by a significant reduction in both loss and expense ratios Corporate Property Insurance Performance | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Insurance Service Revenue | 9,243 | 8,862 | 4.3 | | Underwriting Profit | 918 | 38 | 2315.8 | | Combined Loss Ratio | 64.3% | 71.6% | Decreased by 7.3 pps | | Combined Expense Ratio | 25.8% | 28.0% | Decreased by 2.2 pps | | Combined Ratio | 90.1% | 99.6% | Decreased by 9.5 pps | - The company capitalized on the domestic economic recovery to serve the real economy and specialized, innovative enterprises, focusing on increasing coverage for SMEs[36](index=36&type=chunk) - The significant decrease in the combined loss and combined ratios was mainly due to **improved risk mitigation services**, enhanced risk surveys in key industries, and a lower impact from major catastrophes compared to the same period last year[37](index=37&type=chunk) (6) Other Insurance Other insurance lines maintained stable underwriting profit, as a lower expense ratio largely offset the impact of a higher loss ratio Other Insurance Performance | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Insurance Service Revenue | 16,792 | 15,440 | 8.8 | | Underwriting Profit | 1,917 | 1,921 | -0.2 | | Combined Loss Ratio | 58.3% | 55.2% | Increased by 3.1 pps | | Combined Expense Ratio | 30.3% | 32.4% | Decreased by 2.1 pps | | Combined Ratio | 88.6% | 87.6% | Increased by 1.0 pps | - The company supported technological self-reliance, the low-altitude economy, and high-level foreign trade, actively insuring key "Belt and Road" projects[38](index=38&type=chunk) - Despite a higher combined loss ratio, **underwriting profit remained stable** due to continuous operational improvements, differentiated product strategies, and enhanced claims system controls[39](index=39&type=chunk) (II) Insurance Funds Investment Business The company's investment business achieved significant growth in total investment income, driven by an optimized asset allocation with an increased proportion of equity investments 1. Investment Performance Total investment income grew by 26.6%, with the total investment yield rising to 2.6%, reflecting successful portfolio optimization and active trading Investment Performance Summary | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Interest income from financial assets not at FVTPL | 6,080 | 5,713 | 6.4 | | Other investment income | 7,901 | 4,773 | 65.5 | | Share of profits and losses of associates and joint ventures | 3,617 | 3,241 | 11.6 | | Total Investment Income | 17,260 | 13,638 | 26.6 | | Total Investment Yield (not annualized) | 2.6% | 2.4% | Increased by 0.2 pps | | Total Investment Assets | 711,480 | 676,512 | 5.2 | - The company adhered to a principle of seeking progress while maintaining stability, optimizing its equity asset structure and capitalizing on market opportunities through tactical trading[40](index=40&type=chunk) - The company enhanced proactive operations to increase income from bond price differentials[40](index=40&type=chunk) 2. Investment Asset Composition Total investment assets grew by 5.2%, with the proportion of equity investments increasing while fixed-income investments slightly decreased Investment Assets by Type | Investment Asset Category | Balance at June 30, 2025 (RMB in millions) | Share at June 30, 2025 (%) | Balance at Dec 31, 2024 (RMB in millions) | Share at Dec 31, 2024 (%) | Change in Balance (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 16,963 | 2.4 | 19,370 | 2.9 | -12.4 | | Term deposits | 66,998 | 9.4 | 77,156 | 11.4 | -13.2 | | Financial investments at amortized cost | 146,103 | 20.5 | 136,060 | 20.1 | 7.4 | | Financial assets at FVOCI | 270,848 | 38.1 | 243,771 | 36.0 | 11.1 | | Financial assets at FVTPL | 127,906 | 18.0 | 120,066 | 17.7 | 6.5 | | Investment properties | 7,929 | 1.1 | 7,234 | 1.1 | 9.6 | | Investments in associates and joint ventures | 68,906 | 9.7 | 67,129 | 9.9 | 2.6 | | Other investment assets | 5,827 | 0.8 | 5,726 | 0.9 | 1.8 | | **Total Investment Assets** | **711,480** | **100.0** | **676,512** | **100.0** | **5.2** | Investment Assets by Object | Investment Object Category | Balance at June 30, 2025 (RMB in millions) | Share at June 30, 2025 (%) | Balance at Dec 31, 2024 (RMB in millions) | Share at Dec 31, 2024 (%) | Change in Balance (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Fixed-income investments | 425,506 | 59.8 | 407,026 | 60.2 | 4.5 | | Equity investments | 186,046 | 26.1 | 170,027 | 25.1 | 9.4 | - The increase in the proportion of equity investments was mainly due to **increased stock allocation and a rise in the market value of equity assets**[44](index=44&type=chunk) 3. Investments in Associates and Joint Ventures As of June 30, 2025, the company's investments in associates and joint ventures increased by 2.6% from the beginning of the year Investments in Associates and Joint Ventures | Indicator | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Investments in associates and joint ventures | 68,906 | 67,129 | 2.6 | 4. Major Investments During the reporting period, there were no significant changes to the major investments of the company and its subsidiaries compared to the 2024 annual report - There were no material changes in the major investment information of the company and its subsidiaries during the reporting period[46](index=46&type=chunk) 5. Asset Pledge The company pledged certain securities as collateral for securities sold under repurchase agreements for liquidity management purposes - Securities held by the company were used as collateral in securities sold under repurchase agreements to meet liquidity management needs[47](index=47&type=chunk) (III) Overall Performance In H1 2025, the company's profit before tax and net profit grew significantly, accompanied by steady growth in total assets and net assets Profit Before Tax In H1 2025, the company's profit before tax was RMB 28.904 billion, an increase of RMB 7.255 billion or 33.5% year-on-year Profit Before Tax | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Profit Before Tax | 28,904 | 21,649 | 33.5 | Income Tax Expense In H1 2025, income tax expense was RMB 4.449 billion, an increase of 40.9%, primarily due to higher taxable income Income Tax Expense | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Income Tax Expense | (4,449) | (3,158) | 40.9 | - The increase in income tax expense was mainly attributable to the rise in taxable income[50](index=50&type=chunk) Net Profit In H1 2025, net profit increased by 32.3% to RMB 24.455 billion, with basic earnings per share at RMB 1.099 Net Profit | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net Profit | 24,455 | 18,491 | 32.3 | | Basic Earnings Per Share | RMB 1.099 | RMB 0.831 | - | [III. Special Analysis](index=22&type=section&id=%E4%B8%89%E3%80%81%E5%B0%88%E9%A0%85%E5%88%86%E6%9E%90) This section analyzes the company's liquidity, capital adequacy, risk management, and other specific matters (I) Liquidity and Capital Adequacy Analysis The company maintained strong operating cash flow and high solvency adequacy ratios, though financing activities resulted in a net cash outflow due to bond redemption Cash Flow Analysis In H1 2025, net cash inflow from operating activities grew by 26.6%, while financing activities saw a significant net outflow due to the redemption of capital supplementary bonds Cash Flow Summary | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | Change (RMB in millions) | | :--- | :--- | :--- | :--- | | Net cash inflow from operating activities | 26,891 | 21,246 | 5,645 | | Net cash outflow from investing activities | (11,657) | (16,501) | 4,844 | | Net cash (outflow)/inflow from financing activities | (17,633) | 287 | -17,920 | | Net (decrease)/increase in cash and cash equivalents | (2,403) | 5,039 | -7,442 | - The increase in net cash outflow from financing activities was mainly due to the **redemption of RMB 8 billion in capital supplementary bonds** and a reduction in the scale of securities sold under repurchase agreements[53](index=53&type=chunk) - As of June 30, 2025, the company's cash and cash equivalents (excluding accrued interest) amounted to **RMB 16.96 billion**[54](index=54&type=chunk) Gearing Ratio As of June 30, 2025, the company's gearing ratio was 63.6%, a decrease of 0.3 percentage points from the beginning of the year Gearing Ratio | Indicator | June 30, 2025 | December 31, 2024 | Change (pps) | | :--- | :--- | :--- | :--- | | Gearing Ratio | 63.6% | 63.9% | Decreased by 0.3 | Working Capital Sources The company's working capital is primarily sourced from cash flows generated by operating activities, mainly collected premiums - The company's main source of liquidity is cash flow from operating activities, primarily collected premiums[58](index=58&type=chunk) - The company expects to meet its future working capital needs through operating cash flows and has sufficient working capital[58](index=58&type=chunk) Capital Expenditure In H1 2025, the company's capital expenditure amounted to RMB 0.73 billion, mainly for property under construction, vehicle purchases, and IT system development Capital Expenditure | Indicator | H1 2025 (RMB in billions) | | :--- | :--- | | Capital Expenditure | 0.73 | - Capital expenditure primarily included spending on operating properties under construction, purchases of operating motor vehicles, and development of information systems[59](index=59&type=chunk) Solvency As of June 30, 2025, the company's comprehensive and core solvency adequacy ratios both increased, indicating a robust capital position Solvency Adequacy | Indicator | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | Change (pps) | | :--- | :--- | :--- | :--- | | Actual Capital | 284,513 | 265,560 | 7.1 | | Core Capital | 257,672 | 240,863 | 7.0 | | Minimum Capital | 120,879 | 114,171 | 5.9 | | Comprehensive Solvency Adequacy Ratio | 235.4% | 232.6% | Increased by 2.8 | | Core Solvency Adequacy Ratio | 213.2% | 211.0% | Increased by 2.2 | (II) Risk Management The company effectively manages credit, exchange rate, and interest rate risks through rigorous assessments, diversification, and optimized investment strategies Credit Risk The company effectively controls credit risk through a diversified customer base, regular credit assessments of reinsurers, and adherence to strict investment rating requirements - The company's credit risk exposure is mainly concentrated in premiums receivable, reinsurance assets, debt investments, and bank deposits[62](index=62&type=chunk) - The company effectively controls credit risk through a diversified customer base, regular credit assessments of reinsurers, strict adherence to corporate bond investment rating regulations (**over 99% of bonds are rated AAA or are exempt from rating**), and placing most deposits with state-owned banks[62](index=62&type=chunk)[63](index=63&type=chunk) Exchange Rate Risk The company's primary operations are in RMB, but it faces exchange rate risk from foreign currency-denominated business and assets, with capital account transactions subject to foreign exchange controls - The company mainly operates in RMB but faces exchange rate risk from some foreign currency-denominated businesses (such as corporate property, international cargo, and aviation insurance) and foreign currency assets and liabilities[64](index=64&type=chunk) - The company's capital account foreign exchange transactions are subject to foreign exchange controls, and the Chinese government's policies may lead to exchange rate fluctuations[64](index=64&type=chunk) Interest Rate Risk The company manages interest rate risk by maintaining a balanced portfolio of fixed and floating rate instruments and using interest rate swaps for hedging - The company manages interest rate risk by maintaining an appropriate mix of fixed and floating rate instruments and managing the maturity profiles of interest-bearing financial assets and liabilities[65](index=65&type=chunk) - The company uses interest rate swap contracts for hedging to manage floating interest rate risk[66](index=66&type=chunk) (III) Other Special Analysis This section covers contingent events, post-balance sheet date events, new product development, and employee information Contingent Events The company is involved in routine legal proceedings and arbitrations, which are not expected to have a material adverse impact on its financial condition or operating results - The company is involved in legal proceedings and arbitrations in its ordinary course of business, mainly related to policy claims[67](index=67&type=chunk) - Management believes that any resulting liabilities will not have a material adverse effect on the company's financial condition or operating results[67](index=67&type=chunk) Post-Balance Sheet Date Events The Board of Directors proposed an interim dividend of RMB 0.24 per ordinary share for 2025, subject to approval at the general meeting - The Board of Directors proposed the distribution of an interim dividend for 2025 of **RMB 0.24 per ordinary share**, totaling **RMB 5.338 billion**, which is subject to approval at the general meeting[68](index=68&type=chunk)[189](index=189&type=chunk) New Product Development In H1 2025, the company developed or revised 1,227 insurance clauses to support structural reforms in product and service supply - In the first half of 2025, the company developed or revised a total of **1,227 insurance clauses**, including 234 national and 993 local clauses[69](index=69&type=chunk) - The company deepened the supply-side structural reform of insurance products and services, continuously enriching its product and service system[69](index=69&type=chunk) Employees As of June 30, 2025, the company had 161,963 employees, with total remuneration paid in H1 2025 amounting to RMB 21.314 billion Employee Information | Indicator | Value | | :--- | :--- | | Number of Employees (June 30, 2025) | 161,963 | | Employee Remuneration (H1 2025) | RMB 21.314 billion | - The company enhances employee performance and efficiency through multiple career development paths, strengthened training, and performance assessments[70](index=70&type=chunk) [IV. Outlook](index=26&type=section&id=%E5%9B%9B%E3%80%81%E5%B1%95%E6%9C%9B) The company will focus on serving China's modernization, deepening reforms, and optimizing asset allocation to achieve high-quality development and value creation - The company will focus on serving China's modernization, advancing the "five major areas" of finance, deepening supply-side structural reform in insurance, and enhancing operational management and risk control[71](index=71&type=chunk) - **Serving National Strategies:** Vigorously promote technology finance, green finance, inclusive finance, pension finance, and digital finance to enhance insurance coverage and service capabilities[71](index=71&type=chunk) - **Deepening Reform and Innovation:** Strengthen standardization, refined operations, differentiated management, and digital empowerment to build core competitiveness towards becoming a world-leading P&C insurer[72](index=72&type=chunk) - **Strengthening Professional Operations:** Promote quality and efficiency in business development, optimize resource allocation, build a "greater consumer protection" framework, and deepen digital transformation[72](index=72&type=chunk) - **Adhering to Compliant Operations:** Improve internal control, compliance, and comprehensive risk management systems, and strictly implement the "filing and execution integration" for auto insurance[74](index=74&type=chunk) - **Continuously Optimizing Asset Allocation:** For fixed-income investments, strengthen market analysis and steadily expand scale; for equity investments, seize opportunities for long-term capital entry, actively allocate to high-dividend stocks, and diversify investment strategies[74](index=74&type=chunk) [Corporate Governance and Other Information](index=28&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Interests of Directors, Supervisors and President in Shares](index=28&type=section&id=%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E5%8F%8A%E7%B8%BD%E8%A3%81%E6%8C%81%E6%9C%89%E8%82%A1%E4%BB%BD%E7%9A%84%E6%AC%8A%E7%9B%8A) As of June 30, 2025, no directors, supervisors, or the president held any disclosable interests or short positions in the company's shares - As of June 30, 2025, no directors, supervisors, or the president of the company held any interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations that required disclosure[76](index=76&type=chunk) - In H1 2025, the company did not grant any rights to subscribe for shares of the company or its associated corporations to any director, supervisor, president (including their spouses or children under 18)[76](index=76&type=chunk) [Changes in the Board of Directors and Supervisory Committee](index=28&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E7%9B%A3%E4%BA%8B%E6%9C%83%E8%AE%8A%E5%8B%95%E6%83%85%E6%B3%81) There were no changes in the composition of the Board of Directors or the Supervisory Committee during the reporting period - From January 1, 2025, to the date of this interim report, there were no changes in the members of the Board of Directors[77](index=77&type=chunk) - From January 1, 2025, to the date of this interim report, there were no changes in the members of the Supervisory Committee[78](index=78&type=chunk) - The report lists the members of the Board of Directors (Ms. Ding Xiangqun, Mr. Yu Ze, etc.) and the Supervisory Committee (Mr. Dong Qingxiu, Mr. Wang Yadong, etc.) as of the interim report date[78](index=78&type=chunk)[79](index=79&type=chunk) [Changes in Information of Directors and Supervisors](index=29&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%A3%E4%BA%8B%E8%B3%87%E6%96%99%E7%9A%84%E8%AE%8A%E5%8B%95) During the reporting period, there were several changes in the roles of directors, while supervisors' information remained unchanged - Ms. Ding Xiangqun also serves as the Chairman and a non-executive director of The People's Insurance Company of China (Hong Kong), Limited[80](index=80&type=chunk) - Mr. Jiang Caishi ceased to be a supervisor of Shanghai Insurance Exchange Co., Ltd[81](index=81&type=chunk) - Mr. Zhang Daoming now also serves as the Chairman and a non-executive director of PICC Financial Services Company Limited, and ceased to be an executive director and president[81](index=81&type=chunk) - Ms. Xue Shuang ceased to be an independent director of Jiangsu Financial Leasing Co., Ltd[82](index=82&type=chunk) - There were no changes in the information of the supervisors[84](index=84&type=chunk) [Model Code for Securities Transactions by Directors of Listed Issuers](index=29&type=section&id=%E4%B8%8A%E5%B8%82%E7%99%BC%E8%A1%8C%E4%BA%BA%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E3%80%8A%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87%E3%80%8B) The company has adopted guidelines for employee securities trading, and all directors and supervisors have confirmed compliance during H1 2025 - The company has adopted the "Guidelines on Securities Dealings by Employees," and all directors and supervisors have confirmed their compliance with the "Model Code" and the "Guidelines on Securities Dealings" throughout H1 2025[85](index=85&type=chunk) [Shareholders' Interests and Short Positions to be Disclosed under the Securities and Futures Ordinance](index=30&type=section&id=%E6%A0%B9%E6%93%9A%E3%80%8A%E8%AD%89%E5%88%B8%E5%8F%8A%E6%9C%9F%E8%B2%A8%E6%A2%9D%E4%BE%8B%E3%80%8B%E8%82%A1%E6%9D%B1%E9%A0%88%E6%8A%AB%E9%9C%B2%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, PICC Group held 68.98% of the company's total issued shares, with several major institutional investors holding significant positions in H-shares Major Shareholdings | Shareholder Name | Capacity | Number of Shares (Long Position) | Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | PICC Group | Beneficial owner | 15,343,471,470 (Domestic Shares) | 68.98% | | JPMorgan Chase & Co. | Beneficial owner, investment manager, etc. | 562,543,191 (H Shares) | 2.53% | | Citigroup Inc. | Interest of controlled corporation, etc. | 544,562,211 (H Shares) | 2.45% | | The Capital Group Companies, Inc. | Interest of controlled corporation | 486,470,923 (H Shares) | 2.19% | | BlackRock, Inc. | Interest of controlled corporation | 401,898,644 (H Shares) | 1.81 | - Institutional investors including JPMorgan Chase & Co., Citigroup Inc., and BlackRock, Inc. held short positions in the company's H-shares[86](index=86&type=chunk) [Proposed Interim Dividend and Closure of H-Share Register](index=31&type=section&id=%E5%BB%BA%E8%AD%B0%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF%E3%80%81%E6%9A%AB%E5%81%9C%E8%BE%A6%E7%90%86H%E8%82%A1%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98%E6%89%8B%E7%BA%8C) The Board proposed an interim dividend of RMB 0.24 per share, subject to shareholder approval, with payment details to be announced later - The Board of Directors proposed an interim dividend of **RMB 0.24 per share (inclusive of tax)** for the first half of 2025, totaling **RMB 5.338 billion**[88](index=88&type=chunk) - The dividend proposal is subject to approval at an extraordinary general meeting, with specific arrangements and the H-share register closure period to be disclosed separately[88](index=88&type=chunk) [Withholding and Payment of Dividend Income Tax](index=31&type=section&id=%E4%BB%A3%E6%89%A3%E4%BB%A3%E7%B9%B3%E8%82%A1%E6%81%AF%E6%89%80%E5%BE%97%E7%A8%85) The company will withhold income tax on dividends distributed to H-shareholders in accordance with Chinese tax regulations - The company is required to withhold and pay dividend income tax for H-shareholders, including corporate income tax for non-resident enterprise shareholders and individual income tax for overseas individual shareholders and mainland individual shareholders via the Stock Connect program[89](index=89&type=chunk) - Information regarding tax relief will be disclosed separately[89](index=89&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=32&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) In H1 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - In the first half of 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and there were no treasury shares[91](index=91&type=chunk) [Corporate Governance](index=32&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company complied with all code provisions of the Corporate Governance Code during the reporting period - The company has complied with all code provisions of the Corporate Governance Code during the reporting period[92](index=92&type=chunk) [Review of Interim Results](index=32&type=section&id=%E5%AF%A9%E9%96%B1%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) The company's auditor and Audit Committee have reviewed the unaudited interim condensed consolidated financial information - The company's auditor, Ernst & Young, and the company's Audit Committee have reviewed the interim condensed consolidated financial information[93](index=93&type=chunk) [Review Report on the Interim Condensed Consolidated Financial Information](index=33&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E7%9A%84%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) [Review Report on the Interim Condensed Consolidated Financial Information](index=33&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E7%9A%84%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) The auditor's review concluded that nothing has come to their attention that causes them to believe the interim financial information is not prepared in accordance with HKAS 34 - Ernst & Young conducted a review of the company's interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[95](index=95&type=chunk) - The review concluded that nothing has come to their attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[96](index=96&type=chunk) [Unaudited Interim Condensed Consolidated Financial Information](index=34&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E8%A8%88%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) [Interim Condensed Consolidated Income Statement](index=34&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E5%88%A9%E6%BD%A4%E8%A1%A8) In H1 2025, the company achieved insurance service revenue of RMB 249.04 billion and a net profit of RMB 24.455 billion Income Statement Summary | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | | :--- | :--- | :--- | | Insurance service revenue | 249,040 | 235,841 | | Insurance service expenses | (227,806) | (217,380) | | Insurance service result | 16,885 | 13,495 | | Underwriting finance losses | (4,415) | (5,106) | | Net profit | 24,455 | 18,491 | | Attributable to equity holders of the parent | 24,454 | 18,490 | | Basic earnings per share | RMB 1.099 | RMB 0.831 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=35&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) In H1 2025, the company's total comprehensive income reached RMB 27.812 billion, including net profit and other comprehensive income Comprehensive Income Summary | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | | :--- | :--- | :--- | | Net profit | 24,455 | 18,491 | | Other comprehensive income, net of tax | 3,357 | 3,786 | | Total comprehensive income | 27,812 | 22,277 | | Attributable to equity holders of the parent | 27,785 | 22,275 | [Interim Condensed Consolidated Statement of Financial Position](index=36&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company's total assets were RMB 804.605 billion and total equity was RMB 281.061 billion Financial Position Summary | Indicator | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Total Assets | 804,605 | 778,244 | | Total Liabilities | 523,544 | 517,622 | | Total Equity | 281,061 | 260,622 | - **Financial investments** (including those at amortized cost, FVOCI, and FVTPL) totaled **RMB 544,857 million**, representing the company's largest asset class[101](index=101&type=chunk) - **Insurance contract liabilities** amounted to **RMB 417,025 million**, constituting the company's largest liability class[101](index=101&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=38&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) In H1 2025, equity attributable to parent company shareholders increased, driven by net profit and other comprehensive income, partially offset by dividend payments Changes in Equity Summary | Indicator | January 1, 2025 (RMB in millions) | June 30, 2025 (RMB in millions) | | :--- | :--- | :--- | | Equity attributable to equity holders of the parent | 257,924 | 278,324 | | Net profit | - | 24,454 | | Other comprehensive income | - | 3,331 | | Dividends declared | - | (7,385) | [Interim Condensed Consolidated Statement of Cash Flows](index=40&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) In H1 2025, the company generated a net cash inflow from operating activities, while investing and financing activities resulted in net cash outflows Cash Flow Summary | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | | :--- | :--- | :--- | | Net cash generated from operating activities | 26,891 | 21,246 | | Net cash used in investing activities | (11,657) | (16,501) | | Net cash (used in)/generated from financing activities | (17,633) | 287 | | Net (decrease)/increase in cash and cash equivalents | (2,403) | 5,039 | | Cash and cash equivalents at end of period | 16,960 | 21,527 | [Notes to the Interim Condensed Consolidated Financial Information](index=42&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) This section provides detailed notes essential for understanding the interim condensed consolidated financial information 1. Corporate Information PICC P&C is a joint stock company incorporated in China, listed in Hong Kong, and primarily engages in property and casualty insurance - The company is a joint stock company incorporated in China, listed on the Hong Kong Stock Exchange, with PICC Group as its parent and ultimate holding company[112](index=112&type=chunk) - The company is principally engaged in providing property and casualty insurance products and services[112](index=112&type=chunk) 2. Basis of Preparation The interim financial information is prepared in accordance with HKAS 34 and the disclosure requirements of the Hong Kong Stock Exchange Listing Rules - This interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 and the disclosure requirements of the Hong Kong Stock Exchange Listing Rules[113](index=113&type=chunk) - The adoption of amended Hong Kong Financial Reporting Standards did not have a material impact on the Group's interim condensed consolidated financial information[115](index=115&type=chunk) 3. Operating Segment Report The company is organized into six main operating segments based on products and services, with its primary operations concentrated in mainland China - The company's operating segments include Motor Vehicle, Accident & Health, Agricultural, Liability, Corporate Property, Other Insurance, and a Head Office segment[119](index=119&type=chunk)[120](index=120&type=chunk) - As the company's main operations are concentrated in mainland China, no geographical segment information is presented[119](index=119&type=chunk) Profit/(Loss) Before Tax by Segment | Segment | H1 2025 Profit/(Loss) Before Tax (RMB in millions) | H1 2024 Profit/(Loss) Before Tax (RMB in millions) | | :--- | :--- | :--- | | Motor Vehicle Insurance | 8,926 | 5,544 | | Accident & Health Insurance | (626) | 208 | | Agricultural Insurance | 3,428 | 3,054 | | Liability Insurance | (288) | (511) | | Corporate Property Insurance | 1,993 | 906 | | Other Insurance | 3,619 | 4,137 | | Head Office and Others | 11,852 | 8,311 | | **Total** | **28,904** | **21,649** | 4. Insurance Service Revenue and Expenses In H1 2025, total insurance service revenue was RMB 249.04 billion, with incurred claims being the largest component of insurance service expenses Insurance Service Revenue and Expenses | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | | :--- | :--- | :--- | | Total insurance service revenue | 249,040 | 235,841 | | Of which: Contracts measured under the premium allocation approach | 246,620 | 233,066 | | Total insurance service expenses | (227,806) | (217,380) | | Of which: Incurred claims | (183,435) | (170,856) | 5. Net Investment Income In H1 2025, net investment income totaled RMB 14.00 billion, primarily from other investment income and interest from financial assets not at FVTPL Net Investment Income | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | | :--- | :--- | :--- | | Other investment income | 7,901 | 4,773 | | Interest income from financial assets not at FVTPL | 6,080 | 5,713 | | Reversal of impairment losses | 19 | 265 | | **Total** | **14,000** | **10,751** | - Other investment income included **RMB 3.341 billion in dividend income**, RMB 1.008 billion in unrealized gains, and RMB 2.766 billion in realized gains[128](index=128&type=chunk) 6. Other Finance Costs In H1 2025, other finance costs totaled RMB 0.46 billion, mainly comprising interest on securities sold under repurchase agreements Other Finance Costs | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | | :--- | :--- | :--- | | Interest on securities sold under repurchase agreements | 394 | 333 | | Interest on bonds payable | 39 | 168 | | Interest on lease liabilities | 20 | 24 | | Interest on investment contract settlements | 7 | 63 | | **Total** | **460** | **588** | 7. Other Operating Expenses In H1 2025, employee costs and commission expenses were the largest components of operating expenses Other Operating Expenses | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | | :--- | :--- | :--- | | Employee costs | 21,062 | 21,057 | | Commission expenses | 18,719 | 19,734 | | Service fees | 6,332 | 5,620 | | Business promotion expenses | 5,555 | 5,926 | | **Total other operating expenses** | **1,386** | **1,038** | 8. Income Tax Expense In H1 2025, income tax expense was RMB 4.449 billion, with the company subject to a statutory tax rate of 25% and preferential rates in certain regions Income Tax Expense | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | | :--- | :--- | :--- | | Current tax | 8,772 | 7,444 | | Deferred tax | (4,323) | (4,286) | | **Total** | **4,449** | **3,158** | - The company is subject to the statutory corporate income tax rate of 25% in China, with some branches in western provinces and Hainan enjoying a preferential rate of 15%[134](index=134&type=chunk) 9. Earnings Per Share In H1 2025, the company's basic earnings per share was RMB 1.099, which is the same as the diluted earnings per share Earnings Per Share | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net profit attributable to equity holders of the parent (RMB in millions) | 24,454 | 18,490 | | Weighted average number of ordinary shares in issue (in millions) | 22,242 | 22,242 | | **Basic earnings per share (RMB)** | **1.099** | **0.831** | - The company had no dilutive potential ordinary shares, so diluted earnings per share is the same as basic earnings per share[137](index=137&type=chunk) 10. Dividends In H1 2025, the company recognized the distribution of the 2024 final dividend amounting to RMB 7.385 billion Dividends | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | | :--- | :--- | :--- | | 2024 final dividend | 7,385 | - | | 2023 final dividend | - | 10,877 | - Following approval at the annual general meeting on June 27, 2025, the company declared a final dividend of RMB 0.332 per ordinary share for the year 2024[139](index=139&type=chunk) 11. Cash and Cash Equivalents As of June 30, 2025, cash and cash equivalents totaled RMB 16.963 billion, mainly comprising demand deposits and securities purchased under resale agreements Cash and Cash Equivalents | Indicator | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Demand deposits and cash | 9,463 | 8,550 | | Securities purchased under resale agreements with original maturity of not more than 3 months | 7,497 | 10,813 | | **Total** | **16,963** | **19,370** | - The fair value of cash and cash equivalents approximates their carrying amounts[141](index=141&type=chunk) 12. Financial Investments at Amortized Cost As of June 30, 2025, financial investments at amortized cost totaled RMB 146.103 billion, primarily consisting of government and corporate bonds Financial Investments at Amortized Cost | Investment Category | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Government bonds | 58,928 | 44,893 | | Corporate bonds | 16,181 | 16,552 | | Financial bonds | 9,040 | 6,953 | | Long-term debt investment plans | 29,613 | 31,388 | | Trust schemes | 24,425 | 29,454 | | **Net amount** | **146,103** | **136,060** | 13. Financial Assets at Fair Value Through Other Comprehensive Income As of June 30, 2025, financial assets at FVOCI totaled RMB 270.848 billion, comprising both debt and equity instruments Financial Assets at FVOCI | Investment Category | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Debt instruments | 162,938 | 141,378 | | Equity instruments | 107,910 | 102,393 | | **Total** | **270,848** | **243,771** | - Equity instruments mainly include listed stocks (RMB 48.563 billion), perpetual bonds (RMB 34.704 billion), perpetual trust and debt plans (RMB 17.266 billion), and preferred stocks (RMB 7.377 billion)[143](index=143&type=chunk) - In H1 2025, the company disposed of FVOCI equity instruments totaling RMB 4.80 billion, with a cumulative gain of RMB 2.067 billion (net of tax) transferred to retained earnings[144](index=144&type=chunk) 14. Financial Assets at Fair Value Through Profit or Loss As of June 30, 2025, financial assets at FVTPL totaled RMB 127.906 billion, mainly consisting of financial bonds, mutual funds, and listed stocks Financial Assets at FVTPL | Investment Category | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Financial bonds | 41,943 | 46,883 | | Mutual funds | 32,612 | 33,790 | | Listed stocks | 16,753 | 9,551 | | Equity investment funds and plans | 15,396 | 14,687 | | **Total** | **127,906** | **120,066** | 15. Insurance Contracts As of June 30, 2025, the company's net insurance contract liabilities stood at RMB 416.368 billion Insurance and Reinsurance Contracts | Indicator | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Net insurance contract liabilities | 416,368 | 400,124 | | Liability for remaining coverage | 174,246 | 175,594 | | Liability for incurred claims | 242,122 | 224,530 | | Net assets of reinsurance contracts held | 34,097 | 40,447 | 16. Term Deposits As of June 30, 2025, term deposits totaled RMB 66.998 billion, with deposits over 3 years forming the largest portion Term Deposits | Maturity | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Over 3 months to 1 year (inclusive) | 535 | 485 | | 1 to 2 years (inclusive) | 200 | 200 | | 2 to 3 years (inclusive) | 23,429 | 13,585 | | Over 3 years | 41,790 | 61,261 | | **Total** | **66,998** | **77,156** | 17. Investments in Associates and Joint Ventures As of June 30, 2025, the net amount of investments in associates and joint ventures was RMB 68.906 billion, with no impairment recognized for the investment in Huaxia Bank Investments in Associates and Joint Ventures | Indicator | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Net investment in associates | 68,871 | 67,095 | | Net investment in joint ventures | 42 | 41 | | **Total** | **68,906** | **67,129** | - The investment in Huaxia Bank had a carrying amount of **RMB 49.52 billion** and a market value of RMB 20.275 billion; despite the market value being lower, no impairment was recognized after testing[148](index=148&type=chunk) 18. Investment Properties As of June 30, 2025, the carrying amount of investment properties was RMB 7.929 billion, with fair value determined by independent external valuers Investment Properties | Indicator | H1 2025 (RMB in millions) | H1 2024 (RMB in millions) | | :--- | :--- | :--- | | Balance at beginning of period | 7,234 | 7,576 | | Transfers from property and equipment and right-of-use assets | 777 | 120 | | Fair value revaluation gains | 69 | 17 | | Decrease in fair value | (151) | (86) | | **Balance at end of period** | **7,929** | **7,627** | - The fair value of investment properties is determined by independent external valuers using the income approach or market comparison approach and is classified as Level 3[150](index=150&type=chunk)[151](index=151&type=chunk) 19. Property and Equipment In H1 2025, the company added new property and equipment assets and transferred certain assets to investment properties Property and Equipment | Indicator | H1 2025 (RMB in billions) | | :--- | :--- | | Cost of new assets | 3.91 | | Cost of new construction in progress | 0.54 | | Carrying amount of disposed assets | 1.31 | | Net gain on disposal | 0.11 | | Carrying amount transferred to investment properties | 7.77 | 20. Right-of-use Assets As of June 30, 2025, right-of-use assets included RMB 3.869 billion in prepaid land lease payments Right-of-use Assets | Indicator | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Prepaid land lease payments | 3,869 | 4,085 | - In H1 2025, the company entered into new lease contracts for properties and vehicles with terms of 1 to 10 years, recognizing right-of-use assets and lease liabilities of RMB 288 million each[154](index=154&type=chunk) 21. Prepayments and Other Assets As of June 30, 2025, net prepayments and other assets totaled RMB 24.056 billion, mainly comprising deductible VAT and capital deposits Prepayments and Other Assets | Asset Category | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Deductible VAT input tax | 4,610 | 4,828 | | Capital deposits | 4,570 | 4,633 | | Co-insurance receivables | 3,738 | 4,138 | | Prepaid output tax borne by policyholders | 2,592 | 1,825 | | Intangible assets | 2,267 | 2,706 | | Deposits paid | 2,070 | 1,246 | | **Net amount** | **24,056** | **27,022** | - Capital deposits, equivalent to 20% of the registered capital, are required by Chinese insurance law to be placed in a bank designated by the National Financial Regulatory Administration[155](index=155&type=chunk) 22. Investment Contract Liabilities As of June 30, 2025, investment contract liabilities totaled RMB 1.728 billion, primarily consisting of policyholder deposits Investment Contract Liabilities | Liability Category | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Policyholder deposits | 1,668 | 1,671 | | Policy dividends payable | 60 | 60 | | **Total** | **1,728** | **1,731** | 23. Bonds Payable As of June 30, 2025, the carrying amount of bonds payable was RMB 12.188 billion, all of which are capital supplementary bonds with maturities over 5 years Bonds Payable | Indicator | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Carrying amount repayable in more than 5 years | 12,188 | 20,433 | - On March 24, 2025, the company exercised its early redemption option and fully redeemed the **RMB 8 billion** capital supplementary bonds issued in 2020[158](index=158&type=chunk) 24. Accrued Expenses and Other Liabilities As of June 30, 2025, accrued expenses and other liabilities totaled RMB 57.902 billion, mainly comprising employee benefits and dividends payable Accrued Expenses and Other Liabilities | Liability Category | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Salaries and employee benefits payable | 22,799 | 23,051 | | Dividends payable | 7,385 | - | | Other taxes payable | 7,325 | 7,857 | | Premiums received in advance | 4,408 | 6,696 | | Co-insurance payables | 4,005 | 3,257 | | **Total** | **57,902** | **52,619** | 25. Issued Share Capital As of June 30, 2025, the company's total issued and fully paid share capital was RMB 22.242 billion Issued Share Capital | Share Capital Category | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Domestic shares | 15,343 | 15,343 | | H shares | 6,899 | 6,899 | | **Total** | **22,242** | **22,242** | 26. Risk Management The company faces insurance and various financial risks, with no significant changes in its risk management processes and policies compared to year-end 2024 - The company is exposed to insurance risk and various financial risks, with the main financial risks being credit risk, liquidity risk, and market risk[161](index=161&type=chunk) - The company's risk management processes and policies have not changed significantly compared to December 31, 2024[162](index=162&type=chunk) 27. Classification and Fair Value of Financial Instruments This section provides fair value information for the company's main financial assets and liabilities, categorized into three levels based on input observability - The company's financial assets mainly include cash and cash equivalents, financial investments at amortized cost, financial assets at fair value, and term deposits[163](index=163&type=chunk) - The company's financial liabilities mainly include securities sold under repurchase agreements, investment contract liabilities, and bonds payable[165](index=165&type=chunk) - Fair value measurement inputs are categorized into Level 1 (unadjusted quoted prices in active markets), Level 2 (other directly or indirectly observable inputs), and Level 3 (unobservable inputs)[166](index=166&type=chunk) Financial Instruments Measured at Fair Value | Item | Fair Value at June 30, 2025 (RMB in millions) | Fair Value Hierarchy | | :--- | :--- | :--- | | Financial assets at FVTPL | 127,906 | Level 1, 2, 3 | | Debt instruments at FVOCI | 162,938 | Level 1, 2 | | Equity instruments at FVOCI | 107,910 | Level 1, 2, 3 | | **Total** | **398,754** | - | 28. Contingent Events and Commitments The company faces routine legal proceedings and has capital and investment commitments totaling RMB 8.239 billion as of June 30, 2025 - The company is involved in legal proceedings and arbitrations in its ordinary course of business, but management believes the resulting liabilities will not have a material adverse effect on its financial condition or operating results[180](index=180&type=chunk) Commitments | Commitment Category | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Property and equipment: Contracted but not provided for | 1,178 | 835 | | Investment projects: Contracted but not provided for | 6,991 | 7,572 | | **Total** | **8,239** | **8,484** | 29. Related Party Transactions This section discloses significant transactions and balances with PICC Group, fellow subsidiaries, associates, and joint ventures - The company has various significant transactions with PICC Group, fellow subsidiaries, associates, and joint ventures, including dividend distributions, service fees, financial product subscriptions, and ceded premiums[182](index=182&type=chunk)[183](index=183&type=chunk) - The company believes that transactions with state-owned enterprises are conducted in the ordinary course of business and that pricing policies are not affected by their state-owned status[186](index=186&type=chunk) Balances with Related Parties | Related Party Balance Category | June 30, 2025 (RMB in millions) | December 31, 2024 (RMB in millions) | | :--- | :--- | :--- | | Cash and cash equivalents: Associates of PICC Group | 3,015 | 2,399 | | Term deposits: Associates of PICC Group | 4,201 | 6,280 | | Amounts due from reinsurers: Associates | 1,021 | 1,056 | | Amounts due to reinsurers: Associates | 2,484 | 2,700 | 30. Post-Balance Sheet Date Events The Board of Directors approved a 2025 interim profit distribution plan to pay a cash dividend of RMB 0.24 per share, subject to shareholder approval - The Board of Directors proposes to distribute a cash dividend of **RMB 0.24 per share (inclusive of tax)** to all shareholders based on the total share capital of 22,242,765,303 shares as of June 30, 2025, totaling **RMB 5.338 billion**[189](index=189&type=chunk) - This profit distribution plan is subject to approval at the general meeting[189](index=189&type=chunk) [Definitions](index=74&type=section&id=%E9%87%8B%E7%BE%A9) [Definitions](index=74&type=section&id=%E9%87%8B%E7%BE%A9) This section provides definitions for key terms used throughout the interim report to ensure clear understanding - This section lists and defines key terms used in the interim report, such as "Board of Directors," "CBIRC," "the Company," and "Listing Rules"[190](index=190&type=chunk) [Corporate Information](index=75&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Corporate Information](index=75&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides basic information about the company, including its registered name, address, stock code, and key personnel - The company's registered name is "中国人民财产保险股份有限公司" and its English abbreviation is "PICC P&C"[193](index=193&type=chunk) - The company's stock code is 2328, and its H-shares are listed on The Stock Exchange of Hong Kong Limited[193](index=193&type=chunk) - The company's legal representative is Yu Ze, and its auditors are Ernst & Young (international) and Ernst & Young Hua Ming LLP (domestic)[193](index=193&type=chunk)

