[Important Notice](index=3&type=section&id=%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA) The report emphasizes the responsibility of the Board of Directors, Supervisory Committee, and senior management for the truthfulness, accuracy, and completeness of the report content, with interim financial information reviewed by Grant Thornton Hong Kong Limited and guaranteed by key executives, while forward-looking statements are not substantive commitments - The company's Board of Directors, Supervisory Committee, and senior management guarantee the truthfulness, accuracy, and completeness of the report content and assume legal responsibility[4](index=4&type=chunk) - The interim financial information for the six months ended June 30, 2025, has been reviewed by Grant Thornton Hong Kong Limited[4](index=4&type=chunk) - Chairman Mr. Zhu Yanhui, President Mr. Yin Guohong, and Chief Financial Officer Mr. Sun Hang declare and guarantee the truthfulness, accuracy, and completeness of the interim financial information[5](index=5&type=chunk) [Section I Definitions](index=3&type=section&id=%E7%AC%AC%E4%B8%80%E7%AF%80%20%E9%87%8B%E4%B9%89) This section defines key terms and entities used in the report, including company names, major shareholders, subsidiaries, financial products, and regulatory bodies, ensuring clear understanding of the report content - The Company, Hengtou Securities, refers to a limited company established in China on December 28, 1998, and converted into a joint-stock company under Chinese law on November 3, 2008[7](index=7&type=chunk) - The Reporting Period refers to the six months ended June 30, 2025[10](index=10&type=chunk) - Major shareholders include Baotou Huazi, Financial Street Capital, Financial Street Investment, Financial Street Xihuan Property, Tianfeng Securities, Huifa Technology, and Hongzhi Huitong[7](index=7&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk)[12](index=12&type=chunk) [Section II Company Profile](index=7&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 the company's basic information, including Chinese and English names, Board of Directors and special committee members, Supervisory Committee members, company secretary, authorized representatives, registered and headquarters addresses, auditors, and H-share listing information, comprehensively presenting the company's organizational structure and general overview - The company's Chinese name is Hengtai Securities Co., Ltd., operating in Hong Kong under the name 'Hengtou Securities'[14](index=14&type=chunk) - The Board of Directors consists of 1 executive director (Chairman Zhu Yanhui), 5 non-executive directors, and 3 independent non-executive directors[15](index=15&type=chunk) - The company's headquarters is located at 12th Floor, Block B, Desheng International Center, No. 83 Deshengmenwai Street, Xicheng District, Beijing, China[19](index=19&type=chunk) [Company Name](index=8&type=section&id=%E4%B8%80.%20%E5%85%AC%E5%8F%B8%E5%90%8D%E7%A8%B1) [Board of Directors](index=8&type=section&id=%E4%BA%8C.%20%E8%91%A3%E4%BA%8B%E6%9C%83) [Supervisory Committee](index=9&type=section&id=%E4%B8%89.%20%E7%9B%A3%E4%BA%8B%E6%9C%83) [Board Secretary](index=9&type=section&id=%E5%9B%9B.%20%E8%91%A3%E4%BA%8B%E6%9C%83%E7%A7%98%E4%B9%A6) [Joint Company Secretaries](index=9&type=section&id=%E4%BA%94.%20%E8%81%AF%E5%B8%AD%E5%85%AC%E5%8F%B8%E7%A7%98%E6%9B%B8) [Authorized Representatives](index=9&type=section&id=%E5%85%AD.%20%E6%8E%88%E6%AC%8A%E4%BB%A3%E8%A1%A8) [China Headquarters](index=9&type=section&id=%E4%B8%83.%20%E4%B8%AD%E5%9C%8B%E7%B8%BD%E9%83%A8) [Hong Kong Business Address](index=9&type=section&id=%E5%85%AB.%20%E9%A6%99%E6%B8%AF%E7%87%9F%E6%A5%AD%E5%9C%B0%E5%9D%80) [Auditor](index=10&type=section&id=%E4%B9%9D.%20%E6%A0%B8%E6%95%B8%E5%B8%AB) [Hong Kong Legal Advisor](index=10&type=section&id=%E5%8D%81.%20%E9%A6%99%E6%B8%AF%E6%B3%95%E5%BE%8B%E9%A1%A7%E5%95%8F) [H Share Registrar](index=10&type=section&id=%E5%8D%81%E4%B8%80.%20H%E8%82%A1%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98%E8%99%95) [H Share Stock Code](index=10&type=section&id=%E5%8D%81%E4%BA%8C.%20H%E8%82%A1%E8%82%A1%E7%A5%A8%E4%BB%A3%E8%99%9F) [Section III Summary of Accounting Data and Financial Indicators](index=11&type=section&id=%E7%AC%AC%E4%B8%89%E7%AF%80%20%E6%9C%83%E8%A8%88%E6%95%B8%E6%93%9A%E5%92%8C%E8%B2%A1%E5%8B%99%E6%8C%87%E6%A8%99%E6%91%98%E8%A6%81) This section summarizes the company's key accounting data and financial indicators for the six months ended June 30, 2025, including operating performance, profitability, scale indicators, and risk control indicators, demonstrating significant performance growth and compliance with regulatory risk requirements Key Operating Performance and Profitability Indicators for H1 2025 (RMB thousands) | Indicator | Jan 1, 2025 to Jun 30, 2025 | Jan 1, 2024 to Jun 30, 2024 | YoY Growth/(Decline) | | :--- | :--- | :--- | :--- | | Total Operating Income | 1,665,642 | 1,169,284 | 42.45% | | Profit Before Tax | 314,359 | 75,098 | 318.60% | | Profit for the Period – Attributable to Ordinary Equity Holders of the Company | 240,733 | 53,872 | 346.86% | | Net Cash Generated From/(Used In) Operating Activities | 389,736 | (129,342) | 401.32% | | Basic Earnings Per Share (RMB per share) | 0.0924 | 0.0207 | 346.38% | | Weighted Average Return on Net Assets (%) | 2.86 | 0.67 | Increase of 2.19 percentage points | Scale Indicators for H1 2025 (RMB thousands) | Indicator | June 30, 2025 | December 31, 2024 | Growth/(Decline) from end of previous year | | :--- | :--- | :--- | :--- | | Total Assets | 43,186,520 | 39,981,081 | 8.02% | | Total Liabilities | 34,261,815 | 31,274,058 | 9.55% | | Equity Attributable to Ordinary Equity Holders and Holders of Perpetual Capital Securities | 8,544,448 | 8,295,533 | 3.00% | | Net Assets Per Share Attributable to Ordinary Equity Holders (RMB per share) | 3.28 | 3.18 | 3.14% | | Asset-Liability Ratio (%) | 61.31 | 62.60 | Decrease of 1.29 percentage points | Risk Control Indicators as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | Regulatory Standard | | :--- | :--- | :--- | :--- | | Net Capital | 5,615,398 | 5,903,665 | Not applicable | | Risk Coverage Ratio | 164.62% | 175.73% | ≥100% | | Capital Leverage Ratio | 24.85% | 23.62% | ≥8% | | Liquidity Coverage Ratio | 175.47% | 182.28% | ≥100% | | Net Stable Funding Ratio | 164.45% | 173.37% | ≥100% | | Net Capital / Net Assets | 65.70% | 71.34% | ≥20% | | Net Capital / Liabilities | 43.31% | 44.21% | ≥8% | | Proprietary Equity Securities and Derivatives / Net Capital | 19.39% | 22.61% | ≤100% | | Proprietary Non-Equity Securities and Derivatives / Net Capital | 166.21% | 147.18% | ≤500% | - During the reporting period, the company's net capital was **RMB 5,615.40 million**, a decrease of **RMB 288.27 million** from the end of 2024, but all risk control indicators met regulatory requirements[33](index=33&type=chunk) [Key Accounting Data and Financial Indicators](index=11&type=section&id=%E4%B8%80.%20%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%95%B8%E6%93%9A%E5%92%8C%E8%B2%A1%E5%8B%99%E6%8C%87%E6%A8%99) [The Company's Net Capital and Other Risk Control Indicators](index=14&type=section&id=%E4%BA%8C.%20%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E6%B7%A8%E8%B3%87%E6%9C%AC%E7%AD%89%E9%A2%A8%E9%9A%AA%E6%8E%A7%E5%88%B6%E6%8C%87%E6%A8%99) [Section IV Management Discussion and Analysis](index=14&type=section&id=%E7%AC%AC%E5%9B%9B%E7%AF%80%20%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) This section provides a comprehensive analysis of the company's operating performance, market environment, business development, financial condition, and risk management during the reporting period, demonstrating significant growth in a complex market and active promotion of business transformation and risk management system construction - During the reporting period, the Group achieved total operating income of **RMB 1,665.64 million**, a year-on-year increase of **42.45%**, and net profit of **RMB 209.50 million**, a year-on-year increase of **1,003.21%**[38](index=38&type=chunk) - The company will continuously enhance its business capabilities, promote corporate transformation and upgrading, accelerate the construction of its business brand system, strengthen financial technology empowerment, and improve customer service capabilities[62](index=62&type=chunk) - The company has established a four-tier risk management system including the Board of Directors, Party Committee, management, risk management functional departments, and business departments, and has incorporated all subsidiaries into its comprehensive risk management system[94](index=94&type=chunk) [Economic Environment and Market Conditions During the Reporting Period](index=15&type=section&id=%E4%B8%80.%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%85%A7%E7%B6%93%E6%BF%9F%E7%92%B0%E5%A2%83%E5%92%8C%E5%B8%82%E5%9C%B0%E7%8B%80%E6%B3%81) In H1 2025, China's economy remained stable and positive, with GDP growing by **5.30%** year-on-year and moderately loose monetary policy, while the A-share market saw volatile upward movement, increased trading activity, and significant year-on-year growth in total stock and fund transaction volume - In H1 2025, China's Gross Domestic Product (GDP) increased by **5.30%** year-on-year[36](index=36&type=chunk) - China's A-share market showed a volatile upward trend, with the Shanghai Composite Index rising by **2.76%**, the Shenzhen Component Index by **0.48%**, and the ChiNext Index by **0.53%**[37](index=37&type=chunk) - The total transaction volume of stock funds in Shanghai and Shenzhen markets amounted to **RMB 18,878.28 billion**, with Shanghai increasing by **50.80%** and Shenzhen by **76.35%** year-on-year[37](index=37&type=chunk) [Analysis of Principal Business Operations](index=16&type=section&id=%E4%BA%8C.%20%E4%B8%BB%E7%87%9F%E6%A5%AD%E5%8B%99%E6%83%85%E6%B3%81%E5%88%86%E6%9E%90) During the reporting period, all principal business segments achieved positive progress, with significant growth in brokerage and wealth management, breakthroughs in investment banking equity and debt financing, solid performance in investment management product innovation, and substantial revenue increase in proprietary trading through diversified strategies - Brokerage and wealth management business achieved operating income of **RMB 950.77 million**, a **36.19%** increase from the same period in 2024[39](index=39&type=chunk) - Investment banking business achieved operating income of **RMB 92.68 million**, a **41.54%** increase from the same period in 2024[46](index=46&type=chunk) - Proprietary trading business achieved operating income of **RMB 475.12 million**, a **102.99%** increase from the same period in 2024[58](index=58&type=chunk) [Brokerage and Wealth Management Business](index=16&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%20%E7%B6%93%E7%B4%80%E5%8F%8A%E8%B2%A1%E5%AF%8C%E7%AE%A1%E7%90%86%E6%A5%AD%E5%8B%99) Brokerage and wealth management business achieved growth in client numbers and assets under custody, with significantly increased stock and fund trading volume, by optimizing organizational structure, enhancing online services, and improving tiered service systems, while futures brokerage equity reached a new high, wealth management transitioned to a buyer-side model, financial product sales and retention steadily grew, capital intermediary balances remained stable, and asset custody expanded Key Indicators for Brokerage and Wealth Management Business | Indicator | June 30, 2025 | December 31, 2024 | Growth from end of 2024 | | :--- | :--- | :--- | :--- | | Total Clients | 4.1189 million accounts | - | 3.21% | | Total Client Assets Under Custody | RMB 189,284.21 million | - | 5.55% | | Stock and Fund Trading Volume | RMB 1,375,839.14 million | - | Increased by 65.04% from same period in 2024 | | Stock and Fund Market Share | 0.3645% | - | Increased by 0.64% from same period in 2024 | - Wealth management business sold **2,346 financial products**, with a sales volume of **RMB 9,019.66 million** and an end-of-period financial product retention scale of **RMB 19,478.06 million**[43](index=43&type=chunk) - Total scale of asset custody, fund services, and fundraising supervision was **RMB 115,050 million**, with **1 new asset management plan** and **12 new private equity fund custody accounts** added[45](index=45&type=chunk) [Securities Brokerage](index=16&type=section&id=1.%20%E8%AD%89%E5%88%B8%E7%B6%93%E7%B4%80) [Futures Brokerage](index=16&type=section&id=2.%20%E6%9C%9F%E8%B2%A8%E7%B6%93%E7%B4%80) [Wealth Management](index=17&type=section&id=3.%20%E8%B2%A1%E5%AF%8C%E7%AE%A1%E7%90%86) [Capital Intermediation](index=17&type=section&id=4.%20%E8%B3%87%E6%9C%AC%E4%B8%AD%E4%BB%8B) [Asset Custody](index=17&type=section&id=5.%20%E8%B3%87%E7%94%A2%E8%A8%97%E7%AE%A1) [Investment Banking Business](index=18&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%20%E6%8A%95%E8%B3%87%E9%8A%80%E8%A1%8C%E6%A5%AD%E5%8B%99) Investment banking business focused on core clients, achieving progress in both equity and debt financing and NEEQ recommendations, completing **1 listed company financial advisory project** and actively advancing refinancing and M&A, while completing **24 corporate bond projects** with an underwriting scale of **RMB 5,652 million**, and **1 NEEQ declaration project**, **4 financing projects**, and **132 ongoing supervision projects** - Equity financing completed **1 financial advisory project** for a listed company, with multiple refinancing and M&A projects steadily progressing[47](index=47&type=chunk) - Debt business completed **24 corporate bond projects**, with a total underwriting scale of **RMB 5,652 million**[48](index=48&type=chunk) - NEEQ recommendation business completed **1 declaration project**, **4 NEEQ financing projects**, and had **132 ongoing supervision projects** at period-end[49](index=49&type=chunk) [Equity Financing](index=18&type=section&id=1.%20%E8%82%A1%E6%AC%8A%E8%9E%8D%E8%B3%87) [Debt Financing](index=18&type=section&id=2.%20%E5%82%B5%E5%88%B8%E8%9E%8D%E8%B3%87) [NEEQ Recommendation Business](index=18&type=section&id=3.%20%E6%96%B0%E4%B8%89%E6%9D%BF%E6%8E%A8%E8%96%A6%E6%A5%AD%E5%8B%99) [Investment Management Business](index=19&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%20%E6%8A%95%E8%B3%87%E7%AE%A1%E7%90%86%E6%A5%AD%E5%8B%99) Investment management business operating income decreased by **12.85%** year-on-year, with asset management issuing **2 fixed-income** and **1 FOF collective asset management plans** through enhanced research and product innovation, achieving positive growth in fixed-income product performance, while Xinhua Fund launched **two new equity index products** with AUM growing by **7.68%** year-on-year, Hengtai Capital managed **2 private equity funds** totaling **RMB 2,900 million**, and alternative investments strengthened post-investment management with **22 direct investment projects** - Investment management business achieved operating income of **RMB 132.08 million**, a **12.85%** decrease from the same period in 2024[51](index=51&type=chunk) - Asset management business issued **2 fixed-income** and **1 FOF collective asset management plans**, with an end-of-period total scale of **RMB 15,333.40 million**[52](index=52&type=chunk) - Xinhua Fund managed **47 public funds**, with assets under management of **RMB 53,206 million**, a year-on-year increase of **7.68%**[54](index=54&type=chunk) - Hengtai Capital managed **2 private equity funds**, with a fund management scale of **RMB 2,900 million**[55](index=55&type=chunk) [Asset Management](index=19&type=section&id=1.