[Important Notice](index=3&type=section&id=%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA) The company upgraded its strategy to 'Cloud-Digital Transformation and Intelligent Empowerment,' embracing AI, and resolved to distribute an interim dividend, while also highlighting significant operational risks - The company's strategy upgraded to 'Cloud-Digital Transformation and Intelligent Empowerment,' fully embracing artificial intelligence and continuously promoting high-quality development[4](index=4&type=chunk) 2025 First Half Interim Dividend Distribution Plan | Indicator | Value | | :--- | :--- | | Profit Attributable to Shareholders | RMB 23.02 billion | | Dividend Payout Ratio | 72% | | Total Dividend | RMB 16.58 billion | | Dividend Per Share (Tax Inclusive) | RMB 0.1812 | | Dividend Per Share (HKD, Tax Inclusive) | HKD 0.199264 | | Total Share Capital | 91,507,138,699 shares | - The report highlights risks related to adapting to economic and policy environments, technological innovation, network and data security, emerging businesses in strategic and future industries, and international operations[8](index=8&type=chunk) [Section 1: Definitions](index=4&type=section&id=%E7%AC%AC%E4%B8%80%E7%AF%80%20%E9%87%8B%E7%BE%A9) This section defines common terms used in the report, including 4G, 5G, AIDC, ARPU, AI, A-shares, Board of Directors, China Telecom, Cloud, Computing Power, EFLOPS, FTTR, H-shares, IDC, MaaS, PON, PQC, QKD, Quantum Secure Call and Message, Guodun Quantum, RDO, Reporting Period, and HKEX - The report defines several key technical and business terms, such as AIDC (Intelligent Computing Data Center), ARPU (Average Revenue Per User), EFLOPS (Exa Floating-point Operations Per Second), MaaS (Model as a Service), PQC (Post-Quantum Cryptography), and QKD (Quantum Key Distribution)[10](index=10&type=chunk)[11](index=11&type=chunk) [Section 2: Company Profile](index=6&type=section&id=%E7%AC%AC%E4%BA%8C%E7%AF%80%20%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B) This section provides basic information about China Telecom Corporation Limited, including its Chinese and English names, legal representative, contact details, registered and office addresses, website, and listing information for A-shares and H-shares Company Basic Information | Indicator | Content | | :--- | :--- | | Chinese Name | 中國電信股份有限公司 | | Legal Representative | Ke Ruiwen | | Registered and Office Address | No. 31 Jinrong Street, Xicheng District, Beijing | | Company Website | www.chinatelecom-h.com | Stock Overview | Stock Type | Listing Exchange | Stock Abbreviation | Stock Code | | :--- | :--- | :--- | :--- | | A-shares | Shanghai Stock Exchange | China Telecom | 601728 | | H-shares | The Stock Exchange of Hong Kong Limited | China Telecom | 00728 | [Section 3: Management Discussion and Analysis](index=7&type=section&id=%E7%AC%AC%E4%B8%89%E7%AF%80%20%E7%AE%A1%E7%90%86%E5%B1%A4%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) This section details the company's operational status, industry trends, strategic transformation, core competitiveness, financial performance, and potential risks during the reporting period, highlighting its embrace of AI and strategic upgrades [I. Overview of the Company's Industry and Main Business During the Reporting Period](index=7&type=section&id=%E4%B8%80%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E5%85%AC%E5%8F%B8%E6%89%80%E5%B1%AC%E8%A1%8C%E4%B8%9A%E5%8F%8A%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E6%83%85%E5%86%B5%E8%AF%B4%E6%98%8E) In the first half of 2025, the telecommunications industry experienced stable growth, with new infrastructure construction progressing and user scale expanding, while China Telecom achieved steady revenue growth by focusing on customer-centric innovation in basic and industrial digitalization businesses - In the first half of 2025, the telecommunications industry's cumulative telecom business revenue reached **RMB 905.5 billion**, a year-on-year increase of **1%**[16](index=16&type=chunk) 2025 First Half Telecommunications Industry Infrastructure and User Scale | Indicator | Value | | :--- | :--- | | Total 5G Base Stations | 4.549 million units | | Internet Broadband Access Ports | 1.234 billion units | | Total Optical Cable Line Length | 73.77 million kilometers | | Total Mobile Phone Subscribers | 1.81 billion subscribers | | 5G Subscribers | 1.118 billion subscribers | | Fixed Broadband Access Subscribers | 684 million subscribers | - The company's strategy focuses on basic business innovations such as **"5G-A upgrade," "FTTR upgrade," "direct-to-satellite services," and "quantum secure calls and messages,"** while accelerating the development of AI phones, AI mid-screens, and AI cameras[17](index=17&type=chunk) 2025 First Half Key Operating Data | Indicator | Value (RMB) | Year-on-Year Growth | | :--- | :--- | :--- | | Operating Revenue | 271.5 billion | 1.3% | | Service Revenue | 249.1 billion | 1.2% | | Mobile Communication Service Revenue | 106.6 billion | 1.3% | | Fixed-line and Smart Family Service Revenue | 64.1 billion | 0.2% | | Industrial Digitalization Business Revenue | 74.9 billion | - | | Mobile User ARPU | 46.0 | - | | Broadband Integrated ARPU | 48.3 | - | [II. Chairman's Report](index=8&type=section&id=%E4%BA%8C%E3%80%81%E8%91%A3%E4%BA%8B%E9%95%B7%E6%8A%A5%E5%91%8A%E6%9B%B8) The Chairman's report emphasizes AI as a core driver of the new technological revolution, detailing the company's strategic upgrade to 'Cloud-Digital Transformation and Intelligent Empowerment' and its progress in overall performance, intelligent cloud, technological innovation, digital infrastructure, green security, reform, and social responsibility [1. Overall Performance](index=9&type=section&id=1.%20%E7%B8%BD%E9%AB%94%E6%A5%AD%E7%B8%BE) In the first half of 2025, the company achieved steady growth in operating and service revenue, with good increases in EBITDA and net profit, while strategic emerging businesses, especially cloud, intelligence, security, and quantum, developed rapidly, and interim dividends grew by **8.4%** 2025 First Half Key Financial Indicators | Indicator | Value (RMB) | Year-on-Year Growth | | :--- | :--- | :--- | | Operating Revenue | 271.5 billion | 1.3% | | Service Revenue | 249.1 billion | 1.2% | | EBITDA | 80.6 billion | 4.9% | | Net Profit | 23.0 billion | 5.5% | | Basic Earnings Per Share | 0.25 | - | | Capital Expenditure | 34.2 billion | - | | Free Cash Flow | 13.1 billion | 13.9% | 2025 First Half Key Business Revenue and User Data | Business Type | Revenue (RMB) | Year-on-Year Growth | | :--- | :--- | :--- | | Mobile Communication Service Revenue | 106.6 billion | 1.3% | | Fixed-line and Smart Family Service Revenue | 64.1 billion | 0.2% | | Industrial Digitalization Revenue | 74.9 billion | - | | AIDC Revenue | - | 7.4% | | Tianyi Cloud Revenue | 57.3 billion | - | | Intelligent Revenue | 6.3 billion | 89.4% | | Security Revenue | 9.1 billion | 18.2% | | Video Network Revenue | - | 46.2% | | Satellite Revenue | - | 20.5% | | Quantum Revenue | - | 171.1% | | Mobile Subscribers | 433 million subscribers | - | | Broadband Subscribers | 199 million subscribers | - | | Mobile User ARPU | 46.0 | - | | Broadband Integrated ARPU | 48.3 | - | - The Board decided to continue distributing an interim dividend in 2025, with a cash payout representing **72%** of the profit attributable to shareholders for the first half, amounting to **RMB 0.1812 per share** (tax inclusive), a year-on-year increase of **8.4%**[24](index=24&type=chunk) [2. Seizing Opportunities for Strategic Initiative and Solid Progress in High-Quality Development](index=9&type=section&id=2.%20%E6%90%B6%E6%8A%93%E6%A9%9F%E9%81%87%E8%B4%8F%E5%BE%97%E6%88%B0%E7%95%A5%E4%B8%BB%E5%8B%95%EF%BC%8C%E6%8E%A8%E5%8B%95%E4%BC%81%E6%A5%AD%E9%AB%98%E8%B3%AA%E9%87%8F%E7%99%BC%E5%B1%95%E9%82%81%E5%87%BA%E5%A0%85%E5%AF%A6%E6%AD%A5%E4%BC%90) The company fully embraced AI, upgrading its strategy to 'Cloud-Digital Transformation and Intelligent Empowerment,' achieving significant progress in intelligent cloud, technological innovation, digital infrastructure, green security, and reform, with breakthroughs in AI applications, quantum technology, computing power, green energy, and security [2.1 Building an Intelligent Cloud System and Deeply Advancing the "AI+" Initiative](index=9&type=section&id=2.1%20%E6%A7%8B%E5%BB%BA%E5%AE%8C%E6%88%90%E6%99%BA%E8%83%BD%E9%9B%B2%E9%AB%94%E7%B3%BB%EF%BC%8C%E6%B7%B1%E5%85%A5%E6%8E%A8%E9%80%B2%E3%80%8C%E4%BA%BA%E5%B7%A5%E6%99%BA%E8%83%BD%2B%E3%80%8D%E8%A1%8C%E5%8B%95) The company built an integrated intelligent cloud service system with "Xirang" at its core, advancing AI capabilities across IaaS, PaaS, DaaS, MaaS, and SaaS layers, with AI applications empowering government, enterprise, and individual customers, and quantum communication users exceeding **6 million** - The company built an integrated intelligent cloud system with "Xirang" as its core, providing "computing power + platform + data + model + application" intelligent cloud services[25](index=25&type=chunk) - Total self-owned and accessed computing power reached **77 EFLOPS**, offering heterogeneous computing services covering general, intelligent, super, and quantum computing[25](index=25&type=chunk) - Developed the full-modal, full-size, fully domestically produced Xingchen large model, integrating over **10 trillion tokens** of general large model corpus data and **14 industry datasets**, totaling over **350 TB**[25](index=25&type=chunk) - For government and enterprise customers, over **80 industry large models** and **30 intelligent agents** were developed, serving over **20,000 industry customers**, and establishing a state-owned enterprise "AI+" action demonstration base[26](index=26&type=chunk) - In customer operations, AI-driven precision marketing served approximately **60,000 frontline employees**, with monthly call volumes exceeding **20 million times**, and intelligent customer service accounting for **87.5%**[27](index=27&type=chunk) - Quantum communication user scale exceeded **6 million**, serving over **3,000 industry customers** in government, finance, and energy sectors[28](index=28&type=chunk) [2.2 Dedicated to Innovation and Accelerating the Construction of a Technology-Leading Enterprise](index=12&type=section&id=2.2%20%E7%9F%A2%E5%BF%97%E5%88%9B%E6%96%B0%E5%8F%91%E5%B1%95%EF%BC%8C%E5%8A%A0%E5%BF%AB%E5%BB%BA%E8%AE%BE%E7%A7%91%E6%8A%80%E9%A2%86%E5%86%9B%E4%BC%81%E4%B8%9A) The company continued to advance high-level technological self-reliance, achieving breakthroughs in AI, computing power, network, quantum, and security, with its self-developed Tianyi Cloud server OS passing national security assessments and leading the computing power interconnection market - Self-developed Tianyi Cloud server operating system passed national security and reliability assessments[29](index=29&type=chunk) - Innovatively proposed the Triless architecture, achieving multi-source computing power interconnection, maintaining its leading position in China's computing power interconnection and scheduling market, and remaining a leader in China's intelligent computing cloud service market[29](index=29&type=chunk) - Innovatively built the Intelligent Transmission Network (AI Flow) technology system, tackling three key technologies: generative intelligent transmission, family-based homologous models, and intelligent emergence based on connection and interaction[29](index=29&type=chunk) - Released the world's first distributed cryptographic system integrating QKD and PQC; pioneered cloud-network-device collaborative anti-DDoS technology in the industry, and launched the first domestic open-source large model basic security guardrail[29](index=29&type=chunk) - Research on a generative encoding image new framework based on diffusion models won the sole "Best Paper Award" at ICME 2025[29](index=29&type=chunk) [2.3 Leveraging Cloud-Network Integration Advantages to Accelerate Intelligent Upgrades of Digital Information Infrastructure](index=13&type=section&id=2.3%20%E5%8F%91%E6%8C%A5%E9%9B%B2%E7%B6%B2%E8%9E%8D%E5%90%88%E5%84%AA%E5%8B%A2%EF%BC%8C%E5%8A%A0%E5%BF%AB%E6%95%B8%E5%AD%97%E8%B3%87%E8%A8%8A%E5%9F%BA%E7%A4%8E%E8%A8%AD%E6%96%BD%E6%99%BA%E8%83%BD%E5%8C%96%E5%8D%87%E7%B4%9A) The company leverages its cloud-network integration advantages to accelerate the intelligent upgrade of digital information infrastructure, deploying computing power infrastructure ahead of demand, with self-owned intelligent computing power reaching **43 EFLOPS**, and expanding its gigabit optical network and 5G base stations - Self-owned intelligent computing power reached **43 EFLOPS**, and extensively integrated partner computing power[32](index=32&type=chunk) - Built a new generation AIDC with a central + edge tiered layout and triple elastic upgrades in space, cooling, and power supply, with data center racks exceeding **580,000 units**[32](index=32&type=chunk) - Activated the nation's first 400G quantum-secure OTN encrypted computing private line, promoting the renewal and upgrade of backbone optical cables and trial commercial use of hollow-core optical cables[32](index=32&type=chunk) - Gigabit optical network 10G PON ports exceeded **9.88 million units**, with urban gigabit residential coverage exceeding **96%**[32](index=32&type=chunk) - Total 5G mid- and high-frequency base stations reached **1.49 million units**, low-frequency base stations reached **880,000 units**, and 5G-A carrier aggregation (**100,000 stations**) and Redcap (**600,000 stations**) have been deployed at scale in over **300 cities**[32](index=32&type=chunk) [2.4 Green Empowerment, Security Escort, Promoting Green and Secure Economic and Social Development](index=14&type=section&id=2.4%20%E7%B6%A0%E8%89%B2%E8%B3%A6%E8%83%BD%EF%BC%8C%E5%AE%89%E5%85%A8%E8%AD%B7%E8%88%AA%EF%BC%8C%E5%8A%A9%E6%8E%A8%E7%B6%93%E6%BF%9F%E7%A4%BE%E6%9C%83%E7%B6%A0%E8%89%B2%E5%AE%89%E5%85%A8%E7%99%BC%E5%B1%95) The company actively practices green development, achieving double-digit reductions in carbon emissions per unit of telecom business, and enhances security through AI integration, developing the "Xingchen • Jianwei" security large model and strengthening anti-DDoS capabilities - Carbon emissions per unit of telecom business decreased by a **double-digit percentage**, ranking among the top central enterprises in "Central Enterprise Green Development Evaluation"[33](index=33&type=chunk) - AI energy saving covered over **5.96 million base station sectors** and **3,400 equipment rooms**, saving approximately **1.1 billion kWh** annually[33](index=33&type=chunk) - Green electricity application exceeded **1.4 billion kWh**, innovatively promoting coordinated development of computing power and electricity[33](index=33&type=chunk) - Built the security corpus "Qianmo Shuju" and continuously iterated the "Xingchen • Jianwei" security large model using general AI technology[34](index=34&type=chunk) - Cloud-based anti-DDoS scrubbing capability exceeded **18 Tbps**, maintaining leading protection capabilities and market share, with over **7,000 customers** for Cloud-based security managed services[34](index=34&type=chunk) - Constructed a large model basic security guardrail, strengthened AI security governance, and utilized QKD technology to ensure secure transmission of AI training data and cross-cluster data[34](index=34&type=chunk) [2.5 Further Comprehensive Deepening of Reform and Opening-Up, Improving Governance System and Capabilities](index=15&type=section&id=2.5%20%E9%80%B2%E4%B8%80%E6%AD%A5%E5%85%A8%E9%9D%A2%E6%B7%B1%E5%8C%96%E6%94%B9%E9%9D%A9%E9%96%8B%E6%94%BE%EF%BC%8C%E5%AE%8C%E5%96%84%E6%B2%BB%E7%90%86%E9%AB%94%E7%B3%BB%E6%8F%90%E5%8D%87%E6%B2%BB%E7%90%86%E8%83%BD%E5%8A%9B) The company comprehensively advanced state-owned enterprise reform, fostering high-quality development by strengthening talent cultivation, optimizing R&D organization, and enhancing open cooperation in technology, digital infrastructure, capital, and international business, including acquiring control of Guodun Quantum and expanding satellite services to Southeast Asia - Solidly advanced the "Mount Everest," "Kunlun," and "Five Sacred Mountains" plans, selecting **24 new chief experts** to improve the echelon of scientific and technological talent[35](index=35&type=chunk) - Established Artificial Intelligence Technology (Shanghai) Co., Ltd.; Cloud Company and Digital Intelligence Company consecutively recognized as benchmark enterprises in SASAC's "Science and Technology Reform Action" for three years[35](index=35&type=chunk) - Strengthened open cooperation in technology, collaborating with Shanghai AI Lab to deeply participate in the application of DeepLink ultra-large-scale cross-domain mixed training technology[36](index=36&type=chunk) - Strengthened open cooperation in capital, acquiring control of Guodun Quantum, comprehensively deploying in the three major fields of the quantum information industry[36](index=36&type=chunk) - Mobile direct-to-satellite services officially launched commercially in Laos, expanding services to Southeast Asian countries; released the Tianyi Video Network International Platform[37](index=37&type=chunk) [3. Actively Fulfilling Social Responsibilities and Gaining Widespread Recognition in the Capital Market](index=16&type=section&id=3.%20%E7%A9%8D%E6%A5%B5%E8%B9%A7%E8%A1%8C%E7%A4%BE%E6%9C%83%E8%B2%AC%E4%BB%BB%EF%BC%8C%E7%8D%B2%E5%BE%97%E8%B3%87%E6%9C%AC%E5%B8%82%E5%A0%B4%E5%BB%A3%E6%B3%9B%E8%AA%8D%E5%8F%AF) The company successfully completed major communication support tasks, actively promoted rural revitalization, provided inclusive services to over **8.6 million people**, and developed the "Yi'an Anti-Fraud" platform, while its high-level corporate governance and investor relations earned widespread recognition - Successfully completed communication support for major events such as the Harbin Asian Winter Games, Boao Forum for Asia, and the launch of Shenzhou-20 manned spacecraft[38](index=38&type=chunk) - "Aixin Yizhan" inclusive services were integrated into **80,000 urban and rural business halls**, organizing over **80,000 care activities** and serving over **8.6 million person-times**[38](index=38&type=chunk) - Won "Asia's Best Corporate Social Responsibility" award from Corporate Governance Asia for the **sixth consecutive year**; awarded "Investor Relations Management Shareholder Return Award" by Securities Times[39](index=39&type=chunk) - Achieved an **A-level** overall ESG rating from China Securities Index in 2025[39](index=39&type=chunk) [4. Seizing Momentum, Guiding Direction, and Promoting Enterprise Strategic Upgrades](index=17&type=section&id=4.%20%E4%B9%98%E5%8B%A2%E8%80%8C%E4%B8%8A%EF%BC%8C%E6%8A%8A%E6%8F%A1%E6%96%B9%E5%90%91%EF%BC%8C%E6%8E%A8%E5%8B%95%E4%BC%81%E6%A5%AD%E6%88%B0%E7%95%A5%E5%8D%87%E7%B4%9A) The company successfully implemented its 'Cloud-Digital Transformation' strategy, achieving steady performance growth and significant technological innovation, forming an "1+1+1+M+N" AI development layout, and is now upgrading its strategy to 'Cloud-Digital Transformation and Intelligent Empowerment' to build a world-class enterprise - The company comprehensively implemented the "Cloud-Digital Transformation" strategy, achieving steady growth in operating performance, with service revenue growth consistently higher than the industry average for many years[40](index=40&type=chunk) - Formed an "1+1+1+M+N" artificial intelligence development layout, with Tianyi Cloud fully taking shape as the national cloud framework[40](index=40&type=chunk) - The enterprise strategy upgraded to "Cloud-Digital Transformation and Intelligent Empowerment," strengthening the innovation-led integrated development of basic and industrial digitalization businesses[41](index=41&type=chunk)[43](index=43&type=chunk) - Adhered to a customer-centric approach, driven by reform and opening-up, with technological innovation as the core, cloud-network integration as the foundation, green security as the backdrop, a digital intelligence platform as the hub, and talent as the fundamental element[41](index=41&type=chunk) [III. Analysis of Core Competencies During the Reporting Period](index=19&type=section&id=%E4%B8%89%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E6%A0%B8%E5%BF%83%E7%AB%B6%E4%BA%89%E5%8A%9B%E5%88%86%E6%9E%90) The company's core competencies lie in the intelligent, secure, and green upgrade of its digital information infrastructure, significantly enhanced technological innovation, application-oriented product and service innovation, and continuously strengthened security governance capabilities, particularly in intelligent computing power, network, cloud, AI models, and quantum security - Accelerated the deployment of intelligent computing power, building a nationwide, hotspot-concentrated, technologically advanced, and fully scheduled intelligent computing capability, constructing super-node clusters in the Guangdong-Hong Kong-Macao Greater Bay Area[45](index=45&type=chunk) - Built China Telecom's primary technology "Xirang," comprehensively advancing AI-oriented technological innovation from underlying infrastructure to upper-layer applications[46](index=46&type=chunk) - In the field of artificial intelligence, innovatively constructed the Intelligent Transmission Network (AI Flow) technology system and continuously upgraded the full-modal, full-size, fully domestically produced Xingchen foundational large model[46](index=46&type=chunk) - Built an integrated intelligent cloud service of "computing power + platform + data + model + application," establishing over **80 industry large models** in sectors such as industry, emergency response, and transportation, serving over **20,000 customers**[47](index=47&type=chunk) - Strengthened AI security governance, building a large model protection system to ensure technical security, reliability, and controllability; Cloud-based anti-DDoS technology and quantum integration into cloud-network infrastructure enhanced security protection capabilities[48](index=48&type=chunk) [IV. Major Operating Performance During the Reporting Period](index=21&type=section&id=%E5%9B%9B%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E4%B8%BB%E8%A6%81%E7%B6%93%E7%87%9F%E6%83%85%E6%B3%81) In the first half of 2025, the company achieved steady growth in operating revenue and optimized service revenue structure, effectively controlled operating expenses, and improved profitability, maintaining robust free cash flow and a stable asset-liability structure 2025 First Half Operating Revenue Composition | Revenue Type | Amount (RMB billion) | Year-on-Year Growth | | :--- | :--- | :--- | | Total Operating Revenue | 271.469 | 1.3% | | Service Revenue | 249.112 | 1.2% | | Mobile Communication Service Revenue | 106.572 | 1.3% | | Fixed-line and Smart Family Service Revenue | 64.133 | 0.2% | | Industrial Digitalization Service Revenue | 74.853 | 1.5% | 2025 First Half Operating Expense Composition | Expense Type | Amount (RMB billion) | Year-on-Year Growth | | :--- | :--- | :--- | | Total Operating Expenses | 242.920 | 0.9% | | % of Operating Revenue | 89.5% | Decreased by 0.3 p.p. | | Depreciation and Amortization | 52.039 | 5.1% | | Network Operations and Support Costs | 78.288 | -2.3% | | Selling, General and Administrative Expenses | 32.783 | -0.9% | | Staff Costs | 50.438 | -0.3% (Increased by 2.8% after excluding fair value changes in share appreciation rights) | | Other Operating Expenses | 29.372 | 7.1% | 2025 First Half Profitability and Cash Flow | Indicator | Amount (RMB billion) | Year-on-Year Growth | | :--- | :--- | :--- | | Net Finance Costs | 0.294 | 17.3% | | Profit Attributable to Shareholders | 23.017 | 5.5% | | EBITDA | 80.588 | 4.9% | | Capital Expenditure | 34.235 | - | | Free Cash Flow | 13.072 | 13.9% | Asset and Liability Situation as of June 30, 2025 | Indicator | June 30, 2025 (RMB billion) | December 31, 2024 (RMB billion) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 887.224 | 866.625 | Increased by 2.4% | | Total Liabilities | 413.215 | 410.073 | Increased by 0.8% | | Asset-Liability Ratio | 46.6% | - | - | [V. Other Disclosures](index=23&type=section&id=%E4%BA%94%E3%80%81%E5%85%B6%E4%BB%96%E6%8A%AB%E9%9C%B2) This section discloses risks related to economic, policy, technological innovation, network and data security, emerging businesses, and international operations, confirms no purchases, sales, or redemptions of listed securities, and details the interim dividend distribution arrangements and tax treatment - The company faces risks related to adapting to economic and policy environments, technological innovation, network and data security, emerging businesses in strategic and future industries, and international operations[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[62](index=62&type=chunk) - The Board decided to continue distributing an interim dividend in 2025, amounting to **RMB 0.1812 per share** (tax inclusive), expected to be paid on or before September 30, 2025[67](index=67&type=chunk) - Dividends will be denominated and declared in RMB, paid in RMB to A-share shareholders and Stock Connect investors, and paid in HKD to H-share shareholders other than Stock Connect investors[68](index=68&type=chunk) - A **10%** enterprise income tax will be withheld for non-resident enterprise H-share shareholders; individual income tax will be withheld for individual H-share shareholders according to tax agreements, with rates ranging from **10% to 20%**[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) [Section 4: Corporate Governance, Environment and Society](index=29&type=section&id=%E7%AC%AC%E5%9B%9B%E7%AF%80%20%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E3%80%81%E7%92%B0%E5%A2%83%E5%92%8C%E7%A4%BE%E6%9C%83) This section reports on changes in directors, supervisors, and senior management, the profit distribution plan, employee incentive schemes, compliance with corporate governance codes, and social responsibility efforts in poverty alleviation and rural revitalization, demonstrating continuous optimization of governance and talent incentives [I. Changes in the Company's Directors, Supervisors, and Senior Management Since the Date of the 2024 Annual Report](index=29&type=section&id=%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E3%80%81%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E4%BA%BA%E5%93%A1%E8%87%AA2024%E5%B9%B4%E5%B9%B4%E5%A0%B1%E6%97%A5%E6%9C%9F%E4%B9%8B%E5%BE%8C%E7%9A%84%E8%AE%8A%E5%8B%95%E6%83%85%E5%86%B5) During the reporting period, Mr. Liu Guiqing was appointed President and Chief Operating Officer, Mr. Huang Zhiyong was appointed Executive Vice President, and Mr. Lü Yongzhong became a Non-Executive Director, with corresponding adjustments to Board committees - Mr. Liu Guiqing was appointed President and Chief Operating Officer, no longer concurrently serving as Executive Vice President[75](index=75&type=chunk) - Mr. Huang Zhiyong was appointed Executive Vice President and concurrently served as General Counsel of China Telecom Group Co., Ltd[75](index=75&type=chunk)[76](index=76&type=chunk) - Mr. Lü Yongzhong was appointed Non-Executive Director, and Mr. Chen Shengguang ceased to hold this position[75](index=75&type=chunk) [II. Profit Distribution or Capital Reserve Conversion Plan](index=30&type=section&id=%E4%BA%8C%E3%80%81%E5%88%A9%E6%BD%A4%E5%88%86%E9%85%8D%E6%88%96%E8%B3%87%E6%9C%AC%E5%85%AC%E7%A9%8D%E9%87%91%E8%BD%89%E5%A2%9E%E9%A0%90%E6%A1%88) The Board resolved to distribute a dividend of **RMB 0.1812 per share** (tax inclusive) to all shareholders, totaling **RMB 16.58 billion**, representing **72%** of the **RMB 23.02 billion** profit attributable to shareholders for the first half of 2025, as authorized by the 2024 Annual General Meeting Semi-Annual Profit Distribution Plan | Indicator | Value | | :--- | :--- | | Distribution or Conversion | Yes | | Dividend Per 10 Shares (RMB, Tax Inclusive) | 1.812 | - The Board decided to distribute a dividend to all shareholders based on **72%** of the profit attributable to shareholders for the first half of 2025, which was **RMB 23.02 billion**, totaling **RMB 16.58 billion**[79](index=79&type=chunk) [III. Company Share Incentive Plan, Employee Stock Ownership Plan, or Other Employee Incentive Measures and Their Impact](index=31&type=section&id=%E4%B8%89%E3%80%81%E5%85%AC%E5%8F%B8%E8%82%A1%E6%AC%8A%E6%BF%80%E5%8B%B5%E8%A8%88%E5%8A%83%E3%80%81%E5%93%A1%E5%B7%A5%E6%8C%81%E8%82%A1%E8%A8%88%E5%8A%83%E6%88%96%E5%85%B6%E4%BB%96%E5%93%A1%E5%B7%A5%E6%BF%80%E5%8B%B5%E6%8E%AA%E6%96%BD%E7%9A%84%E6%83%85%E5%86%B5%E5%8F%8A%E5%85%B6%E5%BD%B1%E9%9F%BF) The company implemented a second phase of share appreciation rights incentive plan in 2021 for core employees, with the Board confirming the achievement of exercise conditions for the first and second vesting periods in October 2024, and benefits distributed based on contribution, potential, and performance - The company implemented the second phase of its share appreciation rights incentive plan in 2021, targeting core employees[80](index=80&type=chunk) - In October 2024, the Board confirmed that the exercise conditions for the first and second vesting periods of the 2021 share appreciation rights had been met[80](index=80&type=chunk) - The distribution principles for share appreciation rights are "based on contribution," "based on potential," and "earned by performance," closely linked to company and individual performance[80](index=80&type=chunk) [IV. Compliance with Corporate Governance Code](index=31&type=section&id=%E5%9B%9B%E3%80%81%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99) The company prioritizes corporate governance, continuously improving internal control systems and information disclosure, and, except for the Chairman and CEO roles being held by the same person to enhance decision-making efficiency, has complied with the Corporate Governance Code - The roles of Chairman and Chief Executive Officer are held by the same person, an arrangement believed to enhance decision-making and execution efficiency[81](index=81&type=chunk) - Except for the aforementioned situation, the company has complied with the code provisions set out in Appendix C1 of the Listing Rules, "Corporate Governance Code," during the reporting period[81](index=81&type=chunk) [V. Specifics of Consolidating and Expanding Poverty Alleviation Achievements and Rural Revitalization Efforts](index=32&type=section&id=%E4%BA%94%E3%80%81%E5%B7%A9%E5%9B%BA%E6%8B%93%E5%B1%95%E8%84%AB%E8%B2%A7%E6%94%BB%E5%A0%85%E6%88%90%E6%9E%9C%E3%80%81%E9%84%89%E6%9D%91%E6%8C%AF%E8%88%88%E7%AD%89%E5%B7%A5%E4%BD%9C%E5%85%B7%E9%AB%94%E6%83%85%E5%86%B5) In the first half of 2025, the company focused on consolidating poverty alleviation achievements and promoting rural revitalization, directly purchasing and assisting in sales of agricultural products worth **RMB 442.77 million**, organizing **61,081 talent training sessions**, and serving over **100 million villagers** through digital rural construction, earning top evaluations for targeted assistance for seven consecutive years - Directly purchased and assisted in sales of agricultural and sideline products totaling **RMB 442.77 million**[82](index=82&type=chunk) - Organized various talent training sessions for **61,081 person-times**[82](index=82&type=chunk) - Promoted digital rural construction, serving over **100 million villagers**[82](index=82&type=chunk) - Received the highest evaluation for targeted assistance from central government units for **seven consecutive years**, consistently ranking among the top ten central enterprises[82](index=82&type=chunk) [Section 5: Significant Matters](index=33&type=section&id=%E7%AC%AC%E4%BA%94%E7%AF%80%20%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A0%85) This section details the company's and its related parties' fulfillment of commitments, including share lock-up, avoiding competition, and regulating related-party transactions, all strictly adhered to, and reports on significant guarantees to subsidiaries, totaling **RMB 71.7349 million**, all non-financing and without overdue status [I. Fulfillment of Commitments](index=33&type=section&id=%E4%B8%80%E3%80%81%E6%89%BF%E8%AB%BE%E4%BA%8B%E9%A0%85%E5%B1%A5%E8%A1%8C%E6%83%85%E5%86%B5) All commitments made by the company's actual controller, shareholders, related parties, and the company itself, including share lock-up, shareholding intentions, competition avoidance, related-party transaction regulation, property title defect resolution, trademark authorization, anti-dilution measures, prospectus truthfulness, and shareholder information disclosure, have been strictly fulfilled - The 57,377,053,317 initial public offering restricted shares held by controlling shareholder China Telecom Group Co., Ltd. became unrestricted and listed for trading on February 20, 2025, after the lock-up period expired[84](index=84&type=chunk)[97](index=97&type=chunk) - All commitments, including share lock-up, avoidance of horizontal competition, and regulation of related-party transactions, have been strictly fulfilled[83](index=83&type=chunk)[85](index=85&type=chunk) [II. Material Contracts and Their Performance](index=35&type=section&id=%E4%BA%8C%E3%80%81%E9%87%8D%E5%A4%A7%E5%90%88%E5%90%8C%E5%8F%8A%E5%85%B6%E5%B1%A5%E8%A1%8C%E6%83%85%E5%86%B5) This section primarily discloses the company's guarantees to its subsidiaries, with a total guarantee amount of **RMB 71.7349 million** at the end of the reporting period, representing **0.0151%** of the company's net assets, all being non-financing guarantees provided by its financial and international subsidiaries to wholly-owned subsidiaries, with no overdue guarantees Company External Guarantees (As of June 30, 2025) | Indicator | Amount (RMB) | | :--- | :--- | | Total Guarantees to Subsidiaries During Reporting Period | 13,960,779.20 | | Total Guarantee Balance to Subsidiaries at End of Reporting Period (B) | 71,734,868.09 | | Total Guarantees (A+B) | 71,734,868.09 | | Total Guarantees as % of Company's Net Assets | 0.0151 | - The company's external guarantees are all non-financing guarantees provided by its subsidiaries, China Telecom Group Finance Co., Ltd. and China Telecom Global Limited, to the company's wholly-owned subsidiaries[88](index=88&type=chunk) - As of the end of the reporting period, the total outstanding external guarantees by the company and its subsidiaries amounted to **RMB 71.7349 million**, all for wholly-owned subsidiaries, with no overdue guarantees[92](index=92&type=chunk) [Section 6: Share Changes and Shareholder Information](index=38&type=section&id=%E7%AC%AC%E5%85%AD%E7%AF%80%20%E8%82%A1%E4%BB%BD%E8%AE%8A%E5%8B%95%E5%8F%8A%E8%82%A1%E6%9D%B1%E6%83%85%E5%86%B5) This section details the company's share capital changes, primarily the expiration of the lock-up period for the controlling shareholder's initial public offering restricted shares on February 20, 2025, resulting in zero restricted shares and an increase in unrestricted tradable shares, and also discloses the total number of shareholders and the top ten shareholders at the end of the reporting period [I. Share Capital Changes](index=38&type=section&id=%E4%B8%80%E3%80%81%E8%82%A1%E6%9C%AC%E8%AE%8A%E5%8B%95%E6%83%85%E5%86%B5) During the reporting period, the 57,377,053,317 initial public offering restricted shares held by controlling shareholder China Telecom Group Co., Ltd. became unrestricted and listed for trading on February 20, 2025, resulting in a change from **62.70%** restricted shares to **0%**, and unrestricted tradable shares from **37.30%** to **100%**, while the total number of shares remained unchanged Table of Share Changes (Units: Shares) | Share Type | Quantity Before Change | % Before Change | Change in Quantity | Quantity After Change | % After Change | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 57,377,053,317 | 62.70 | -57,377,053,317 | 0 | 0.00 | | II. Unrestricted Tradable Shares | 34,130,085,382 | 37.30 | +57,377,053,317 | 91,507,138,699 | 100.00 | | III. Total Shares | 91,507,138,699 | 100.00 | 0 | 91,507,138,699 | 100.00 | - The 57,377,053,317 initial public offering restricted shares held by controlling shareholder China Telecom Group Co., Ltd. became unrestricted and listed for trading on February 20, 2025, after the lock-up period expired[97](index=97&type=chunk) [II. Shareholder Information](index=39&type=section&id=%E4%BA%8C%E3%80%81%E8%82%A1%E6%9D%B1%E6%83%85%E5%86%B5) As of the end of the reporting period, the company had **222,841** common shareholders, with China Telecom Group Co., Ltd. being the largest shareholder, holding **63.90%** of shares, and this section lists the top ten shareholders and top ten unrestricted tradable share shareholders Total Number of Common Shareholders at End of Reporting Period | Indicator | Quantity (Households) | | :--- | :--- | | Total Common Shareholders | 222,841 | Top Ten Shareholders' Shareholding as of End of Reporting Period | Shareholder Name | Shares Held at Period End (Shares) | % | Shareholder Nature | | :--- | :--- | :--- | :--- | | China Telecom Group Co., Ltd. | 58,476,519,174 | 63.90 | State-owned Legal Person | | HKSCC Nominees Limited | 13,848,878,611 | 15.13 | Overseas Legal Person | | Guangdong Guang Sheng Holdings Group Co., Ltd. | 4,794,082,653 | 5.24 | State-owned Legal Person | | Zhejiang Provincial Finance Development Co., Ltd. | 2,137,473,626 | 2.34 | State-owned Legal Person | | China Life Insurance Co., Ltd. - Traditional - Ordinary Insurance Products - 005L - CT001 Shanghai | 1,096,730,505 | 1.20 | Unknown | - State Grid Yingda International Holdings Group Co., Ltd., as a strategic investor, had its newly allotted shares unlocked on August 22, 2022[106](index=106&type=chunk) [Section 7: Interim Financial Information](index=41&type=section&id=%E7%AC%AC%E4%B8%83%E7%AF%80%20%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) This section includes KPMG's review report on the condensed consolidated interim financial information, unaudited condensed consolidated statements of financial position, comprehensive income, changes in equity, and cash flows, along with detailed notes on business, basis of preparation, accounting policies, segment reporting, property, plant and equipment, interests in associates and joint ventures, receivables, cash and cash equivalents, loans, payables, operating revenue, operating expenses, finance costs, income tax, dividends, earnings per share, capital commitments, fair value measurement of financial instruments, related party transactions, post-employment benefit plans, and subsequent events [Review Report on Interim Financial Information](index=42&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E7%9A%84%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) KPMG reviewed China Telecom Corporation Limited's condensed consolidated interim financial information for the six months ended June 30, 2025, concluding that they found no matters leading them to believe the interim financial information was not prepared in all material respects in accordance with International Accounting Standard 34 - KPMG reviewed the interim financial information and found no material matters inconsistent with International Accounting Standard 34[110](index=110&type=chunk) - The scope of review is substantially less than that of an audit, and therefore no audit opinion is expressed[109](index=109&type=chunk) [Condensed Consolidated Statement of Financial Position](index=43&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8%EF%BC%88%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%EF%BC%89) As of June 30, 2025, the company's total assets were **RMB 887.224 billion**, a **2.4%** increase from the end of 2024, with total liabilities at **RMB 413.215 billion** and equity attributable to shareholders at **RMB 466.871 billion** Key Data from Condensed Consolidated Statement of Financial Position (As of June 30, 2025, RMB million) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total Non-current Assets | 662,230 | 678,500 | -2.4% | | Total Current Assets | 224,994 | 188,125 | +19.6% | | **Total Assets** | **887,224** | **866,625** | **+2.4%** | | **Liabilities** | | | | | Total Current Liabilities | 330,152 | 325,377 | +1.5% | | Total Non-current Liabilities | 83,063 | 84,696 | -1.9% | | **Total Liabilities** | **413,215** | **410,073** | **+0.8%** | | **Equity** | | | | | Total Equity Attributable to Shareholders | 466,871 | 452,390 | +3.2% | | Non-controlling Interests | 7,138 | 4,162 | +71.5% | | **Total Equity** | **474,009** | **456,552** | **+3.8%** | - As of June 30, 2025, the Group's total current liabilities exceeded total current assets by approximately **RMB 105.158 billion**, but management believes there are sufficient funds to meet operational needs[126](index=126&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=45&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8%EF%BC%88%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%EF%BC%89) For the six months ended June 30, 2025, the company's operating revenue was **RMB 271.469 billion**, a **1.3%** year-on-year increase, with profit attributable to shareholders reaching **RMB 23.017 billion**, up **5.5%**, and basic earnings per share at **RMB 0.25** Key Data from Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30, 2025, RMB million) | Indicator | 2025 | 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 271,469 | 268,011 | +1.3% | | Total Operating Expenses | (242,920) | (240,751) | +0.9% | | Operating Profit | 28,549 | 27,260 | +4.7% | | Net Finance Costs | (294) | (250) | +17.6% | | Profit Before Tax | 29,595 | 28,239 | +4.8% | | Income Tax | (6,576) | (6,273) | +4.8% | | Profit for the Period | 23,019 | 21,966 | +4.8% | | Profit Attributable to Shareholders | 23,017 | 21,812 | +5.5% | | Basic Earnings Per Share (RMB) | 0.25 | 0.24 | +4.2% | [Condensed Consolidated Statement of Changes in Equity](index=47&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8%EF%BC%88%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%EF%BC%89) For the six months ended June 30, 2025, total equity attributable to shareholders was **RMB 466.871 billion**, with profit for the period at **RMB 23.017 billion**, total comprehensive income at **RMB 23.012 billion**, and dividends distributed totaling **RMB 8.483 billion** Key Data from Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30, 2025, RMB million) | Indicator | Balance as of January 1, 2025 | Profit for the Period | Total Comprehensive Income for the Period | Dividends | Balance as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Equity Attributable to Shareholders | 452,390 | 23,017 | 23,012 | (8,483) | 466,871 | | Non-controlling Interests | 4,162 | 2 | 2 | 0 | 7,138 | | Total Equity | 456,552 | 23,019 | 23,014 | (8,483) | 474,009 | - Acquisition of subsidiaries resulted in an increase in non-controlling interests of **RMB 2.811 billion**[116](index=116&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=48&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8%EF%BC%88%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%EF%BC%89) For the six months ended June 30, 2025, net cash generated from operating activities was **RMB 47.307 billion**, net cash used in investing activities was **RMB 61.149 billion**, and net cash used in financing activities was **RMB 15.386 billion**, resulting in a net decrease in cash and cash equivalents of **RMB 29.228 billion** Key Data from Condensed Consolidated Statement of Cash Flows (For the six months ended June 30, 2025, RMB million) | Cash Flow Type | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 47,307 | 58,700 | | Net Cash Used in Investing Activities | (61,149) | (50,103) | | Net Cash Used in Financing Activities | (15,386) | (14,583) | | Net Decrease in Cash and Cash Equivalents | (29,228) | (5,986) | | Cash and Cash Equivalents as of June 30 | 52,959 | 75,072 | - Net cash used in investing activities significantly increased, primarily due to cash paid for investments rising from **RMB 109 million** in 2024 to **RMB 55.575 billion** in 2025[118](index=118&type=chunk) - In the reconciliation of net cash generated from operating activities to profit before tax, depreciation and amortization amounted to **RMB 52.039 billion**[119](index=119&type=chunk) [Notes to the Unaudited Condensed Consolidated Interim Financial Information](index=51&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) This section provides detailed notes to the condensed consolidated interim financial information, covering business, basis of preparation (including Guodun Quantum consolidation), accounting policies, segment reporting, property, plant and equipment, interests in associates and joint ventures (China Tower), other assets, trade and other receivables, cash and cash equivalents, loans, payables, operating revenue, operating expenses, net finance costs, income tax, dividends, earnings per share, capital commitments, fair value measurement of financial instruments, related party transactions, post-employment benefit plans, and subsequent events - The Group obtained control of Guodun Quantum and consolidated it into its financial statements, recognizing goodwill of **RMB 991 million** related to the acquisition[124](index=124&type=chunk) - For the six months ended June 30, 2025, the Group's additions to property, plant and equipment and construction in progress totaled **RMB 33.615 billion**[130](index=130&type=chunk) - As of June 30, 2025, the fair value of the Group's investment in China Tower was **RMB 36.925 billion**, which was **9.9%** lower than its carrying amount[132](index=132&type=chunk) Net Trade and Other Receivables (RMB million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Third Parties | 79,166 | 49,726 | | China Telecom Group | 5,133 | 2,556 | | China Tower | 50 | 46 | | Other China Telecom Operators | 1,767 | 1,259 | | Total | 86,116 | 53,587 | | Less: Provision for Credit Losses | (15,981) | (10,720) | | Net Amount | 70,135 | 42,867 | Breakdown of Operating Revenue (For the six months ended June 30, 2025, RMB million) | Revenue Type | 2025 | 2024 | | :--- | :--- | :--- | | Service Revenue | 249,112 | 246,235 | | Mobile Communication Service Revenue | 106,572 | 105,217 | | Fixed-line and Smart Family Service Revenue | 64,133 | 63,993 | | Industrial Digitalization Service Revenue | 74,853 | 73,750 | | Other Service Revenue | 3,554 | 3,275 | | Revenue from Sales of Goods and Others | 22,357 | 21,776 | | Total Operating Revenue | 271,469 | 268,011 | - As of June 30, 2025, the Group's capital commitments (contracted but not yet executed) totaled **RMB 19.510 billion**[156](index=156&type=chunk) - Subsequent to the reporting period, the Board resolved on August 14, 2025, to declare an interim dividend of **RMB 0.1812 per share** (tax inclusive) for the six months ended June 30, 2025, totaling approximately **RMB 16.581 billion**[175](index=175&type=chunk)

[Financial Highlights](index=3&type=section&id=Financial%20Highlights) The 2025 interim report for Gemini Investments (Holdings) Limited reveals a year-on-year revenue decrease and expanded losses, primarily due to slower New York residential sales and commercial property revaluations in the US and Hong Kong, with total assets and cash also declining Key Interim Financial Data for 2025 (HKD Thousands) | Metric | Six Months Ended June 30, 2025 (Unaudited) | Six Months Ended June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 411,952 | 596,312 | | Loss Before Income Tax | (64,628) | (37,768) | | Loss for the Period | (116,626) | (53,146) | | Loss Attributable to Company Shareholders | (117,890) | (30,310) | | Loss Per Share — Basic (HKD) | (0.19) | (0.05) | | Loss Per Share — Diluted (HKD) | (0.19) | (0.05) | | **Balance Sheet (Period End):** | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | Total Assets | 9,574,819 | 10,118,632 | | Equity Attributable to Company Shareholders | 4,244,295 | 4,337,387 | | Cash and Cash Equivalents | 253,122 | 374,035 | [Chairman's Report](index=4&type=section&id=Chairman's%20Report) The Chairman's Report attributes expanded losses in H1 2025 to slower New York residential sales and US/HK commercial property revaluations, with the company focusing on US property, optimizing operations, and maintaining prudent capital management, while not recommending an interim dividend - In the first half of 2025, the Group's total revenue was **HKD 412 million** (H1 2024: HKD 596 million), with loss attributable to company shareholders approximately **HKD 118 million** (H1 2024: HKD 30 million)[6](index=6&type=chunk) - The primary reasons for the expanded loss include slower sales progress of New York residential projects, leading to reduced revenue, and downward revaluation of certain properties due to ongoing adjustments in the US and Hong Kong commercial property markets[6](index=6&type=chunk) - The Board of Directors does not recommend the payment of any interim dividend for the 2025 interim period on the company's ordinary shares[7](index=7&type=chunk) - The Group will continue to focus on property investment and development in the United States, managed through its US property fund management platform, Gemini Rosemont Realty LLC[8](index=8&type=chunk) - Facing a complex environment, the Group will adhere to a prudent capital management strategy, strengthen cash flow control, and flexibly respond to market changes[8](index=8&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This section details the Group's H1 2025 business and financial performance, focusing on US and Hong Kong commercial/residential real estate, analyzing revenue, expenses, fair value changes, liquidity, and updating on placement proceeds and staff - The Group continued to focus on commercial and residential real estate-related businesses in the US and Hong Kong during the 2025 interim period[12](index=12&type=chunk) [Business Review](index=5&type=section&id=Business%20Review) The Group's business includes US and Hong Kong property investment, US property development, and other operations, with US investment properties comprising **72%** of total assets, Hong Kong **3%**, and US properties held for sale **6%**, all managed by Gemini-Rosemont Realty LLC - The Group primarily engages in property investment in the United States and Hong Kong, as well as property development and other businesses in the United States[13](index=13&type=chunk) - As of June 30, 2025, investment properties in the US and Hong Kong accounted for **72%** and **3%** of our total assets, respectively, while properties held for sale in the US accounted for **6%**[13](index=13&type=chunk) - All our properties in the United States are managed by the US property fund management platform, Gemini-Rosemont Realty LLC ('GR Realty')[13](index=13&type=chunk) [Property Investment in the US](index=5&type=section&id=Property%20Investment%20in%20the%20US) As of June 30, 2025, the US investment property portfolio, valued at **HKD 6.886 billion**, includes eight commercial properties and several units in four New York City residential buildings, with an average occupancy rate of **74%** - The US investment property portfolio comprises eight commercial properties and several units within four residential buildings in New York City[14](index=14&type=chunk) - As of June 30, 2025, the carrying value of our investment properties in the US totaled **HKD 6,886 million** (December 31, 2024: HKD 6,914 million)[14](index=14&type=chunk) - During the 2025 interim period, our investment properties in the US generated total revenue of **HKD 348 million** (H1 2024: HKD 377 million), with an average occupancy rate of **74%**[14](index=14&type=chunk) [Property Development in the US](index=5&type=section&id=Property%20Development%20in%20the%20US) The Group's US property development projects include three residential redevelopment projects in Manhattan and Brooklyn, New York, with a total carrying value of **HKD 547 million**, and property sales revenue significantly decreased to **HKD 54 million** this period - The Group's property development projects include three residential redevelopment projects located in Manhattan and Brooklyn, New York[15](index=15&type=chunk) - The total carrying value was **HKD 547 million** (December 31, 2024: HKD 767 million)[15](index=15&type=chunk) - During the 2025 interim period, property sales revenue of **HKD 54 million** was recorded (H1 2024: HKD 215 million)[15](index=15&type=chunk) [Investment Properties in Hong Kong](index=5&type=section&id=Investment%20Properties%20in%20Hong%20Kong) Hong Kong investment properties, primarily Grade A office units in two buildings on Hong Kong Island, have a carrying value of **HKD 293 million**, representing **3%** of total assets, with stable rental income of **HKD 4 million** and a **100%** average occupancy rate - Investment properties in Hong Kong primarily consist of Grade A office units within two buildings on Hong Kong Island[16](index=16&type=chunk) - The total carrying value was **HKD 293 million** (December 31, 2024: HKD 321 million), accounting for **3%** of our total assets as of June 30, 2025[16](index=16&type=chunk) - During the 2025 interim period, rental income from investment properties in Hong Kong was **HKD 4 million** (H1 2024: HKD 4 million), with an average occupancy rate of **100%**[16](index=16&type=chunk) [Other Businesses](index=6&type=section&id=Other%20Businesses) Other businesses include fund and securities investments; the securities investment portfolio increased to **HKD 138 million** but yielded lower returns, while the fund investment portfolio slightly decreased, recognizing a fair value loss - Other businesses primarily include fund investments and securities investments[17](index=17&type=chunk) - As of June 30, 2025, our securities investment portfolio was **HKD 138 million** (December 31, 2024: HKD 122 million), recording a securities investment gain of **HKD 10 million** (H1 2024: gain of HKD 15 million)[17](index=17&type=chunk) - The fund investment portfolio had a carrying value of **HKD 453 million** (December 31, 2024: HKD 458 million), recognizing a fair value loss of **HKD 8 million** (H1 2024: loss of HKD 12 million)[17](index=17&type=chunk) [Financial Review](index=6&type=section&id=Financial%20Review) The Group's total revenue decreased **31%** year-on-year, mainly due to reduced New York property sales, which also lowered operating expenses; investment property fair value losses slightly narrowed but were still affected by market slowdowns [Revenue](index=6&type=section&id=Revenue) The Group's total revenue decreased **31%** year-on-year to **HKD 412 million**, primarily due to a significant reduction in property sales from New York City development projects Revenue Component Analysis (HKD Millions) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Rental Income | 269 | 288 | | Ancillary Services and Management Service Income from Property Leasing | 83 | 93 | | Property Sales | 54 | 215 | | Other | 6 | – | | **Total Revenue** | **412** | **596** | - The decrease in revenue was primarily attributable to reduced property sales from development projects located in New York City[18](index=18&type=chunk) [Operating Expenses](index=7&type=section&id=Operating%20Expenses) The Group's operating expenses decreased **35.8%** year-on-year to **HKD 190 million**, mainly due to lower inventory costs resulting from reduced property sales in New York City development projects Operating Expense Component Analysis (HKD Millions) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Repairs, Maintenance and Utilities | 65 | 75 | | Property Insurance and Management Expenses | 23 | 25 | | Property Tax | 54 | 45 | | Cost of Inventories | 41 | 136 | | Other | 7 | 15 | | **Total Operating Expenses** | **190** | **296** | - The decrease in operating expenses was primarily due to reduced property sales from development projects in New York City, leading to lower inventory costs[21](index=21&type=chunk) [Loss from Fair Value Change of Investment Properties](index=7&type=section&id=Loss%20from%20Fair%20Value%20Change%20of%20Investment%20Properties) Loss from fair value change of investment properties was **HKD 162 million**, a slight narrowing year-on-year, but the overall fair value decreased **2%** due to a slowdown in the US and Hong Kong commercial property markets - During the 2025 interim period, a total loss from fair value change of investment properties of **HKD 162 million** was recorded (H1 2024: loss of HKD 167 million)[22](index=22&type=chunk) - The overall fair value of our investment properties decreased by **2%** due to multiple factors leading to a slowdown in the US and Hong Kong commercial property markets[22](index=22&type=chunk) - Properties located in the US recorded a value decrease of **2%** (approximately HKD 134 million), while our properties in Hong Kong recorded a value decrease of **9%** (approximately HKD 28 million)[22](index=22&type=chunk) [Other Income, Gains/Losses](index=7&type=section&id=Other%20Income%2C%20Gains%2FLosses) Other income, gains/losses primarily comprised interest income, which amounted to **HKD 3 million** this period, a year-on-year decrease - During the 2025 interim period, other income, gains/losses primarily included interest income of **HKD 3 million** (H1 2024: HKD 6 million)[23](index=23&type=chunk) [Administrative and Other Expenses](index=8&type=section&id=Administrative%20and%20Other%20Expenses) Administrative and other expenses decreased **17.35%** year-on-year to **HKD 79 million**, mainly influenced by changes in exchange differences Administrative and Other Expenses Component Analysis (HKD Millions) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Staff Costs | 45 | 43 | | Legal and Professional Fees | 18 | 24 | | Depreciation | 6 | 7 | | Insurance Expenses | 4 | 3 | | Information Service Fees | 4 | 4 | | Auditor's Remuneration | 3 | 3 | | Net Exchange Differences | (14) | 1 | | Other | 13 | 11 | | **Total** | **79** | **96** | - Excluding a **HKD 15 million** change in exchange differences, there were no significant fluctuations in administrative and other expenses[24](index=24&type=chunk) [Finance Costs](index=8&type=section&id=Finance%20Costs) Finance costs decreased **24%** year-on-year to **HKD 126 million**, primarily due to the repayment of certain borrowings in 2024 and 2025 - The Group's finance costs for loans decreased by **HKD 40 million** to **HKD 126 million** (H1 2024: HKD 166 million)[25](index=25&type=chunk) - The decrease was due to the repayment of certain borrowings in 2024 and 2025[25](index=25&type=chunk) [Loss Attributable to Limited Partners](index=8&type=section&id=Loss%20Attributable%20to%20Limited%20Partners) Loss attributable to limited partners was **HKD 77 million**, primarily stemming from the decrease in fair value of US investment properties - During the 2025 interim period, a loss of **HKD 77 million** (H1 2024: HKD 85 million) arising from the decrease in fair value of investment properties, primarily located in the US, was attributable to limited partners[26](index=26&type=chunk) [Financial Resources and Liquidity](index=8&type=section&id=Financial%20Resources%20and%20Liquidity) The Group's cash resources decreased due to mortgage loan repayments, while total loans declined, but the proportion of short-term loans significantly increased, though the net gearing ratio improved [Cash Resources](index=8&type=section&id=Cash%20Resources) The Group's total cash resources decreased **32.3%** to **HKD 253 million**, primarily due to the repayment of maturing mortgage loans - As of June 30, 2025, the Group's total cash resources amounted to **HKD 253 million** (December 31, 2024: HKD 374 million)[27](index=27&type=chunk) - The decrease in cash resources was primarily due to the repayment of maturing mortgage loans[27](index=27&type=chunk) [Loan Maturity Profile](index=9&type=section&id=Loan%20Maturity%20Profile) The Group's total loans decreased to **HKD 3.411 billion**, but loans maturing within one year significantly increased from **17%** to **33%**, raising short-term repayment pressure, though the net gearing ratio improved Loan Maturity Profile (HKD Millions) | Maturity | June 30, 2025 (HKD Millions) | Percentage of Loans | December 31, 2024 (HKD Millions) | Percentage of Loans | | :--- | :--- | :--- | :--- | :--- | | Within 1 Year | 1,134 | 33% | 644 | 17% | | 1 to 2 Years | 1,785 | 52% | 909 | 24% | | 2 to 5 Years | 492 | 15% | 2,244 | 59% | | **Total** | **3,411** | **100%** | **3,797** | **100%** | - The Group's net gearing ratio was **61%** as of June 30, 2025 (December 31, 2024: 65%)[30](index=30&type=chunk) [Financial Guarantees](index=9&type=section&id=Financial%20Guarantees) As of June 30, 2025, the Group had not provided any financial guarantees for the benefit of third parties - As of June 30, 2025, the Group had not provided any financial guarantees for the benefit of third parties[31](index=31&type=chunk) [Pledged Assets](index=9&type=section&id=Pledged%20Assets) The Group has pledged bank deposits and investment properties as collateral for loans, with the total value of pledged assets decreasing - As of June 30, 2025, the Group's pledged bank deposits amounted to **HKD 62 million** (December 31, 2024: HKD 60 million)[32](index=32&type=chunk) - Investment properties totaling **HKD 4,557 million** (December 31, 2024: HKD 5,180 million), along with interests in certain subsidiaries of the Group, were pledged as collateral for the Group's loans of **HKD 3,189 million** (December 31, 2024: HKD 3,797 million)[32](index=32&type=chunk) [Significant Investments](index=9&type=section&id=Significant%20Investments) As of June 30, 2025, the Group held no significant investments valued at **5%** or more of its total assets - As of June 30, 2025, the Group held no significant investments valued at **5%** or more of its total assets as of that date[33](index=33&type=chunk) [Contingent Liabilities](index=10&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[34](index=34&type=chunk) [Capital Commitments](index=10&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had no capital commitments - As of June 30, 2025, the Group had no capital commitments (December 31, 2024: nil)[35](index=35&type=chunk) [Use of Proceeds from Placement Activities](index=10&type=section&id=Use%20of%20Proceeds%20from%20Placement%20Activities) Of the **HKD 179.2 million** net proceeds from 2020 placement activities, **HKD 96 million** was used for US property development working capital, with the remaining **HKD 83 million** unutilized due to global economic uncertainty, expected to be invested in real estate-related projects by Q4 2025 - The net proceeds raised from the placement activities amounted to **HKD 179.2 million**[36](index=36&type=chunk) - As of June 30, 2025, **HKD 96 million** had been used as general working capital for the Group's US property development projects[37](index=37&type=chunk) - The remaining proceeds of **HKD 83 million** (representing **46%** of the total net proceeds from the placement activities) intended for investment in real estate-related projects remain unutilized and are expected to be used by the fourth quarter of 2025 or earlier[37](index=37&type=chunk) [Employees](index=11&type=section&id=Employees) As of June 30, 2025, the Group had **74** full-time employees, with **60** in the US, and total staff costs amounted to **HKD 45 million**, of which **HKD 37 million** was for US employees - As of June 30, 2025, the total number of full-time employees was **74** (December 31, 2024: 85), of whom **60** (December 31, 2024: 69) were US employees[39](index=39&type=chunk) - During the 2025 interim period, the Group's total staff costs were **HKD 45 million** (H1 2024: HKD 43 million), with US employees accounting for **HKD 37 million** (H1 2024: HKD 35 million)[39](index=39&type=chunk) [Independent Review Report](index=12&type=section&id=Independent%20Review%20Report) BDO Limited, Hong Kong, reviewed Gemini Investments (Holdings) Limited's H1 2025 interim financial statements, concluding their preparation in all material respects complied with HKAS 34 'Interim Financial Reporting' with no unusual matters identified - The auditor has reviewed the interim financial statements presented on pages 13 to 51, which include the condensed consolidated statement of financial position of Gemini Investments (Holdings) Limited and its subsidiaries as of June 30, 2025, and the related condensed consolidated statement of profit or loss, condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity, and condensed consolidated statement of cash flows for the six-month period then ended, along with notes to the condensed consolidated financial statements[40](index=40&type=chunk) - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Hong Kong Institute of Certified Public Accountants, with a scope significantly smaller than an audit, and no audit opinion is expressed[41](index=41&type=chunk) - Based on our review, we have not become aware of any matter that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting'[43](index=43&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=14&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group reported revenue of **HKD 412 million**, a loss before income tax of **HKD 64.6 million**, a loss for the period of **HKD 117 million**, a loss attributable to company shareholders of **HKD 118 million**, and basic loss per share of **HKD 0.19** Condensed Consolidated Statement of Profit or Loss (HKD Thousands) | Metric | Six Months Ended June 30, 2025 (Unaudited) | Six Months Ended June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 411,952 | 596,312 | | Direct Costs and Operating Expenses | (190,021) | (295,678) | | Other Income, Gains/Losses | 3,278 | 6,548 | | Administrative and Other Expenses | (78,514) | (96,232) | | Fair Value Change of Financial Instruments Held for Trading | 9,627 | 14,804 | | Fair Value Change of Financial Assets at Fair Value Through Profit or Loss | (7,709) | (11,790) | | Fair Value Change of Investment Properties | (162,212) | (167,284) | | Impairment Loss (Provision)/Reversal for Financial Assets | (1,481) | 2,640 | | Finance Costs | (126,456) | (166,589) | | Loss Attributable to Limited Partners | 76,908 | 85,468 | | Loss Before Income Tax | (64,628) | (37,768) | | Income Tax | (51,998) | (15,378) | | **Loss for the Period** | **(116,626)** | **(53,146)** | | Loss for the Period Attributable to Company Shareholders | (117,890) | (30,310) | | Basic Loss Per Share (HKD) | (0.19) | (0.05) | [Condensed Consolidated Statement of Comprehensive Income](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's loss for the period was **HKD 117 million**, but the total comprehensive income loss for the period narrowed to **HKD 91.6 million** due to a positive impact from exchange differences on translating overseas operations Condensed Consolidated Statement of Comprehensive Income (HKD Thousands) | Metric | Six Months Ended June 30, 2025 (Unaudited) | Six Months Ended June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Loss for the Period | (116,626) | (53,146) | | Other Comprehensive Income: Exchange Differences on Translating Overseas Operations | 25,024 | (3,549) | | **Total Comprehensive Income for the Period** | **(91,602)** | **(56,695)** | | Total Comprehensive Income Attributable to Company Shareholders | (92,866) | (33,859) | | Total Comprehensive Income Attributable to Non-controlling Interests | 1,264 | (22,836) | [Condensed Consolidated Statement of Financial Position](index=16&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were **HKD 9.575 billion**, a decrease from year-end 2024, with investment properties remaining the largest non-current asset, and changes in current assets and liabilities resulting in a net current liability, while total equity stood at **HKD 5.163 billion** Condensed Consolidated Statement of Financial Position (HKD Thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | **Total Assets** | **9,574,819** | **10,118,632** | | Non-current Assets: Investment Properties | 7,178,749 | 7,235,163 | | Current Assets: Properties Held for Sale | 546,808 | 767,180 | | Current Assets: Cash and Bank Balances | 253,122 | 374,035 | | **Net Current (Liabilities)/Assets** | **(317,392)** | **395,116** | | **Total Equity** | **5,162,976** | **5,261,738** | | Equity Attributable to Company Shareholders | 4,244,295 | 4,337,387 | | Non-current Liabilities: Loans | 2,302,278 | 3,183,117 | [Condensed Consolidated Statement of Changes in Equity](index=18&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 **HKD 5.262 billion** at the beginning of the period to **HKD 5.163 billion** at the end, primarily due to the loss for the period, partially offset by other comprehensive income from overseas operations' exchange differences Condensed Consolidated Statement of Changes in Equity (HKD Thousands) | Metric | Six Months Ended June 30, 2025 (Unaudited) | Six Months Ended June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Balance at Beginning of Period | 5,261,738 | 5,463,154 | | Loss for the Period | (116,626) | (53,146) | | Other Comprehensive Income: Exchange Differences on Translating Overseas Operations | 25,024 | (3,549) | | Total Comprehensive Income for the Period | (91,602) | (56,695) | | Distributions Paid to Perpetual Bond Holders | (226) | (226) | | Distributions Paid to Non-controlling Interests | (6,934) | (9,280) | | **Balance at End of Period** | **5,162,976** | **5,396,953** | [Condensed Consolidated Statement of Cash Flows](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group generated **HKD 94.2 million** net cash from operating activities, used **HKD 55.7 million** in investing activities, and **HKD 170.5 million** in financing activities, resulting in a net decrease of **HKD 132 million** in cash and cash equivalents Condensed Consolidated Statement of Cash Flows (HKD Thousands) | Metric | Six Months Ended June 30, 2025 (Unaudited) | Six Months Ended June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 94,212 | 189,654 | | Net Cash Used in Investing Activities | (55,743) | (52,718) | | Net Cash Used in Financing Activities | (170,450) | (208,747) | | **Net Decrease in Cash and Cash Equivalents** | **(131,981)** | **(71,811)** | | Cash and Cash Equivalents at Beginning of Period | 374,035 | 455,995 | | Effect of Exchange Rate Changes | 11,068 | (672) | | **Cash and Cash Equivalents at End of Period** | **253,122** | **383,512** | [Notes to the Condensed Consolidated Financial Statements](index=22&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the Group's interim financial statements, covering preparation basis, key accounting policies, segment information, income and expense components, balance sheet item specifics, equity changes, loan details, related party transactions, and fair value measurements [General Information](index=22&type=section&id=General%20Information) Gemini Investments (Holdings) Limited's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, were prepared in accordance with HKAS 34 and the Listing Rules, and approved for issue on August 18, 2025 - The Group's unaudited condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[57](index=57&type=chunk) - These interim financial statements were approved and authorized for issue on August 18, 2025[59](index=59&type=chunk) [Basis of Preparation](index=22&type=section&id=Basis%20of%20Preparation) The interim financial statements are prepared on a historical cost basis, with exceptions for investment properties and certain financial instruments measured at fair value, involving management judgments and estimates, and should be read in conjunction with the 2024 consolidated financial statements - These interim financial statements are presented in HKD and do not include all the information required for a complete set of financial statements prepared in accordance with Hong Kong Financial Reporting Standards, and should be read in conjunction with the 2024 consolidated financial statements[61](index=61&type=chunk) - These interim financial statements are unaudited but have been reviewed by BDO Limited in accordance with Hong Kong Standard on Review Engagements 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Hong Kong Institute of Certified Public Accountants[61](index=61&type=chunk) [Principal Accounting Policies](index=23&type=section&id=Principal%20Accounting%20Policies) The interim financial statements adopt the same accounting policies as the 2024 annual financial statements, with new standards or interpretations effective from January 1, 2025, having no significant impact on the amounts presented - These interim financial statements are prepared in accordance with the same accounting policies adopted in the 2024 annual financial statements, except for accounting policies related to new standards or interpretations effective for periods beginning on or after January 1, 2025[62](index=62&type=chunk) - The adoption of the new amendments to Hong Kong Financial Reporting Standards during this period had no significant impact on the amounts presented and/or disclosed in these unaudited condensed consolidated financial statements[62](index=62&type=chunk) [Segment Information](index=25&type=section&id=Segment%20Information) The Group's operating segments are US property investment, US property development, Hong Kong property investment, fund investment, and securities and other investments, with US property investment remaining the primary revenue source in H1 2025, though segment performance declined - The Group's reportable and operating segments under HKFRS 8 Operating Segments include: US property investment, US property development, Hong Kong property investment, fund investment, and securities and other investments[65](index=65&type=chunk) H1 2025 Segment Revenue and Results (HKD Thousands) | Segment | Revenue | Results | | :--- | :--- | :--- | | US Property Investment | 348,323 | 147,455 | | US Property Development | 59,610 | (1,766) | | Hong Kong Property Investment | 3,786 | (25,119) | | Fund Investment | – | (6,858) | | Securities and Other Investments | 233 | 9,639 | | **Consolidated Total** | **411,952** | **123,351** | Segment Assets and Liabilities as of June 30, 2025 (HKD Thousands) | Segment | Assets | Liabilities | | :--- | :--- | :--- | | US Property Investment | 7,804,612 | 3,855,098 | | US Property Development | 820,832 | 227,491 | | Hong Kong Property Investment | 295,201 | 3,819 | | Fund Investment | 452,582 | 268 | | Securities and Other Investments | 167,110 | 190 | | Unallocated Assets/Liabilities | 34,482 | 324,977 | | **Consolidated Total** | **9,574,819** | **4,411,843** | [Revenue](index=29&type=section&id=Revenue) The Group's revenue primarily derives from rental income, property sales, and ancillary services, with total revenue for H1 2025 at **HKD 412 million**, a **30.87%** year-on-year decrease mainly due to significantly reduced property sales Revenue Source Analysis (HKD Thousands) | Revenue Source | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Rental Income | 268,504 | 288,228 | | Dividend Income | 353 | 211 | | Property Sales | 53,851 | 214,637 | | Food and Beverage Sales | 5,759 | – | | Ancillary Services and Management Service Income from Property Leasing | 83,485 | 93,236 | | **Total Revenue** | **411,952** | **596,312** | [Direct Costs and Operating Expenses](index=29&type=section&id=Direct%20Costs%20and%20Operating%20Expenses) The Group's direct costs and operating expenses decreased **35.74%** year-on-year to **HKD 190 million**, primarily due to a significant reduction in the cost of properties sold Direct Costs and Operating Expenses Analysis (HKD Thousands) | Expense Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Repairs, Maintenance and Utilities | 65,693 | 74,833 | | Property Insurance Costs | 7,766 | 8,082 | | Property Management Expenses | 15,069 | 16,601 | | Property Tax | 53,331 | 44,529 | | Cost of Properties Sold | 41,339 | 136,343 | | Cost of Sales | 3,834 | 13,544 | | Cost of Food and Beverage Sales | 1,420 | – | | Other | 1,569 | 1,746 | | **Total** | **190,021** | **295,678** | [Other Income, Gains/Losses](index=30&type=section&id=Other%20Income%2C%20Gains%2FLosses) The Group's other income, gains/losses primarily consisted of interest income, amounting to **HKD 2.71 million** in H1 2025, a year-on-year decrease Other Income, Gains/Losses Analysis (HKD Thousands) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Interest Income | 2,712 | 6,466 | | Other | 566 | 82 | | **Total** | **3,278** | **6,548** | [Administrative and Other Expenses](index=30&type=section&id=Administrative%20and%20Other%20Expenses) The Group's administrative and other expenses decreased **18.39%** year-on-year to **HKD 78.51 million**, mainly due to a shift from a net positive to a net negative exchange difference Administrative and Other Expenses Analysis (HKD Thousands) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Auditor's Remuneration | 3,441 | 3,393 | | Depreciation | 6,247 | 6,617 | | Staff Costs | 44,489 | 43,177 | | Legal and Professional Fees | 17,645 | 23,815 | | Net Exchange Differences | (14,639) | 1,234 | | **Total** | **78,514** | **96,232** | [Finance Costs](index=31&type=section&id=Finance%20Costs) The Group's finance costs decreased **24.1%** year-on-year to **HKD 126 million**, primarily due to reduced interest expenses on bank and other loans Finance Costs Analysis (HKD Thousands) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Interest on Bank and Other Loans | 122,798 | 161,479 | | Interest Expense on Lease Liabilities | 1,484 | 1,375 | | Amortization of Arrangement Fees | 2,174 | 3,735 | | **Total** | **126,456** | **166,589** | [Income Tax](index=31&type=section&id=Income%20Tax) The Group's income tax expense significantly increased to **HKD 51.99 million**, mainly comprising overseas tax and deferred tax expenses, with no provision for Hong Kong profits tax Income Tax Analysis (HKD Thousands) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Current Tax – Hong Kong Profits Tax | – | – | | Current Tax – Overseas Tax | 13,964 | 9,380 | | Deferred Tax Expense | 38,034 | 5,998 | | **Total Income Tax** | **51,998** | **15,378** | - The Group's US subsidiaries are subject to US federal income tax at **21%** (2024: 21%) and state income tax ranging from **0% to 8.84%** (2024: 0% to 8.84%)[78](index=78&type=chunk) [Loss Per Share](index=32&type=section&id=Loss%20Per%20Share) The Group's basic loss per share significantly widened to **HKD 0.19** from **HKD 0.05** in the prior period, with no adjustment for dilution due to the anti-dilutive effect of convertible preference shares - Basic loss per share attributable to company shareholders is calculated based on the adjusted loss attributable to company shareholders of approximately **HKD 118,116,000** for the period and the weighted average of **635,570,000** ordinary shares outstanding during the period[79](index=79&type=chunk) - No adjustment has been made to the basic loss per share amounts presented for the six months ended June 30, 2025 and 2024, as the unexercised convertible preference shares had an anti-dilutive effect on the basic loss per share amounts presented[81](index=81&type=chunk) [Interim Dividend](index=33&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of any dividend for the 2025 interim period - The Board of Directors does not recommend the payment of a dividend for this interim period (six months ended June 30, 2024: nil)[82](index=82&type=chunk) [Investment Properties](index=33&type=section&id=Investment%20Properties) The Group's total investment properties amounted to **HKD 7.179 billion**, predominantly US properties, with a net loss of **HKD 162 million** from fair value changes this period, and approximately **74%** of investment properties leased under operating leases, with some pledged as collateral for bank loans Investment Property Composition (HKD Thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Hong Kong Properties | 293,080 | 321,420 | | US Properties | 6,885,669 | 6,913,743 | | **Total** | **7,178,749** | **7,235,163** | - During the period, the revaluation of investment properties resulted in a net loss from fair value changes of approximately **HKD 162,212,000** (six months ended June 30, 2024: HKD 167,284,000)[83](index=83&type=chunk) - As of June 30, 2025, investment properties of approximately **HKD 4,557,059,000** were pledged as collateral for bank loans of approximately **HKD 2,969,196,000**[84](index=84&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=35&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) The Group's financial assets at fair value through profit or loss totaled **HKD 461 million**, primarily comprising unlisted fund investments and other assets (membership bonds), all classified within Level 3 of the fair value hierarchy Financial Assets at Fair Value Through Profit or Loss (HKD Thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Other Assets (Membership Bonds) | 8,000 | 7,670 | | Unlisted Fund Investments | 452,516 | 458,443 | | **Total** | **460,516** | **466,113** | - The fair value measurements of the above financial assets are classified within Level 3 of the fair value hierarchy[89](index=89&type=chunk) [Deposits, Prepayments and Other Receivables](index=36&type=section&id=Deposits%2C%20Prepayments%20and%20Other%20Receivables) The Group's deposits, prepayments, and other receivables increased to **HKD 148 million**, mainly including service income receivables, rental receivables, and accrued rental income Deposits, Prepayments and Other Receivables (HKD Thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Service Income Receivables | 10,407 | 7,444 | | Rental Receivables | 10,331 | 8,925 | | Accrued Rental Income Receivables | 79,841 | 81,870 | | Other Receivables | 24,561 | 18,969 | | Prepayments | 22,484 | 16,639 | | **Total** | **147,624** | **133,847** | [Restricted Bank Deposits](index=36&type=section&id=Restricted%20Bank%20Deposits) The Group's restricted bank deposits totaled **HKD 156 million**, primarily comprising pledged bank deposits, tenant deposits, and reserves, with most classified as current assets - As of June 30, 2025, restricted bank deposits included pledged bank deposits of approximately **HKD 61,524,000**, tenant deposits of approximately **HKD 10,241,000**, and margins and reserves of