%20%E8%B3%87%E7%94%A2%E7%AE%A1%E7%90%86) [Fund Management](index=20&type=section&id=2.%20%E5%9F%BA%E9%87%91%E7%AE%A1%E7%90%86) [Private Equity Investment](index=20&type=section&id=3.%20%E7%A7%81%E5%8B%9F%E8%82%A1%E6%AC%8A%E6%8A%95%E8%B3%87) [Alternative Investment](index=20&type=section&id=4.%20%E5%8F%A6%E9%A1%9E%E6%8A%95%E8%B3%87) [Proprietary Trading Business](index=21&type=section&id=%EF%BC%88%E5%9B%9B%EF%BC%89%20%E8%87%AA%E7%87%9F%E4%BA%A4%E6%98%93%E6%A5%AD%E5%8B%99) Proprietary trading business achieved operating income of **RMB 475.12 million**, a **102.99%** year-on-year increase, by building a tiered equity investment system focusing on core assets and high-dividend/growth assets, utilizing quantitative tools and stock index futures to enhance returns, while fixed income business managed trading pace, increased allocation to high-grade credit bonds, and actively engaged in interest rate derivatives, and multi-strategy investment capitalized on Beijing Stock Exchange opportunities to increase equity exposure - Proprietary trading business achieved operating income of **RMB 475.12 million**, a **102.99%** increase from the same period in 2024[58](index=58&type=chunk) - Equity investment business built a tiered equity investment system, focusing on core assets, high-dividend, and growth assets, enhancing return stability through A-share, H-share high-dividend investments, and quantitative/stock index futures tools[58](index=58&type=chunk) - Fixed income business achieved favorable returns by rapidly reducing long-duration bond positions, increasing allocation to high-grade credit bonds, and engaging in interest rate derivatives trading[59](index=59&type=chunk) - Multi-strategy investment business capitalized on the high-elasticity opportunities in the Beijing Stock Exchange market, increasing equity exposure, and conducted preliminary preparations for commodity futures investments[59](index=59&type=chunk) [Outlook and Future Plans](index=22&type=section&id=%E4%B8%89.%20%E5%89%8D%E6%99%AF%E5%8F%8A%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) The company anticipates continued deepening of capital market reforms, accelerated integration in the securities industry with leading institutions consolidating faster, requiring small and medium-sized brokers to differentiate, while traditional brokerage will shift to a buyer-side advisory model, investment banking will focus on key national strategies, asset management will optimize its structure, and fintech will be fully leveraged, with the company committed to Party building, governance improvement, risk control, business capability enhancement, transformation, and differentiated competitive advantages - Industry Outlook: Capital market reforms continue to deepen, securities industry integration accelerates, leading institutions will consolidate faster, and small and medium-sized brokers need to focus on differentiated operations[61](index=61&type=chunk) - Brokerage business will accelerate its transformation to a buyer-side advisory model, and investment banking will focus on the 'Five Key Articles' guidelines, deeply participating in the cultivation of new quality productive forces through innovative models such as M&A integration and industrial chain matchmaking[61](index=61&type=chunk) - Company Development Plan: Adhere to Party building leadership, improve corporate governance, strengthen compliance and risk control foundations, enhance internal control management, launch talent renewal projects, and improve operational efficiency[62](index=62&type=chunk) - In terms of business, the company will continuously enhance its business capabilities, promote corporate transformation and upgrading, accelerate the construction of its business brand system, strengthen financial technology empowerment, and improve customer service capabilities[62](index=62&type=chunk) [Industry Development Outlook](index=22&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%20%E8%A1%8C%E6%A5%AD%E7%99%BC%E5%B1%95%E5%89%8D%E6%99%AF) [Company Development Plan](index=23&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%20%E5%85%AC%E5%8F%B8%E7%99%BC%E5%B1%95%E8%A6%8F%E5%8A%83) [Financial Statement Analysis](index=24&type=section&id=%E5%9B%9B.%20%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E5%88%86%E6%9E%90) During the reporting period, the company's profitability significantly improved, with substantial growth in total operating income and net profit attributable to the parent company, while asset structure remained stable with increases in total assets and liabilities, and asset-liability ratio and financial leverage multiples remained relatively stable, with debt financing meeting funding needs, good liquidity management, improved operating and investing cash flows, and financing cash outflows, with no changes in major accounting policies Profitability Overview | Indicator | H1 2025 | H1 2024 | YoY Growth/(Decline) | | :--- | :--- | :--- | :--- | | Total Operating Income | RMB 1,665.64 million | RMB 1,169.28 million | 42.45% | | Net Profit Attributable to Shareholders of the Company | RMB 240.73 million | RMB 53.87 million | 346.86% | | Earnings Per Share | RMB 0.0924 | RMB 0.0207 | 346.38% | | Weighted Average Return on Net Assets | 2.86% | 0.67% | Increase of 2.19 percentage points | Asset Structure and Liability Level | Indicator | June 30, 2025 | December 31, 2024 | Growth/(Decline) from end of 2024 | | :--- | :--- | :--- | :--- | | Total Assets | RMB 43,186.52 million | RMB 39,981.08 million | 8.02% | | Total Liabilities | RMB 34,261.82 million | RMB 31,274.06 million | 9.55% | | Equity Attributable to Ordinary Equity Holders and Holders of Perpetual Capital Securities | RMB 8,544.45 million | RMB 8,295.53 million | 3.00% | | Asset-Liability Ratio | 61.31% | 62.60% | Decrease of 1.29 percentage points | | Financial Leverage Multiple | 2.70 times | 2.81 times | Decrease of 3.91% | - Cash flow situation: Net cash from operating activities turned positive, net cash from investing activities significantly increased, and net cash from financing activities shifted from inflow to outflow[69](index=69&type=chunk) [Analysis of Profitability During the Reporting Period](index=24&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%85%A7%E7%9B%88%E5%88%A9%E8%83%BD%E5%8A%9B%E6%83%85%E5%86%B5%E5%88%86%E6%9E%90) [Asset Structure and Asset Quality](index=24&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%20%E8%B3%87%E7%94%A2%E7%B5%90%E6%A7%8B%E5%92%8C%E8%B3%87%E7%94%A2%E5%93%81%E8%B3%AA) [Financing Channels and Capacity](index=25&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%20%E8%9E%8D%E8%B3%87%E6%B8%A0%E9%81%93%E5%92%8C%E8%9E%8D%E8%B3%87%E8%83%BD%E5%8A%9B) [Liquidity Level Management](index=25&type=section&id=%EF%BC%88%E5%9B%9B%EF%BC%89%20%E6%B5%81%E5%8B%95%E6%80%A7%E6%B0%B4%E5%B9%B3%E7%AE%A1%E7%90%86) [Cash Flow Situation](index=25&type=section&id=%EF%BC%88%E4%BA%94%EF%BC%89%20%E7%8F%BE%E9%87%91%E6%B5%81%E8%BD%89%E6%83%85%E5%86%B5) [Changes in Major Accounting Policies](index=25&type=section&id=%EF%BC%88%E5%85%AD%EF%BC%89%20%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E6%9B%B4%E6%83%85%E5%86%B5) [Branch Offices and Subsidiaries](index=26&type=section&id=%E4%BA%94.%20%E5%88%86%E6%94%AF%E6%A9%9F%E6%A7%8B%E3%80%81%E5%AD%90%E5%85%AC%E5%8F%B8%E6%83%85%E5%86%B5) As of the end of the reporting period, the company had **7 branch offices** and **102 securities brokerage outlets**, with **5 outlets completing relocation**, while **4 securities brokerage outlets were upgraded to branch offices** and **1 branch office completed a change in business scope**, and major subsidiaries Hengtai Futures and Xinhua Fund completed registered capital changes, and Hengtai Xianfeng completed a change in legal representative - As of the end of the reporting period, the company had **7 branch offices** and **102 securities brokerage outlets**, with **5 outlets completing relocation**[71](index=71&type=chunk)[72](index=72&type=chunk) - **4 securities brokerage outlets were upgraded to branch offices**, including Shandong Branch, Shanghai First Branch, Shanghai Second Branch, and Zhejiang Branch[73](index=73&type=chunk) - Hengtai Futures completed the industrial and commercial registration for a change in registered capital from **RMB 125 million** to **RMB 228.0303 million**[76](index=76&type=chunk) - Xinhua Fund completed the industrial and commercial registration for a change in registered capital from **RMB 217.50 million** to **RMB 627.75641 million**, with the company's shareholding ratio changing from **58.62%** to **52.99%**[76](index=76&type=chunk) [Branch Offices and Securities Brokerage Outlets](index=26&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%20%E5%88%86%E5%85%AC%E5%8F%B8%E3%80%81%E8%AD%89%E5%88%B8%E7%87%9F%E6%A5%AD%E9%83%A8%E6%83%85%E5%86%B5) [Subsidiaries](index=28&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%20%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E6%83%85%E5%86%B5) [Significant Financing Activities](index=28&type=section&id=%E5%85%AD.%20%E9%87%8D%E5%A4%A7%E8%9E%8D%E8%B3%87%E6%83%85%E6%B3%81) During the reporting period, the company did not undertake equity financing, with major debt financing including the issuance of income certificates raising a cumulative **RMB 1.35 billion** and borrowing **RMB 150 million** in subordinated debt, while as of the end of the reporting period, outstanding income certificates totaled **RMB 1.58 billion**, outstanding subordinated bonds **RMB 1.50 billion**, and outstanding corporate bonds **RMB 1.95 billion** - During the reporting period, the company had no equity financing activities[74](index=74&type=chunk) - The company issued income certificates raising a cumulative **RMB 1.35 billion**, and as of June 30, 2025, the outstanding balance of income certificates was **RMB 1.58 billion**[75](index=75&type=chunk) - The company borrowed subordinated debt raising a cumulative **RMB 150 million**, and as of June 30, 2025, the outstanding balance of subordinated debt was **RMB 150 million**[80](index=80&type=chunk) - As of June 30, 2025, the outstanding balance of subordinated bonds was **RMB 1.50 billion**, and the outstanding balance of corporate bonds was **RMB 1.95 billion**[78](index=78&type=chunk)[79](index=79&type=chunk) [Equity Financing](index=28&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%20%E8%82%A1%E6%AC%8A%E8%9E%8D%E8%B3%87) [Major Debt Financing](index=28&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%20%E4%B8%BB%E8%A6%81%E5%82%B5%E5%8B%99%E8%9E%8D%E8%B3%87) [Significant Investment Activities](index=29&type=section&id=%E4%B8%83.%20%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%83%85%E5%86%B5) During the reporting period, the company had no significant investment activities - During the reporting period, the company had no significant investment activities[81](index=81&type=chunk) [Significant Asset Acquisitions, Disposals, External Guarantees, Mortgages, Pledges, and Material Contingent Liabilities](index=30&type=section&id=%E5%85%AB.%20%E9%87%8D%E5%A4%A7%E8%B3%87%E7%94%A2%E6%94%B6%E8%B3%BC%E3%80%81%E5%87%BA%E5%94%AE%E5%8F%8A%E5%B0%8D%E5%A4%96%E6%93%8D%E4%BF%9D%E3%80%81%E6%8A%B5%E6%8A%BC%E3%80%81%E8%B3%AA%E6%8A%BC%E5%92%8C%E9%87%8D%E5%A4%A7%E6%88%96%E6%9C%89%E8%B2%A0%E5%80%B5%E6%83%85%E6%B3%81) During the reporting period, the company had no significant asset acquisitions, disposals, or business combinations, nor any material contingent liabilities, but provided a guarantee for Xinhua Fund, with real estate and **50% equity** in Hengtai Changcai serving as counter-guarantees - During the reporting period, the company had no significant asset acquisitions, disposals, or business combinations, nor any material contingent liabilities[82](index=82&type=chunk) - The company mortgaged or pledged a residential property, an office property, and **50% equity** in Hengtai Changcai to Financial Street Investment as counter-guarantees for the amounts guaranteed by Financial Street Investment under the execution settlement agreement, guarantee agreement, and letter of guarantee[83](index=83&type=chunk)[84](index=84&type=chunk) [Risk Management](index=31&type=section&id=%E4%B9%9D.%20%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The company has established a comprehensive risk management system covering credit, market, liquidity, compliance, operational, and reputational risks, with corresponding strategies and measures, and during the reporting period, continuously improved risk management systems, organizational structure, information technology systems, and indicator frameworks, while strengthening talent development and response mechanisms to ensure all risk indicators meet regulatory requirements - The company's main operating risks include credit risk, market risk, liquidity risk, compliance risk, operational risk, and reputational risk[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - The company has established a four-tier risk management system including the Board of Directors, Party Committee, management, risk management functional departments, and business departments, and has incorporated all subsidiaries into its comprehensive risk management system[94](index=94&type=chunk) - The company has established a risk appetite indicator system centered on net capital and liquidity, covering market risk, credit risk, operational risk, and concentration risk, and regularly assesses its tolerance through stress tests and other methods[96](index=96&type=chunk) [Principal Operating Risks and Countermeasures](index=31&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%20%E5%85%AC%E5%8F%B8%E7%B6%93%E7%87%9F%E7%9A%84%E4%B8%BB%E8%A6%81%E9%A2%A8%E9%9A%AA%E5%92%8C%E5%B0%8D%E7%AD%96) [Credit Risk](index=31&type=section&id=1.%20%E4%BF%A1%E7%94%A8%E9%A2%A8%E9%9A%AA) [Market Risk](index=31&type=section&id=2.%20%E5%B8%82%E5%A0%B4%E9%A2%A8%E9%9A%AA) [Liquidity Risk](index=32&type=section&id=3.%20%E6%B5%81%E5%8B%95%E6%80%A7%E9%A2%A8%E9%9A%AA) [Compliance Risk](index=32&type=section&id=4.%20%E5%90%88%E8%A6%8F%E9%A2%A8%E9%9A%AA) [Operational Risk](index=32&type=section&id=5.%20%E6%93%8D%E4%BD%9C%E9%A2%A8%E9%9A%AA) [Reputational Risk](index=33&type=section&id=6.%20%E8%81%B2%E8%AA%89%E9%A2%A8%E9%9A%AA) [Construction of the Company's Risk Management System and Implementation of Comprehensive Risk Management](index=33&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%20%E5%85%AC%E5%8F%B8%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86%E9%AB%94%E7%B3%BB%E5%BB%BA%E8%A8%AD%E5%8F%8A%E5%85%A8%E9%9D%A2%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86%E8%90%BD%E5%AF%A6%E6%83%85%E5%86%B5) [Management System Aspects](index=33&type=section&id=1.%20%E7%AE%A1%E7%90%86%E5%88%B6%E5%BA%A6%E6%96%B9%E9%9D%A2) [Organizational Structure Aspects](index=34&type=section&id=2.