approximately **HKD 88,571,000**[92](index=92&type=chunk) - The pledged bank deposits were used to secure loans disclosed in Note 20[93](index=93&type=chunk) [Properties Held for Sale](index=37&type=section&id=Properties%20Held%20for%20Sale) The Group's properties held for sale decreased to **HKD 547 million**, all located in the US, with **HKD 183 million** transferred to investment properties and **HKD 41.33 million** derecognized from property sales during the period Changes in Properties Held for Sale (HKD Thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | At Beginning of Period/Year | 767,180 | 1,349,749 | | Transferred to Investment Properties | (182,620) | (392,260) | | Derecognized on Sale | (41,339) | (182,709) | | Exchange Adjustments | 3,587 | (7,600) | | **At End of Period/Year** | **546,808** | **767,180** | - All properties held for sale are located in the United States[94](index=94&type=chunk) [Financial Instruments Held for Trading](index=37&type=section&id=Financial%20Instruments%20Held%20for%20Trading) The Group's financial instruments held for trading, consisting of investments in US-listed equities, increased to **HKD 138 million**, with fair value determined by market bid prices - As of June 30, 2025, financial instruments held for trading refer to investments in US-listed equities of approximately **HKD 137,885,000** (December 31, 2024: approximately HKD 121,812,000)[95](index=95&type=chunk) - The fair value of listed securities is determined by reference to market bid prices available from the relevant exchanges[95](index=95&type=chunk) [Amounts Due to a Shareholder](index=37&type=section&id=Amounts%20Due%20to%20a%20Shareholder) Amounts due to a shareholder include current amounts to Oceanwide Real Estate (Hong Kong) Limited and non-current amounts to Gemini Management Limited, with the latter bearing **4.25%** annual interest and maturing on April 1, 2027 Amounts Due to a Shareholder (HKD Thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Current Liabilities: Oceanwide Real Estate (Hong Kong) Limited | 9,297 | 9,637 | | Non-current Liabilities: Gemini Management Limited | 418,256 | 415,234 | - The amount due to Gemini Management Limited is unsecured, bears interest at an annual rate of **4.25%**, is denominated in USD, and is due on April 1, 2027[96](index=96&type=chunk) [Loans](index=38&type=section&id=Loans) The Group's total loans decreased to **HKD 3.444 billion**, primarily bank and revolving loans, with a significant increase in loans due within one year; some bank loans had covenant breaches but were resolved by depositing pledged bank deposits, and third-party loans were extended Loan Composition (HKD Thousands) | Loan Type | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Lease Liabilities | 33,440 | 38,806 | | Bank and Revolving Loans | 2,969,196 | 3,439,522 | | Notes Payable | 219,485 | 357,714 | | Third-Party Loans | 222,088 | – | | **Total Loans** | **3,444,209** | **3,836,042** | | Amounts Payable Within One Year Included Under Current Liabilities | (1,141,931) | (652,925) | - Bank and revolving loans are non-recourse and are secured by legal charges over certain investment properties and pledged bank deposits of the Group[99](index=99&type=chunk) - Certain bank loans had debt service coverage ratio covenant breaches, but the Group has deposited the required funds into pledged bank deposits as defined by the loan agreements[100](index=100&type=chunk) - Third-party loans have received lender consent, confirming their intention to extend the loans for at least one year beyond their maturity date[100](index=100&type=chunk) [Other Financial Assets/Liabilities](index=41&type=section&id=Other%20Financial%20Assets%2FLiabilities) The Group's other financial assets and liabilities are primarily related to limited partners' interests, with fair value changes in these interests resulting in a **HKD 76.9 million** loss attributable to limited partners this period Other Financial Assets/Liabilities (HKD Thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Non-current Assets: Limited Partners' Interests | 314,822 | 476,549 | | Non-current Liabilities: Limited Partners' Interests | 12,514 | 17,269 | - Limited partners' interests represent the portion of profit or loss and net assets not held by the Group, presented separately in the Group's condensed consolidated statement of profit or loss and as assets/liabilities or equity in the condensed consolidated statement of financial position[101](index=101&type=chunk) - For the six months ended June 30, 2025, the loss allocated to limited partners was approximately **HKD 76,908,000** (six months ended June 30, 2024: approximately HKD 85,468,000)[103](index=103&type=chunk) [Share Capital](index=42&type=section&id=Share%20Capital) As of June 30, 2025, the company's total issued and fully paid ordinary shares remained unchanged from year-end 2024 at **635,570,000** shares, with a share capital of **HKD 371 million** Issued and Fully Paid Ordinary Shares (HKD Thousands) | Item | June 30, 2025 (Number of Shares) | June 30, 2025 (HKD Thousands) | December 31, 2024 (Number of Shares) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | :--- | :--- | | At Beginning/End of Period/Year | 635,570,000 | 371,191 | 635,570,000 | 371,191 | - In accordance with Section 135 of the Hong Kong Companies Ordinance, the company's ordinary shares have no par value[104](index=104&type=chunk) [Property, Plant and Equipment](index=42&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group acquired plant and machinery items at a cost of **HKD 1.737 million**, a significant decrease from the prior period - For the six months ended June 30, 2025, the Group acquired items of plant and machinery at a cost of **HKD 1,737,000** (six months ended June 30, 2024: HKD 14,557,000)[105](index=105&type=chunk) [Convertible Preference Share Reserve](index=42&type=section&id=Convertible%20Preference%20Share%20Reserve) This section details the issuance, terms, and subsequent revisions and capital reductions of convertible preference shares, initially issued in 2014, with conversion terms revised in 2018, leading to reclassification as an equity instrument on July 1, 2018, due to non-compliance with the 'fixed amount for fixed number of equity instruments' standard - On December 23, 2014, the company issued **1,300,000,000** non-voting convertible preference shares to its shareholder, Gemini Management Limited, for a total subscription price of **HKD 3,900,000,000**[106](index=106&type=chunk) - On January 26, 2018, the company and Gemini Management Limited entered into a second supplemental deed, amending certain terms of the convertible preference shares, including advancing the conversion period, increasing the conversion price from **HKD 3** to **HKD 6**, and adjusting the dividend to a fixed annual rate of **3%**[108](index=108&type=chunk) - As the conversion option of the adjusted convertible preference shares did not meet the 'fixed amount for fixed number of equity instruments' criterion, it was initially classified as a liability and subsequently reclassified as an equity instrument on July 1, 2018[110](index=110&type=chunk) - The company has undertaken multiple capital reductions, involving the cancellation of convertible preference shares and transfer to accumulated losses or capital reduction reserve[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) [Perpetual Bonds](index=46&type=section&id=Perpetual%20Bonds) In 2017, the Group issued unsecured perpetual bonds with a total principal of **HKD 2.26 billion**, granting a **0.01%** annual distribution right on the principal amount with no fixed redemption date, and **HKD 226,000** was distributed to bondholders this period - On May 31, 2017, the company issued unsecured perpetual bonds with a total principal amount of approximately **HKD 2,259,500,000** to its shareholder, Gemini Management Limited[114](index=114&type=chunk) - The perpetual bonds grant the right to receive distributions at **0.01%** per annum on the principal amount and have no fixed redemption date[114](index=114&type=chunk) - For the six months ended June 30, 2025, distributions paid to perpetual bond holders by the company amounted to approximately **HKD 226,000** (six months ended June 30, 2024: approximately HKD 226,000)[115](index=115&type=chunk) [Operating Lease Commitments](index=47&type=section&id=Operating%20Lease%20Commitments) As a lessor, the Group's operating lease commitments for investment properties total **HKD 1.619 billion** in undiscounted lease payments receivable for future periods, with lease terms ranging from one month to ten years Undiscounted Lease Payments Receivable for Future Periods (HKD Thousands) | Period | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Within 1 Year | 460,262 | 491,155 | | After 1 Year but Within 2 Years | 404,672 | 387,802 | | After 2 Years but Within 3 Years | 267,695 | 286,592 | | After 3 Years but Within 4 Years | 197,145 | 166,971 | | After 4 Years but Within 5 Years | 153,268 | 182,799 | | After 5 Years | 135,538 | 23,546 | | **Total** | **1,618,580** | **1,538,865** | - The properties held by the Group have committed tenants, with lease terms ranging from one month to ten years[116](index=116&type=chunk) [Related Party Transactions](index=48&type=section&id=Related%20Party%20Transactions) Key management personnel compensation amounted to **HKD 2.55 million**, and transactions with a shareholder (Gemini Management Limited) resulted in **HKD 8.905 million** in interest expenses Related Party Transactions (HKD Thousands) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Key Management Personnel Compensation | 2,550 | 2,253 | | Interest Expense with a Shareholder | 8,905 | 8,983 | [Fair Value Measurement](index=49&type=section&id=Fair%20Value%20Measurement) The Group's financial assets and liabilities are measured using a three-level fair value hierarchy, with financial instruments held for trading (listed equities) classified as Level 1, and other financial assets (unlisted fund investments and limited partners' interests) as Level 3 as of June 30, 2025 - Fair value hierarchy is categorized into: Level 1 (quoted prices in active markets for identical assets and liabilities), Level 2 (observable input data), and Level 3 (unobservable input data)[122](index=122&type=chunk) Financial Assets Measured at Fair Value as of June 30, 2025 (HKD Thousands) | Type | Level 1 | Level 3 | Total | | :--- | :--- | :--- | :--- | | Financial Assets at Fair Value Through Profit or Loss - Other | – | 8,000 | 8,000 | | Financial Assets at Fair Value Through Profit or Loss - Unlisted Fund Investments | – | 452,516 | 452,516 | | Financial Instruments Held for Trading | 137,885 | – | 137,885 | | Limited Partners' Interests | – | 314,822 | 314,822 | | **Total** | **137,885** | **775,338** | **913,223** | - The valuation of unlisted fund investments is based on the asset approach, and their fair value is sensitive to discounts/premiums determined by property quality[124](index=124&type=chunk) - The fair value of limited partners' interests is determined using the asset approach, primarily calculated by reference to the estimated fair value of the relevant investment property portion in which the limited partners hold interests[125](index=125&type=chunk) [Other Information](index=53&type=section&id=Other%20Information) This section discloses directors' and chief executives' and major shareholders' interests in securities, and the company's compliance with corporate governance, directors' securities dealing code, changes in directors' information, share repurchases, and public float requirements [Directors' and Chief Executives' Interests in Securities of the Company and its Associated Corporations](index=53&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests%20in%20Securities%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, no directors or chief executives of the company held any interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations requiring disclosure under the SFO or Listing Rules - 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 any of its associated corporations that are required to be disclosed under the Securities and Futures Ordinance or the Listing Rules of The Stock Exchange of Hong Kong Limited[128](index=128&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=53&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) During the 2025 interim period, neither the company, its holding company, nor any of its subsidiaries or fellow subsidiaries were involved in any arrangements enabling directors to acquire benefits by purchasing shares or debentures of the company or any other body corporate - At no time during the six months ended June 30, 2025, was the company, its holding company, or any of its subsidiaries or fellow subsidiaries a party to any arrangement to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the company or any other body corporate[129](index=129&type=chunk) [Major Shareholders' Interests in Securities of the Company](index=54&type=section&id=Major%20Shareholders'%20Interests%20in%20Securities%20of%20the%20Company) As of June 30, 2025, Oceanwide Holdings Limited and its associates, Gemini Management Limited, Fountain International Limited and its associates, and Hong Kong Paxstar Enterprise Limited and its associates were major shareholders of the company, holding interests in shares or underlying shares Major Shareholders' Interests in Securities of the Company (June 30, 2025) | Name | Nature/Capacity of Interest | Number of Shares/Underlying Shares | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Oceanwide Holdings Limited | Interest in Controlled Corporation | 800,654,083 (Long Position) | 125.97% | | Yiu Shing Development Limited | Interest in Controlled Corporation | 800,654,083 (Long Position) | 125.97% | | Sun Young International Limited | Interest in Controlled Corporation | 800,654,083 (Long Position) | 125.97% | | Oceanwide Real Estate (Hong Kong) Limited | Interest in Controlled Corporation | 800,654,083 (Long Position) | 125.97% | | Gemini Management Limited | Beneficial Owner | 535,153,166 (Long Position) | 84.20% | | Jie Ning Limited | Interest in Controlled Corporation | 265,500,917 (Long Position) | 41.77% | | Rui Xi Venture Capital Limited | Interest in Controlled Corporation | 265,500,917 (Long Position) | 41.77% | | Oceanwide Capital Holdings Limited | Interest in Controlled Corporation | 265,500,917 (Long Position) | 41.77% | | Dong Fan Limited | Interest in Controlled Corporation | 265,500,917 (Long Position) | 41.77% | | Oceanland Global Investment Limited | Interest in Controlled Corporation | 265,500,917 (Long Position) | 41.77% | | Yao Pin Venture Capital Limited | Interest in Controlled Corporation | 265,500,917 (Long Position) | 41.77% | | Fountain International Limited | Beneficial Owner | 265,500,917 (Long Position) | 41.77% | | Hong Kong Paxstar Enterprise Limited | Beneficial Owner | 45,139,000 (Long Position) | 7.10% | | Zhang Li | Interest in Controlled Corporation | 45,139,000 (Long Position) | 7.10% | - Oceanwide Holdings Limited indirectly holds interests in Gemini Management Limited and Fountain International Limited through its wholly-owned subsidiaries[136](index=136&type=chunk) - Mr. Zhang Li wholly owns Hong Kong Paxstar Enterprise Limited[136](index=136&type=chunk) [Corporate Governance](index=57&type=section&id=Corporate%20Governance) During the 2025 interim period, the company complied with the applicable code provisions set out in Appendix C1 Part 2 (Corporate Governance Code) of the Listing Rules - During the 2025 interim period, the company has complied with the applicable code provisions set out in Appendix C1 Part 2 (Corporate Governance Code) of the Listing Rules when such code provisions were in effect[138](index=138&type=chunk) [Review by Auditor and Review Committee](index=57&type=section&id=Review%20by%20Auditor%20and%20Review%20Committee) The Review Committee and management reviewed the Group's accounting principles, internal controls, and financial reporting matters, including the unaudited interim financial information for the 2025 interim period, which was also reviewed by the company's auditor - The Review Committee and the company's management have reviewed the accounting principles and practices adopted by the Group and discussed auditing, internal control, and financial reporting matters, including the review of the Group's unaudited interim financial information for the 2025 interim period[139](index=139&type=chunk) - The company's auditor has reviewed the Group's unaudited interim financial information for the 2025 interim period in accordance with Hong Kong Standard on Review Engagements 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Hong Kong Institute of Certified Public Accountants[139](index=139&type=chunk) [Code for Securities Transactions by Directors and Relevant Employees](index=57&type=section&id=Code%20for%20Securities%20Transactions%20by%20Directors%20and%20Relevant%20Employees) The company adopted the Model Code as the code of conduct for directors' securities transactions, with all directors confirming compliance during the 2025 interim period, and also adopted a code for relevant employees' securities transactions with terms no less exacting than the Model Code - The company has adopted the Model Code as the code of conduct for directors' securities transactions, and all directors confirmed their compliance with the standards set out in the Model Code during the 2025 interim period[140](index=140&type=chunk) - The company has also adopted a code of conduct for securities transactions by relevant employees, with terms no less exacting than the standards set out in the Model Code[140](index=140&type=chunk) [Changes in Directors' Information](index=58&type=section&id=Changes%20in%20Directors'%20Information) The report discloses recent changes in the Board of Directors, including Ms. Lam Yee Lan's appointment to the Nomination Committee, and changes in other listed company positions for Mr. Leung Wai Hung and Mr. Lai Kwok Hung - Executive Director Ms. Lam Yee Lan was appointed as a member of the company's Nomination Committee, effective June 26, 2025[142](index=142&type=chunk) - Independent Non-executive Director Mr. Leung Wai Hung resigned as an independent non-executive director of Wang Lee Construction Holdings Limited, effective July 14, 2025[142](index=142&type=chunk) - Executive Director Mr. Lai Kwok Hung was appointed as a member of the Nomination Committee of Wah Yan Holdings Limited, effective July 29, 2025[142](index=142&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=58&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the 2025 interim period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed shares - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed shares during the 2025 interim period[143](index=143&type=chunk) [Sufficiency of Public Float](index=59&type=section&id=Sufficiency%20of%20Public%20Float) Throughout the 2025 interim period, the company maintained a sufficient public float for its ordinary shares as required by the Listing Rules - Throughout the 2025 interim period, the company maintained a sufficient public float for its ordinary shares as required by the Listing Rules[145](index=145&type=chunk) [Company Information](index=60&type=section&id=Company%20Information) This section provides essential information for Gemini Investments (Holdings) Limited, including its Board of Directors, committee compositions, company secretary, authorized representatives, auditor, legal counsel, principal bankers, share registrar, registered office, principal place of business, listing information, and company website - The Board of Directors includes Executive Directors Shen Peiying (Chairman), Lai Kwok Hung (CEO), Lam Yee Lan; Non-executive Director Tang Runjiang; Independent Non-executive Directors Lo Huen Bo, Lee Sai Kai, Leung Wai Hung[147](index=147&type=chunk) - The auditor is BDO Limited, Hong Kong[148](index=148&type=chunk) - The company's stock code is **174**, and its website is www.geminiinvestments.com.hk[150](index=150&type=chunk)

[About PCCW](index=3&type=section&id=About%20PCCW) [Company Overview](index=3&type=section&id=Company%20Overview) PCCW is a global company based in Hong Kong with businesses in telecom, media, IT services, property development, and investment - PCCW is a Hong Kong-based global company with diversified businesses in telecommunications, media, IT solutions, property development, and investment[4](index=4&type=chunk) - The company holds a majority interest in HKT Trust and HKT Limited, Hong Kong's premier telecommunications service provider[4](index=4&type=chunk) - PCCW operates a fully integrated multimedia and entertainment group in Hong Kong, offering OTT video services, content creation, artist management, and the free-to-air TV service ViuTV[4](index=4&type=chunk)[5](index=5&type=chunk) [Chairman's Statement](index=4&type=section&id=Chairman's%20Statement) [Market Environment and Corporate Strategy](index=4&type=section&id=Market%20Environment%20and%20Corporate%20Strategy) The company is capitalizing on rising demand for content, data, and AI by deepening customer engagement and expanding technology applications - PCCW is addressing the rising demand for content, data, and AI-driven services by deepening customer engagement, enhancing network connectivity, and expanding emerging technology applications[7](index=7&type=chunk) - Viu has solidified its leadership in Southeast Asia's online video market through a multi-pillar content strategy and is producing a major Hong Kong-based drama to boost the city's international appeal[7](index=7&type=chunk) - HKT's 800G AI Superhighway connects major data center clusters, deploys 5G private networks, and provides ASEAN connectivity, with **5G subscribers now exceeding 54%** of the post-paid base[8](index=8&type=chunk)[9](index=9&type=chunk) [Acting Group Managing Director's Statement](index=5&type=section&id=Acting%20Group%20Managing%20Director's%20Statement) [Profit Growth and Business Performance](index=5&type=section&id=Profit%20Growth%20and%20Business%20Performance) The company achieved solid revenue and EBITDA growth in H1, driven by strong performance from Viu and HKT, and declared an interim dividend - In the first half of the year, PCCW's **revenue grew 7% to HK$18.922 billion**, and **EBITDA increased 6% to HK$6.010 billion**[16](index=16&type=chunk) Viu Business Performance (as of end-June 2025) | Metric | Data | | :--- | :--- | | Paid Subscribers | 13.8 million | | H1 Revenue Growth | 10% | | EBITDA Margin | Improved from 21% to 29% | - ViuTV's digital membership **grew over 4% to 3.3 million**, with viewing time up by more than 4%, while creating new opportunities for artists through live concerts and international collaborations[14](index=14&type=chunk) HKT Business Performance (H1) | Metric | Growth Rate | | :--- | :--- | | Revenue | 4% | | EBITDA | 3% | | Adjusted Funds Flow | 3% | - The Board declared an interim dividend of **HK$9.77 cents per ordinary share** for the six months ended June 30, 2025, and will continue to adopt a prudent dividend policy[16](index=16&type=chunk) [Board of Directors](index=7&type=section&id=Board%20of%20Directors) [Executive Directors](index=7&type=section&id=Executive%20Directors) This section lists PCCW's executive directors, including their respective roles, experience, and professional backgrounds - Mr Richard Li Tzar Kai serves as Executive Director and Chairman of PCCW, and also holds key positions at PCG, FWD Group, and HKT[18](index=18&type=chunk) - Ms Susanna Hui Hon Hing is the Executive Director, Acting Group Managing Director, and Group Chief Financial Officer, holding multiple key roles within PCCW Group and HKT with extensive experience in the innovation and technology ecosystem[19](index=19&type=chunk)[21](index=21&type=chunk) [Non-Executive Directors](index=8&type=section&id=Non-Executive%20Directors) This section introduces PCCW's non-executive directors, who possess extensive expertise in insurance, telecom, finance, and investment - Mr Tse Sze Wing, an Non-Executive Director, is a renowned figure in the international insurance industry, having held senior positions at AIG and AIA[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - Mr Tang Yongbo serves as a Non-Executive Director and Deputy Chairman, and is also a director of China Unicom Group and China Unicom (Hong Kong) Limited, with extensive management experience in the telecommunications industry[25](index=25&type=chunk) - Ms Meng Shusen, a Non-Executive Director, is the Chairman and President of China Unicom Global Limited, with rich experience in telecom technology, sales, and corporate governance[26](index=26&type=chunk) - Mr David Wei, a Non-Executive Director, has over 20 years of experience in investment and operational management in China and was the former CEO of Alibaba.com Limited[28](index=28&type=chunk) [Independent Non-Executive Directors](index=10&type=section&id=Independent%20Non-Executive%20Directors) This section lists PCCW's independent non-executive directors, who have profound international experience in banking, consulting, and media - Mr Aman Mehta, an Independent Non-Executive Director, is a distinguished international banker who previously served as the Chief Executive Officer of The Hongkong and Shanghai Banking Corporation Limited[31](index=31&type=chunk)[32](index=32&type=chunk) - Ms Jennifer Wong How Yue, an Independent Non-Executive Director, has extensive experience in management consulting and media, having worked at McKinsey & Company and held senior roles at Hutchison Whampoa Group and PCG[34](index=34&type=chunk)[35](index=35&type=chunk) - Mr Bryce Wayne Lee, an Independent Non-Executive Director, is currently a Managing Director at Silver Lake with extensive experience in investment banking and technology investments[36](index=36&type=chunk) - Mr Sharhan Mohamed Muhseen Mohamed, an Independent Non-Executive Director, is a seasoned investment banker with extensive experience in M&A, corporate finance, and capital markets[41](index=41&type=chunk)[42](index=42&type=chunk) [Management's Discussion and Analysis](index=14&type=section&id=Management's%20Discussion%20and%20Analysis) [Financial Summary](index=14&type=section&id=Financial%20Summary) The Group reported growth in revenue and EBITDA, with a significant increase in consolidated profit and a narrowed loss attributable to equity holders Key Financial Data for H1 2025 | Metric | Amount (HK$) | YoY Change | | :--- | :--- | :--- | | Revenue | 18.922 billion | +7% | | EBITDA | 6.010 billion | +6% | | Consolidated Profit | 758 million | +116% | | Loss attributable to equity holders | (445 million) | Loss narrowed | | Interim Dividend (per ordinary share) | 9.77 cents | - | - Viu's paid subscribers **increased to 13.8 million**, driving a **27% rise** in subscription and advertising revenue[44](index=44&type=chunk) - ViuTV's digital membership reached **3.3 million**, with a strong lineup of concerts and programs planned for the second half of the year[44](index=44&type=chunk) [Segment Financial Review](index=15&type=section&id=Segment%20Financial%20Review) This section details the financial performance of PCCW's business segments in H1 2025, highlighting growth in HKT and OTT businesses Segment Financial Performance for H1 2025 | Business Segment | Revenue (HK$ million) | Revenue YoY Change | EBITDA (HK$ million) | EBITDA YoY Change | | :--- | :--- | :--- | :--- | :--- | | HKT | 17,322 | +4% | 6,380 | +3% | | OTT Business | 1,194 | +10% | 346 | +51% | | Free TV and Related Business | 343 | (29)% | 47 | (48)% | | Other Businesses | 743 | +99% | (364) | (18)% | | Consolidated | 18,922 | +7% | 6,010 | +6% | [HKT](index=17&type=section&id=HKT) - HKT's total revenue **grew 4% to HK$17.322 billion**, and total EBITDA **rose over 3% year-on-year to HK$6.380 billion**, with a stable EBITDA margin of 37%[47](index=47&type=chunk)[50](index=50&type=chunk) - Broadband revenue **increased by 3%**, with **1.055 million** Fiber-to-the-Home (FTTH) connections accounting for 71% of consumer broadband lines, while local data revenue **grew 11%** year-on-year[48](index=48&type=chunk) - Mobile revenue **grew 5% to HK$5.2 billion**, driven by roaming services growth, an expanded post-paid customer base, and an increase in 5G subscribers to **1.894 million** (over 54% of post-paid customers)[49](index=49&type=chunk) - Operating costs were **reduced by 4% to HK$1.921 billion**, reflecting efficiencies from AI-driven workflow transformation and business streamlining[50](index=50&type-chunk) [OTT Business](index=18&type=section&id=OTT%20Business) - OTT business revenue **rose significantly by 10% to HK$1.194 billion**, primarily contributed by Viu, which accounted for nearly 90% of the segment's revenue[52](index=52&type=chunk) - Viu's subscription and advertising revenue **grew by 27%**, with paid subscribers (excluding Myanmar) reaching **13.8 million**, a **19% year-on-year increase**[52](index=52&type=chunk)[55](index=55&type=chunk) - OTT business EBITDA **surged 51% to HK$346 million**, with the margin improving from 21% to 29%, moving towards positive cash flow[55](index=55&type=chunk) - Viu added nearly 150 new titles, including popular Korean and Chinese dramas, and expanded partnerships with telecom operators and media companies[54](index=54&type=chunk) [Free TV and Related Business](index=19&type=section&id=Free%20TV%20and%20Related%20Business) - The Free TV and Related Business recorded revenue of **HK$343 million**, a **29% decrease** from the same period last year, mainly due to the timing of concerts and events[56](index=56&type=chunk) - EBITDA **declined to HK$47 million** with a margin of 14%, consistent with the deferral of event-related revenue, which is expected to recover in the second half of the year[58](index=58&type=chunk) - ViuTV's digital membership **grew by over 4% to 3.3 million**, with viewing time also increasing by more than 4%[57](index=57&type=chunk) [Other Businesses](index=19&type=section&id=Other%20Businesses) - Revenue from Other Businesses **grew 99%** from HK$373 million last year to **HK$743 million**, in line with the progress of IT enterprise solutions projects[59](index=59&type=chunk) - EBITDA costs for the six months ended June 30, 2025 were **HK$364 million**[59](index=59&type=chunk) [Eliminations](index=19&type=section&id=Eliminations) - Eliminations for the six months ended June 30, 2025 amounted to **HK$680 million**, reflecting inter-segment collaborations on internal and external projects[60](index=60&type=chunk) [Costs](index=20&type=section&id=Costs) The Group's total cost of sales increased due to revenue mix changes at HKT, while overall operating costs decreased from efficiency gains - The Group's total cost of sales **increased by 12% to HK$9.978 billion**, while HKT's cost of sales rose by 6% to HK$9.021 billion[61](index=61&type=chunk) - The Group's operating costs **decreased by 5% to HK$2.934 billion**, and the operating costs to revenue ratio improved from 17.4% to 15.5%[62](index=62&type=chunk) - HKT reduced operating costs by 4% to HK$1.921 billion through AI-driven workflow transformation, while the OTT business achieved cost savings through enhanced promotional efficiency[62](index=62&type=chunk) [EBITDA](index=20&type=section&id=EBITDA) Consolidated EBITDA grew, driven by increased contributions from the OTT business and the solid performance of HKT - Consolidated EBITDA **rose 6% to HK$6.010 billion**, primarily driven by increased contributions from the OTT business and HKT's solid performance and operational efficiencies[63](index=63&type=chunk) - The EBITDA margin remained stable at **32%**[63](index=63&type=chunk) [Other Net Gains](index=20&type=section&id=Other%20Net%20Gains) Other net gains decreased compared to the prior year, mainly reflecting the revaluation of the Group's investment portfolio - For the six months ended June 30, 2025, other net gains were **HK$125 million**, compared to HK$184 million in the prior year[64](index=64&type=chunk) - The change primarily reflects the mark-to-market revaluation of the Group's investment portfolio[64](index=64&type=chunk) [Interest Income and Finance Costs](index=20&type=section&id=Interest%20Income%20and%20Finance%20Costs) Finance costs decreased significantly due to HKT's debt reduction and a decline in HIBOR, lowering the Group's average cost of debt - Interest income was **HK$45 million**, while finance costs **decreased significantly by 15% to HK$1.185 billion**[65](index=65&type=chunk) - The reduction in finance costs was mainly due to lower borrowings following HKT's debt reduction in late 2024 and a decline in HIBOR since early May 2025[65](index=65&type=chunk) - The Group's average cost of debt **decreased year-on-year from 4.4% to 4.1%**, and net finance costs fell by 14% to HK$1.140 billion[65](index=65&type=chunk) [Income Tax](index=20&type=section&id=Income%20Tax) Income tax expense increased year-on-year, primarily as a result of higher profit before income tax during the period - Income tax expense was **HK$446 million**, compared to HK$326 million in the prior year[66](index=66&type=chunk) - The increase in income tax expense was mainly due to the increase in profit before income tax for the period[66](index=66&type=chunk) [Profit Attributable to Non-controlling Interests](index=21&type=section&id=Profit%20Attributable%20to%20Non-controlling%20Interests) Profit attributable to non-controlling interests increased, mainly representing the share of results for non-controlling shareholders of HKT and Viu - Profit attributable to non-controlling interests was **HK$1.088 billion** (June 30, 2024: HK$696 million)[67](index=67&type=chunk) - This primarily represents the results attributable to non-controlling shareholders of HKT and Viu International Limited[67](index=67&type=chunk) [Profit Attributable to Holders of Perpetual Capital Securities](index=21&type=section&id=Profit%20Attributable%20to%20Holders%20of%20Perpetual%20Capital%20Securities) This amount represents the coupon payment on the perpetual capital securities issued by the Group in January 2021 - Profit attributable to holders of perpetual capital securities was **HK$115 million**[68](index=68&type=chunk) - This represents the coupon payable to security holders on the perpetual capital securities issued in January 2021, bearing interest at a rate of 4% per annum[68](index=68&type=chunk) [Loss Attributable to Equity Holders of the Company](index=21&type=section&id=Loss%20Attributable%20to%20Equity%20Holders%20of%20the%20Company) The loss attributable to equity holders narrowed due to improved operating profit and lower net finance costs - The loss attributable to equity holders of the Company **narrowed to HK$445 million** (June 30, 2024: HK$462 million)[69](index=69&type=chunk) - The narrowed loss was a result of improved operating profit and a decrease in net finance costs[69](index=69&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) The Group maintained a solid liquidity position with substantial available bank facilities and investment-grade credit ratings Liquidity Position as at June 30, 2025 | Metric | Amount (HK$) | | :--- | :--- | | Total Debt | 57.273 billion | | Cash and Short-term Deposits | 2.329 billion | | Available Bank Facilities | 59.761 billion | | Undrawn Bank Facilities | 22.093 billion | | Total Debt to Total Assets Ratio | 57% | - CAS Holding No 1 Limited is rated **"Baa3" by Moody's** and **"BBB-" by S&P**, while Hong Kong Telecommunications (HKT) Limited is rated **"Baa2" by Moody's** and **"BBB" by S&P**[71](index=71&type=chunk) [Capital Expenditure](index=21&type=section&id=Capital%20Expenditure) The Group's capital expenditure decreased, with HKT accounting for the majority, reflecting prudent investment in digital capabilities - The Group's capital expenditure was **HK$1.106 billion** (June 30, 2024: HK$1.142 billion), with HKT accounting for approximately 97%[72](index=72&type=chunk) - The capital expenditure to revenue ratio was approximately **5.8%** (June 30, 2024: 6.5%)[72](index=72&type=chunk) - HKT's mobile and telecommunications services capex decreased, while media business capex also fell following the completion of a new production studio's first phase[72](index=72&type=chunk) [Hedging](index=22&type=section&id=Hedging) The Group actively manages foreign currency and interest rate risks through a non-speculative hedging policy - The Group's policy is to continuously manage market risks directly related to its business and financing activities and not to engage in speculative derivative transactions[73](index=73&type=chunk) - Approximately three-quarters of the Group's consolidated revenue and costs are denominated in Hong Kong dollars, providing a natural hedge[73](index=73&type=chunk) - The Group has entered into forward and swap contracts to manage foreign exchange and interest rate risks on its foreign currency-denominated financing[73](index=73&type=chunk) [Pledge of Assets](index=22&type=section&id=Pledge%20of%20Assets) As of the reporting date, the Group had not pledged any assets to secure its bank facilities - As at June 30, 2025, the Group had not pledged any assets to secure its bank facilities[74](index=74&type=chunk) [Contingent Liabilities](index=22&type=section&id=Contingent%20Liabilities) The Group's contingent liabilities primarily consist of performance guarantees and a partial guarantee for a credit facility to an associate Contingent Liabilities (HK$ million) | Item | Dec 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Performance guarantees | 1,227 | 1,119 | | Others | 25 | 24 | | **Total** | **1,252** | **1,143** | - The Group has provided a partial guarantee for a **HK$780 million** credit facility granted to an associate, with its share of the drawn amount being approximately **HK$235 million**[75](index=75&type=chunk) [Human Resources](index=22&type=section&id=Human%20Resources) The Group employs over 14,400 staff globally and maintains performance-based bonus and incentive schemes - As at June 30, 2025, the Group employed over **14,400 employees** in 25 countries and cities worldwide (June 30, 2024: 14,800)[76](index=76&type=chunk) - Approximately **68% of employees** are based in Hong Kong, with the remainder mostly employed in mainland China[76](index=76&type=chunk) - The Group has performance-based bonus and incentive schemes tied to revenue, EBITDA, and free cash flow targets, as well as individual performance[76](index=76&type=chunk) [Interim Dividend](index=22&type=section&id=Interim%20Dividend) The Board declared an interim dividend of HK$9.77 cents per ordinary share for the first half of 2025 - The Board has declared an interim dividend of **HK$9.77 cents per ordinary share** for the six months ended June 30, 2025 (June 30, 2024: HK$9.77 cents)[77](index=77&type=chunk) - The dividend will be paid on or about Friday, September 5, 2025, to shareholders on the register of members on Wednesday, August 20, 2025[77](index=77&type=chunk) [Consolidated Income Statement](index=23&type=section&id=Consolidated%20Income%20Statement) [Consolidated Income Statement for H1 2025](index=23&type=section&id=Consolidated%20Income%20Statement%20for%20H1%202025) The Group's profit for the period was HK$758 million, with a loss attributable to equity holders of HK$445 million H1 2025 Consolidated Income Statement Summary (HK$ million) | Metric | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Revenue | 17,698 | 18,922 | | Cost of sales | (8,939) | (9,978) | | General and administrative expenses | (6,761) | (6,602) | | Other net gains | 184 | 125 | | Interest income | 68 | 45 | | Finance costs | (1,390) | (1,185) | | Profit before income tax | 677 | 1,204 | | Income tax | (326) | (446) | | **Profit for the period** | **351** | **758** | | (Loss)/profit attributable to equity holders | (462) | (445) | | Attributable to perpetual capital securities holders | 117 | 115 | | Attributable to non-controlling interests | 696 | 1,088 | | **Loss per share (basic and diluted)** | **(5.98) HK cents** | **(5.75) HK cents** | [Consolidated Statement of Comprehensive Income](index=24&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) [Consolidated Statement of Comprehensive Income for H1 2025](index=24&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income%20for%20H1%202025) The Group recorded a total comprehensive income of HK$141 million, resulting from a profit for the period offset by other comprehensive loss H1 2025 Consolidated Statement of Comprehensive Income Summary (HK$ million) | Metric | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Profit for the period | 351 | 758 | | Other comprehensive (loss)/income | (257) | (617) | | **Total comprehensive income for the period** | **94** | **141** | | Attributable to equity holders of the Company | (682) | (782) | | Attributable to perpetual capital securities holders | 117 | 115 | | Attributable to non-controlling interests | 659 | 808 | - Other comprehensive loss mainly includes fair value changes of financial assets at FVTOCI, currency translation differences, and fair value changes of cash flow hedges[80](index=80&type=chunk) [Consolidated and Company Statements of Financial Position](index=25&type=section&id=Consolidated%20and%20Company%20Statements%20of%20Financial%20Position) [Consolidated and Company Statements of Financial Position as at June 30, 2025](index=25&type=section&id=Consolidated%20and%20Company%20Statements%20of%20Financial%20Position%20as%20at%20June%2030%2C%202025) The Group's total assets stood at HK$101.17 billion, with net assets of HK$7.40 billion as of June 30, 2025 Consolidated Statement of Financial Position Summary as at June 30, 2025 (HK$ million) | Item | Dec 31, 2024 (Audited) | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 83,727 | 85,247 | | Current assets | 15,031 | 15,922 | | **Total assets** | **98,758** | **101,169** | | **Liabilities** | | | | Current liabilities | (25,291) | (22,766) | | Non-current liabilities | (61,953) | (71,007) | | **Total liabilities** | **(87,244)** | **(93,773)** | | **Net assets** | **11,514** | **7,396** | | Equity attributable to equity holders of the Company | 1,604 | (1,366) | | Perpetual capital securities | 5,884 | 5,592 | | Non-controlling interests | 4,026 | 3,170 | | **Total equity** | **11,514** | **7,396** | - Intangible assets (including goodwill) represent a significant portion of non-current assets, amounting to **HK$41.613 billion**[82](index=82&type=chunk) - Within current liabilities, short-term borrowings decreased significantly to **HK$1.252 billion**, while trade payables increased to **HK$8.556 billion**[83](index=83&type=chunk) [Consolidated Statement of Changes in Equity](index=27&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) [Consolidated Statement of Changes in Equity for H1 2025](index=27&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity%20for%20H1%202025) Equity attributable to the Company's equity holders decreased, primarily due to the loss for the period and other comprehensive loss H1 2025 Summary of Changes in Equity (HK$ million) | Item | Total equity attributable to equity holders | Perpetual capital securities | Non-controlling interests | Total equity | | :--- | :--- | :--- | :--- | :--- | | At January 1, 2025 | 1,604 | 5,884 | 4,026 | 11,514 | | Total comprehensive income/(loss) for the period | (782) | 115 | 808 | 141 | | Total transactions with owners | (2,188) | (407) | (1,664) | (4,259) | | **At June 30, 2025** | **(1,366)** | **5,592** | **3,170** | **7,396** | - The change in equity attributable to the Company's equity holders was mainly impacted by the **loss for the period (HK$445 million)** and **other comprehensive loss (HK$337 million)**[86](index=86&type=chunk) - Total transactions with owners amounted to a **negative HK$4.26 billion**, primarily including dividend payments, distributions to non-controlling interests, and redemption of perpetual capital securities[86](index=86&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=29&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) [Condensed Consolidated Statement of Cash Flows for H1 2025](index=29&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows%20for%20H1%202025) The Group generated positive net cash from operating activities, while cash was used in investing and financing activities H1 2025 Condensed Consolidated Statement of Cash Flows Summary (HK$ million) | Item | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Net cash generated from operating activities | 4,411 | 5,074 | | Net cash used in investing activities | (3,872) | (4,221) | | Net cash used in financing activities | (1,199) | (1,321) | | Net decrease in cash and cash equivalents | (660) | (468) | | Effect of foreign exchange rate changes | (11) | 6 | | Cash and cash equivalents at January 1 | 2,627 | 2,288 | | **Cash and cash equivalents at June 30** | **1,956** | **1,826** | - Net cash generated from operating activities increased year-on-year, indicating strong cash generation from core operations[87](index=87&type=chunk) - Net cash used in investing activities increased, primarily including investments in associates and other investing activities[87](index=87&type=chunk) - Net cash used in financing activities increased, as proceeds from new borrowings were offset by other financing activities, including repayment of borrowings[87](index=87&type=chunk) [Notes to the Unaudited Condensed Consolidated Interim Financial Information](index=30&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) [1. Basis of Preparation](index=30&type=section&id=1.