%20%E7%B5%84%E7%B9%94%E6%9E%B6%E6%A7%8B%E6%96%B9%E9%9D%A2) [Information Technology Aspects](index=34&type=section&id=3.%20%E4%BF%A1%E6%81%AF%E6%8A%80%E8%A1%93%E6%96%B9%E9%9D%A2) [Indicator System Aspects](index=34&type=section&id=4.%20%E6%8C%87%E6%A8%93%E9%AB%94%E7%B3%BB%E6%96%B9%E9%9D%A2) [Talent Team Aspects](index=35&type=section&id=5.%20%E4%BA%BA%E6%89%8D%E9%9A%8A%E4%BC%8D%E6%96%B9%E9%9D%A2) [Response Mechanism Aspects](index=35&type=section&id=6.%20%E6%87%89%E5%B0%8D%E6%A9%9F%E5%88%B6%E6%96%B9%E9%9D%A2) [Section V Other Significant Matters](index=36&type=section&id=%E7%AC%AC%E4%BA%94%E7%AF%80%20%E5%85%B6%E4%BB%96%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A0%85) This section discloses the company's significant non-financial matters during the reporting period, including profit distribution plans, absence of equity incentive schemes, progress in major litigation (Qinghui Leasing case first-instance ruling revoked and remanded for retrial), auditor re-appointment, compliance with corporate governance code, and the operation of the Board of Directors and Supervisory Committee, demonstrating the company's efforts in compliance and governance - The 2024 profit distribution plan was no profit distribution, and there is no profit distribution proposal for H1 2025[100](index=100&type=chunk) - During the reporting period, the company had no share option schemes or equity incentive plans[101](index=101&type=chunk) - In the dispute case concerning the Qinghui Leasing Phase I Asset-Backed Special Plan managed by the company, the Supreme People's Court ruled in the second instance to revoke the first-instance ruling and instructed the Beijing High People's Court to conduct a retrial[106](index=106&type=chunk) - The company re-appointed Grant Thornton Certified Public Accountants (Special General Partnership) and Grant Thornton Hong Kong Limited as its domestic and overseas auditors for 2025[107](index=107&type=chunk) - During the reporting period, the company strictly complied with all code provisions of the Corporate Governance Code[108](index=108&type=chunk) [Profit Distribution and Profit Distribution Plan](index=36&type=section&id=%E4%B8%80.%20%E5%88%A9%E6%BD%A4%E5%88%86%E9%85%8D%E5%8F%8A%E5%88%A9%E6%BD%A4%E5%88%86%E9%85%8D%E9%A0%90%E6%A1%88) [Execution of 2024 Annual Profit Distribution Plan](index=36&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%202024%E5%B9%B4%E5%BA%A6%E5%88%A9%E6%BD%A4%E5%88%86%E9%85%8D%E6%96%B9%E6%A1%88%E5%9F%B7%E8%A1%8C%E6%83%85%E5%86%B5) [2025 Interim Profit Distribution Plan](index=36&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%202025%E5%B9%B4%E4%B8%AD%E6%9C%9F%E5%88%A9%E6%BD%A4%E5%88%86%E9%85%8D%E6%96%B9%E6%A1%88) [Share Option Schemes or Equity Incentive Plans](index=36&type=section&id=%E4%BA%8C.%20%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83%E6%88%96%E8%82%A1%E6%AC%8A%E6%BF%80%E5%8B%B5%E8%A8%88%E5%8A%83%E6%83%85%E5%86%B5) [Major Litigation and Arbitration Matters](index=36&type=section&id=%E4%B8%89.%20%E9%87%8D%E5%A4%A7%E8%A8%B4%E8%A8%9F%E3%80%81%E4%BB%B2%E8%A3%81%E4%BA%8B%E9%A0%85) [New Major Litigation and Arbitration Matters During the Reporting Period](index=36&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%85%A7%E6%96%B0%E5%A2%9E%E9%87%8D%E5%A4%A7%E8%A8%B4%E8%A8%9F%E3%80%81%E4%BB%B2%E8%A3%81%E4%BA%8B%E9%A0%85) [Previous Years' Major Litigation and Arbitration Matters with Subsequent Progress](index=36&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%20%E6%9C%89%E5%BE%8C%E7%BA%8C%E9%80%B2%E5%B1%95%E7%9A%84%E4%BB%A5%E5%89%8D%E5%B9%B4%E5%BA%A6%E9%87%8D%E5%A4%A7%E8%A8%B4%E8%A8%9F%E3%80%81%E4%BB%B2%E8%A3%81%E4%BA%8B%E9%A0%85) [Appointment of Auditor](index=37&type=section&id=%E5%9B%9B.%20%E8%81%98%E4%BB%BB%E6%A0%B8%E6%95%B8%E5%B8%AB%E6%83%85%E5%86%B5) [Compliance with Corporate Governance Code](index=37&type=section&id=%E4%BA%94.%20%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99) [Corporate Governance Status](index=38&type=section&id=%E5%85%AD.%20%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E6%83%85%E5%86%B5) [Shareholders' Meeting](index=38&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%20%E8%82%A1%E6%9D%B1%E5%A4%A7%E6%9C%83) [Operation of the Board of Directors and Board Committees](index=38&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%20%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E8%91%A3%E4%BA%8B%E6%9C%83%E5%B0%88%E9%96%80%E5%A7%94%E5%93%A1%E6%9C%83%E9%81%8B%E4%BD%9C%E6%83%85%E5%86%B5) [Operation of the Supervisory Committee](index=39&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%20%E7%9B%A3%E4%BA%8B%E6%9C%83%E9%81%8B%E4%BD%9C%E6%83%85%E5%86%B5) [Compliance with the Model Code](index=39&type=section&id=%E4%B8%83.%20%E9%81%B5%E5%AE%88%E3%80%8A%E6%A8%99%E6%BA%96%E5%AE%88%E5%88%99%E3%80%8B) [Directors' and Supervisors' Service Contracts](index=39&type=section&id=%E5%85%AB.%20%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%A3%E4%BA%8B%E6%9C%8D%E5%8B%99%E5%90%88%E7%B4%84) [Directors' and Supervisors' Rights to Acquire Shares or Debentures](index=39&type=section&id=%E4%B9%9D.%20%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%A3%E4%BA%8B%E8%B3%BC%E5%85%A5%E8%82%A1%E4%BB%BD%E6%88%96%E5%82%B5%E5%88%B8%E8%AD%89%E7%9A%84%E6%AC%8A%E5%88%A9) [Section VI Share Changes and Shareholder Information](index=40&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 interests and short positions of major shareholders and their associates in the company's shares as of June 30, 2025, as well as the shareholdings of directors, supervisors, and senior management, confirming that neither the company nor its subsidiaries purchased, redeemed, or sold any listed securities during the reporting period - As of June 30, 2025, Huarong Comprehensive Investment held **569,895,304 domestic shares**, representing **21.8806%** of the company's total issued shares[119](index=119&type=chunk) - Financial Street Investment and its associates (Financial Street Capital, Xicheng District SASAC) collectively held **781,367,619 domestic shares**, representing **29.9999%** of the company's total issued shares[119](index=119&type=chunk) - Tianfeng Securities held **440,618,114 domestic shares**, representing **16.9171%** of the company's total issued shares[119](index=119&type=chunk) - During the reporting period, none of the company's directors, supervisors, and chief executive had any disclosable interests or short positions in the shares, related shares, or debentures of the company or any of its associated corporations[122](index=122&type=chunk) - During the reporting period, neither the company nor its subsidiaries purchased, redeemed, or sold any of the company's listed securities[123](index=123&type=chunk) [Interests and Short Positions of Major Shareholders and Other Persons in the Company's Shares and Related Shares](index=40&type=section&id=%E4%B8%80.%20%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E5%8F%8A%E5%85%B6%E4%BB%96%E4%BA%BA%E5%A3%AB%E6%96%BC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) [Interests and Short Positions of Directors, Supervisors, and Chief Executive in Shares, Related Shares, and Debentures of the Company and Associated Corporations](index=42&type=section&id=%E4%BA%8C.%20%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%E6%96%BC%E5%85%AC%E5%8F%B8%E5%8F%8A%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E7%9A%84%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E5%88%B8%E8%AD%89%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%92%8C%E6%B7%A1%E5%80%89) [Purchase, Redemption or Sale of the Company's Listed Securities](index=42&type=section&id=%E4%B8%89.%20%E8%B3%BC%E8%B2%B7%E3%80%81%E8%B4%96%E5%9B%9E%E6%88%96%E5%87%BA%E5%94%AE%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) [Section VII Directors, Supervisors, Senior Management, and Employees](index=43&type=section&id=%E7%AC%AC%E4%B8%83%E7%AF%80%20%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%E5%8F%8A%E5%93%A1%E5%B7%A5%E6%83%85%E5%86%B5) This section reports changes in the company's directors, supervisors, and senior management, including new appointments, resignations, and information updates, and details the total number of employees, compensation policy (emphasizing incentives and constraints, deferred payment, and clawback mechanisms), and comprehensive employee training programs as of the end of the reporting period, reflecting the company's commitment to talent management and development - Mr. Pang Jiemin was appointed as a non-executive director of the Fifth Board of Directors, and Mr. Yu Lei resigned[125](index=125&type=chunk) - Mr. Yang Jinliang was appointed as the company's Vice President[127](index=127&type=chunk) - As of the end of the reporting period, the Group had a total of **2,491 employees**, including **2,075 employees** at the company and **416 employees** at subsidiaries[130](index=130&type=chunk) - The company has established a compensation management mechanism that unifies incentives and constraints, combines fairness and efficiency, and includes deferred payment and clawback mechanisms for compensation distribution[130](index=130&type=chunk) - During the reporting period, the company organized and implemented **41 internal and external training sessions**, with a total of **7,849 participants**, achieving **100% training coverage**[131](index=131&type=chunk) [Changes in Directors, Supervisors, and Senior Management](index=43&type=section&id=%E4%B8%80.%20%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%AE%8A%E5%8B%95%E6%83%85%E5%86%B5) [Changes in Directors](index=43&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%20%E8%91%A3%E4%BA%8B%E8%AE%8A%E5%8B%95%E6%83%85%E5%86%B5) [Changes in Supervisors](index=43&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%20%E7%9B%A3%E4%BA%8B%E8%AE%8A%E5%8B%95%E6%83%85%E5%86%B5) [Changes in Senior Management](index=43&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%20%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E4%BA%BA%E5%93%A1%E8%AE%8A%E5%8B%95%E6%83%85%E5%86%B5) [Changes in Directors' and Supervisors' Information](index=43&type=section&id=%EF%BC%88%E5%9B%9B%EF%BC%89%20%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%A3%E4%BA%8B%E8%B3%87%E6%96%99%E8%AE%8A%E6%9B%B4) [Employees, Compensation Policy, and Training](index=44&type=section&id=%E4%BA%8C.%20%E5%91%A1%E5%B7%A5%E3%80%81%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96%E5%8F%8A%E5%9F%B9%E8%A8%93%E6%83%85%E5%86%B5) [Independent Review Report](index=44&type=section&id=%E7%8D%A8%E7%AB%8B%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) Grant Thornton Hong Kong Limited reviewed Hengtou Securities' interim financial information for the six months ended June 30, 2025, concluding that nothing came to their attention to suggest the interim financial information was not prepared, in all material respects, in accordance with International Accounting Standard 34 'Interim Financial Reporting' - Grant Thornton Hong Kong Limited has reviewed the interim financial information of Hengtou Securities and its subsidiaries for the six months ended June 30, 2025[134](index=134&type=chunk) - The scope of review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, and accordingly, no audit opinion is expressed[135](index=135&type=chunk) - Based on the review, nothing has come to the auditor's attention that causes them to believe that the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 'Interim Financial Reporting'[136](index=136&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=46&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%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) This statement presents the condensed consolidated profit or loss and other comprehensive income for the six months ended June 30, 2025, and the comparative period in 2024, reflecting significant growth in the company's total operating income, profit before tax, profit for the period, and earnings per share Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousands) | Item | Jan 1, 2025 to Jun 30, 2025 | Jan 1, 2024 to Jun 30, 2024 | | :--- | :--- | :--- | | Total Operating Income | 1,665,642 | 1,169,284 | | Profit Before Tax | 314,359 | 75,098 | | Profit for the Period | 209,500 | 18,994 | | Profit for the Period – Attributable to Ordinary Equity Holders of the Company | 240,733 | 53,872 | | Total Comprehensive Income for the Period | 217,682 | 33,616 | | Basic and Diluted Earnings Per Share | RMB 0.0924 | RMB 0.0207 | - Fee and commission income increased from **RMB 572,872 thousand** in the same period of 2024 to **RMB 838,699 thousand** in the same period of 2025[139](index=139&type=chunk) - Net investment income increased from **RMB 187,962 thousand** in the same period of 2024 to **RMB 258,674 thousand** in the same period of 2025[139](index=139&type=chunk) [Condensed Consolidated Statement of Financial Position](index=48&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) This statement provides the condensed consolidated financial position as of June 30, 2025, and December 31, 2024, showing the composition and changes in the company's assets, liabilities, and equity, with increases in both total assets and total liabilities, and a steady rise in equity attributable to ordinary equity holders Condensed Consolidated Statement of Financial Position (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 43,186,520 | 39,981,081 | | Total Liabilities | 34,261,815 | 31,274,058 | | Equity Attributable to Ordinary Equity Holders of the Company | 8,544,448 | 8,295,533 | | Total Equity | 8,924,705 | 8,707,023 | - Cash held on behalf of brokerage clients increased from **RMB 16,178,519 thousand** as of December 31, 2024, to **RMB 19,271,204 thousand** as of June 30, 2025[142](index=142&type=chunk) - Accounts payable to brokerage clients increased from **RMB 16,700,618 thousand** as of December 31, 2024, to **RMB 20,121,543 thousand** as of June 30, 2025[143](index=143&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=51&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) This statement presents the condensed consolidated changes in equity for the six months ended June 30, 2025, and the comparative period in 2024, reflecting the impact of profit for the period and other comprehensive income attributable to ordinary equity holders on total equity, as well as the appropriation to general risk reserves Condensed Consolidated Statement of Changes in Equity (RMB thousands) | Item | Jan 1, 2025 | Profit for the Period | Other Comprehensive Income for the Period | Total Comprehensive Income for the Period | Appropriation to General Risk Reserve | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Attributable to Ordinary Equity Holders of the Company | 8,295,533 | 240,733 | 8,182 | 248,915 | - | 8,544,448 | | Non-controlling Interests | 411,490 | (31,233) | - | (31,233) | - | 380,257 | | Total Equity | 8,707,023 | 209,500 | 8,182 | 217,682 | - | 8,924,705 | - Undistributed profits attributable to ordinary equity holders of the company increased from **RMB 1,473,953 thousand** as of January 1, 2025, to **RMB 1,708,228 thousand** as of June 30, 2025[146](index=146&type=chunk) - General risk reserve increased from **RMB 1,073,607 thousand** as of January 1, 2025, to **RMB 1,080,065 thousand** as of June 30, 