%20Basis%20of%20Preparation) This financial information is prepared in accordance with HKAS 34 and has been reviewed by the Audit Committee and independent auditor - This unaudited condensed consolidated interim financial information has been prepared in accordance with the applicable disclosure requirements of Appendix D2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard (HKAS) 34 "Interim Financial Reporting"[89](index=89&type=chunk) - This financial information has been reviewed by the Company's Audit Committee and by the independent auditor in accordance with Hong Kong Standard on Review Engagements 2410[89](index=89&type=chunk) - Management has determined that the Group is able to meet its debts as they fall due for the next 12 months, and therefore has prepared this financial information on a going concern basis[91](index=91&type=chunk) [2. Segment Information](index=31&type=section&id=2.%20Segment%20Information) The Group's performance is assessed from a product perspective, primarily divided into HKT, Media, and Other Businesses - The chief operating decision-maker considers the business from a product perspective and assesses the performance of HKT, Media Business, and Other Businesses[94](index=94&type=chunk)[95](index=95&type=chunk) - EBITDA is the measure of segment performance, representing earnings before interest, tax, depreciation, and amortization[94](index=94&type=chunk) H1 2025 Segment EBITDA (HK$ million) | Business Segment | EBITDA | | :--- | :--- | | HKT | 6,380 | | Media Business | 393 | | Other Businesses | (364) | | Eliminations | (399) | | **Consolidated EBITDA** | **6,010** | [3. Other Net Gains](index=33&type=section&id=3.%20Other%20Net%20Gains) Other net gains were primarily driven by fair value changes of financial assets at FVTPL and derivative financial instruments H1 2025 Composition of Other Net Gains (HK$ million) | Item | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Fair value changes of financial assets at FVTPL | 143 | 68 | | Fair value changes of derivative financial instruments | 7 | 10 | | Others | 34 | 47 | | **Total** | **184** | **125** | [4. Profit Before Income Tax](index=33&type=section&id=4.%20Profit%20Before%20Income%20Tax) Profit before income tax was HK$1.204 billion, after deducting costs of inventories sold, amortization, and finance costs H1 2025 Major Deductions from Profit Before Income Tax (HK$ million) | Item | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Cost of inventories sold | 3,163 | 4,243 | | Cost of sales (excluding inventories sold) | 5,776 | 5,735 | | Amortization of intangible assets | 1,576 | 1,635 | | Finance costs on borrowings | 1,292 | 1,079 | - Profit before income tax was **HK$1.204 billion**, an increase from HK$677 million in the same period last year[78](index=78&type=chunk) [5. Income Tax](index=34&type=section&id=5.%20Income%20Tax) Income tax expense for the period includes Hong Kong profits tax, overseas taxation, and changes in deferred income tax H1 2025 Composition of Income Tax Expense (HK$ million) | Item | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Hong Kong profits tax | 157 | 156 | | Overseas taxation | 43 | 37 | | Change in deferred income tax | 126 | 253 | | **Total** | **326** | **446** | - Hong Kong profits tax has been provided at the rate of 16.5% on the estimated assessable profit for the period[100](index=100&type=chunk) - The Group has assessed the potential impact of top-up tax under the Global Anti-Base Erosion (GloBE) Rules (Pillar Two) and has no tax exposure as of the reporting date[101](index=101&type=chunk) [6. Dividends](index=34&type=section&id=6.%20Dividends) The Board declared an interim dividend of HK$9.77 cents per share, and the final dividend for the previous year was paid during the period H1 2025 Dividend Information (HK$ million) | Item | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Interim dividend (HK$9.77 cents per share) | 756 | 756 | | Prior year final dividend paid (HK$28.48 cents per share) | 2,202 | 2,203 | - The interim dividend has not been recognized as a liability in this unaudited condensed consolidated interim financial information[102](index=102&type=chunk) [7. Loss Per Share](index=35&type=section&id=7.%20Loss%20Per%20Share) The basic and diluted loss per share for H1 2025 was HK$5.75 cents, a slight improvement from the prior year H1 2025 Loss Per Share (HK$) | Metric | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Loss for calculating basic and diluted loss per share (million) | (462) | (445) | | Weighted average number of ordinary shares for basic loss per share | 7,730,147,245 | 7,733,145,659 | | **Basic and diluted loss per share** | **(5.98) cents** | **(5.75) cents** | - The impact of PCCW Shares granted under the Company's share award schemes had an anti-dilutive effect on the loss per share for the six months ended June 30, 2024 and 2025[104](index=104&type=chunk) [8. Net Trade Receivables](index=36&type=section&id=8.%20Net%20Trade%20Receivables) Net trade receivables stood at HK$3.568 billion, with the majority of balances aged within 30 days Aging Analysis of Trade Receivables (HK$ million) | Aging | Dec 31, 2024 (Audited) | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | 1 – 30 days | 2,315 | 2,196 | | 31 – 60 days | 482 | 368 | | 61 – 90 days | 196 | 316 | | 91 – 120 days | 192 | 219 | | Over 120 days | 854 | 876 | | **Total** | **4,039** | **3,975** | | Less: Loss allowance | (362) | (407) | | **Net trade receivables** | **3,677** | **3,568** | - Net trade receivables included amounts due from related parties of **HK$120 million**[105](index=105&type=chunk) - The Group's credit period for general customers is up to 30 days from the invoice date, with individual credit assessments for high-value credit[106](index=106&type=chunk) [9. Trade Payables](index=37&type=section&id=9.%20Trade%20Payables) Trade payables increased to HK$8.556 billion, with the largest portion aged within 30 days Aging Analysis of Trade Payables (HK$ million) | Aging | Dec 31, 2024 (Audited) | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | 1 – 30 days | 2,985 | 3,675 | | 31 – 60 days | 1,751 | 2,298 | | 61 – 90 days | 915 | 844 | | 91 – 120 days | 1,011 | 673 | | Over 120 days | 908 | 1,066 | | **Total** | **7,570** | **8,556** | - Trade payables included amounts due to related parties of **HK$247 million**[107](index=107&type=chunk) [10. Share Capital](index=37&type=section&id=10.%20Share%20Capital) As of June 30, 2025, the Company had over 7.74 billion ordinary shares issued and fully paid Share Capital Information (HK$ million) | Item | Jan 1 & June 30, 2024 (Unaudited) | Jan 1 & June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | Number of issued shares | 7,739,638,249 | 7,741,063,374 | | Share capital | 12,954 | 12,954 | - The total reserves available for distribution by the Company as at June 30, 2025 amounted to **HK$16.896 billion** (as at December 31, 2024: HK$17.722 billion)[108](index=108&type=chunk) [11. Share Award Schemes of the Company and HKT Trust and HKT](index=38&type=section&id=11.%20Share%20Award%20Schemes%20of%20the%20Company%20and%20HKT%20Trust%20and%20HKT) The Company and its subsidiaries operate share award schemes to grant shares and share stapled units to selected participants - The Company operates the PCCW Share Award Scheme, while HKT Trust and HKT operate Share Stapled Unit Award Schemes to grant shares and units to selected participants[109](index=109&type=chunk) Summary of Share Award Scheme Movements (as at June 30, 2025) | Item | At Jan 1, 2025 | Vested | At June 30, 2025 | | :--- | :--- | :--- | :--- | | Number of PCCW Shares | 9,408,279 | (5,883,923) | 3,524,356 | | Number of Share Stapled Units | 4,995,834 | (2,266,735) | 2,729,099 | - For the six months ended June 30, 2025, the weighted average fair value of PCCW Shares and Share Stapled Units granted was **HK$5.08 per share** and **HK$11.10 per unit**, respectively[110](index=110&type=chunk) [12. Commitments](index=39&type=section&id=12.%20Commitments) The Group's commitments primarily relate to capital expenditure for property, plant and equipment, and the purchase of television content rights Commitments (HK$ million) | Item | Dec 31, 2024 (Audited) | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | Capital commitments authorized and contracted for | 1,863 | 1,806 | | Purchase of broadcasting rights for certain television content | 1,616 | 1,287 | | Operating expenditure commitments | 961 | 445 | | **Total** | **4,440** | **3,538** | - Capital commitments include amounts for the acquisition of property, plant and equipment of **HK$1.619 billion** (December 31, 2024) and **HK$1.673 billion** (June 30, 2025)[111](index=111&type=chunk) - Additions to property, plant and equipment for the six months ended June 30, 2025 amounted to **HK$1.106 billion**[112](index=112&type=chunk) [13. Contingent Liabilities](index=39&type=section&id=13.%20Contingent%20Liabilities) The Group's contingent liabilities primarily consist of performance guarantees and a partial guarantee for a credit facility to an associate Contingent Liabilities (HK$ million) | Item | Dec 31, 2024 (Audited) | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | Performance guarantees | 1,227 | 1,119 | | Others | 25 | 24 | | **Total** | **1,252** | **1,143** | - The Group has provided a partial guarantee for a **HK$780 million** credit facility granted to an associate, with its share of the drawn amount being approximately **HK$235 million**[114](index=114&type=chunk) [14. Related Party Transactions](index=40&type=section&id=14.%20Related%20Party%20Transactions) The Group engaged in significant transactions with related parties, including joint ventures, associates, and a substantial shareholder H1 2025 Summary of Related Party Transactions (HK$ million) | Transaction Type | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Service fees received/receivable from joint ventures | 24 | 23 | | Service fees received/receivable from associates | 59 | 39 | | Service fees received/receivable from a substantial shareholder | 84 | 80 | | Service fees paid/payable to joint ventures | 147 | 130 | | Service fees paid/payable to associates | 681 | 534 | | Service fees paid/payable to a substantial shareholder | 82 | 98 | | Key management compensation | 54 | 55 | - All related party transactions were negotiated in the ordinary course of business and based on estimated market values as determined by the directors[115](index=115&type=chunk) [15. Financial Instruments](index=41&type=section&id=15.%20Financial%20Instruments) The Group manages credit, liquidity, and market risks through its financial management policies, measuring financial instruments by fair value hierarchy - The Group controls credit, liquidity, and market risks through its financial management policies and practices and does not engage in speculative derivative transactions[117](index=117&type=chunk) Fair Value Measurement of Financial Instruments as at June 30, 2025 (HK$ million) | Item | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | **Assets** | | | | | | Financial assets at FVTOCI (non-current) | 577 | – | 58 | 635 | | Financial assets at FVTPL (non-current) | 228 | – | 3,258 | 3,486 | | Derivative financial instruments (non-current) | – | 146 | – | 146 | | Derivative financial instruments (current) | – | 7 | – | 7 | | **Total assets** | **805** | **153** | **3,316** | **4,274** | | **Liabilities** | | | | | | Derivative financial instruments (current) | – | (33) | – | (33) | | Derivative financial instruments (non-current) | – | (1,091) | – | (1,091) | | **Total liabilities** | **–** | **(1,124)** | **–** | **(1,124)** | - Unlisted securities are classified under Level 3, with their fair value determined using valuation techniques such as recent arm's length transactions and discounted cash flow analysis[121](index=121&type=chunk)[123](index=123&type=chunk) [16. Changes in Interests in Subsidiaries without a Change of Control](index=45&type=section&id=16.%20Changes%20in%20Interests%20in%20Subsidiaries%20without%20a%20Change%20of%20Control) The Group's economic interest in Viu International Limited decreased slightly, resulting in an increase in non-controlling interests - For the six months ended June 30, 2025, the Company's economic interest in Viu further decreased from approximately 62.8% as at December 31, 2024 to approximately 62.7%[129](index=129&type=chunk) - This change resulted in an increase in non-controlling interests attributable to Viu of **HK$1 million** for the six months ended June 30, 2025[129](index=129&type=chunk) [17. Business Combination](index=45&type=section&id=17.%20Business%20Combination) The Group completed the acquisition of Clermont Media Limited to expand its business in finance, economics, and lifestyle content - On February 4, 2025, the Group completed the acquisition of Clermont Media Limited and its subsidiaries for a total consideration of **HK$70 million**[130](index=130&type=chunk) - The acquisition aims to expand the Group's business in finance, economics, investment, lifestyle, and education to grow advertising and subscription revenue[130](index=130&type=chunk) - Goodwill of **HK$29 million** was recognized on the date of acquisition[130](index=130&type=chunk) [General Information](index=46&type=section&id=General%20Information) [Interests and Short Positions of Directors and Chief Executive in Shares, Share Stapled Units, Underlying Shares, Underlying Share Stapled Units and Debentures of the Company and its Associated Corporations](index=46&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%20and%20Chief%20Executive%20in%20Shares%2C%20Share%20Stapled%20Units%2C%20Underlying%20Shares%2C%20Underlying%20Share%20Stapled%20Units%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) This section details the shareholdings of the Chairman and Acting Group Managing Director in the Company and its associated corporations Directors' and Chief Executive's Long Positions in Shares of the Company (as at June 30, 2025) | Name | Personal Interests | Family Interests | Corporate Interests | Other Interests | Total | Approx % of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Richard Li | – | – | 535,291,134 | 1,928,842,224 | 2,464,133,358 | 31.83% | | Susanna Hui | 8,435,883 | – | – | 4,652,529 | 13,088,412 | 0.17% | | Tse Sze Wing | – | 367,479 | – | – | 367,479 | 0.005% | Directors' and Chief Executive's Long Positions in Share Stapled Units of HKT Trust and HKT Limited (as at June 30, 2025) | Name | Personal Interests | Family Interests | Corporate Interests | Other Interests | Total | Approx % of Total Issued Units | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Richard Li | – | – | 67,655,964 | 152,802,281 | 220,458,245 | 2.91% | | Susanna Hui | 4,133,441 | – | – | 2,024,571 | 6,158,012 | 0.08% | | Tse Sze Wing | – | 246,028 | – | – | 246,028 | 0.003% | Directors' and Chief Executive's Long Positions in Shares of Pacific Century Premium Developments Limited (as at June 30, 2025) | Name | Personal Interests | Family Interests | Corporate Interests | Other Interests | Total | Approx % of Total Issued PCPD Shares | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Richard Li | – | – | 207,267,814 | 402,164,972 | 609,432,786 | 29.90% | | Tse Sze Wing | – | 59,531 | – | – | 59,531 | 0.003% | [Share Schemes of the Company and its Subsidiaries](index=49&type=section&id=Share%20Schemes%20of%20the%20Company%20and%20its%20Subsidiaries) The Company and HKT operate various share and share stapled unit option and award schemes for their employees - The Company has the 2024 Share Option Scheme, 2024 Share Award Scheme, and 2012 Share Award Scheme, while HKT has its own Share Stapled Unit Option and Award Schemes[144](index=144&type=chunk)[147](index=147&type=chunk)[154](index=154&type=chunk)[156](index=156&type=chunk) PCCW Share Award Schemes Unvested Shares (as at June 30, 2025) | Scheme | Unvested at Jan 1, 2025 | Unvested at June 30, 2025 | | :--- | :--- | :--- | | PCCW Subscription Scheme | 6,122,915 | 2,366,623 | | 2024 Share Award Scheme | 78,667 | 6,488,686 | HKT Share Stapled Unit Award Schemes Unvested Units (as at June 30, 2025) | Scheme | Unvested at Jan 1, 2025 | Unvested at June 30, 2025 | | :--- | :--- | :--- | | HKT Share Stapled Unit Subscription Scheme | 1,812,671 | 636,966 | | HKT 2024 Share Stapled Unit Award Scheme | 34,395 | 2,656,065 | - During the six months ended June 30, 2025, options and awards for a total of **6,634,742 Shares** were granted under all share schemes involving new share issuance, representing approximately **0.09%** of the weighted average number of issued shares[153](index=153&type=chunk) - During the six months ended June 30, 2025, options and awards for a total of **2,630,211 Share Stapled Units** were granted under all unit schemes involving new unit issuance, representing approximately **0.03%** of the weighted average number of issued units[167](index=167&type=chunk) [Substantial Shareholders' Interests and Short Positions](index=55&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions) The Company's substantial shareholders include PCG Holdings and China Unicom Group as of the reporting date Substantial Shareholders' Long Positions in Shares (as at June 30, 2025) | Shareholder Name | Number of Shares/Underlying Shares Held | Approx % of Total Issued Shares | | :--- | :--- | :--- | | Pacific Century Group | 1,753,529,954 | 22.65% | | PCG Holdings | 1,928,842,224 | 24.92% | | Star Ocean Ultimate Limited | 1,928,842,224 | 24.92% | | The Ocean Trust | 1,928,842,224 | 24.92% | | The Starlite Trust | 1,928,842,224 | 24.92% | | OS Holdings Limited | 1,928,842,224 | 24.92% | | Ocean Star Management Limited | 1,928,842,224 | 24.92% | | The Ocean Unit Trust | 1,928,842,224 | 24.92% | | The Starlite Unit Trust | 1,928,842,224 | 24.92% | | Star Ocean Ultimate Holdings Limited | 1,928,842,224 | 24.92% | | Fung Wai Ling | 1,928,842,224 | 24.92% | | Wong Ka Chun | 1,928,842,224 | 24.92% | | China United Network Communications Group Company Limited | 1,424,935,885 | 18.41% | - PCG Holdings' interest includes its beneficial interest in 175,312,270 Shares and its interest in 1,753,529,954 Shares held by Pacific Century Group, its controlled corporation[169](index=169&type=chunk) - China Unicom indirectly holds its interests through its wholly-owned subsidiary, China Unicom Group Corporation (BVI) Limited[170](index=170&type=chunk) [Other Persons' Interests and Short Positions Discloseable under the SFO](index=56&type=section&id=Other%20Persons'%20Interests%20and%20Short%20Positions%20Discloseable%20under%20the%20SFO) Ocean Star Investment Management Limited held a significant long position in the Company's shares as of the reporting date Other Persons' Long Positions in Shares (as at June 30, 2025) | Name | Number of Shares/Underlying Shares Held | Approx % of Total Issued Shares | | :--- | :--- | :--- | | Ocean Star Investment Management Limited | 1,928,842,224 | 24.92% | - Ocean Star Investment Management Limited is deemed to be interested in these shares in its capacity as the investment manager of The Ocean Unit Trust and The Starlite Unit Trust[172](index=172&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=56&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the Company nor its subsidiaries engaged in any purchase, sale, or redemption of the Company's listed securities during the period - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities[173](index=173&type=chunk) [Audit Committee](index=56&type=section&id=Audit%20Committee) The Audit Committee has reviewed the Group's accounting policies and the unaudited interim financial information for H1 2025 - The Company's Audit Committee has reviewed the accounting policies adopted by the Group and the unaudited condensed consolidated interim financial information of the Group for the six months ended June 30, 2025[174](index=174&type=chunk) - The condensed consolidated interim financial information is unaudited, but has been reviewed by the Company's independent auditor[174](index=174&type=chunk) [Model Code in Appendix C3 to the Listing Rules](index=56&type=section&id=Model%20Code%20in%20Appendix%20C3%20to%20the%20Listing%20Rules) The Company has adopted a securities dealing code on terms no less exacting than the required standard, with which all directors have complied - The Company has adopted its own code for securities transactions by all directors and employees, the PCCW Code for Securities Transactions, on terms no less exacting than the required standard set out in the Model Code in Appendix C3 to the Listing Rules[175](index=175&type=chunk) - Following specific enquiry of all directors of the Company, the Company has received from each of them confirmation of compliance with the required standard set out in the Model Code and the PCCW Code throughout the period[176](index=176&type=chunk) [Corporate Governance Code](index=56&type=section&id=Corporate%20Governance%20Code) The Company is committed to high standards of corporate governance and has complied with all applicable code provisions - The Company is committed to maintaining a high standard of corporate governance, with principles emphasizing a rigorous ethical, transparent, responsible, and honest corporate culture[177](index=177&type=chunk) - During the six months ended June 30, 2025, the Company has applied the principles of and complied with all applicable code provisions of the Corporate Governance Code contained in Appendix C1 to the Listing Rules[178](index=178&type=chunk) - The directors have received a report from management on the risk management and internal control systems and found no material risks or internal control deficiencies[178](index=178&type=chunk) [Investor Relations](index=57&type=section&id=Investor%20Relations) [Directors](index=57&type=section&id=Directors) This section lists the members of the Board of Directors as of the date of the interim results announcement - Executive Directors include Richard Li (Chairman) and Susanna Hui (Acting Group Managing Director & Group CFO)[179](index=179&type=chunk) - Non-Executive Directors include Tse Sze Wing, Tang Yongbo (Deputy Chairman), Meng Shusen, Zhao Xingfu, and David Wei[179](index=179&type=chunk) - Independent Non-Executive Directors include Aman Mehta, Jennifer Wong How Yue, Bryce Wayne Lee, Lars Eric Nils Rodert, David Christopher Chance, and Sharhan Mohamed Muhseen Mohamed[179](index=179&type=chunk) [Registered Office](index=57&type=section&id=Registered%20Office) The Company's registered office is located at 41/F, PCCW Tower, Taikoo Place, 979 King's Road, Quarry Bay, Hong Kong - The registered office is located at 41/F, PCCW Tower, Taikoo Place, 979 King's Road, Quarry Bay, Hong Kong[179](index=179&type=chunk) [2025 Interim Report](index=57&type=section&id=2025%20Interim%20Report) The 2025 Interim Report is available in print and electronic formats, with options for shareholders to choose their preferred version - Printed copies of the 2025 Interim Report in both English and Chinese are available from the Company and its Share Registrar[179](index=179&type=chunk) - The report is also available in accessible format on the Company's website (www.pccw.com/ir) and the HKEXnews website (www.hkexnews.hk)[179](index=179&type=chunk) - Shareholders may at any time change their choice of language and/or means of receipt of the Company's future corporate communications by giving reasonable prior notice in writing or by email to the Company's Share Registrar[180](index=180&type=chunk) [Listing](index=57&type=section&id=Listing) PCCW's shares are listed in Hong Kong and traded as ADRs in the US, with certain subsidiary-issued notes also listed - The Company's shares are listed on The Stock Exchange of Hong Kong Limited and traded in the form of American Depositary Receipts (ADRs) on the OTC Markets Group Inc in the United States (Ticker: PCCWY)[181](index=181&type=chunk) - Certain guaranteed notes and securities issued by the Company's subsidiaries are listed on the Singapore Exchange Securities Trading Limited and the GreTai Securities Market[181](index=181&type=chunk) [Stock Codes](index=57&type=section&id=Stock%20Codes) This section provides the various stock codes for PCCW across different platforms Stock Codes | Exchange/Platform | Code | | :--- | :--- | | The Stock Exchange of Hong Kong Limited | 0008 | | Reuters | 0008.HK | | Bloomberg | 8 HK | | American Depositary Receipts | PCCWY | [Share Registrar](index=57&type=section&id=Share%20Registrar) The Company's share registrar is Computershare Hong Kong Investor Services Limited - The Share Registrar is Computershare Hong Kong Investor Services Limited, located at Shops 1712–1716, 17/F, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong[184](index=184&type=chunk) [ADR Depositary](index=57&type=section&id=ADR%20Depositary) The ADR depositary for PCCW is Citibank, N.A. - The ADR Depositary is Citibank, N.A., located at P.O. Box 43077 Providence, Rhode Island 02940-3077, USA[184](index=184&type=chunk) [Share Information](index=57&type=section&id=Share%20Information) This section provides key details about the Company's shares Share Information | Item | Data | | :--- | :--- | | Board Lot | 1,000 Shares | | Shares in issue at June 30, 2025 | 7,741,063,374 Shares | [Dividend](index=57&type=section&id=Dividend) The interim dividend for the first half of 2025 is HK$9.77 cents per ordinary share - The interim dividend per ordinary share for the six months ended June 30, 2025 is HK$9.77 cents[185](index=185&type=chunk) [Financial Calendar](index=57&type=section&id=Financial%20Calendar) This section outlines the key dates for the 2025 interim results and dividend payment Financial Calendar | Event | Date | | :--- | :--- | | Announcement of 2025 interim results | August 1, 2025 | | Closure of register of members (for 2025 interim dividend) | August 19–20, 2025 (both days inclusive) | | Record date for 2025 interim dividend | August 20, 2025 | | Payment of 2025 interim dividend | On or about September 5, 2025 | [Investor Relations Contact](index=57&type=section&id=Investor%20Relations%20Contact) Investors can contact the Investor Relations department via email or visit the company website for more information - Investors can contact PCCW's Investor Relations department via email at ir@pccw.com[187](index=187&type=chunk) - The company website is www.pccw.com[187](index=187&type=chunk)

[Company Information](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Company Overview](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E8%A7%88) This section outlines the company's basic information, including board members, committee structures, and registered locations - The Board of Directors comprises four executive directors and three independent non-executive directors, with audit, remuneration, and nomination committees established[2](index=2&type=chunk) - The company is incorporated in the Cayman Islands, with its headquarters and principal place of business in China located in Guangzhou, Guangdong Province, and its principal place of business in Hong Kong in Tsim Sha Tsui, Kowloon[2](index=2&type=chunk) - The auditor is RSM Hong Kong, and the Hong Kong share registrar is Tricor Investor Services Limited[3](index=3&type=chunk) [Unaudited Condensed Consolidated Statement of Comprehensive Income](index=4&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) [Financial Performance Overview](index=4&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E6%A6%82%E8%A7%88) This section reports the unaudited condensed consolidated comprehensive income, showing a significant revenue decrease, a shift from profit to loss, and increased loss per share Condensed Consolidated Statement of Comprehensive Income Key Data | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 393,097 | 770,418 | -49.0% | | Cost of sales | (382,257) | (759,053) | -49.6% | | Gross profit | 10,840 | 11,365 | -4.6% | | Other (losses)/gains, net | (6,737) | 60 | N/A | | Operating loss | (6,707) | (574) | +1068.5% | | Loss before income tax | (7,442) | (33) | +22451.5% | | Loss and total comprehensive expense for the period | (5,300) | (747) | +609.5% | | Basic and diluted loss per share (RMB) | (0.6 cents) | (0.1 cents) | +500.0% | [Unaudited Condensed Consolidated Statement of Financial Position](index=5&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) [Assets and Liabilities Overview](index=5&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%A6%82%E8%A7%88) This section discloses the unaudited condensed consolidated financial position, showing increased total and current assets, slightly decreased total equity, and significantly increased total liabilities Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Non-current assets | 18,058 | 25,105 | -28.1% | | Current assets | 519,930 | 437,953 | +18.7% | | **Total assets** | **537,988** | **463,058** | +16.2% | | **Equity** | | | | | Total equity | 417,357 | 422,657 | -1.25% | | **Liabilities** | | | | | Non-current liabilities | 23,304 | 23,829 | -2.2% | | Current liabilities | 97,327 | 16,572 | +487.3% | | **Total liabilities** | **120,631** | **40,401** | +198.6% | - Current liabilities significantly increased, primarily due to contract liabilities rising from **RMB 88 thousand** to **RMB 73,792 thousand**, and an increase in trade and other payables[6](index=6&type=chunk) [Unaudited Condensed Consolidated Statement of Changes in Equity](index=7&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) [Equity Changes Overview](index=7&type=section&id=%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E6%A6%82%E8%A7%88) This section details changes in equity components, reflecting the impact of loss on retained earnings and the utilization of safety reserves Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | June 30, 2025 (RMB thousands) | January 1, 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Share capital | 7,980 | 7,980 | 0 | | Other reserves | 306,851 | 306,924 | -73 | | Retained earnings | 102,526 | 116,595 | -14,069 | | Total equity | 417,357 | 431,499 | -14,142 | - For the six months ended June 30, 2025, the loss and total comprehensive expense for the period was **RMB 5,300 thousand**, leading to a decrease in retained earnings[7](index=7&type=chunk) - Safety reserves utilized **RMB 62 thousand** in the first half of 2025 and **RMB 2 thousand** in the first half of 2024[7](index=7&type=chunk) [Unaudited Condensed Consolidated Statement of Cash Flows](index=9&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) [Cash Flow Overview](index=9&type=section&id=%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E6%A6%82%E8%A7%88) This section reports unaudited condensed consolidated cash flows, showing a shift to positive operating cash flow, stable investing cash flow, and negative financing cash flow, resulting in a net cash increase Condensed Consolidated Statement of Cash Flows Key Data | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 144,357 | (118,996) | | Net cash generated from investing activities | 719 | 571 | | Net cash (used in)/generated from financing activities | (1,439) | 14,444 | | Net increase/(decrease) in cash and cash equivalents | 143,637 | (103,981) | | Cash and cash equivalents at end of period | 176,895 | 85,779 | - Cash flow from operating activities shifted from a net outflow of **RMB 118,996 thousand** in the same period of 2024 to a net inflow of **RMB 144,357 thousand** in the same period of 2025[10](index=10&type=chunk) - Cash flow from financing activities shifted from a net inflow of **RMB 14,444 thousand** in the same period of 2024 to a net outflow of **RMB 1,439 thousand** in the same period of 2025, primarily due to lease payments and interest paid[10](index=10&type=chunk) [Notes to the Unaudited Condensed Consolidated Interim Financial Statements](index=10&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [1. General Information](index=10&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) This section introduces the company's place of incorporation, principal activities, listing information, and ultimate controlling parties - The company is incorporated in the Cayman Islands and primarily engaged in the sale of refined oil products, other petrochemical products, and the blending and sale of fuel oil in China[11](index=11&type=chunk) - The company's shares are listed on the Main Board of the Hong Kong Stock Exchange, with Mr. Xu Ziming and Ms. Huang Sizhen as the ultimate controlling parties[12](index=12&type=chunk) [2. Basis of Preparation and Accounting Policies](index=10&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E5%8F%8A%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) This section outlines the basis of preparation and accounting policies adopted for interim financial statements, emphasizing consistency and new standard impact - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the 2024 annual financial statements[13](index=13&type=chunk) - Newly issued Hong Kong Financial Reporting Standards, new standards, and amendments have no significant impact on the Group's results or financial position for the current or prior periods[14](index=14&type=chunk) [3. Estimates](index=11&type=section&id=3.%20%E4%BC%B0%E8%A8%88) This section highlights management's judgments, estimates, and assumptions in financial statement preparation, noting potential differences from actual results - Significant judgments and estimates made by management in preparing the condensed consolidated interim financial statements are consistent with those in the 2024 annual consolidated financial statements[15](index=15&type=chunk) [4. Financial Risk Management](index=11&type=section&id=4.%20%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) This section outlines the Group's financial risks, including market, credit, and liquidity risks, noting no significant changes in risk management policies since 2024 - The Group faces market risks (foreign exchange, interest rates), credit risk, and liquidity risk, with no changes in risk management since the year ended December 31, 2024[16](index=16&type=chunk) - Contractual undiscounted cash outflows for financial liabilities show no significant changes compared to the year ended December 31, 2024[17](index=17&type=chunk) [5. Revenue and Segment Information](index=12&type=section&id=5.%20%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) This section clarifies the Group's revenue sources and operating segments, noting management reviews the business as a single operating segment - The Group is primarily engaged in the sale of refined oil products, other petrochemical products, and the blending and sale of fuel oil in China, with management reviewing the business as a single operating segment[18](index=18&type=chunk) Revenue Analysis | Revenue Source | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of goods | 385,907 | 746,381 | | Service income | 7,190 | 24,037 | | **Total revenue** | **393,097** | **770,418** | [6. Other (Losses)/Gains, Net](index=13&type=section&id=6.%20%E5%85%B6%E4%BB%96%EF%BC%88%E虧%E6%90%8D%EF%BC%89%E2%88%95%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D_Notes) This section explains the main components of other net losses for the period, including write-offs of prepayments and property, plant and equipment Other (Losses)/Gains, Net Details | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Write-off of prepayments | (4,194) | – | | Write-off of property, plant and equipment | (1,750) | – | | Others | (793) | 60 | | **Other (losses)/gains, net** | **(6,737)** | **60** | [7. Expenses by Nature](index=13&type=section&id=7.%20%E6%8C%89%E6%80%A7%E8%B3%AA%E5%8A%83%E5%88%86%E7%9A%84%E9%96%8B%E6%94%AF) This section lists expenses by nature, including changes in inventories, purchase costs, and staff costs, reflecting total cost of sales, distribution, and administrative expenses Expenses by Nature Details | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Changes in inventories | 112,723 | (98,090) | | Purchases of refined oil products, fuel oil and other petrochemical products and transportation costs | 269,229 | 856,434 | | Staff costs | 3,133 | 2,727 | | **Total cost of sales, distribution and administrative expenses** | **393,067** | **771,052** | [8. Finance (Costs)/Income, Net](index=14&type=section&id=8.%20%E8%B2%A1%E5%8B%99%EF%BC%88%E6%88%90%E6%9C%AC%EF%BC%89%E2%88%95%E6%94%B6%E5%85%A5%E6%B7%A8%E9%A1%8D_Notes) This section discloses net finance costs and income, showing a shift from income to costs, primarily due to increased interest expense on discounted bills Finance (Costs)/Income, Net Details | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest income from bank deposits | 719 | 571 | | Interest expense on lease liabilities | (89) | (84) | | Interest expense on discounted bills | (1,213) | – | | Exchange (losses)/gains, net on cash and cash equivalents | (152) | 54 | | **Finance (costs)/income, net** | **(735)** | **541** | [9. Income Tax (Credit)/Expense](index=14&type=section&id=9.%20%E6%89%80%E5%BE%97%E7%A8%85%EF%BC%88%E6%8A%B5%E5%85%8D%EF%BC%89%E2%88%95%E9%96%8B%E6%94%AF_Notes) This section explains the shift from income tax expense to credit for the period, primarily due to the reversal of over-provision for China corporate income tax in prior years Income Tax (Credit)/Expense Details | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax | (2,249) | 577 | | Deferred income tax | 107 | 137 | | **Income tax (credit)/expense** | **(2,142)** | **714** | - The income tax credit is primarily due to the reversal of over-provision for China corporate income tax in prior years[24](index=24&type=chunk) - The standard corporate income tax rate for PRC entities is **25%**, and the withholding income tax rate for dividends from PRC direct holding companies is **10%**[24](index=24&type=chunk)[25](index=25&type=chunk) [10. Loss Per Share](index=16&type=section&id=10.%20%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) This section reports the basic and diluted loss per share for the period and explains the calculation method Loss Per Share Data | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Loss for the period (RMB thousands) | 5,300 | 747 | | Weighted average number of ordinary shares in issue | 930,000,000 | 930,000,000 | | **Basic loss per share (RMB)** | **0.6 cents** | **0.1 cents** | - As there were no potential dilutive ordinary shares outstanding during the reporting period, diluted loss per share is the same as basic loss per share[27](index=27&type=chunk) [11. Dividends](index=16&type=section&id=11.%20%E8%82%A1%E6%81%AF) This section states that the company neither paid nor declared any dividends during the reporting period - For the six months ended June 30, 2025, no dividends were paid or declared by the company[27](index=27&type=chunk) [12. Property, Plant and Equipment](index=16&type=section&id=12.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) This section reports changes in property, plant and equipment for the period, primarily involving write-offs - For the six months ended June 30, 2025, the Group neither acquired nor disposed of any property, plant and equipment[28](index=28&type=chunk) - Property, plant and equipment with a net book value of approximately **RMB 1,750,000** was written off during the period[28](index=28&type=chunk) [13. Trade and Other Receivables](index=17&type=section&id=13.%20%E8%B2%A3%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) This section provides details and aging analysis of trade and other receivables, showing a significant increase in trade receivables Trade and Other Receivables Details | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables, net | 100,360 | 19,099 | +425.5% | | Recoverable value-added tax | 20,677 | 34,440 | -40.0% | | Deposits and others | 12,894 | 12,716 | +1.4% | | **Total trade and other receivables** | **133,931** | **66,255** | +102.1% | - Trade receivables, net, significantly increased from **RMB 19,099 thousand** at the end of 2024 to **RMB 100,360 thousand** as of June 30, 2025[29](index=29&type=chunk) - The credit period for trade receivables is generally **0 to 30 days**[29](index=29&type=chunk) [14. Trade and Other Payables](index=18&type=section&id=14.