2025[146](index=146&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=52&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) This statement presents the condensed consolidated cash flows for the six months ended June 30, 2025, and the comparative period in 2024, showing net cash from operating activities turning positive, a significant increase in net cash from investing activities, and net cash from financing activities shifting from inflow to outflow Condensed Consolidated Statement of Cash Flows (RMB thousands) | Item | Jan 1, 2025 to Jun 30, 2025 | Jan 1, 2024 to Jun 30, 2024 | | :--- | :--- | :--- | | Net Cash Generated From/(Used In) Operating Activities | 389,736 | (129,342) | | Net Cash Generated From/(Used In) Investing Activities | 305,507 | (409,316) | | Net Cash (Used In)/Generated From Financing Activities | (850,352) | 613,992 | | Net (Decrease)/Increase in Cash and Cash Equivalents | (155,109) | 75,334 | | Cash and Cash Equivalents at End of Period | 2,086,770 | 2,109,677 | - Net cash from operating activities increased by **RMB 519.08 million** year-on-year[69](index=69&type=chunk) - Net cash from investing activities increased by **RMB 714.83 million** year-on-year[69](index=69&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=53&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes to the condensed consolidated financial statements, covering key information such as basis of preparation, changes in accounting policies, detailed income and expense items, asset and liability composition, cash flows, significant commitments, contingent liabilities, related party transactions, segment reporting, and fair value measurement, offering in-depth background and explanations for understanding the financial statements - The interim financial information is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and the Listing Rules of the Hong Kong Stock Exchange[148](index=148&type=chunk) - For the six months ended June 30, 2025, fee and commission income from securities brokerage business was **RMB 544,618 thousand**, and from underwriting and sponsorship business was **RMB 66,631 thousand**[155](index=155&type=chunk) - As of June 30, 2025, financial assets at fair value through profit or loss totaled **RMB 9,983,470 thousand**, and financial assets at fair value through other comprehensive income totaled **RMB 2,073,637 thousand**[216](index=216&type=chunk) - Segment reporting shows brokerage and wealth management business income of **RMB 950,768 thousand**, investment banking income of **RMB 92,678 thousand**, proprietary trading income of **RMB 475,119 thousand**, and investment management income of **RMB 132,083 thousand**[210](index=210&type=chunk) [Basis of Preparation](index=54&type=section&id=1.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) [Adoption of New and Revised International Financial Reporting Standards](index=54&type=section&id=2.%20%E6%8E%A1%E7%B4%8D%E6%96%B0%E8%A8%82%E5%8F%8A%E7%B6%93%E4%BF%AE%E8%A8%82%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87) [Fee and Commission Income](index=56&type=section&id=3.%20%E6%89%8B%E7%BA%8C%E8%B2%BB%E5%8F%8A%E4%BD%A3%E9%87%91%E6%94%B6%E5%85%A5) [Interest Income](index=57&type=section&id=4.%20%E5%88%A9%E6%81%AF%E6%94%B6%E5%85%A5) [Net Investment Income](index=57&type=section&id=5.%20%E6%8A%95%E8%B3%87%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) [Other Income and Gains](index=58&type=section&id=6.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) [Fee and Commission Expenses](index=58&type=section&id=7.%20%E6%89%8B%E7%BA%8C%E8%B2%BB%E5%8F%8A%E4%BD%A3%E9%87%91%E6%94%AF%E5%87%BA) [Interest Expenses](index=59&type=section&id=8.%20%E5%88%A9%E6%81%AF%E6%94%AF%E5%87%BA) [Staff Costs](index=59&type=section&id=9.%20%E5%93%A1%E5%B7%A5%E6%88%90%E6%9C%AC) [Depreciation and Amortization](index=60&type=section&id=10.%20%E6%8A%98%E8%88%8A%E5%8F%8A%E6%94%A4%E9%8A%B7) [Other Operating Expenses](index=60&type=section&id=11.%20%E5%85%B6%E4%BB%96%E7%B6%93%E7%87%9F%E6%94%AF%E5%87%BA) [Asset Impairment Losses, Net](index=61&type=section&id=12.%20%E8%B3%87%E7%94%A2%E6%B8%9B%E5%80%BC%E6%90%8D%E5%A4%B1%EF%BC%8C%E6%B7%A8%E9%A1%8D) [Income Tax Expense](index=61&type=section&id=13.%20%E6%89%80%E5%BE%97%E7%A8%85%E6%94%AF%E5%87%BA) [Earnings Per Share](index=62&type=section&id=14.%20%E6%AF%8F%E8%82%A1%E6%94%B6%E7%9B%8A) [Property and Equipment](index=62&type=section&id=15.%20%E7%89%A9%E6%A5%AD%E5%8F%8A%E8%A8%AD%E5%82%99) [Right-of-Use Assets](index=62&type=section&id=16.%20%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2) [Other Non-Current Assets](index=63&type=section&id=17.%20%E5%85%B6%E4%BB%96%E9%9D%9E%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2) [Amounts Due from Margin Clients](index=64&type=section&id=18.%20%E6%87%89%E6%94%B6%E8%9E%8D%E8%B3%87%E5%AE%A2%E6%88%B6%E6%AC%BE%E9%A0%85) [Other Current Assets](index=65&type=section&id=19.%20%E5%85%B6%E4%BB%96%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2) [Loans to a Financial Institution](index=67&type=section&id=20.%20%E5%90%91%E4%B8%80%E9%96%93%E9%87%91%E8%9E%8D%E6%A9%9F%E6%A7%8B%E6%8B%86%E5%87%BA%E8%B3%87%E9%87%91) [Financial Assets Purchased Under Resale Agreements](index=68&type=section&id=21.%20%E8%B2%B7%E5%85%A5%E8%BF%94%E5%94%AE%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) [Financial Assets at Fair Value Through Other Comprehensive Income](index=69&type=section&id=22.%20%E4%BB%A5%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E9%87%8F%E4%B8%94%E5%85%B6%E8%AE%8A%E5%8B%95%E8%A8%88%E5%85%A5%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E7%9A%84%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) [Financial Assets at Fair Value Through Profit or Loss](index=70&type=section&id=23.%20%E4%BB%A5%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E9%87%8F%E4%B8%94%E5%85%B6%E8%AE%8A%E5%8B%95%E8%A8%88%E5%85%A5%E7%95%B6%E6%9C%9F%E6%90%8D%E7%9B%8A%E7%9A%84%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) [Cash Held on Behalf of Brokerage Clients](index=70&type=section&id=24.%20%E4%BB%A3%E7%B6%93%E7%B4%80%E6%A5%AD%E5%8B%99%E5%AE%A2%E6%88%B6%E6%8C%81%E6%9C%89%E7%9A%84%E7%8F%BE%E9%87%91) [Cash and Cash Equivalents](index=71&type=section&id=25.%20%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9) [Debt Instruments](index=71&type=section&id=26.%20%E5%82%B5%E5%8B%99%E5%B7%A5%E5%85%B7) [Accounts Payable to Brokerage Clients](index=76&type=section&id=27.%20%E6%87%89%E4%BB%98%E7%B6%93%E7%B4%80%E6%A5%AD%E5%8B%99%E5%AE%A2%E6%88%B6%E8%B3%B4%E6%AC%BE) [Other Liabilities](index=77&type=section&id=28.%20%E5%85%B6%E4%BB%96%E8%B2%A0%E5%80%B5) [Financial Assets Sold Under Repurchase Agreements](index=78&type=section&id=29.%20%E8%B3%A3%E5%87%BA%E5%9B%9E%E8%B3%BC%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2%E6%AC%BE) [Share Capital](index=79&type=section&id=30.%20%E8%82%A1%E6%9C%AC) [Commitments](index=79&type=section&id=31.%20%E6%89%BF%E6%93%94) [Provisions for Compensation and Litigation Claims](index=81&type=section&id=32.%20%E8%B3%A0%E5%84%9F%E8%A8%88%E6%8F%90%E5%8F%8A%E8%A8%B4%E8%A8%9F%E8%B3%A0%E5%84%9F%E6%AC%BE) [Related Party Transactions and Balances](index=82&type=section&id=33.%20%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93%E5%8F%8A%E9%A4%98%E9%A1%8D) [Segment Reporting](index=84&type=section&id=34.%20%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) [Fair Value Measurement](index=87&type=section&id=35.%20%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E9%87%8F) [Approval of Financial Statements](index=93&type=section&id=36.%20%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E6%A0%B8%E5%87%86)