%20%E8%B2%A3%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) This section provides details and aging analysis of trade and other payables, showing an increase in the total amount Trade and Other Payables Details | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 2,513 | 1,091 | +130.3% | | Accrued staff costs and benefits | 3,635 | 5,775 | -37.1% | | Other taxes payable | 10,180 | 272 | +3642.6% | | **Total trade and other payables** | **23,243** | **14,730** | +57.8% | - Other taxes payable significantly increased from **RMB 272 thousand** at the end of 2024 to **RMB 10,180 thousand** as of June 30, 2025[30](index=30&type=chunk) [15. Share Capital](index=19&type=section&id=15.%20%E8%82%A1%E6%9C%AC) This section discloses the company's authorized and issued share capital information, indicating an unchanged share capital structure Share Capital Structure | Indicator | Number of Shares | Equivalent Par Value (HKD) | Equivalent Par Value (RMB) | | :--- | :--- | :--- | :--- | | Authorized ordinary shares (HKD 0.01 each) | 2,000,000,000 | 20,000,000 | 17,161,310 | | Issued and fully paid ordinary shares | 930,000,000 | 9,300,000 | 7,980,009 | - As of June 30, 2025, the company's authorized and issued share capital quantity and par value remained consistent with January 1, 2024[32](index=32&type=chunk)[33](index=33&type=chunk) [16. Capital Commitments](index=19&type=section&id=16.%20%E8%B3%87%E6%9C%AC%E6%89%BF%E6%94%94_Notes) This section reports significant capital expenditure commitments at period-end, showing zero capital commitments for property, plant and equipment Capital Commitments | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Property, plant and equipment | – | 8,483 | - As of June 30, 2025, the Group had no significant capital commitments, compared to **RMB 8,483 thousand** as of December 31, 2024[34](index=34&type=chunk) [17. Related Party Transactions](index=20&type=section&id=17.%20%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) This section discloses the Group's transactions and related balances with related parties, as well as key management personnel compensation - Related parties include controlling shareholders Mr. Xu Ziming and Ms. Huang Sizhen, and directors Mr. Xu Xiaoping and Ms. Xu Yayee[35](index=35&type=chunk) - The Group entered into a lease agreement with the controlling shareholders, with an annual lease expense of **RMB 360,000**[35](index=35&type=chunk) Balances with Related Parties | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Lease liabilities — controlling shareholders | 3,194 | 3,294 | | Amounts due to a related party — director | 87 | 87 | Key Management Personnel Compensation | Key Management Personnel Compensation | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Salaries, wages, benefits and other emoluments | 1,969 | 1,730 | | Contributions to employee social security schemes | 41 | 89 | | **Total** | **2,010** | **1,819** | [18. Contingent Liabilities](index=21&type=section&id=18.%20%E6%88%96%E7%84%B6%E4%BA%8B%E9%A0%85_Notes) This section refers to litigation matters disclosed in the annual report and assesses the likelihood of compensation liability - Management believes there have been no significant developments in the litigation disclosed in the 2024 annual report, and compensation liability cannot be reliably estimated and is considered low or remote[40](index=40&type=chunk) - The Group has not made any provision for the litigation, other than for related legal and other costs incurred[40](index=40&type=chunk) [Management Discussion and Analysis](index=22&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Business Review](index=22&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) This section reviews the Group's business nature, operating environment, and strategies, noting market changes and expansion into other petrochemical products and fuel oil sales - The Group is a wholesaler of oil products and other petrochemical products in Guangdong Province, China, with products including refined oil products, other petrochemical products, and fuel oil[41](index=41&type=chunk) - Rising international and local oil prices and new energy alternatives led to refined oil product trade concentrating on naphtha, which later saw reduced competitiveness due to consumption tax policy adjustments[41](index=41&type=chunk) - The Group reduced naphtha sales and expanded into other chemical products like C6 fractions and fuel oil sales, but C6 fractions recorded a gross loss of approximately **RMB 3,997 thousand** due to price fluctuations[41](index=41&type=chunk) - For the six months ended June 30, 2025, refined oil product sales recorded a gross profit of approximately **RMB 6,488 thousand**, and service income of approximately **RMB 7,190 thousand** was recognized from offshore transactions[41](index=41&type=chunk)[42](index=42&type=chunk) [Operating Results](index=23&type=section&id=%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE) This section analyzes the Group's revenue, cost of sales, gross profit, other (losses)/gains, expenses, finance (costs)/income, loss before tax, income tax, and loss for the period [Revenue](index=23&type=section&id=%E6%94%B6%E7%9B%8A) Total revenue significantly decreased by 49.0% year-on-year, primarily due to reduced sales of refined oil products Total Revenue by Product Type | Product Type | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Refined oil product sales | 204,726 | 746,381 | -72.5% | | Fuel oil sales | 36,831 | – | N/A | | Other petrochemical product sales | 144,350 | – | N/A | | Service income | 7,190 | 24,037 | -70.1% | | **Total revenue** | **393,097** | **770,418** | -49.0% | - Total revenue decreased by approximately **49.0%**, primarily due to reduced sales of refined oil products[43](index=43&type=chunk) [Cost of Sales](index=24&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) Cost of sales decreased year-on-year, consistent with the revenue reduction, primarily influenced by purchase costs Cost of Sales by Product Type | Product Type | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Refined oil products | 198,238 | 759,053 | -73.9% | | Fuel oil | 35,672 | – | N/A | | Other petrochemical products | 148,347 | – | N/A | | **Total** | **382,257** | **759,053** | -49.6% | - The decrease in cost of sales is consistent with the decrease in revenue for the period, with purchase costs influenced by market oil prices[45](index=45&type=chunk) [Gross Profit and Gross Margin](index=25&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Overall gross margin shifted from negative to positive, primarily benefiting from improved refined oil product gross margin, though other petrochemical products recorded a gross loss Gross Profit and Gross Margin Details | Product Type | Six Months Ended June 30, 2025 Gross profit/(loss) (RMB thousands) | Six Months Ended June 30, 2025 Gross margin | Six Months Ended June 30, 2024 Gross profit/(loss) (RMB thousands) | Six Months Ended June 30, 2024 Gross margin | | :--- | :--- | :--- | :--- | :--- | | Refined oil products | 6,488 | 3.2% | (12,672) | (1.7%) | | Fuel oil | 1,159 | 3.1% | – | Not applicable | | Other petrochemical products | (3,997) | (2.8%) | – | Not applicable | | **Sales of goods — Subtotal** | **3,650** | **0.9%** | **(12,672)** | **(1.7%)** | | Service income | 7,190 | Not applicable | 24,037 | Not applicable | | **Total** | **10,840** | **2.8%** | **11,365** | **1.5%** | - Overall gross margin (excluding service income) increased from **negative 1.7%** in the same period of 2024 to **0.9%** in the same period of 2025[46](index=46&type=chunk) [Other (Losses)/Gains, Net](index=25&type=section&id=%E5%85%B6%E4%BB%96%EF%BC%88%E虧%E6%90%8D%EF%BC%89%E2%88%95%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D_MDA) Other net losses for the period were primarily due to the write-off of prepayments and assets under construction after the suspension of a terminal enhancement project - Other net losses were primarily due to the write-off of prepayments to the main contractor and assets under construction, following the suspension of the project to enhance the berth capacity of Zengcheng Oil Depot Terminal[47](index=47&type=chunk) [Distribution Expenses](index=25&type=section&id=%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) Distribution expenses decreased by 5.4% year-on-year, primarily due to reduced short-term lease expenses and handling charges - Distribution expenses decreased by approximately **RMB 277 thousand (5.4%)** to **RMB 4,883 thousand**, primarily due to reduced short-term lease expenses and handling charges[48](index=48&type=chunk) [Administrative Expenses](index=26&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative expenses decreased by 13.3% year-on-year, primarily due to reduced professional fees and PRC stamp duty, partially offset by increased staff costs - Administrative expenses decreased by approximately **RMB 912 thousand (13.3%)** to **RMB 5,927 thousand**, primarily due to reduced professional fees and PRC stamp duty[49](index=49&type=chunk) [Finance (Costs)/Income, Net](index=26&type=section&id=%E8%B2%A1%E5%8B%99%EF%BC%88%E6%88%90%E6%9C%AC%EF%BC%89%E2%88%95%E6%94%B6%E5%85%A5%E6%B7%A8%E9%A1%8D_MDA) Net finance shifted from income to costs, primarily due to increased interest expense on discounted bills - Net finance shifted from an income of **RMB 541 thousand** in the same period of 2024 to a cost of **RMB 735 thousand** in the same period of 2025, primarily due to increased interest expense on discounted bills[50](index=50&type=chunk) [Loss Before Income Tax](index=26&type=section&id=%E9%99%A4%E6%89%80%E5%BE%97%E7%A8%85%E5%89%8D%E虧%E6%90%8D) Loss before income tax significantly increased, primarily due to the write-off of prepayments and assets under construction, and increased interest expenses - Loss before income tax increased from **RMB 33 thousand** in the same period of 2024 to **RMB 7,442 thousand** in the same period of 2025[51](index=51&type=chunk) - The increase in loss was primarily due to the write-off of prepayments and assets under construction related to the Zengcheng Oil Depot Terminal Berth Capacity Enhancement Project, and increased interest expenses[51](index=51&type=chunk) [Income Tax Credit/(Expense)](index=26&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D%E2%88%95%EF%BC%88%E9%96%8B%E6%94%AF%EF%BC%89_MDA) Income tax for the period was a credit, primarily due to the reversal of over-provision for China corporate income tax in prior years - The income tax credit for the six months ended June 30, 2025, was primarily due to the reversal of over-provision for China corporate income tax in prior years[52](index=52&type=chunk) [Loss for the Period](index=26&type=section&id=%E6%9C%9F%E5%85%A7%E虧%E6%90%8D) Loss for the period significantly increased, primarily affected by asset write-offs and increased interest expenses, partially offset by income tax credit - Loss for the period increased from **RMB 747 thousand** in the same period of 2024 to **RMB 5,300 thousand** in the same period of 2025[53](index=53&type=chunk) - The increase in loss was primarily due to the write-off of prepayments and assets under construction related to the Zengcheng Oil Depot Terminal Berth Capacity Enhancement Project, and increased interest expenses, partially offset by the reversal of over-provision for China corporate income tax in prior years[53](index=53&type=chunk) [Liquidity and Financial Resources](index=27&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) This section outlines the Group's cash flows, net current assets, borrowings, capital commitments, significant investments, capital structure, pledged assets, contingent liabilities, and foreign exchange risk management [Cash Flows](index=27&type=section&id=%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F) Operating cash flow shifted from negative to positive, financing cash flow shifted from positive to negative, and cash and cash equivalents at period-end significantly increased Cash Flow Overview | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 144,357 | (118,996) | | Net cash generated from investing activities | 719 | 571 | | Net cash (used in)/generated from financing activities | (1,439) | 14,444 | | **Net increase/(decrease) in cash and cash equivalents** | **143,637** | **(103,981)** | - Net cash from operating activities turned positive, primarily attributable to a decrease in net working capital generated from operations[54](index=54&type=chunk) - Cash and cash equivalents at period-end increased from **RMB 33,410 thousand** at the end of 2024 to **RMB 176,895 thousand** as of June 30, 2025[55](index=55&type=chunk) [Net Current Assets](index=27&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2%E6%B7%A8%E9%A1%8D) Net current assets slightly increased - As of June 30, 2025, net current assets were approximately **RMB 422,603 thousand**, an increase of approximately **RMB 1,222 thousand** compared to December 31, 2024[56](index=56&type=chunk) [Borrowings and Gearing Ratio](index=28&type=section&id=%E5%80%9F%E6%AC%BE%E5%8F%8A%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) The Group had no borrowings at the end of the reporting period, thus no gearing ratio is presented - As of June 30, 2025, the Group had no borrowings, and therefore no gearing ratio is presented[57](index=57&type=chunk) [Capital Commitments](index=28&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%94%94_MDA) No capital expenditures were incurred during the period, and there were no significant capital commitments at the end of the reporting period - For the six months ended June 30, 2025, the Group incurred no capital expenditures[58](index=58&type=chunk) - As of June 30, 2025, the Group had no significant capital commitments (December 31, 2024: **RMB 8,483 thousand**)[58](index=58&type=chunk) [Significant Investments, Material Acquisitions and Disposals of Subsidiaries and Associates](index=28&type=section&id=%E9%87%8D%E8%A6%81%E6%8A%95%E8%B3%87%E3%80%81%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E5%92%8C%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8) There were no significant investments, material acquisitions, or disposals of subsidiaries and associates during the period - For the six months ended June 30, 2025, the Group had no significant investments, material acquisitions, or disposals of subsidiaries and associates[59](index=59&type=chunk) [Capital Structure](index=28&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) The company's capital structure, comprising issued share capital and reserves, remained unchanged at the end of the reporting period - As of June 30, 2025, and December 31, 2024, the company's capital structure comprised its issued share capital and reserves[60](index=60&type=chunk) [Pledged Assets](index=28&type=section&id=%E5%B7%B2%E6%8A%B5%E6%8A%BC%E8%B3%87%E7%94%A2) The Group had no pledged assets at the end of the reporting period - As of June 30, 2025, and December 31, 2024, the Group had no pledged assets[61](index=61&type=chunk) [Contingent Liabilities](index=29&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5_MDA) Reaffirms that litigation matters disclosed in the annual report have no significant developments, with low likelihood of compensation liability - Management believes there have been no significant developments in the litigation disclosed in the 2024 annual report, and compensation liability cannot be reliably estimated and is considered low or remote[62](index=62&type=chunk) [Foreign Exchange Risk](index=29&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group primarily settles in RMB, but some transactions are in foreign currencies; foreign exchange risk is managed by closely monitoring exchange rate movements, with no hedging policy currently - Most of the Group's transactions are settled in RMB, but some are settled in foreign currencies, primarily HKD-denominated assets and liabilities[63](index=63&type=chunk) - The Group currently has no foreign currency hedging policy, manages foreign exchange risk by closely monitoring exchange rate movements, and the Directors consider foreign exchange risk not significant[64](index=64&type=chunk) [Human Resources](index=30&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90) This section describes the Group's employee count, staff costs, recruitment and remuneration policies, and welfare programs - As of June 30, 2025, the Group had **18** full-time employees in China[65](index=65&type=chunk) Total Staff Costs | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total staff costs (including directors' emoluments) | 3,133 | 2,727 | +14.9% | - Remuneration is determined based on qualifications, position, and experience, with annual performance reviews for salary increments, bonuses, and promotions[65](index=65&type=chunk) - Welfare programs include basic medical insurance, unemployment insurance, and mandatory provident fund contributions for Hong Kong employees[65](index=65&type=chunk) [Future Plans and Prospects](index=30&type=section&id=%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83%E5%8F%8A%E5%89%8D%E6%99%AF) This section outlines the Group's market opportunities in energy security and safety, noting no specific plans for significant investments or capital assets currently - Guangdong Energy Bureau's plan emphasizes energy security and safety, positioning the Group to play a greater role in the local supply chain with its experience in the refined oil market and customer network[66](index=66&type=chunk) - As of June 30, 2025, the Group had no specific plans for significant investments or capital assets for the coming year[67](index=67&type=chunk) [Use of Net Proceeds from the Company's Initial Public Offering](index=31&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E9%A6%96%E6%AC%A1%E5%85%AC%E9%96%8B%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%8D%E7%9A%84%E7%94%A8%E9%80%94) [IPO Proceeds Usage and Adjustments](index=31&type=section&id=IPO%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94%E5%8F%8A%E8%AA%BF%E6%95%B4) This section discloses the use of net proceeds from the initial public offering and explains adjustments to the use of unutilized funds - The company's GEM listing net proceeds of approximately **RMB 20,803 thousand** were successfully transferred to the Main Board of the Stock Exchange on May 17, 2023[68](index=68&type=chunk) - The Board has resolved to re-designate the unutilized net proceeds of approximately **RMB 3,474 thousand** for working capital and general corporate purposes[68](index=68&type=chunk) Share Offer Net Proceeds Usage | Purpose | Allocated as per prospectus (RMB thousands) | Amount utilized after re-allocation (RMB thousands) | Unutilized as of June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | :--- | | Enhancing berth capacity of Zengcheng Oil Depot Terminal | 11,038 | 7,564 | – | | Renovating oil tanks, pipelines and other depot facilities at Zengcheng Oil Depot | 9,765 | 9,765 | – | | Working capital and general corporate purposes | – | – | 3,474 | | **Total** | **20,803** | **17,329** | **3,474** | - The remaining unutilized net proceeds are deposited in licensed bank accounts in Hong Kong and China, expected to be fully utilized by December 31, 2025[69](index=69&type=chunk) [Interim Dividends](index=33&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) [Interim Dividend Policy](index=33&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF%E6%94%BF%E7%AD%96) This section states that the Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Directors do not recommend the payment of any dividend for the six months ended June 30, 2025[71](index=71&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=33&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E5%B7%B2%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) [Listed Securities Transaction Status](index=33&type=section&id=%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E6%83%85%E5%86%B5) This section states that neither the company nor any of its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[72](index=72&type=chunk) [Directors' Interests and Short Positions in Shares, Underlying Shares and Debentures](index=33&type=section&id=%E8%91%A3%E4%BA%8B%E6%96%BC%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) [Directors' Shareholding Status](index=33&type=section&id=%E8%91%A3%E4%BA%8B%E6%8C%81%E8%82%A1%E6%83%85%E5%86%B5) This section discloses the interests of directors and chief executives in the company's shares as of June 30, 2025 Directors and Chief Executives Shareholding Status | Name/Designation | Nature of interest | Number of shares | Percentage of shareholding | | :--- | :--- | :--- | :--- | | Xingming Limited | Beneficial owner | 480,150,000 | 51.63% | | Mr. Xu Ziming | Interest in controlled corporation | 480,150,000 | 51.63% | | Ms. Huang Sizhen | Spouse's interest | 480,150,000 | 51.63% | | Kangshi Investment Limited | Beneficial owner | 130,140,000 | 13.99% | | Ms. Xu Yayee | Interest in controlled corporation | 130,140,000 | 13.99% | - Mr. Xu Ziming and Ms. Huang Sizhen jointly hold **51.63%** of the shares through Xingming Limited[73](index=73&type=chunk) - Ms. Xu Yayee holds **13.99%** of the shares through Kangshi Investment Limited[73](index=73&type=chunk) [Share Option Scheme](index=34&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) [Share Option Scheme Details](index=34&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83%E8%A9%B3%E6%83%85) This section introduces the company's share option scheme adopted in 2019, aimed at attracting and retaining talent, but no share options have been granted as of the reporting date - The company adopted a share option scheme on May 28, 2019, to attract and retain quality employees and other individuals[75](index=75&type=chunk) - The maximum number of shares that may be issued under the share option scheme is **42,000,000** shares, representing approximately **4.52%** of the company's share capital[75](index=75&type=chunk) - As of the date of this report, the company has not granted any share options since the adoption of the share option scheme[76](index=76&type=chunk) [Major Shareholders](index=34&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1) [Major Shareholder Information](index=34&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E4%BF%A1%E6%81%AF) This section states that, apart from the disclosed directors and chief executives, no other person holds significant share interests requiring disclosure - As of June 30, 2025, no person other than the disclosed directors or chief executives held any interests required to be recorded in the register kept under Section 336 of the Securities and Futures Ordinance[77](index=77&type=chunk) [Corporate Governance Practices](index=34&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) [Compliance with Corporate Governance Code](index=34&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99%E9%81%B5%E5%AE%88%E6%83%85%E5%86%B5) This section confirms the company's continuous compliance with all code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules during the reporting period - The company has complied with all code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules for the six months ended June 30, 2025[78](index=78&type=chunk) [Directors' Compliance with Standard of Dealings](index=35&type=section&id=%E8%91%A3%E4%BA%8B%E9%81%B5%E5%AE%88%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) [Directors' Securities Dealing Conduct](index=35&type=section&id=%E8%91%A3%E4%BA%8B%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E6%93%8D%E5%AE%88) This section states that all directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules during the reporting period - All Directors confirmed that for the six months ended June 30, 2025, they complied with the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules[79](index=79&type=chunk) [Competing Interests](index=35&type=section&id=%E7%AB%B6%E7%88%AD%E6%AC%8A%E7%9B%8A) [No Competing Interests Statement](index=35&type=section&id=%E7%84%A1%E7%AB%B6%E7%88%AD%E6%AC%8A%E7%9B%8A%E8%81%B2%E6%98%8E) This section states that controlling shareholders, directors, and their close associates have no interests in any business that competes with the Group's business - For the six months ended June 30, 2025, and up to the date of this report, none of the controlling shareholders, Directors, or their respective close associates had any interests in any business that competes with the Group's business[80](index=80&type=chunk) [Audit Committee](index=35&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) [Audit Committee Responsibilities and Review](index=35&type=section&id=%E5%AF%A9%E8%A8%88%E5%A7%94%E5%93%A1%E6%9C%83%E8%81%B7%E8%B2%AC%E8%88%87%E5%AF%A9%E9%96%B1) This section describes the Audit Committee's main responsibilities and confirms its review of this interim report - The Audit Committee's primary responsibilities include reviewing and overseeing financial reporting, internal control, and risk management systems, and communicating with external auditors[81](index=81&type=chunk) - The Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, and this interim report[81](index=81&type=chunk) [By Order of the Board](index=35&type=section&id=%E4%BB%A3%E8%A1%A8%E8%91%A3%E4%BA%8B%E6%9C%83) [Board Statement](index=35&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E8%81%B2%E6%98%8E) This section reports the release by Mr. Xu Ziming, Chairman of the Board, on behalf of the Board, and lists the Board members as of the report date - This report was issued by Mr. Xu Ziming, Chairman and Executive Director, on behalf of the Board on August 22, 2025[82](index=82&type=chunk)[83](index=83&type=chunk) - Executive Directors as of the report date include Mr. Xu Ziming, Ms. Huang Sizhen, Mr. Xu Xiaoping, and Ms. Xu Yayee; Independent Non-executive Directors include Mr. Xu Xingshan, Mr. Jin Shaocong, and Ms. E Hongda[83](index=83&type=chunk)

[Company Information](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Board of Directors and Committees](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E5%A7%94%E5%93%A1%E6%9C%83) This section lists the executive, non-executive, and independent non-executive directors of the company's board, along with the composition of audit, nomination, remuneration, risk management, and ESG committees, noting changes in the nomination and risk management committees on August 20, 2025 - The Nomination Committee added Dr. Leung Ming Chu and Mr. Au Yu Chiu as members on **August 20, 2025**[3](index=3&type=chunk) - The Risk Management Committee added Ms. Tsui Wing Kwan, Mr. Yeung Wing Fung, and Mr. Zuo Lihui as members on **August 20, 2025**, while Ms. Hu Fang and Mr. Zhang Changqing ceased to be members[3](index=3&type=chunk) [Company Contact and Registration Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%81%AF%E7%B5%A1%E5%8F%8A%E8%A8%BB%E5%86%8A%E4%BF%A1%E6%81%AF) This section provides the company's essential contact and registration details, including company secretary, authorized representatives, registered office, Hong Kong headquarters, auditor, share registrar, principal bankers, investor relations, stock code, and website - The company's registered office is in the Cayman Islands, with its Hong Kong headquarters located in Hung Hom, Kowloon[4](index=4&type=chunk) - The auditor is RSM Hong Kong, and the stock code is **1612**[4](index=4&type=chunk)[5](index=5&type=chunk) [Financial Highlights](index=4&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) For the six months ended June 30, 2025, the company achieved significant growth in revenue and profit, with increased basic earnings per share and interim dividend, primarily driven by imaging disposables and respiratory products in key markets like the US and Spain Financial Highlights for the Six Months Ended June 30 | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 449,441 | 380,706 | 18.1% | | Gross Profit | 159,006 | 119,181 | 33.4% | | Profit for the Period | 54,272 | 33,561 | 61.7% | | Profit Attributable to Owners of the Company | 51,629 | 33,288 | 55.1% | | Basic Earnings Per Share (HK Cents) | 8.03 | 5.17 | 55.3% | | Interim Dividend Per Share (HK Cents) | 2.40 | 1.60 | 50.0% | - In the first half of 2025, imaging disposables accounted for **55%** of total revenue, respiratory products for **28%**, orthopedic support and rehabilitation devices for **13%**, and other products for **4%**, showing an increased share for imaging disposables and respiratory products compared to the first half of 2024, while orthopedic support and rehabilitation devices decreased[7](index=7&type=chunk) - By geographical market, in the first half of 2025, the US accounted for **33%** of total revenue, Spain for **37%**, China for **8%**, Japan for **8%**, and other regions for **14%**, with Spain and Japan increasing their share while the US and China slightly decreased[9](index=9&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Overall Business Review](index=5&type=section&id=%E6%95%B4%E9%AB%94%E7%B6%93%E7%87%9F%E5%9B%9E%E9%A1%A7) Despite global economic slowdowns, trade frictions, and supply chain uncertainties, the Group achieved strong results in the first half of 2025, with profit for the period reaching a post-COVID-19 high, driven by enhanced client collaboration, robust imaging disposables performance, stable respiratory product growth, and ongoing construction of new production facilities - In the first half of 2025, the Group's profit for the period reached a new high in the post-COVID-19 era[12](index=12&type=chunk) - The new production facility in Kaiping City, Jiangmen, Guangdong Province, China, is on schedule for trial operation by **end of 2025** and phased production from **2026** onwards[13](index=13&type=chunk) [Segment Results](index=5&type=section&id=%E5%88%86%E9%83%A8%E6%A5%AD%E7%B8%BE) The Group's product segments showed varied performance, with significant growth in imaging disposables and respiratory products, a decline in orthopedic support and rehabilitation devices due to trade relations, and improved revenue and gross profit margin for other products through diversification [Imaging Disposables Segment](index=5&type=section&id=%E6%88%90%E5%83%8F%E4%B8%80%E6%AC%A1%E6%80%A7%E7%94%A2%E5%93%81%E5%88%86%E9%83%A8) Driven by market tailwinds such as an aging population, rising chronic disease rates, and increased disease detection awareness, the imaging disposables segment saw continuous order growth, with revenue increasing by **28.6%** year-on-year to **HK$244.0 million**, accounting for **54.3%** of total revenue, while gross profit margin improved from **30.2%** to **34.8%** due to economies of scale, operating leverage, and improved production efficiency Imaging Disposables Segment Revenue and Gross Profit Margin | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 244.0 | 189.7 | 28.6% | | Percentage of Total Revenue | 54.3% | - | - | | Gross Profit Margin | 34.8% | 30.2% | +4.6pp | [Respiratory Products Segment](index=5&type=section&id=%E5%91%BC%E5%90%B8%E7%94%A2%E5%93%81%E5%88%86%E9%83%A8) Leveraging strong R&D and manufacturing capabilities, the respiratory products segment resumed stable growth, with revenue increasing by **5.0%** year-on-year to **HK$126.4 million**, representing **28.1%** of total revenue, primarily driven by increased sales of inspiredTM disposable respiratory consumables in Japan, the UK, Canada, and Turkey, while reduced inventory provisions and product mix changes improved the gross profit margin from **36.8%** to **38.7%** Respiratory Products Segment Revenue and Gross Profit Margin | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 126.4 | 120.4 | 5.0% | | Percentage of Total Revenue | 28.1% | - | - | | Gross Profit Margin | 38.7% | 36.8% | +1.9pp | [Orthopedic Support and Rehabilitation Devices Segment](index=6&type=section&id=%E9%AA%A8%E7%A7%91%E6%94%AF%E8%AD%B7%E5%BE%A9%E5%BA%B7%E5%99%A8%E5%85%B7%E5%88%86%E9%83%A8) Affected by global supply chain uncertainties and strategic order reductions from US clients, the orthopedic support and rehabilitation devices segment's revenue decreased by **18.4%** year-on-year to **HK$19.3 million**, accounting for **4.3%** of total revenue, while the segment's gross profit margin remained stable at **30.3%** Orthopedic Support and Rehabilitation Devices Segment Revenue and Gross Profit Margin | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 19.3 | 23.6 | -18.4% | | Percentage of Total Revenue | 4.3% | - | - | | Gross Profit Margin | 30.3% | 29.9% | +0.4pp | [Other Products](index=6&type=section&id=%E5%85%B6%E4%BB%96%E7%94%A2%E5%93%81) The Group's diversification strategy into healthcare and wellness products expanded customer reach and increased inquiries and orders, leading to a **27.1%** year-on-year revenue growth to **HK$59.7 million**, representing **13.3%** of total revenue, with gross profit margin improving from **22.4%** to **32.3%** due to economies of scale and product mix changes Other Products Revenue and Gross Profit Margin | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 59.7 | 47.0 | 27.1% | | Percentage of Total Revenue | 13.3% | - | - | | Gross Profit Margin | 32.3% | 22.4% | +9.9pp | [Investments and Collaborations](index=6&type=section&id=%E6%8A%95%E8%B3%87%E8%88%87%E5%90%88%E4%BD%9C) The Group views external investments and collaborations as crucial for expanding product offerings and technological expertise, and despite a **20.0%** decrease in the fair value of its investment in Inovytec Medical Solutions Ltd. due to order delays and delivery complexities, the Group remains cautiously optimistic about its future prospects while increasing R&D allocation and seeking strategic partnerships - The Group recorded a **20.0%** decrease in the fair value of its investment in Inovytec Medical Solutions Ltd., primarily due to customer order delays and delivery complexities[19](index=19&type=chunk) - The Group is increasing R&D resource allocation to expand its skill and intellectual property base, and seeking strategic investments and collaborations with business partners and universities[19](index=19&type=chunk) [Outlook](index=6&type=section&id=%E5%B1%95%E6%9C%9B) Looking ahead to the second half of 2025, despite ongoing trade disputes, the Group remains optimistic about future development, continuing as a strategic partner to key clients, investing in new production lines for imaging disposables, promoting respiratory product registration and penetration, and exploring new opportunities in healthcare and wellness products, with the Kaiping new production facility expected to commence trial operation by **end of 2025** and phased production from **2026** to support long-term growth and profitability while maintaining prudent cost control measures - The Group will continue to act as a strategic partner to key customers, investing in new production lines and facilities to meet increasing orders for imaging disposables[20](index=20&type=chunk) - The Group will promote the registration and penetration of respiratory products and explore new product categories or business opportunities in healthcare and wellness products[20](index=20&type=chunk) - The Kaiping new production facility is progressing well, expected to commence trial operation by **end of 2025** and phased production from **2026** onwards, supporting long-term order growth and profit enhancement[20](index=20&type=chunk) [Financial Review](index=7&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) Total revenue for the period increased by **18.1%** year-on-year, primarily driven by increased orders for imaging disposables, while gross profit grew by **33.4%** and gross profit margin improved to **35.4%** due to operational efficiency and economies of scale, with other income significantly increasing, selling and distribution expenses decreasing as a percentage of revenue, administrative and R&D expenses rising, and income tax expense increasing due to higher profit before tax, ultimately leading to a post-COVID-19 high in profit attributable to owners of the company [Revenue](index=7&type=section&id=%E6%94%B6%E5%85%A5) Total revenue for the period was **HK$449.4 million**, an **18.1%** year-on-year increase, mainly due to increased orders in the imaging disposables segment, with growing geographical diversification, significant sales growth in Spain and Japan, a slight decrease in the US market share, and a marginal decline in China sales Revenue by Geographical Region | Region | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-Year Change (%) | Percentage of Total Revenue (2025) | | :--- | :--- | :--- | :--- | :--- | | United States | 164.4 | 145.2 | 13.2% | 36.6% | | Spain | 146.8 | 121.2 | 21.1% | 32.7% | | Japan | 34.5 | 21.1 | 63.5% | 7.7% | | China | 36.1 | 36.9 | -2.0% | 8.0% | [Gross Profit and Gross Profit Margin](index=7&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit increased by **33.4%** to **HK$159.0 million**, and gross profit margin rose from **31.3%** to **35.4%**, primarily benefiting from improved operational efficiency, expanded economies of scale, and reduced inventory provisions Gross Profit and Gross Profit Margin | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 159.0 | 119.2 | 33.4% | | Gross Profit Margin | 35.4% | 31.3% | +4.1pp | [Other Income, Other Gains and Losses](index=7&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E3%80%81%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E虧%E6%90%8D) Other income, other gains and losses significantly increased to **HK$3.9 million** (2024 first half: **HK$0.5 million**), mainly due to increased exchange gains offsetting higher impairment losses and write-offs Other Income, Other Gains and Losses | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Amount | 3.9 | 0.5 | 680.0% | [Selling and Distribution Expenses](index=7&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) Selling and distribution expenses increased by **11.4%** year-on-year to **HK$20.7 million**, but the growth rate was lower than revenue growth, reducing its proportion of total revenue from **4.9%** to **4.6%**, primarily due to higher sales volume in the imaging disposables segment with relatively lower expenses Selling and Distribution Expenses | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-Year Change (%) | Percentage of Total Revenue (2025) | | :--- | :--- | :--- | :--- | :--- | | Amount | 20.7 | 18.5 | 11.4% | 4.6% | | Percentage of Total Revenue | 4.6% | 4.9% | -0.3pp | - | [Administrative Expenses](index=7&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative expenses increased by **8.4%** year-on-year to **HK$55.8 million**, but their proportion of total revenue decreased from **13.5%** to **12.4%**, primarily due to higher administrative staff costs, software amortization, and upgrades to IT and management systems Administrative Expenses | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-Year Change (%) | Percentage of Total Revenue (2025) | | :--- | :--- | :--- | :--- | :--- | | Amount | 55.8 | 51.5 | 8.4% | 12.4% | | Percentage of Total Revenue | 12.4% | 13.5% | -1.1pp | - | [Research and Development Expenses](index=7&type=section&id=%E7%A0%94%E7%99%BC%E9%96%8B%E6%94%AF) Research and development expenses increased by **46.5%** year-on-year to **HK$21.9 million**, and their proportion of total revenue rose from **3.9%** to **4.9%**, mainly due to increased R&D-related staff costs, reflecting the company's continuous investment in product and technology innovation Research and Development Expenses | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-Year Change (%) | Percentage of Total Revenue (2025) | | :--- | :--- | :--- | :--- | :--- | | Amount | 21.9 | 14.9 | 46.5% | 4.9% | | Percentage of Total Revenue | 4.9% | 3.9% | +1.0pp | - | [Income Tax Expense](index=7&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense significantly increased to **HK$9.5 million** (2024 first half: **HK$0.3 million**), primarily due to higher profit before tax and no reversal of income tax provision for a wholly-owned subsidiary in Hong Kong during the period Income Tax Expense | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Amount | 9.5 | 0.3 | 3066.7% | [Profit Attributable to Owners of the Company](index=7&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%93%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%B5%E6%BA%A2%E5%88%A9) As a result of the combined impact of the aforementioned factors, profit attributable to owners of the company reached **HK$51.6 million** (2024 first half: **HK$33.3 million**), marking a new high in the post-COVID-19 era Profit Attributable to Owners of the Company | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Amount | 51.6 | 33.3 | 55.0% | [Balance Sheet Item Analysis](index=8&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8%E9%A0%85%E7%9B%AE%E5%88%86%E6%9E%90) In the first half of 2025, the Group continued to invest in property, plant, and equipment, particularly for new production facilities, leading to significant increases in capital expenditure and related assets, while trade receivables rose with revenue growth, inventory levels remained stable, and prepayments and other receivables increased due to deposits for goods and machinery, with trade payables and other payables also rising in line with revenue growth and construction costs [Property, Plant and Equipment](index=8&type=section&id=%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) Capital expenditure for the period was **HK$57.6 million**, primarily for the construction of new production facilities, purchase of automated machinery, and equipment upgrades for capacity expansion, resulting in total property, plant and equipment valued at **HK$270.3 million** as of June 30, 2025, an increase from December 31, 2024, with contracted but unprovided capital commitments of **HK$72.2 million** Property, Plant and Equipment Related Data | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Capital Expenditure | 57.6 | 39.9 | 44.4% | | Total Property, Plant and Equipment (Period End) | 270.3 | 220.5 (December 31, 2024) | 22.6% | | Contracted but Unprovided Capital Commitments (Period End) | 72.2 | - | - | [Right-of-Use Assets and Lease Liabilities](index=8&type=section&id=%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2%E5%8F%8A%E7%A7%9F%E8%B3%83%E8%B2%A0%E5%82%B5) As of June 30, 2025, right-of-use assets were **HK$48.3 million** and lease liabilities were **HK$17.9 million**, a slight decrease from December 31, 2024, mainly influenced by depreciation, exchange differences, lease payments, and renewal contracts Right-of-Use Assets and Lease Liabilities | Indicator | June 30, 2025 (HK$ Million) | December 31, 2024 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Right-of-Use Assets | 48.3 | 49.8 | -3.0% | | Lease Liabilities | 17.9 | 19.5 | -8.2% | [Inventories](index=8&type=section&id=%E5%AD%98%E8%B2%A8) As of June 30, 2025, inventories amounted to **HK$175.4 million**, maintaining a stable level despite increased revenue due to strict inventory policies Inventories | Indicator | June 30, 2025 (HK$ Million) | December 31, 2024 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Inventories | 175.4 | 162.7 | 7.8% | [Trade Receivables](index=8&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, trade receivables were **HK$230.8 million**, an increase from December 31, 2024, primarily due to increased revenue in the imaging disposables segment, with the company satisfied with the quality of receivables and prudently managing credit risk Trade Receivables | Indicator | June 30, 2025 (HK$ Million) | December 31, 2024 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Receivables | 230.8 | 169.3 | 36.3% | [Contract Assets](index=8&type=section&id=%E5%90%88%E7%B4%84%E8%B3%87%E7%94%A2) As of June 30, 2025, contract assets were **HK$24.4 million**, a decrease from December 31, 2024, mainly due to a reduction in inventories related to revenue to be recognized over time Contract Assets | Indicator | June 30, 2025 (HK$ Million) | December 31, 2024 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Contract Assets | 24.4 | 31.6 | -22.7% | [Prepayments, Deposits and Other Receivables](index=8&type=section&id=%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85%E3%80%81%E6%8C%89%E9%87%91%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, prepayments, deposits and other receivables increased to **HK$98.2 million**, up from December 31, 2024, primarily due to increased deposits for the purchase of goods and machinery Prepayments, Deposits and Other Receivables | Indicator | June 30, 2025 (HK$ Million) | December 31, 2024 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Amount | 98.2 | 75.0 | 30.9% | [Trade Payables](index=8&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, trade payables were **HK$66.7 million**, an increase from December 31, 2024, broadly in line with the increase in revenue Trade Payables | Indicator | June 30, 2025 (HK$ Million) | December 31, 2024 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Payables | 66.7 | 41.6 | 60.3% | [Other Payables and Accrued Expenses](index=8&type=section&id=%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8) As of June 30, 2025, other payables and accrued expenses increased to **HK$191.4 million**, up from December 31, 2024, primarily due to increased accrued staff costs, payable construction costs for new production facilities, and customer advances Other Payables and Accrued Expenses | Indicator | June 30, 2025 (HK$ Million) | December 31, 2024 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Amount | 191.4 | 170.6 | 12.2% | [Liquidity, Financial Resources and Borrowings](index=9&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E6%94%BF%E8%B3%87%E6%BA%90%E5%8F%8A%E5%80%9F%E6%AC%BE) The Group maintained a robust financial position amidst a volatile macroeconomic environment, with increased bank and cash balances and a stable current ratio of **2.1 times** as of June 30, 2025, while total interest-bearing borrowings significantly increased due to new production facility financing, leading to a higher net gearing ratio, but unutilized bank facilities remained ample Liquidity and Borrowing Situation | Indicator | June 30, 2025 (HK$ Million) | December 31, 2024 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Bank and Cash Balances | 204.3 | 173.4 | 17.8% | | Current Ratio | 2.1 times | 2.2 times | -4.5% | | Total Interest-Bearing Borrowings | 144.9 | 80.2 | 80.7% | | Net Gearing Ratio | 0.23 | 0.14 | 64.3% | | Unutilized Bank Facilities | 428.4 | 487.0 | -12.0% | - The increase in interest-bearing borrowings was primarily due to funds raised for the construction of new production facilities[40](index=40&type=chunk) [Human Resources](index=9&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90) As of June 30, 2025, the Group's total number of full-time employees increased to **1,463**, with staff remuneration reviewed annually based on individual performance, qualifications, Group financial performance, and market conditions, and various benefits provided to attract and retain talent, resulting in a year-on-year increase in staff costs (including directors' emoluments) but a decrease as a percentage of total revenue Human Resources Data | Indicator | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Full-Time Employees | 1,463 | 1,328 | 10.2% | | Staff Costs (2025 First Half) | HK$117.6 Million | HK$104.5 Million (2024 First Half) | 12.5% | | Staff Costs as % of Total Revenue (2025 First Half) | 26.2% | 27.5% (2024 First Half) | -1.3pp | [Capital Structure](index=9&type=section&id=%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B) As of June 30, 2025, the company's issued share capital was approximately **HK$6.5 million**, comprising **653,336,332 shares** with a par value of **HK$0.01** each, remaining unchanged from December 31, 2024 Capital Structure | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Issued Share Capital | HK$6.5 Million | HK$6.5 Million | | Number of Issued Shares | 653,336,332 shares | 653,336,332 shares | [Significant Investments](index=9&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) As of June 30, 2025, the fair value of the company's equity investment in Inovytec Medical Solutions Ltd. was **HK$20.0 million**, representing approximately **13.68%** of its equity, a decrease from **HK$25.0 million** as of December 31, 2024, due to Inovytec's performance being affected by customer order delays and delivery complexities, which reduced the asset ratio as defined by the Listing Rules to **1.8%**, leading the company to no longer consider this investment significant after June 30, 2025 Inovytec Investment Fair Value | Indicator | June 30, 2025 (HK$ Million) | December 31, 2024 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Fair Value of Equity Investment | 20.0 | 25.0 | -20.0% | | Asset Ratio as Defined by Listing Rules | 1.8% | 2.7% | -0.9pp | - The decrease in Inovytec's investment fair value was primarily due to customer order delays and complex delivery situations[44](index=44&type=chunk) - Due to the decrease in the asset ratio, the company no longer considers the Inovytec investment significant after **June 30, 2025**[45](index=45&type=chunk) [Significant Acquisitions and Disposals](index=10&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) During the period, the Group did not undertake any significant acquisitions or disposals of subsidiaries and associated companies - There were no significant acquisitions or disposals of subsidiaries and associated companies during the period[47](index=47&type=chunk) [Pledge of Group Assets](index=10&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group had **HK$189.7 million** in property, plant and equipment and **HK$30.5 million** in right-of-use assets pledged as security for borrowings related to the construction of new production facilities Pledged Assets | Asset Type | June 30, 2025 (HK$ Million) | December 31, 2024 (HK$ Million) | | :--- | :--- | :--- | | Property, Plant and Equipment | 189.7 | 132.7 | | Right-of-Use Assets | 30.5 | 30.4 | - Asset pledges are primarily used to finance the construction of new production facilities[48](index=48&type=chunk) [Foreign Exchange Risk](index=10&type=section&id=%E5%A4%96%E5%BD%99%E9%A2%A8%E9%9A%AA) As some of the Group's costs are denominated in RMB while most sales are in USD and JPY, an appreciation of RMB against USD and JPY could lead to increased costs and reduced profitability, a risk the Board has assessed as potentially significant, and while no foreign currency hedging policy is currently in place, the Group closely monitors the situation and will consider hedging when necessary - An appreciation of RMB against USD and JPY could lead to increased costs and reduced profitability for the Group[49](index=49&type=chunk) - The Group currently has no foreign currency hedging policy but closely monitors foreign currency risk and will consider hedging when necessary[49](index=49&type=chunk) [Contingent Liabilities](index=10&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no other contingent liabilities - As of **June 30, 2025**, the Group had no other contingent liabilities[50](index=50&type=chunk) [Other Information](index=11&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Interim Dividend](index=11&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board resolved to declare an interim dividend of **2.4 HK cents** per share for the six months ended June 30, 2025, a **50%** increase from the first half of 2024, payable on or about September 26, 2025, with shareholders required to complete transfer registration by 4:30 p.m. on September 3, 2025, to receive the dividend Interim Dividend | Indicator | 2025 First Half (HK Cents) | 2024 First Half (HK Cents) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Interim Dividend Per Share | 2.40 | 1.60 | 50.0% | - The record date for the interim dividend is **September 8, 2025**, with payment on or about **September 26, 2025**[51](index=51&type=chunk) [Directors' and Chief Executive's Interests and/or Short Positions in Shares, Underlying Shares and Debentures of the Company](index=11&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E2%95%B1%E6%88%96%E6%B7%A1%E5%80%89) As of June 30, 2025, several directors and chief executive held interests in the company's shares and underlying shares, primarily through beneficial ownership, controlled corporation interests, and spouse interests, with Mr. Choi Man Sing being the largest shareholder, and Mr. Choi Cheung Tai, Mr. Hui Ming Fai, and Mr. Fu Kwok Fu also holding shares and share options Directors' and Chief Executive's Share Interests | Director Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Choi Man Sing | Beneficial Owner/Interest of Controlled Corporation | 393,189,890 shares | 60.18% | | Mr. Choi Cheung Tai | Beneficial Owner | 11,700,000 shares | 1.79% | | Mr. Hui Ming Fai | Beneficial Owner/Spouse's Interest | 7,645,166 shares | 1.17% | | Mr. Fu Kwok Fu | Beneficial Owner/Spouse's Interest | 7,867,166 shares | 1.20% | - Mr. Choi Man Sing's interests include shares held personally, through controlled corporations VRI and VRHK, and his spouse Ms. Liu Pui Ching's interest in VRI[53](index=53&type=chunk) - The interests of Mr. Choi Cheung Tai, Mr. Hui Ming Fai, and Mr. Fu Kwok Fu include share options granted under the share option scheme[53](index=53&type=chunk) [Substantial Shareholders' Interests and/or Short Positions in Shares of the Company](index=13&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E2%95%B1%E6%88%96%E6%B7%A1%E5%80%89) As of June 30, 2025, Ms. Liu Pui Ching and VINCENT RAYA INTERNATIONAL LIMITED (VRI) were substantial shareholders of the company, holding **60.18%** and **58.50%** of the share interests respectively, primarily through spouse interests and controlled corporation interests Substantial Shareholders' Share Interests | Shareholder Name/Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Ms. Liu Pui Ching | Spouse's Interest/Interest of Controlled Corporation | 393,189,890 shares | 60.18% | | VRI | Beneficial Owner/Interest of Controlled Corporation | 382,189,890 shares | 58.50% | - Ms. Liu Pui Ching's interests include shares held by her spouse Mr. Choi Man Sing, and shares held through VRI and VRHK[57](index=57&type=chunk) - VRI's interests include shares held directly and shares held through VRHK[57](index=57&type=chunk) [Share Option Schemes and Share Award Scheme](index=14&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83%E5%8F%8A%E8%82%A1%E4%BB%BD%E7%8D%8E%E5%8B%B5%E8%A8%88%E5%8A%83) The company operates a Pre-IPO Share Option Scheme, a Terminated Share Option Scheme, a New Share Option Scheme, and a Share Award Scheme to incentivize and reward employees and executives; the Terminated Share Option Scheme ceased on May 22, 2024, but previously granted options remain valid, while the New Share Option Scheme was adopted on the same day to replace it, and during the period, no options were exercised, cancelled, or lapsed under the Pre-IPO scheme, **100,000** options lapsed under the Terminated scheme, and no options or awards were granted under the New Share Option Scheme or Share Award Scheme [Pre-IPO Share Option Scheme](index=14&type=section&id=%E9%A6%96%E6%AC%A1%E5%85%AC%E9%96%8B%E7%99%BC%E5%94%AE%E5%89%8D%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) Adopted on June 17, 2016, this scheme aims to reward executives, directors, employees, and consultants, expiring on June 16, 2026, with **19,684,000** share options granted at an exercise price of **HK$0.80** per share, and as of June 30, 2025, **1,986,668** options remained unexercised, representing approximately **0.3%** of the issued share capital, with no exercises, cancellations, or lapses during the period - The Pre-IPO Share Option Scheme expires on **June 16, 2026**[59](index=59&type=chunk) Pre-IPO Share Option Scheme Details | Indicator | Unexercised as of January 1, 2025 | Exercised During the Period | Cancelled During the Period | Lapsed During the Period | Unexercised as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Number of Share Options | 1,986,668 | – | – | – | 1,986,668 | | Weighted Average Exercise Price (HK$) | 0.80 | – | – | – | 0.80 | [Terminated Share Option Scheme](index=15&type=section&id=%E5%B7%B2%E7%B5%82%E6%AD%A2%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) Adopted on June 24, 2016, this scheme was terminated on May 22, 2024, prohibiting further option grants but keeping previously granted options valid, with **100,000** options lapsing during the period and no exercises or cancellations, leaving **27,486,332** unexercised options as of June 30, 2025, representing approximately **4.2%** of the issued share capital - The Terminated Share Option Scheme was terminated on **May 22, 2024**, but previously granted options remain valid[64](index=64&type=chunk) Terminated Share Option Scheme Details | Indicator | Unexercised as of January 1, 2025 | Exercised During the Period | Cancelled During the Period | Lapsed During the Period | Unexercised as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Number of Share Options | 27,586,332 | – | – | (100,000) | 27,486,332 | | Weighted Average Exercise Price (HK$) | 0.89 | – | – | 0.80 | 0.90 | [New Share Option Scheme](index=18&type=section&id=%E6%96%B0%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) Adopted on May 22, 2024, to replace the terminated scheme and comply with Listing Rules amendments, this scheme will expire on May 21, 2034, with no options granted during the period or up to the interim report date, and a maximum of **65,333,633** shares, or **10%** of the issued share capital, available for grant - The New Share Option Scheme was adopted on **May 22, 2024**, replacing the Terminated Share Option Scheme and complying with Listing Rules amendments[68](index=68&type=chunk) - No share options were granted under the New Share Option Scheme during the period or up to the interim report date[71](index=71&type=chunk) - The maximum number of share options that can be granted is **65,333,633 shares**, equivalent to **10%** of the issued share capital[70](index=70&type=chunk) [Share Award Scheme](index=19&type=section&id=%E8%82%A1%E4%BB%BD%E7%8D%8E%E5%8B%B5%E8%A8%88%E5%8A%83) Adopted on December 2, 2021, and amended on May 22, 2024, this scheme aims to recognize and reward eligible participants for their contributions to the Group, expiring on December 1, 2031, with no awards granted during the period or up to the interim report date, and the trustee holding **10,000,000 shares** as of June 30, 2025, representing approximately **1.53%** of the issued share capital - The Share Award Scheme was adopted on **December 2, 2021**, and amended on **May 22, 2024**, to reward participants for their contributions to the Group[72](index=72&type=chunk) - No awards were granted under the amended Share Award Scheme during the period or up to the interim report date[75](index=75&type=chunk) Share Award Scheme Holding Details | Indicator | June 30, 2025 | | :--- | :--- | | Number of Shares Held by Trustee | 10,000,000 shares | | Percentage of Issued Share Capital | Approximately 1.53% | [Scheme Mandate Limit and Service Provider Sub-limit](index=20&type=section&id=%E8%A8%88%E5%8A%83%E6%8E%88%E6%AC%8A%E9%99%90%E9%A1%8D%E5%8F%8A%E6%9C%8D%E5%8B%99%E6%8F%90%E4%BE%9B%E8%80%85%E5%88%86%E9%A1%9E%E9%99%90%E9%A1%8D) The total number of all options and awards granted must not exceed **10%** of the company's issued share capital at the adoption date (Scheme Mandate Limit), which is **65,333,633 shares**, and options granted to service providers must not exceed **1%** of the issued share capital (Service Provider Sub-limit), or **6,533,363 shares**, with **0** shares available for issue during the period due to no options or awards being granted Scheme Mandate Limit | Limit Type | Number of Shares | Percentage of Issued Share Capital | | :--- | :--- | :--- | | Scheme Mandate Limit | 65,333,633 shares | 10% | | Service Provider Sub-limit | 6,533,363 shares | 1% | - During the period, the number of shares available for issue under all schemes was **0** due to no options or awards being granted[78](index=78&type=chunk) [Disclosure Pursuant to Rule 13.51B(1) of the Listing Rules](index=22&type=section&id=%E6%A0%B9%E6%93%9A%E4%B8%8A%E5%B8%82%E8%A6%8F%E5%89%87%E7%AC%AC13.51B(1)%E6%A2%9D%E9%80%B2%E8%A1%8C%E7%9A%84%E6%8A%AB%E9%9C%B2) This section discloses changes in directors' information since the date of the 2024 annual report, including Mr. Choi Cheung Tai's changes in positions at The Hong Kong Polytechnic University and the Vocational Training Council, Mr. Fu Kwok Fu's changes at The Hong Kong Institution of Engineers, and the appointments of Dr. Leung Ming Chu and Mr. Au Yu Chiu to the Nomination Committee - Mr. Choi Cheung Tai was re-appointed as an Industry Advisor to the Technology Transfer Assessment Committee of The Hong Kong Polytechnic University and appointed as a member of the Advanced Manufacturing Training Board of the Vocational Training Council[81](index=81&type=chunk) - Dr. Leung Ming Chu and Mr. Au Yu Chiu were appointed as members of the company's Nomination Committee[81](index=81&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=22&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, including treasury shares - No purchase, sale, or redemption of the company's listed securities occurred during the period[83](index=83&type=chunk) [Corporate Governance Practices](index=22&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The company is committed to maintaining the highest standards of corporate governance and has adopted the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules, with the Board believing that the company has complied with the code provisions throughout the period and up to the date of the interim report - The company has adopted and complied with the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules throughout the period[84](index=84&type=chunk) [Model Code for Securities Transactions by Directors](index=23&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%88%99) The company has adopted the Model Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' dealings in the company's securities, and all directors have confirmed compliance with the Model Code throughout the period and up to the date of the interim report - All directors confirmed compliance with the Model Code set out in Appendix C3 of the Listing Rules throughout the period[85](index=85&type=chunk) [Environmental, Social and Governance ("ESG") Responsibilities](index=23&type=section&id=%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E5%8F%8A%E7%AE%A1%E6%B2%BB%EF%BC%88%E3%80%8C%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E5%8F%8A%E7%AE%A1%E6%B2%BB%E3%80%8D%EF%BC%89%E8%B2%AC%E4%BB%BB) The Group upholds its mission and values, committed to providing innovative, high-quality, and reliable medical devices, and achieving sustainable development by integrating environmental and social measures into its operations, with further details available in the 2024 Annual Report's ESG Report - The Group is committed to sustainable development and integrates environmental and social measures into its operations[86](index=86&type=chunk) [Review of Interim Financial Statements](index=23&type=section&id=%E5%AF%A9%E9%96%B1%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, which have also been reviewed by the auditor, RSM Hong Kong, in accordance with Hong Kong Standard on Review Engagements 2410 - The Audit Committee has reviewed the interim financial statements, and the auditor, RSM Hong Kong, has completed an independent review[87](index=87&type=chunk) [Sufficiency of Public Float](index=23&type=section&id=%E8%B6%B3%E5%A4%A0%E7%9A%84%E5%85%AC%E7%9C%BE%E6%8C%81%E8%82%A1%E9%87%8F) The company has maintained a sufficient public float of not less than **25%** as required by the Listing Rules throughout the period and up to the date of the interim report - The company has consistently maintained a sufficient public float of not less than **25%** as required by the Listing Rules[88](index=88&type=chunk) [Events After the Reporting Period](index=23&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) On August 20, 2025, non-executive director Dr. Leung Ming Chu and independent non-executive director Mr. Au Yu Chiu were appointed as members of the Nomination Committee, with no other significant events occurring after the period end up to the interim report date - On **August 20, 2025**, Dr. Leung Ming Chu and Mr. Au Yu Chiu were appointed as members of the Nomination Committee[89](index=89&type=chunk) [Publication of Interim Report](index=23&type=section&id=%E7%99%BB%E8%BC%89%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) The company's interim report for the six months ended June 30, 2025, has been published on the HKEXnews website and the company's website - The interim report has been published on the HKEXnews website (www.hkexnews.hk) and the company's website (www.vincentmedical.com)[91](index=91&type=chunk) [Independent Review Report](index=24&type=section&id=%E7%8D%A8%E7%AB%8B%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) [Introduction](index=24&type=section&id=%E7%B7%92%E8%A8%80) RSM Hong Kong has reviewed the condensed consolidated interim financial information of Vincent Medical Holdings Limited and its subsidiaries for the six months ended June 30, 2025, with the Board of Directors responsible for its preparation and presentation in accordance with Hong Kong Accounting Standard 34 - RSM Hong Kong has reviewed the Group's condensed consolidated interim financial information for the six months ended **June 30, 2025**[95](index=95&type=chunk) - The Board of Directors is responsible for preparing and presenting the interim financial information in accordance with Hong Kong Accounting Standard 34[95](index=95&type=chunk) [Scope of Review](index=24&type=section&id=%E5%AF%A9%E9%96%B1%E7%AF%84%E5%9C%8D) The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, primarily involving inquiries of financial accounting personnel and performing analytical and other review procedures, and as the scope is less than an audit, the auditor cannot guarantee awareness of all significant matters and therefore does not express an audit opinion - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, with a scope less than an audit[96](index=96&type=chunk) - The auditor does not express an audit opinion, as it cannot guarantee awareness of all significant matters[96](index=96&type=chunk) [Conclusion](index=24&type=section&id=%E7%B5%90%E8%AB%96) Based on the review, the auditor has not noted any matters that lead them to believe the interim financial information is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 - The auditor believes the interim financial information is prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[97](index=97&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=25&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group's revenue increased by **18.1%** year-on-year to **HK$449.4 million**, gross profit grew by **33.4%** to **HK$159.0 million**, profit for the period surged by **61.7%** to **HK$54.3 million**, profit attributable to owners of the company was **HK$51.6 million**, and basic earnings per share reached **8.03 HK cents** Condensed Consolidated Statement of Profit or Loss Key Data | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 449,441 | 380,706 | | Cost of Sales | (290,435) | (261,525) | | Gross Profit | 159,006 | 119,181 | | Operating Profit | 64,556 | 34,737 | | Profit Before Tax | 63,766 | 33,860 | | Profit for the Period | 54,272 | 33,561 | | Profit Attributable to Owners of the Company | 51,629 | 33,288 | | Basic Earnings Per Share (HK Cents) | 8.03 | 5.17 | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=26&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group's profit for the period was **HK$54.3 million**, with other comprehensive income primarily influenced by exchange differences on translating foreign operations (**HK$9.8 million** gain) and fair value changes of equity investments measured at fair value through other comprehensive income (**HK$4.9 million** loss), resulting in a total comprehensive income for the period of **HK$59.1 million** Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Profit for the Period | 54,272 | 33,561 | | Fair Value Change of Equity Investments Measured at Fair Value Through Other Comprehensive Income | (4,986) | 3,688 | | Exchange Differences on Translating Foreign Operations | 9,765 | (4,769) | | Other Comprehensive Income for the Period, Net of Tax | 4,779 | (1,081) | | Total Comprehensive Income for the Period | 59,051 | 32,480 | | Attributable to Owners of the Company | 55,542 | 32,983 | [Condensed Consolidated Statement of Financial Position](index=27&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's total assets were **HK$1,083.9 million**, an increase from December 31, 2024, with non-current assets driven by property, plant and equipment, and significant increases in trade receivables and bank and cash balances within current assets, while total equity was **HK$631.6 million**, non-current liabilities rose due to increased borrowings, and current liabilities also increased due to higher trade payables and other payables Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total Non-Current Assets | 388,387 | 332,028 | | Total Current Assets | 695,556 | 587,657 | | Total Assets | 1,083,943 | 919,685 | | Total Equity | 631,582 | 583,359 | | Total Non-Current Liabilities | 117,199 | 64,386 | | Total Current Liabilities | 335,162 | 271,940 | | Net Current Assets | 360,394 | 315,717 | [Condensed Consolidated Statement of Changes in Equity](index=28&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For the six months ended June 30, 2025, total equity attributable to owners of the company increased from **HK$578.6 million** as of January 1, 2025, to **HK$623.4 million**, primarily influenced by a total comprehensive income for the period of **HK$55.5 million** and share-based payments of **HK$281 thousand**, offset by dividends paid of **HK$10.9 million** Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | As of January 1, 2025 (HK$ Thousand) | Total Comprehensive Income for the Period (HK$ Thousand) | Share-Based Payments (HK$ Thousand) | Dividends Paid (HK$ Thousand) | As of June 30, 2025 (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 578,553 | 55,542 | 281 | (10,937) | 623,439 | | Non-Controlling Interests | 4,806 | 3,509 | – | (172) | 8,143 | | Total Equity | 583,359 | 59,051 | 281 | (11,109) | 631,582 | [Condensed Consolidated Statement of Cash Flows](index=29&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, the Group's net cash generated from operating activities was **HK$42.9 million**, net cash used in investing activities was **HK$60.1 million**, primarily for purchasing property, plant and equipment, and net cash generated from financing activities was **HK$45.0 million**, mainly from borrowings raised, resulting in an ending bank and cash balance of **HK$204.3 million**, an increase of **HK$27.8 million** from the beginning of the period Condensed Consolidated Statement of Cash Flows Key Data | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 42,917 | 33,373 | | Net Cash Used in Investing Activities | (60,130) | (22,293) | | Net Cash Generated from/(Used in) Financing Activities | 45,018 | (17,691) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 27,805 | (6,611) | | Cash and Cash Equivalents at June 30 | 204,332 | 166,730 | [Notes to the Condensed Consolidated Financial Statements](index=30&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Basis of Preparation](index=30&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) These condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, consistent with the accounting policies and methods of computation used in the 2024 annual financial statements - These condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the Listing Rules[110](index=110&type=chunk) - The accounting policies and methods of computation used are consistent with those in the 2024 annual financial statements[110](index=110&type=chunk) [New and Revised Hong Kong Financial Reporting Standards](index=30&type=section&id=%E6%96%B0%E8%A8%82%E5%8F%8A%E7%B6%93%E4%BF%AE%E8%A8%82%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87) The Group first applied the amendments to Hong Kong Accounting Standard 21 "Lack of Exchangeability" from January 1, 2025, without changing accounting policies or making retrospective adjustments, and the Board is currently evaluating the expected impact of new and revised standards issued but not yet adopted for the first application period - The Group first applied the amendments to Hong Kong Accounting Standard 21 "Lack of Exchangeability" from **January 1, 2025**, without changing accounting policies or making retrospective adjustments[111](index=111&type=chunk) - The Board is evaluating the expected impact of new and revised standards issued but not yet adopted[113](index=113&type=chunk) [Fair Value Measurement](index=30&type=section&id=%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E9%87%8F) The carrying amounts of the Group's financial assets and liabilities approximate their fair values, with fair value measurements categorized into a three-level hierarchy; as of June 30, 2025, unlisted equity securities measured at fair value through other comprehensive income were **HK$19.987 million**, classified as Level 3, and the fair value change of these financial assets for the period was a loss of **HK$4.986 million** recognized in other comprehensive income, with valuation procedures overseen by the Chief Financial Officer and conducted by external valuation experts - The carrying amounts of the Group's financial assets and financial liabilities approximate their respective fair values[114](index=114&type=chunk) Financial Assets Measured at Fair Value Through Other Comprehensive Income | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Unlisted Equity Securities | 19,987 | 24,973 | Reconciliation of Financial Assets Measured at Level 3 Fair Value | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | As of January 1 | 24,973 | 26,802 | | Total Gains or Losses Recognized in Other Comprehensive Income | (4,986) | 3,688 | | As of June 30 | 19,987 | 30,490 | [Segment Information](index=33&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group is primarily divided into two reporting segments: OEM and OBM; for the six months ended June 30, 2025, the OEM segment generated revenue of **HK$359.0 million** and a segment profit of **HK$77.6 million**, while the OBM segment generated revenue of **HK$90.4 million** and a segment loss of **HK$0.7 million**, with revenue from a major customer A amounting to **HK$245.2 million**, representing a significant portion of the OEM segment's revenue Reportable Segment Profit or Loss | Segment | 2025 First Half Revenue (HK$ Thousand) | 2025 First Half Profit/(Loss) (HK$ Thousand) | 2024 First Half Revenue (HK$ Thousand) | 2024 First Half Profit/(Loss) (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | OEM | 359,032 | 77,574 | 302,691 | 46,947 | | OBM | 90,409 | (694) | 78,015 | (4,694) | | Total | 449,441 | 76,880 | 380,706 | 42,253 | Revenue from Major Customers | Customer | 2025 First Half (HK$ Thousand) | 2024 First Half (HK$ Thousand) | | :--- | :--- | :--- | | Customer A (OEM Segment) | 245,182 | 191,505 | [Revenue](index=34&type=section&id=%E6%94%B6%E5%85%A5) The Group's revenue is derived from contracts with customers, disaggregated by product category, geographical market, and timing of revenue recognition, with imaging disposables being the largest revenue source, followed by respiratory products, and the United States and Spain as key geographical markets, with most revenue recognized for products transferred over time Revenue by Product Category | Product Category | 2025 First Half (HK$ Thousand) | 2024 First Half (HK$ Thousand) | | :--- | :--- | :--- | | Imaging Disposables | 244,022 | 189,718 | | Respiratory Products | 126,410 | 120,369 | | Orthopedic Support and Rehabilitation Devices | 19,279 | 23,629 | | Other Products | 59,730 | 46,990 | | Total | 449,441 | 380,706 | Revenue by Geographical Market | Geographical Market | 2025 First Half (HK$ Thousand) | 2024 First Half (HK$ Thousand) | | :--- | :--- | :--- | | United States | 164,439 | 145,246 | | Spain | 146,847 | 121,231 | | People's Republic of China | 36,111 | 36,864 | | Japan | 34,483 | 21,089 | | Total | 449,441 | 380,706 | Revenue by Timing of Recognition | Timing of Recognition | 2025 First Half (HK$ Thousand) | 2024 First Half (HK$ Thousand) | | :--- | :--- | :--- | | Products Transferred at a Point in Time | 205,419 | 190,988 | | Products Transferred Over Time | 244,022 | 189,718 | | Total | 449,441 | 380,706 | [Income Tax Expense](index=36&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense for the period was **HK$9.5 million**, a significant increase from the prior year, with Hong Kong profits tax provision at **HK$5.1 million**, China corporate income tax provision at **HK$2.3 million**, and other regions at **HK$1.9 million**, noting that Hong Kong profits tax applies a two-tiered tax rate and China corporate income tax rates range from **15%** to **25%** Income Tax Expense Details | Tax Category | 2025 First Half (HK$ Thousand) | 2024 First Half (HK$ Thousand) | | :--- | :--- | :--- | | Current Tax – Hong Kong Profits Tax | 4,999 | (2,099) | | Current Tax – China | 2,333 | 962 | | Current Tax – Others | 1,902 | 541 | | Deferred Tax | 260 | 895 | | Total | 9,494 | 299 | - Hong Kong profits tax applies a two-tiered tax rate, and China corporate income tax rates range from **15%** to **25%**[136](index=136&type=chunk)[137](index=137&type=chunk) [Profit for the Period](index=37&type=section&id=%E6%9C%9F%E9%96%93%E6%BA%A2%E5%88%A9) Profit for the period is presented after deducting/crediting various expenses and income, with key influencing factors including inventory provisions, amortization, cost of inventories sold, depreciation of property, plant and equipment, depreciation expense of right-of-use assets, directors' emoluments, equity-settled share-based payments, impairment of other intangible assets, staff costs, and write-offs of inventories and property, plant and equipment Major Adjustments to Profit for the Period | Item | 2025 First Half (HK$ Thousand) | 2024 First Half (HK$ Thousand) | | :--- | :--- | :--- | | Inventory Provisions | 3,142 | 5,064 | | Amortization | 1,368 | 1,104 | | Cost of Inventories Sold | 286,312 | 255,485 | | Depreciation of Property, Plant and Equipment | 10,543 | 9,484 | | Depreciation Expense of Right-of-Use Assets | 6,679 | 7,186 | | Staff Costs (including Directors' Emoluments) | 117,592 | 104,540 | | Write-off of Property, Plant and Equipment | 2,181 | 99 | [Dividends](index=37&type=section&id=%E8%82%A1%E6%81%AF) The Board resolved to declare an interim dividend of **2.4 HK cents** per share for the six months ended June 30, 2025, a **50%** increase from the prior year, and the final dividend of **1.7 HK cents** per share for the year ended December 31, 2024, was paid on June 20, 2025 Dividend Declaration | Dividend Type | 2025 First Half (HK Cents/Share) | 2024 First Half (HK Cents/Share) | | :--- | :--- | :--- | | Interim Dividend | 2.4 | 1.6 | | 2024 Final Dividend | 1.7 (Paid) | - | [Earnings Per Share](index=38&type=section&id=%E6%AF%8F%E8%82%A1%E7%86%B1%E5%88%A9) For the six months ended June 30, 2025, profit attributable to owners of the company was **HK$51.6 million**, resulting in basic earnings per share of **8.03 HK cents**, and diluted earnings per share is not applicable as the exercise price of unexercised share options was higher than the average market price of shares, thus not assuming their exercise Earnings Per Share Calculation | Indicator | 2025 First Half (HK$ Thousand/Thousand Shares) | 2024 First Half (HK$ Thousand/Thousand Shares) | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 51,629 | 33,288 | | Weighted Average Number of Ordinary Shares for Basic EPS | 643,336 | 643,336 | | Basic Earnings Per Share (HK Cents) | 8.03 | 5.17 | | Diluted Earnings Per Share | Not Applicable | Not Applicable | - Diluted earnings per share is not applicable as the exercise price of share options was higher than the average market price of shares[142](index=142&type=chunk) [Property, Plant and Equipment](index=38&type=section&id=%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) For the six months ended June 30, 2025, the Group purchased approximately **HK$57.6 million** in property, plant and equipment, a significant increase from the prior year, reflecting continuous investment in fixed assets Property, Plant and Equipment Purchase Amount | Indicator | 2025 First Half (HK$ Thousand) | 2024 First Half (HK$ Thousand) | | :--- | :--- | :--- | | Purchase Amount | 57,573 | 39,939 | [Right-of-Use Assets](index=38&type=section&id=%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2) For the six months ended June 30, 2025, the Group entered into a three-year office premises lease renewal agreement, recognizing right-of-use assets and lease liabilities of approximately **HK$4.9 million** - The Group entered into a three-year office premises lease renewal agreement, recognizing right-of-use assets and lease liabilities of approximately **HK$4.9 million**[144](index=144&type=chunk) [Trade Receivables](index=39&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) The Group grants customers a general credit period ranging from **30 to 90 days** and maintains strict control over unrecovered receivables; as of June 30, 2025, total trade receivables were **HK$230.8 million**, with the **0 to 30 days** aging category accounting for the largest proportion Trade Receivables Aging Analysis | Aging | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 30 Days | 79,961 | 61,139 | | 31 to 60 Days | 69,943 | 49,452 | | 61 to 90 Days | 58,100 | 38,953 | | Over 90 Days | 22,775 | 19,788 | | Total | 230,779 | 169,332 | [Prepayments, Deposits and Other Receivables](index=39&type=section&id=%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85%E3%80%81%E6%8C%89%E9%87%91%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, total prepayments, deposits and other receivables amounted to **HK$98.2 million**, primarily comprising deposits for goods purchased and deposits for property, plant and equipment and intangible assets Prepayments, Deposits and Other Receivables Details | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Deposits for Purchase of Goods | 35,359 | 21,330 | | Deposits for Purchase of Property, Plant and Equipment and Intangible Assets | 35,889 | 23,816 | | Prepaid Expenses | 4,840 | 2,948 | | Rent and Other Deposits | 1,806 | 1,776 | | VAT and Other Receivables | 20,280 | 25,127 | | Total | 98,174 | 74,997 | | Less: Non-Current Deposits | (37,596) | (24,446) | | Current Portion | 60,578 | 50,551 | [Trade Payables](index=40&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, the Group's total trade payables were **HK$66.7 million**, with the **0 to 30 days** aging category representing the largest proportion, reflecting normal procurement and payment cycles Trade Payables Aging Analysis | Aging | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 30 Days | 49,575 | 25,259 | | 31 to 60 Days | 8,527 | 5,988 | | Over 60 Days | 8,635 | 10,354 | | Total | 66,737 | 41,601 | [Other Payables and Accrued Expenses](index=40&type=section&id=%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8) As of June 30, 2025, total other payables and accrued expenses increased to **HK$191.4 million**, primarily comprising accrued staff costs, other accrued expenses, other payables, warranty provisions, and contract liabilities Other Payables and Accrued Expenses Details | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Accrued Staff Costs | 51,696 | 47,735 | | Other Accrued Expenses | 5,544 | 7,362 | | Other Payables | 84,941 | 70,420 | | Warranty Provisions | 403 | 399 | | Contract Liabilities | 48,865 | 44,651 | | Total | 191,449 | 170,567 | [Share Option and Share Award Schemes](index=41&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E5%8F%8A%E8%82%A1%E4%BB%BD%E7%8D%8E%E5%8B%B5%E8%A8%88%E5%88%83) The Group operates a Pre-IPO Share Option Scheme, a Terminated Share Option Scheme, a New Share Option Scheme, and a Share Award Scheme; the Terminated Share Option Scheme was terminated on May 22, 2024, but previously granted options remain valid, while the New Share Option Scheme was adopted on the same day, and during the period, no changes occurred in the Pre-IPO scheme, **100,000** options lapsed under the Terminated scheme, and no options or awards were granted under the New Share Option Scheme or Share Award Scheme [Share Option Schemes](index=41&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The Group operates three share option schemes: the Pre-IPO Share Option Scheme (adopted June 17, 2016, expiring June 16, 2026, with **1,986,668** unexercised options as of June 30, 2025), the Terminated Share Option Scheme (adopted June 24, 2016, terminated May 22, 2024, with **27,486,332** unexercised options as of June 30, 2025, and **100,000** options lapsed during the period), and the New Share Option Scheme (adopted May 22, 2024, expiring May 21, 2034, with no grants during the period) - The Pre-IPO Share Option Scheme expires on **June 16, 2026**, with **1,986,668** unexercised share options as of **June 30, 2025**[153](index=153&type=chunk)[158](index=158&type=chunk) - The Terminated Share Option Scheme was terminated on **May 2

V & V TECHNOLOGY HOLDINGS LIMITED 時 騰 科 技 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （ 股 份 代 號 ： 8113 ） 中期報告 本中期報告採用環保紙印製 香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在聯交所上市 的公司帶有較高投資風險。有意投資的人士應了解投資於該等公司的潛在風險，並應經過 審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於聯交所主板買賣的 證券承受較大的市場波動風險，同時無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所對本報告的內容概不負責，對其準確性或完整性亦不 發表任何聲明，並明確表示概不就因本報告全部或任何部分內容而產生或因倚賴該等內容 而引致的任何損失承擔任何責任。 本報告的資料乃遵照聯交所GEM證券上市規則（「GEM上市規則」）而刊載，旨在提供有關 時騰科技控股有限公司（「本公司」）的資料。本公司的董事（「董事」）願就本報告的資料共 同及個別地承擔全部責任，並在作出一切合 ...

Corporate Statement](index=3&type=section&id=%E4%BC%81%E4%B8%9A%E5%AE%A3%E8%A8%80) Swire Pacific is a Hong Kong-headquartered international conglomerate with over 150 years of history in Greater China, focused on enhancing shareholder value through long-term returns and diversified core businesses in property, beverages, and aviation, while expanding into new sectors like healthcare - The company aims to achieve sustained growth in shareholder value by generating ideal long-term returns on equity and maintaining consistent dividend growth[5](index=5&type=chunk) - The company's strategy focuses on Greater China and Southeast Asia, developing core divisions in property, beverages, and aviation, while exploring new areas like healthcare[5](index=5&type=chunk) - Core principles include integrity, diligence, continuous improvement, humility, teamwork, and long-term development[6](index=6&type=chunk) - The company adopts prudent financial management to shield long-term investments from short-term market fluctuations and maintains high corporate governance standards[8](index=8&type=chunk)[9](index=9&type=chunk) Performance Summary](index=4&type=section&id=%E8%A1%A8%E7%8F%BE%E6%91%98%E8%A6%81) The company reported robust revenue growth of **16%** in H1 2025, but profit attributable to company shareholders significantly decreased by **79%** due to investment property fair value changes. Underlying profit and recurring underlying profit slightly declined, while dividends per share increased by **4%** Key Financial Data for H1 2025 (HKD million) | Metric | 2025 H1 | 2024 H1 | Change | 2024 Full Year | | :--- | :--- | :--- | :--- | :--- | | Profit Attributable to Company Shareholders | 815 | 3,914 | -79% | 4,321 | | Underlying Profit | 5,476 | 5,576 | -2% | 10,471 | | Recurring Underlying Profit | 4,712 | 4,762 | -1% | 9,284 | | Revenue | 45,774 | 39,563 | +16% | 81,969 | | Operating Profit | 1,861 | 4,945 | -62% | 4,240 | | Operating Profit Excluding Fair Value Changes of Investment Properties | 5,745 | 5,785 | -1% | 10,214 | | Fair Value Changes of Investment Properties | (3,884) | (840) | N/A | (5,974) | | Net Debt | 71,337 | 63,479 | +12% | 70,563 | | Net Debt to Capital Ratio (Excluding Lease Liabilities) | 22.7% | 19.8% | +2.9 percentage points | 22.1% | | Dividends Per Share ('A' Share) | 1.30 | 1.25 | +4% | 3.35 | | Dividends Per Share ('B' Share) | 0.26 | 0.25 | +4% | 0.67 | Chairman's Statement](index=5&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A) The Chairman's Statement highlights the Group's solid overall business performance in H1 2025 despite an uncertain operating environment, with strong aviation and property divisions, and resilient beverages. Underlying profit attributable to company shareholders slightly decreased, but the rise in investment property fair value losses is non-cash. The Group will continue strategic initiatives in core markets and remains optimistic about long-term prospects - H1 2025 underlying profit attributable to company shareholders was **HKD5.476 billion**, a slight decrease from **HKD5.576 billion** in H1 2024[12](index=12&type=chunk) - Fair value loss on investment properties increased to **HKD4.664 billion** (H1 2024: **HKD877 million**), but this is non-cash and does not impact cash flow or underlying profit[12](index=12&type=chunk) - Swire Properties continues to advance its **HKD100 billion** investment plan, with **67%** of funds committed, focusing on expanding in Hong Kong, Mainland China, and Southeast Asia[14](index=14&type=chunk) - Swire Coca-Cola's Southeast Asia business continues to grow, and an application has been submitted for the proposed spin-off and separate listing of ThaiNamthip on the Stock Exchange of Thailand[16](index=16&type=chunk) - Cathay Group continues to invest in its fleet, cabins, and digital innovation, with total investments exceeding **HKD100 billion**, and added **19 new passenger destinations**[17](index=17&type=chunk) - The Group maintains a strong financial position with **HKD52.6 billion** in available liquidity, a net debt to capital ratio of **22.7%**, and declared a **4% increase** in the first interim dividend[21](index=21&type=chunk) - The company repurchased **25,119,000 'A' shares** and **15,402,500 'B' shares** in H1 2025, at a total cost of **HKD1.842 billion**[22](index=22&type=chunk) - The Group continues to advance its SwireTHRIVE sustainable development strategy, with its companies making progress in renewable energy use and sustainable aviation fuel development[23](index=23&type=chunk) Business Review](index=9&type=section&id=%E6%A5%AD%E5%8B%99%E8%A9%95%E8%BF%B0) This section reviews the H1 2025 operating performance, strategic developments, key project progress, and outlook for the company's five divisions: Property, Beverages, Aviation, Healthcare, and Trading & Industrial, each navigating diverse market dynamics and challenges Property Division](index=9&type=section&id=%E5%9C%B0%E7%94%A2%E9%83%A8%E9%96%80) The Property Division's H1 2025 attributable recurring underlying profit slightly decreased due to Hong Kong office market challenges and weak retail. However, progress was made in property trading and Mainland China projects through US non-core asset disposals and the **HKD100 billion** investment plan. Future focus remains on core markets, developing quality properties and residential projects - H1 2025 attributable recurring underlying profit was **HKD2.829 billion**, a **2% decrease** from H1 2024, primarily due to lower Hong Kong office rental income[18](index=18&type=chunk) - High office vacancy rates and new supply in Hong Kong create downward pressure, but the office portfolio's occupancy rate remains stable[18](index=18&type=chunk)[50](index=50&type=chunk) - Completed the disposal of Brickell City Centre retail and parking businesses in Miami, US, with proceeds supporting the **HKD100 billion** investment plan[15](index=15&type=chunk)[48](index=48&type=chunk) - Mainland China retail sales showed stable growth, with Taikoo Li Sanlitun, Beijing, HKRI Taikoo Hui, Shanghai, and Taikoo Li Qiantan retail sales increasing by **7%**, **14%**, and **4%** respectively[58](index=58&type=chunk) - Lujiazui Taikoo Li Residences in Shanghai achieved outstanding sales, with two phases totaling **RMB5.93 billion** in sales[14](index=14&type=chunk)[47](index=47&type=chunk) - As of August 1, 2025, approximately **HKD67 billion** of the **HKD100 billion** investment plan has been committed, primarily for Hong Kong, Mainland China, and residential trading projects[44](index=44&type=chunk) Property Division Total Revenue (HKD million) | Category | 2025 H1 | 2024 H1 | 2024 Full Year | | :--- | :--- | :--- | :--- | | Property Investment | 6,576 | 6,727 | 13,452 | | Property Trading | 1,706 | 88 | 88 | | Hotels | 441 | 464 | 888 | | **Total Revenue** | **8,723** | **7,279** | **14,428** | Beverages Division](index=22&type=section&id=%E9%A3%B2%E6%96%99%E9%83%A8%E9%96%80) The Beverages Division's H1 2025 attributable profit slightly decreased due to weak consumer sentiment and capacity enhancement project expenses in Vietnam and Taiwan. Despite this, total revenue and sales volume significantly grew from ThaiNamthip's contribution. Mainland China operations' profit rose, but Hong Kong, Taiwan, and Southeast Asia faced challenges. The company is actively addressing market headwinds and plans to spin off ThaiNamthip for listing - H1 2025 attributable profit was **HKD803 million**, including a non-recurring loss of **HKD58 million**, with recurring attributable profit at **HKD861 million**, a **2% decrease** year-on-year[100](index=100&type=chunk) - Total revenue (including Shanghai Shenmei and excluding sales to other bottlers) increased by **25%** to **HKD22.188 billion**, with sales volume up **20%** to **1.038 billion standard cases**, primarily due to TNCC's contribution[100](index=100&type=chunk) - Mainland China operations' attributable profit increased by **8%**, with both revenue and sales volume rising[19](index=19&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - Profits from Hong Kong, Taiwan, Vietnam, and Cambodia operations all declined, impacted by weak consumer sentiment, capacity enhancement project expenses, and Vietnamese Dong depreciation[19](index=19&type=chunk)[105](index=105&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk)[111](index=111&type=chunk) - An application has been submitted

[Company Information](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF) This section provides an overview of the GEM market characteristics, the company's board of directors, and essential corporate details [Characteristics of GEM Market](index=2&type=section&id=GEM%E5%B8%82%E5%9C%BA%E7%89%B9%E8%89%B2) The GEM market positions itself as a listing platform for small and medium-sized companies, but involves higher investment risks and does not guarantee high liquidity - The GEM market is positioned as a listing platform for small and medium-sized companies with **high investment risks**[2](index=2&type=chunk) - Investing in GEM securities may face significant market volatility risks and does not guarantee high liquidity[2](index=2&type=chunk) [Board of Directors and Company Information](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E4%BC%9A%E5%8F%8A%E5%85%AC%E5%8F%B8%E8%B5%84%E6%96%99) This section lists the company's board members (executive directors, independent non-executive directors), audit committee members, authorized representatives, company secretary, auditor, principal bankers, H share registrar, registered office, principal place of business in Hong Kong, and stock code - The company's board of directors comprises Zhou Jinhui, Shi Huixing, Zhou Guoping (executive directors), and Song Zizhang, Wang Guozhong, Zhu Yijuan (independent non-executive directors)[4](index=4&type=chunk) - The company's auditor is UHY F.I.D.A. CPA Limited, and the H share stock code is **8115**[4](index=4&type=chunk) [Interim Results Overview](index=4&type=section&id=%E4%B8%AD%E6%9C%9F%E4%B8%9A%E7%BB%A9%E6%A6%82%E8%A7%88) This section presents a summary of the unaudited consolidated financial performance for the six months ended June 30, 2025 [Unaudited Consolidated Results Summary](index=4&type=section&id=%E6%9C%AA%E7%BB%8F%E5%AE%A1%E6%A0%B8%E7%BB%BC%E5%90%88%E4%B8%9A%E7%BB%A9%E6%91%98%E8%A6%81) For the six months ended June 30, 2025, the company's revenue increased by 12.5% year-on-year to RMB44.5 million, and the loss attributable to owners of the company significantly decreased year-on-year 2025 First Half Unaudited Results Summary | Metric | 2025 First Half (RMB '000) | 2024 First Half (RMB '000) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 44,500 | 39,571 | Increased by 12.5% | | Loss attributable to owners of the company | (418) | 3,773 (Profit) | Loss decreased by 4,191 thousand | [Condensed Consolidated Financial Statements](index=5&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section presents the Group's condensed consolidated financial statements, including statements of profit or loss, comprehensive income, financial position, changes in equity, and cash flows for the period [Condensed Consolidated Statement of Profit or Loss](index=5&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's revenue grew, but profit for the period decreased year-on-year due to increased cost of sales, administrative expenses, and finance costs Key Data from Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 44,500 | 39,571 | Increased by 12.5% | | Cost of sales | (32,195) | (27,732) | Increased by 16.1% | | Gross profit | 12,305 | 11,839 | Increased by 3.9% | | Other income and gains | 994 | 2,121 | Decreased by 53.2% | | Selling and distribution expenses | (1,946) | (1,794) | Increased by 8.5% | | Administrative expenses | (8,866) | (5,186) | Increased by 71.0% | | Finance costs | (339) | (160) | Increased by 111.9% | | Profit before tax | 1,607 | 6,236 | Decreased by 74.2% | | Income tax expense | 326 | (971) | Decreased by 133.6% (From expense to income) | | Profit for the period | 1,933 | 5,265 | Decreased by 63.3% | | Profit/(Loss) attributable to owners of the company | (418) | 3,773 | From profit to loss | | Basic (loss)/earnings per share (RMB cents) | (0.22) | 2.01 | From profit to loss | [Condensed Consolidated Statement of Comprehensive Income](index=6&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group's total comprehensive income for the period significantly decreased to RMB1,933 thousand from RMB5,265 thousand in the prior year, primarily due to the shift from profit to loss attributable to owners of the company Key Data from Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | YoY Change | | :--- | :--- | :--- | :--- | | Profit for the period | 1,933 | 5,265 | Decreased by 63.3% | | Other comprehensive income for the period | – | – | No change | | Total comprehensive income for the period | 1,933 | 5,265 | Decreased by 63.3% | | Total comprehensive income/(expense) attributable to owners of the company | (418) | 3,773 | From income to expense | | Non-controlling interests | 2,351 | 1,492 | Increased by 57.6% | [Condensed Consolidated Statement of Financial Position](index=7&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, the Group's total assets slightly decreased, net current assets decreased, but total non-current liabilities increased, and net assets slightly increased Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Total non-current assets | 26,453 | 23,752 | Increased by 2,701 | | Total current assets | 169,092 | 178,674 | Decreased by 9,582 | | Total current liabilities | 10,011 | 13,799 | Decreased by 3,788 | | Net current assets | 159,081 | 164,875 | Decreased by 5,794 | | Total assets less current liabilities | 185,534 | 188,627 | Decreased by 3,093 | | Total non-current liabilities | 14,684 | 8,738 | Increased by 5,946 | | Net assets | 176,796 | 173,943 | Increased by 2,853 | | Total equity | 176,796 | 173,943 | Increased by 2,853 | [Condensed Consolidated Statement of Changes in Equity](index=9&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%9D%83%E7%9B%8A%E5%8F%98%E5%8A%A8%E8%A1%A8) For the six months ended June 30, 2025, total equity attributable to owners of the company slightly increased, primarily due to the combined effect of decreased retained profits and increased capital reserve Key Data from Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Balance at beginning of period (attributable to owners of the company) | 150,540 | 145,212 | Increased by 5,328 | | (Loss)/profit and total comprehensive income for the period (attributable to owners of the company) | (418) | 3,773 | From profit to loss | | Fair value of land use rights granted to share capital and non-controlling interests | 492 | 494 | Slightly decreased | | Balance at end of period (attributable to owners of the company) | 150,614 | 149,479 | Increased by 1,135 | | Non-controlling interests balance at end of period | 26,182 | 19,730 | Increased by 6,452 | | Total equity balance at end of period | 176,796 | 169,209 | Increased by 7,587 | [Condensed Consolidated Statement of Cash Flows](index=10&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, the net decrease in cash and cash equivalents significantly increased, primarily due to increased net cash used in operating, investing, and financing activities Key Data from Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | YoY Change | | :--- | :--- | :--- | :--- | | Net cash flows used in operating activities | (3,102) | (1,157) | Increased by 168.1% (Cash outflow increased) | | Net cash flows used in investing activities | (1,177) | (340) | Increased by 246.2% (Cash outflow increased) | | Net cash flows used in financing activities | (6,169) | (69) | Increased by 8840.6% (Cash outflow significantly increased) | | Net decrease in cash and cash equivalents | (10,448) | (1,566) | Increased by 567.2% (Cash outflow significantly increased) | | Cash and cash equivalents at end of period | 137,978 | 141,825 | Decreased by 2.7% | [Notes to the Financial Statements](index=11&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) This section provides detailed notes to the financial statements, covering the basis of preparation, accounting policies, segment and geographical information, and specific financial statement line items [General Information](index=11&type=section&id=%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) This section provides information on the company's registration, listing venue, principal business, direct holding company, and ultimate holding company - The company was restructured into a joint stock limited company in the PRC on **December 1, 2000**, with its H shares listed on GEM of the Stock Exchange of Hong Kong[13](index=13&type=chunk)[14](index=14&type=chunk) - The direct holding company is Liancheng Fire Protection Group Co., Ltd., and the ultimate holding company is Zhejiang Hengtai Real Estate Co., Ltd[15](index=15&type=chunk) [Basis of Preparation and Accounting Policies](index=11&type=section&id=%E7%BC%96%E5%88%B6%E5%9F%BA%E5%87%86%E5%8F%8A%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96) The Group's condensed consolidated financial statements are prepared in accordance with IAS 34 and the GEM Listing Rules, using the historical cost convention, with new and revised standards adopted this period expected to have no material impact [Basis of Preparation](index=11&type=section&id=%E7%BC%96%E5%88%B6%E5%9F%BA%E5%87%86) - The financial statements are prepared in accordance with International Accounting Standard 34 and the GEM Listing Rules[16](index=16&type=chunk) - Financial information is prepared under the historical cost convention, except for financial assets at fair value through profit or loss[16](index=16&type=chunk) [Changes in Accounting Policies and Disclosures](index=11&type=section&id=%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E5%8F%98%E5%8A%A8%E5%8F%8A%E6%8A%AB%E9%9C%B2) - New and revised International Financial Reporting Standards, including IAS 21 (Amendment) "Lack of Exchangeability," were adopted for the first time in the current period[17](index=17&type=chunk) - These amendments have no significant impact on the Group's unaudited condensed consolidated financial statements[17](index=17&type=chunk) [Issued but Not Yet Effective International Financial Reporting Standards](index=12&type=section&id=%E5%B7%B2%E9%A2%81%E5%B8%83%E4%BD%86%E5%B0%9A%E6%9C%AA%E7%94%9F%E6%95%88%E4%B9%8B%E5%9B%BD%E9%99%85%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A%E5%87%86%E5%88%99) - The Group has not early adopted IFRS 18, IFRS 19, IFRS 9, and IAS 28 (Amendments), which are issued but not yet effective[18](index=18&type=chunk)[22](index=22&type=chunk) - Preliminary assessment indicates that the application of these new and revised standards is not expected to have a significant impact on the Group's financial performance and position[19](index=19&type=chunk) [Operating Segment Information](index=12&type=section&id=%E7%BB%8F%E8%90%A5%E5%88%86%E9%83%A8%E8%B5%84%E6%96%99) The Group is divided into six reportable operating segments based on products and services, with management independently monitoring each segment's performance; for the six months ended June 30, 2025, the aquarium products and property investment segments performed well, while the testing services segment saw declines in both revenue and performance [Segment Allocation and Management](index=12&type=section&id=%E5%88%86%E9%83%A8%E5%88%92%E5%88%86%E5%8F%8A%E7%AE%A1%E7%90%86) - The Group's business is divided into six reportable operating segments: fire-fighting equipment, aquarium products, marine fire-fighting equipment, testing services, property investment, and trading[20](index=20&type=chunk)[22](index=22&type=chunk) - Segment results are assessed based on adjusted profit before tax, excluding interest income, government grants, realised gains on financial assets at fair value, finance costs (excluding interest on lease liabilities), and head office/corporate expenses[20](index=20&type=chunk) [Segment Results and Assets/Liabilities](index=13&type=section&id=%E5%88%86%E9%83%A8%E4%B8%9A%E7%BB%A9%E5%8F%8A%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA) 2025 First Half Segment Revenue and Results (RMB '000) | Segment | Revenue | Results | | :--- | :--- | :--- | | Fire-fighting equipment | 16,759 | (1,657) | | Aquarium products | 15,655 | 1,935 | | Marine fire-fighting equipment | 6,883 | 327 | | Testing services | 1,413 | (364) | | Property investment | 3,790 | 1,692 | | Trading | – | – | | **Total** | **44,500** | **1,933** | 2024 First Half Segment Revenue and Results (RMB '000) | Segment | Revenue | Results | | :--- | :--- | :--- | | Fire-fighting equipment | 14,735 | (57) | | Aquarium products | 13,868 | 2,744 | | Marine fire-fighting equipment | 4,719 | 428 | | Testing services | 2,711 | 511 | | Property investment | 3,538 | 1,260 | | Trading | – | – | | **Total** | **39,571** | **4,886** | - In the first half of 2025, revenue from the fire-fighting equipment, aquarium products, and marine fire-fighting equipment segments all increased, while revenue from the testing services segment significantly decreased[23](index=23&type=chunk)[24](index=24&type=chunk) [Major Customers and Geographical Information](index=15&type=section&id=%E4%B8%BB%E8%A6%81%E5%AE%A2%E6%88%B7%E5%8F%8A%E5%9C%B0%E5%8C%BA%E8%B5%84%E6%96%99) For the six months ended June 30, 2025, Customer A (aquarium products segment) and Customer B (fire-fighting equipment segment) contributed over 10% of total revenue, collectively accounting for 62.7% of total revenue, with revenue primarily derived from China and the EU region 2025 First Half Major Customer Revenue (RMB '000) | Customer | 2025 First Half | 2024 First Half | Source Segment | | :--- | :--- | :--- | :--- | | Customer A | 15,595 | 11,443 | Aquarium products | | Customer B | 12,304 | 9,872 | Fire-fighting equipment | | **Total** | **27,899** | **21,315** | | 2025 First Half Geographical Revenue (RMB '000) | Region | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | China | 28,145 | 25,743 | | European Union | 16,355 | 13,828 | | **Total** | **44,500** | **39,571** | - Over **90%** of the Group's assets are located in China, thus no further geographical information for non-current assets is disclosed[26](index=26&type=chunk) [Revenue, Other Income and Gains](index=15&type=section&id=%E6%94%B6%E5%85%A5%E3%80%81%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) For the six months ended June 30, 2025, the Group's revenue primarily came from sales of pressure vessels, aquarium products, and marine fire-fighting equipment, with rental income also contributing, while other income and gains significantly decreased year-on-year, mainly due to reduced realized gains on financial assets at fair value 2025 First Half Revenue Source Analysis (RMB '000) | Revenue Source | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Sales of pressure vessels | 16,759 | 14,735 | | Sales of aquarium products | 15,655 | 13,868 | | Sales of marine fire-fighting equipment | 6,883 | 4,719 | | Testing service fees | 1,413 | 2,711 | | Gross rental income | 3,790 | 3,538 | | **Total Revenue** | **44,500** | **39,571** | 2025 First Half Other Income and Gains Analysis (RMB '000) | Other Income and Gains | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Interest income | 690 | 164 | | Realized gains on financial assets at fair value | 125 | 1,606 | | Government grants | – | 230 | | Net exchange gains | 105 | 116 | | Others | 74 | 5 | | **Total** | **994** | **2,121** | - Revenue from goods sales is recognized at a point in time, while service revenue is transferred over time[28](index=28&type=chunk) [Profit Before Tax](index=17&type=section&id=%E9%99%A4%E7%A8%8E%E5%89%8D%E6%BA%A2%E5%88%A9) For the six months ended June 30, 2025, profit before tax was primarily affected by factors such as depreciation and amortization, staff costs, auditor's remuneration, realized gains on financial assets at fair value, and provision for expected credit losses 2025 First Half Profit Before Tax Impact Factors (RMB '000) | Item | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Depreciation of right-of-use assets | 166 | 253 | | Amortization of intangible assets | 93 | 90 | | Depreciation of property, plant and equipment | 698 | 662 | | Interest on lease liabilities | 11 | 28 | | Staff costs (excluding directors' emoluments) | 4,362 | 4,442 | | Auditor's remuneration | 198 | 168 | | Realized gains on financial assets at fair value | 125 | (1,606) (Loss) | | Provision for expected credit losses | 541 | 584 | [Income Tax Expense](index=17&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) For the six months ended June 30, 2025, the Group had no assessable profits in Hong Kong, while China enterprise income tax is calculated at a 25% rate, with some eligible small low-profit enterprises enjoying a preferential rate of 5% - No provision for Hong Kong profits tax was made due to no assessable profits[30](index=30&type=chunk) - The general PRC enterprise income tax rate is **25%**, with eligible small low-profit enterprises paying tax at an effective rate of **5%** on the first **RMB1,000,000** and the remaining assessable profits not exceeding **RMB3,000,000**[31](index=31&type=chunk)[56](index=56&type=chunk) 2025 First Half Income Tax Expense (RMB '000) | Item | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | | Current tax — PRC provision for the period | (473) | (428) | | Deferred tax | 799 | (543) | | **Total tax expense for the period** | **326** | **(971)** | [Dividends](index=18&type=section&id=%E8%82%A1%E6%81%AF) For the six months ended June 30, 2025, the company did not pay or declare any dividends - The company did not pay or declare any dividends during the reporting period[33](index=33&type=chunk) [(Loss)/Earnings Per Share](index=18&type=section&id=%E6%AF%8F%E8%82%A1%EF%BC%88%E4%BA%8F%E6%8D%9F%EF%BC%89%2F%E7%9B%88%E5%88%A9) For the six months ended June 30, 2025, the loss per share attributable to owners of the company was RMB0.22 cents, compared to earnings per share of RMB2.01 cents in the prior year (Loss)/Earnings Per Share (For the six months ended June 30) | Metric | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic (loss)/earnings per share | (0.22) | 2.01 | | Number of ordinary shares issued | 187,430,000 | 187,430,000 | - Basic earnings per share was not diluted as there were no potential dilutive ordinary shares[35](index=35&type=chunk) [Property, Plant and Equipment](index=18&type=section&id=%E7%89%A9%E4%B8%9A%E3%80%81%E5%8E%82%E6%88%BF%E5%8F%8A%E8%AE%BE%E5%A4%87) For the six months ended June 30, 2025, additions to property, plant and equipment amounted to approximately RMB1,292,000, a significant increase from the prior year, with no property, plant and equipment pledged at period-end Additions to Property, Plant and Equipment (RMB '000) | Period | Additions Amount | | :--- | :--- | | 2025 First Half | 1,292 | | 2024 First Half | 340 | - As of June 30, 2025, the Group had no pledged property, plant and equipment, whereas as of December 31, 2024, buildings of approximately **RMB8,012,000** were pledged[36](index=36&type=chunk) [Goodwill](index=18&type=section&id=%E5%95%86%E8%AA%89) As of June 30, 2025, the net carrying amount of goodwill was RMB2,320,000, remaining unchanged from December 31, 2024 Net Carrying Amount of Goodwill (RMB '000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cost | 4,211 | 4,211 | | Accumulated impairment | (1,891) | (1,891) | | **Net carrying amount** | **2,320** | **2,320** | [Trade and Bills Receivables](index=19&type=section&id=%E5%BA%94%E6%94%B6%E8%B4%B8%E6%98%93%E8%B4%A6%E6%AC%BE%E5%8F%8A%E5%BA%94%E6%94%B6%E7%A5%A8%E6%AC%BE) As of June 30, 2025, total trade and bills receivables amounted to RMB12,311,000, a decrease from December 31, 2024, and the Group faces significant credit concentration risk, with the top five outstanding balances accounting for 59% of the total Trade and Bills Receivables (RMB '000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 13,177 | 15,993 | | Less: Provision for credit losses | (866) | (366) | | **Net amount** | **12,311** | **15,627** | - Trade terms are primarily credit transactions, with credit periods typically ranging from **2 to 3 months**, extendable up to **half a year** for major customers[38](index=38&type=chunk) - As of June 30, 2025, the Group faces significant credit concentration risk, with the top five outstanding balances accounting for **59%** of total trade receivables[39](index=39&type=chunk)[57](index=57&type=chunk) Ageing Analysis of Trade Receivables (RMB '000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 4,044 | 7,299 | | 1 to 2 months | 2,165 | 2,706 | | 2 to 3 months | 2,064 | 2,662 | | 3 to 6 months | 2,953 | 1,872 | | 6 to 12 months | 688 | 892 | | 1 to 2 years | 397 | 196 | | **Total** | **12,311** | **15,627** | [Trade Payables](index=19&type=section&id=%E5%BA%94%E4%BB%98%E8%B4%B8%E6%98%93%E8%B4%A6%E6%AC%BE) As of June 30, 2025, total trade payables amounted to RMB5,737,000, a decrease from December 31, 2024 Ageing Analysis of Trade Payables (RMB '000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 688 | 1,945 | | 1 to 2 months | 432 | 1,868 | | 2 to 3 months | 145 | 283 | | Over 3 months | 4,472 | 2,971 | | **Total** | **5,737** | **7,067** | [Interest-Bearing Bank Borrowings, Secured](index=20&type=section&id=%E8%AE%A1%E6%81%AF%E9%93%B6%E8%A1%8C%E5%80%9F%E8%B4%B7%EF%BC%8C%E6%9C%89%E6%8A%B5%E6%8A%BC) The Group fully repaid all bank borrowings on March 7, 2025, with no outstanding bank borrowings as of June 30, 2025 - The Group fully repaid all bank borrowings on **March 7, 2025**[42](index=42&type=chunk)[58](index=58&type=chunk) Interest-Bearing Bank Borrowings (RMB '000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bank borrowings | – | 5,790 | - The loan drawn in December 2023 was secured by the Group's property and bore interest at the loan prime rate plus **0.40%**[42](index=42&type=chunk) [Amounts Due to Direct Holding Company](index=20&type=section&id=%E5%BA%94%E4%BB%98%E7%9B%B4%E6%8E%A5%E6%8E%A7%E8%82%A1%E5%85%AC%E5%8F%B8%E6%AC%BE%E9%A1%B9) Amounts due to the direct holding company are unsecured, interest-free, and have no fixed repayment terms, with the direct holding company Liancheng committing to provide up to RMB50,000,000 in unsecured interest-free shareholder loan financing, which remained undrawn at the end of the reporting period - Amounts due to the direct holding company are unsecured, interest-free, and have no fixed repayment terms[43](index=43&type=chunk) - Liancheng has committed to provide unsecured interest-free shareholder loan financing of up to **RMB50,000,000** until May 30, 2026, which remained undrawn at the end of the reporting period[43](index=43&type=chunk)[62](index=62&type=chunk) [Commitments](index=20&type=section&id=%E6%89%BF%E8%AF%BA) As of June 30, 2025, the Group had no material commitments - As of June 30, 2025, the Group had no material commitments[44](index=44&type=chunk) [Related Party Transactions](index=21&type=section&id=%E5%85%B3%E8%BF%9E%E6%96%B9%E4%BA%A4%E6%98%93) This section discloses key management personnel compensation and details the acquisition agreement with Tsinghua Eastern Education Technology Group Co., Ltd. (a related party), which remained incomplete at the end of the reporting period Key Management Personnel Compensation (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Emoluments | 45 | 45 | | Salaries, allowances and benefits in kind | 162 | 162 | | Pension scheme contributions | 15 | 32 | | **Total** | **222** | **239** | - The company entered into a sale and purchase agreement with Tsinghua Eastern Education Technology Group Co., Ltd. (a related party) to acquire the entire equity interest in Tsinghua Eastern Fire Protection Technology Group Co., Ltd. and its subsidiaries for **RMB200,000,000**[45](index=45&type=chunk) - The acquisition consideration will be settled by issuing consideration shares, convertible bonds, and cash, and remained incomplete at the end of the reporting period, pending regulatory and independent shareholder approvals[45](index=45&type=chunk) [Contingent Liabilities](index=21&type=section&id=%E6%88%96%E7%84%B6%E8%B4%9F%E5%80%BA) As of June 30, 2025, the Group had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities[46](index=46&type=chunk) [Business and Financial Review](index=22&type=section&id=%E4%B8%9A%E5%8A%A1%E5%8F%8A%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B5) This section provides a comprehensive review of the Group's business operations and financial performance, including revenue, cost of sales, expenses, profit, and financial position metrics [Revenue Analysis](index=22&type=section&id=%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) For the six months ended June 30, 2025, the Group's revenue increased by 12.5% year-on-year to RMB44.5 million, primarily driven by increased sales of pressure vessels, aquarium products, and marine fire-fighting equipment Revenue Comparison (For the six months ended June 30) | Period | Revenue (RMB '000) | YoY Growth | | :--- | :--- | :--- | | 2025 | 44,500 | 12.5% | | 2024 | 39,571 | | - Revenue growth was primarily driven by increased sales of pressure vessels, aquarium products, and marine fire-fighting equipment[47](index=47&type=chunk) [Cost of Sales and Gross Profit](index=22&type=section&id=%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC%E5%8F%8A%E6%AF%9B%E5%88%A9) For the six months ended June 30, 2025, cost of sales increased by 16% year-on-year to RMB32.195 million, and gross profit margin decreased by 2 percentage points to 28%, mainly due to reduced testing service fees with higher profit margins Cost of Sales and Gross Profit Comparison (For the six months ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | YoY Change | | :--- | :--- | :--- | | Cost of sales | 32,195 | 27,732 | Increased by 16% | | Gross profit | 12,305 | 11,839 | Increased by 3.9% | | Gross profit margin | 28% | 30% | Decreased by 2 percentage points | - The decline in gross profit margin was primarily due to reduced testing service fees, which have higher profit margins[48](index=48&type=chunk) [Other Income and Gains Analysis](index=22&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A%E5%88%86%E6%9E%90) For the six months ended June 30, 2025, other income and gains decreased by 53% year-on-year to RMB994,000, mainly due to reduced realized gains on financial assets at fair value through profit or loss Other Income and Gains Comparison (For the six months ended June 30) | Period | Amount (RMB '000) | YoY Change | | :--- | :--- | :--- | | 2025 | 994 | Decreased by 53% | | 2024 | 2,121 | | - The decrease was primarily due to reduced realized gains on financial assets at fair value through profit or loss[49](index=49&type=chunk) [Selling and Distribution Expenses](index=22&type=section&id=%E9%94%80%E5%94%AE%E5%8F%8A%E5%88%86%E9%94%80%E5%BC%80%E6%94%AF) For the six months ended June 30, 2025, selling and distribution expenses increased by 8% year-on-year to RMB1,946,000, mainly due to higher staff and transportation costs from increased sales of aquarium products and pressure vessels Selling and Distribution Expenses Comparison (For the six months ended June 30) | Period | Amount (RMB '000) | YoY Change | | :--- | :--- | :--- | | 2025 | 1,946 | Increased by 8% | | 2024 | 1,794 | | - The increase was primarily due to higher staff costs and transportation costs resulting from increased sales of aquarium products and pressure vessels[50](index=50&type=chunk) [Administrative Expenses](index=22&type=section&id=%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) For the six months ended June 30, 2025, administrative expenses significantly increased by 72% year-on-year to RMB8,866,000, mainly due to increased legal and professional fees for the Tsinghua acquisition Administrative Expenses Comparison (For the six months ended June 30) | Period | Amount (RMB '000) | YoY Change | | :--- | :--- | :--- | | 2025 | 8,866 | Increased by 72% | | 2024 | 5,186 | | - The increase was primarily due to increased legal and professional fees related to the Tsinghua acquisition[51](index=51&type=chunk) [Finance Costs](index=23&type=section&id=%E8%B4%A2%E5%8A%A1%E8%B4%B9%E7%94%A8) For the six months ended June 30, 2025, finance costs increased by 111.9% year-on-year to RMB339,000, primarily comprising bank charges and interest expenses on bank borrowings Finance Costs Comparison (For the six months ended June 30) | Period | Amount (RMB '000) | YoY Change | | :--- | :--- | :--- | | 2025 | 339 | Increased by 111.9% | | 2024 | 160 | | - Finance costs primarily comprise bank charges and interest expenses on bank borrowings[52](index=52&type=chunk) [Non-Controlling Interests](index=23&type=section&id=%E9%9D%9E%E6%8E%A7%E8%82%A1%E6%9D%83%E7%9B%8A) For the six months ended June 30, 2025, profit attributable to non-controlling interests increased by 57.6% year-on-year to RMB2,351,000, mainly due to increased profits from certain non-wholly owned subsidiaries Profit Attributable to Non-Controlling Interests Comparison (For the six months ended June 30) | Period | Amount (RMB '000) | YoY Change | | :--- | :--- | :--- | | 2025 | 2,351 | Increased by 57.6% | | 2024 | 1,492 | | - The increase was primarily due to increased profits from certain non-wholly owned subsidiaries[53](index=53&type=chunk) [Profit for the Period](index=23&type=section&id=%E6%9C%9F%E9%97%B4%E6%BA%A2%E5%88%A9) For the six months ended June 30, 2025, the Group's profit for the period decreased by 63% year-on-year to RMB1,933,000, primarily due to increased administrative expenses Profit for the Period Comparison (For the six months ended June 30) | Period | Amount (RMB '000) | YoY Change | | :--- | :--- | :--- | | 2025 | 1,933 | Decreased by 63% | | 2024 | 5,265 | | - The decrease in profit for the period was primarily due to increased administrative expenses[54](index=54&type=chunk) [Income Tax](index=23&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E) The general PRC enterprise income tax rate is 25%, with eligible small low-profit enterprises enjoying a preferential rate of 5% - The general PRC enterprise income tax rate is **25%**[55](index=55&type=chunk) - Eligible small low-profit enterprises pay tax at an effective rate of **5%** on the first **RMB1,000,000** and the remaining assessable profits not exceeding **RMB3,000,000**[56](index=56&type=chunk) [Net Current Assets and Current Ratio](index=24&type=section&id=%E6%B5%81%E5%8A%A8%E8%B5%84%E4%BA%A7%E5%87%80%E5%80%BC%E5%8F%8A%E6%B5%81%E5%8A%A8%E6%AF%94%E7%8E%87) As of June 30, 2025, the Group's net current assets were RMB159,081,000, and the current ratio was 16.9, an increase from December 31, 2024, primarily due to reduced current liabilities Net Current Assets and Current Ratio Comparison | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Current Assets (RMB '000) | 169,092 | 178,674 | Decreased by 9,582 | | Current Liabilities (RMB '000) | 10,011 | 13,799 | Decreased by 3,788 | | Current Ratio | 16.9 | 12.9 | Increased by 4.0 | | Inventory Turnover Days | 68日 | 63日 | Increased by 5 days | - The increase in current ratio was primarily due to reduced current liabilities, specifically other payables and accrued expenses, trade payables, and lease liabilities[57](index=57&type=chunk) - The increase in inventory turnover days was due to a significant increase in inventories (finished goods) in preparation for future sales[57](index=57&type=chunk) [Borrowings](index=24&type=section&id=%E5%80%9F%E8%B4%B7) The Group fully repaid all bank borrowings on March 7, 2025, with no outstanding bank borrowings as of June 30, 2025 - The Group fully repaid all bank borrowings on **March 7, 2025**[58](index=58&type=chunk) - As of June 30, 2025, there were no outstanding bank borrowings[58](index=58&type=chunk) [Gearing Ratio](index=24&type=section&id=%E8%B5%84%E6%9C%AC%E8%B4%9F%E5%80%BA%E6%AF%94%E7%8E%87) As of June 30, 2025, the gearing ratio was 10.6%, a decrease from 16.4% as of December 31, 2024, primarily due to reduced interest-bearing bank borrowings Gearing Ratio Comparison | Period | Gearing Ratio | | :--- | :--- | | June 30, 2025 | 10.6% | | December 31, 2024 | 16.4% | - The decrease in gearing ratio was primarily due to reduced interest-bearing bank borrowings[59](index=59&type=chunk) [Capital Structure and Financial Resources](index=24&type=section&id=%E8%B5%84%E6%9C%AC%E7%BB%93%E6%9E%84%E5%8F%8A%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90) As of June 30, 2025, the company's total number of issued shares was 187,430,000, with no change in capital structure, and the Group's operations are primarily funded by internal resources, interest-bearing bank borrowings, and shareholders' equity, with committed financing from the direct holding company - As of June 30, 2025, the total number of shares issued by the company was **187,430,000**, with no change in capital structure[60](index=60&type=chunk)[61](index=61&type=chunk) - The Group's operations are primarily funded by internal resources, interest-bearing bank borrowings, and shareholders' equity[62](index=62&type=chunk) - The direct holding company, Liancheng, has committed to provide unsecured interest-free shareholder loan financing of up to **RMB50,000,000** until May 30, 2026, which remained undrawn at the end of the reporting period[62](index=62&type=chunk) [Material Investments and Acquisitions/Disposals](index=25&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E5%8F%8A%E6%94%B6%E8%B4%AD%E5%87%BA%E5%94%AE) For the six months ended June 30, 2025, the Group had no material asset acquisitions or disposals - For the six months ended June 30, 2025, the Group had no material asset acquisitions or disposals[63](index=63&type=chunk) [Pledge of Assets](index=25&type=section&id=%E8%B5%84%E4%BA%A7%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group had not pledged any of its assets - As of June 30, 2025, the Group had not pledged any of its assets[64](index=64&type=chunk) [Business Review](index=25&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%B5) The Group offers CO2, water-based, and dry powder fire extinguisher products and manufactures pressure vessels compliant with international standards, having ceased manufacturing and selling fire extinguisher products since April 1, 2025, with auxiliary businesses including aquarium products and property investment - The Group's fire extinguisher products include CO2, water-based, and dry powder types, and it manufactures pressure vessels compliant with quality standards in China, the US, and the EU[65](index=65&type=chunk) - Effective **April 1, 2025**, the company resolved to cease manufacturing and selling fire extinguishers, which were consistently loss-making products within the fire-fighting equipment segment[65](index=65&type=chunk) - Auxiliary businesses include sales of aquarium products and property investment, and the Group continuously reviews non-core businesses to ensure efficiency[66](index=66&type=chunk) [Future Outlook](index=26&type=section&id=%E6%9C%AA%E6%9D%A5%E5%B1%95%E6%9C%9B) This section outlines the company's strategic direction, growth opportunities, potential risks and challenges, and initiatives to maximize shareholder value [Strategic Direction and Growth Opportunities](index=26&type=section&id=%E6%88%98%E7%95%A5%E6%96%B9%E5%90%91%E4%B8%8E%E5%A2%9E%E9%95%BF%E6%9C%BA%E4%BC%9A) The company is committed to consolidating its market position, actively seeking core business growth opportunities, and is optimistic about the growth potential of the Tsinghua acquisition, which will enable it to offer comprehensive fire safety training solutions - The company will continue to consolidate its market position and actively seek growth opportunities in its core businesses[67](index=67&type=chunk) - The Tsinghua acquisition has been approved by shareholders, and upon regulatory approvals and asset transfer completion, the target group will be integrated to provide comprehensive fire safety training solutions[67](index=67&type=chunk) - The company is confident in achieving sustainable growth through organic expansion, strategic acquisitions, and continuous innovation[67](index=67&type=chunk) [Risks and Challenges](index=26&type=section&id=%E9%A3%8E%E9%99%A9%E4%B8%8E%E6%8C%91%E6%88%98) The Group faces macroeconomic and industry challenges such as raw material price fluctuations, rising labor costs, customer concentration risk, and foreign exchange volatility risk, while the completion of the Tsinghua acquisition remains subject to regulatory approvals, potentially affecting integration timing and certainty - The Group faces macroeconomic and industry challenges such as raw material price fluctuations, rising labor costs, customer concentration risk, and foreign exchange volatility risk[68](index=68&type=chunk) - The completion of the Tsinghua acquisition remains subject to various regulatory approvals, which may affect integration timing and certainty[68](index=68&type=chunk) [Maximizing Shareholder Value](index=26&type=section&id=%E8%82%A1%E4%B8%9C%E4%BB%B7%E5%80%BC%E6%9C%80%E5%A4%A7%E5%8C%96) The Board will drive sustainable growth by consolidating market position, expanding product and service offerings, and seizing new opportunities to maximize shareholder value, while the Group will continuously evaluate opportunities for mergers, reorganizations, and disposals of non-core businesses - The Board will drive sustainable growth and maximize shareholder value by consolidating its market position, expanding its product and service offerings, and seizing new opportunities in the fire safety sector[69](index=69&type=chunk) - The Group will evaluate opportunities for mergers, reorganizations, and, if necessary, disposals of non-core or underperforming business segments to optimize resources and enhance profitability[69](index=69&type=chunk) [Equity and Corporate Governance](index=27&type=section&id=%E8%82%A1%E6%9D%83%E5%8F%8A%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86) This section details directors' and substantial shareholders' interests, employee information, and the company's adherence to corporate governance practices and policies [Directors' and Supervisors' Interests and Short Positions in Shares, Underlying Shares, and Debentures](index=27&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%91%E4%BA%8B%E4%BA%8E%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E5%85%B3%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%80%BA%E5%88%B8%E7%9A%84%E6%9D%83%E7%9B%8A%E5%8F%8A%E6%B7%A1%E4%BB%93) As of June 30, 2025, Mr. Zhou Jinhui held a **71.05%** long position in the company's shares through a controlled corporation Directors' and Supervisors' Long Positions in the Company's Shares | Name | Manner of Holding | Number of Shares | Approximate Percentage of Total Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Zhou Jinhui | Held by controlled corporation | 133,170,000 | 71.05% | - Mr. Zhou Jinhui holds an **80%** interest in Liancheng through Zhejiang Hengtai, and Liancheng holds **131,870,000** domestic shares and **1,300,000** H shares of the company[71](index=71&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares, Underlying Shares, and Debentures](index=28&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E4%B8%9C%E5%8F%8A%E5%85%B6%E4%BB%96%E4%BA%BA%E5%A3%AB%E4%BA%8E%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E5%85%B3%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%80%BA%E5%88%B8%E7%9A%84%E6%9D%83%E7%9B%8A%E5%8F%8A%E6%B7%A1%E4%BB%93) As of June 30, 2025, Liancheng Fire Protection Group Co., Ltd., Zhejiang Hengtai Real Estate Co., Ltd., and Mr. Zhou Jinhui were substantial shareholders, holding **70.36%** and **0.69%** long positions in the company's shares respectively, with some domestic shares held by Liancheng being pledged Substantial Shareholders' Long Positions in the Company's Shares | Name/Entity | Manner of Holding | Number of Shares | Approximate Percentage of Total Issued Share Capital | | :--- | :--- | :--- | :--- | | Liancheng Fire Protection Group Co., Ltd. | Beneficial owner | 131,870,000 (Domestic shares) | 70.36% | | | Held by controlled corporation | 1,300,000 (H shares) | 0.69% | | Zhejiang Hengtai Real Estate Co., Ltd. | Held by controlled corporation | 131,870,000 (Domestic shares) | 70.36% | | | Held by controlled corporation | 1,300,000 (H shares) | 0.69% | | Mr. Zhou Jinhui | Held by controlled corporation | 131,870,000 (Domestic shares) | 70.36% | | | Held by controlled corporation | 1,300,000 (H shares) | 0.69% | - **131,870,000** domestic shares of the company held by Liancheng have been pledged to an independent third party as collateral for a loan of **RMB198,000,000**[75](index=75&type=chunk) [Directors' and Supervisors' Interests in Contracts](index=29&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%91%E4%BA%8B%E4%BA%8E%E5%90%88%E7%BA%A6%E7%9A%84%E6%9D%83%E7%9B%8A) For the six months ended June 30, 2025, no director or supervisor had any direct or indirect material interest in any significant contract of the company, other than related party transactions disclosed in Note 16 - For the six months ended June 30, 2025, no director or supervisor had any direct or indirect material interest in any significant contract of the company, other than related party transactions[77](index=77&type=chunk) [Employees](index=29&type=section&id=%E9%9B%87%E5%91%98) As of June 30, 2025, the Group had 95 employees, with remuneration determined by market levels, performance, qualifications, and experience, contributing to defined contribution retirement schemes for eligible employees in China, maintaining good employee relations without significant labor disputes Employee Count Comparison | Period | Number of Employees | | :--- | :--- | | June 30, 2025 | 95 | | June 30, 2024 | 89 | - Remuneration is determined by market levels and individual performance, qualifications, and experience, with contributions made to defined contribution retirement schemes for eligible employees in China[78](index=78&type=chunk) - The company maintains good employee relations, with no significant labor disputes or strikes[78](index=78&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=29&type=section&id=%E8%B4%AD%E4%B9%B0%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B5%8E%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AF%81%E5%88%B8) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - 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[79](index=79&type=chunk) [Dividends](index=30&type=section&id=%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[80](index=80&type=chunk) [Corporate Governance](index=30&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) The company is committed to promoting good corporate governance, has complied with all code provisions of the Corporate Governance Code set out in Appendix 15 of the GEM Listing Rules, and has adopted a code of conduct for directors' securities transactions, with the Audit Committee having reviewed the unaudited financial statements for the period [Corporate Governance Practices](index=30&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A7%84) - The company has complied with all code provisions of the Corporate Governance Code set out in Appendix 15 of the GEM Listing Rules[81](index=81&type=chunk)[82](index=82&type=chunk) - The objective is to maintain responsible decision-making processes, enhance transparency in information disclosure, respect shareholders' rights, improve risk management, and boost business performance[82](index=82&type=chunk) [Directors' Securities Transactions](index=30&type=section&id=%E8%91%A3%E4%BA%8B%E8%BF%9B%E8%A1%8C%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93) - The company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than the Model Code for Securities Transactions set out in Rules 5.48 to 5.67 of the GEM Listing Rules[83](index=83&type=chunk) - Upon enquiry, all directors have complied with the relevant Model Code and code of conduct[83](index=83&type=chunk) [Audit Committee](index=31&type=section&id=%E5%AE%A1%E6%A0%B8%E5%A7%94%E5%91%98%E4%BC%9A) - The Audit Committee comprises three independent non-executive directors: Ms. Zhu Yijuan, Mr. Wang Guozhong, and Mr. Song Zizhang[84](index=84&type=chunk) - The Audit Committee's primary responsibilities include reviewing and monitoring the Group's financial reporting process and internal control systems, and it has reviewed the unaudited financial statements for the current period[84](index=84&type=chunk) [Other Information](index=31&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section provides details regarding the publication and availability of the report [Report Publication Information](index=31&type=section&id=%E6%8A%A5%E5%91%8A%E5%8F%91%E5%B8%83%E4%BF%A1%E6%81%AF) This report will be published on the GEM website and the company's website for at least seven consecutive days from the date of publication - This report will be published on the GEM website www.hkgem.com and the company's website www.shanghaiqingpu.com[85](index=85&type=chunk)