[Corporate Statement](index=3&type=section&id=1%20企業宣言) Swire Pacific is a Hong Kong-based international conglomerate with a long history and diverse market-leading businesses in Greater China, aiming for sustained shareholder value growth and consistent dividend returns - Swire Pacific is a Hong Kong-based international conglomerate with a long history and over 150 years of reputation in Greater China, operating diversified and market-leading businesses[5](index=5&type=chunk) - The company's goal is to achieve sustained growth in shareholder value by creating ideal long-term returns on equity and to return value to shareholders by maintaining consistent dividend growth[5](index=5&type=chunk) - The strategy focuses on Greater China and Southeast Asia, committed to developing core divisions in property, beverages, and aviation in these regions, and exploring new areas such as healthcare[5](index=5&type=chunk) - The company upholds values of integrity, dedication, excellence, humility, teamwork, and long-term development[6](index=6&type=chunk) - It adopts a prudent financial management approach, recruits top talent, and invests in sustainable development initiatives[8](index=8&type=chunk)[9](index=9&type=chunk) [Performance Summary](index=4&type=section&id=2%20表現摘要) This section provides a concise overview of the company's key financial performance indicators for the first half of 2025 compared to 2024, highlighting significant changes in profit, revenue, and cash flow 2025 First Half Key Financial Indicators | Indicator | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Profit attributable to company shareholders (as per financial statements) | 815 | 3,914 | -79% | | Underlying profit | 5,476 | 5,576 | -2% | | Recurring underlying profit | 4,712 | 4,762 | -1% | | Revenue | 45,774 | 39,563 | +16% | | Operating profit | 1,861 | 4,945 | -62% | | Operating profit excluding fair value changes of investment properties | 5,745 | 5,785 | -1% | | Fair value changes of investment properties | (3,884) | (840) | Not applicable | | Cash generated from operations | 8,438 | 5,307 | +59% | | Net cash inflow/(outflow) before financing | 6,161 | (1,965) | Not applicable | | Net debt-to-capital ratio (excluding lease liabilities) | 22.7% | 19.8% | +2.9 percentage points | | Dividend per share ('A' shares) | 1.30 | 1.25 | +4% | | Dividend per share ('B' shares) | 0.26 | 0.25 | +4% | [Chairman's Statement](index=5&type=section&id=3%20主席報告) The Chairman's Statement highlights the company's financial results, operational performance across key divisions, and strategic initiatives for future growth, emphasizing a robust financial position and commitment to sustainability - The company's consolidated profit attributable to shareholders for the first half of 2025 was **HKD 815 million**, a **79% year-on-year decrease**, primarily due to increased fair value losses on investment properties of **HKD 4.664 billion**[12](index=12&type=chunk) - Excluding the impact of fair value changes on investment properties, the underlying profit attributable to shareholders was **HKD 5.476 billion**, a **2% year-on-year decrease**[12](index=12&type=chunk) - The Aviation Division performed well, with solid results from Cathay Group and strong performance from HAECO Group; the Property Division achieved strong underlying profit, benefiting from the sale of Brickell City Centre retail and parking businesses in Miami[12](index=12&type=chunk) - Swire Properties' **HKD 100 billion investment plan** is progressing well, with **67% of funds already deployed**, focusing on expanding in Hong Kong, mainland China, and Southeast Asia markets[14](index=14&type=chunk) - Swire Coca-Cola continues to grow its Southeast Asia business and has submitted an application for the spin-off and listing of ThaiNamthip in Thailand[16](index=16&type=chunk) - Cathay Group continues to invest over **HKD 100 billion** in its fleet, cabin and lounge products, and digital innovation, adding 19 new destinations[17](index=17&type=chunk) - The Group's financial position is robust, with **HKD 52.6 billion** in available liquidity and a net debt-to-capital ratio of **22.7%**[21](index=21&type=chunk) - The Board of Directors declared a first interim dividend of **HKD 1.30 per 'A' share** and **HKD 0.26 per 'B' share**, a **4% increase** from 2024[21](index=21&type=chunk) - In the first half, **25,119,000 'A' shares** and **15,402,500 'B' shares** were repurchased for a total cash consideration of **HKD 1.842 billion**[22](index=22&type=chunk) - The SwireTHRIVE sustainable development strategy continues to advance, focusing on climate, waste, water resources, employees, and communities, with standardized sustainability data and reporting[23](index=23&type=chunk) - Looking ahead, the Group will continue to execute its investment plan and seek growth opportunities in core markets such as the Greater Bay Area[26](index=26&type=chunk) [Business Review](index=9&type=section&id=7%20業務評述) This section provides a detailed review of the operational performance and strategic developments across the company's diverse business divisions, including property, beverages, aviation, healthcare, and trading and industrial [Property Division](index=9&type=section&id=地產部門) Swire Properties' recurring underlying profit decreased by 2% in H1 2025, impacted by Hong Kong office market challenges, while actively advancing its HKD 100 billion investment plan Swire Properties 2025 First Half Recurring Underlying Profit | Indicator | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Attributable recurring underlying profit | 2,829 | 2,898 | -2% | - The Hong Kong office market faces challenges of high vacancy rates and new supply, leading to a decline in rental income, though the office portfolio occupancy rate remains stable[18](index=18&type=chunk)[50](index=50&type=chunk) - Retail sales in mainland China are stable, with overall footfall increasing, indicating a steady performance of the retail property portfolio[18](index=18&type=chunk)[58](index=58&type=chunk) - The **HKD 100 billion investment plan** has deployed approximately **HKD 67 billion**, with key projects including Taikoo Li Sanlitun in Beijing, Taikoo Source in Lujiazui, Shanghai, and Taikoo Li in Julongwan, Guangzhou[14](index=14&type=chunk)[44](index=44&type=chunk) - The sale of retail and parking interests in Brickell City Centre, Miami, USA, has been completed, with proceeds supporting the **HKD 100 billion investment plan**[15](index=15&type=chunk)[48](index=48&type=chunk)[73](index=73&type=chunk) - Hotel business recovery in Hong Kong is slow, performance in mainland China is mixed, while US hotels show improved performance[18](index=18&type=chunk)[42](index=42&type=chunk)[75](index=75&type=chunk) - Residential sales and marketing expenses were incurred for residential projects, with some Hong Kong residential units recording losses[41](index=41&type=chunk) - The Hong Kong office market is expected to remain weak, but demand from quality tenants is strong; the mainland China retail market is projected to accelerate development[24](index=24&type=chunk)[57](index=57&type=chunk)[70](index=70&type=chunk) - The Lujiazui Taikoo Source residential project achieved outstanding pre-sales, with cumulative sales totaling **RMB 5.93 billion** across two phases[14](index=14&type=chunk)[47](index=47&type=chunk)[83](index=83&type=chunk) [Beverages Division](index=22&type=section&id=飲料部門) Swire Coca-Cola's recurring underlying profit decreased by 2% in H1 2025, despite a 25% revenue increase driven by the ThaiNamthip acquisition and strong mainland China performance Swire Coca-Cola 2025 First Half Attributable Profit and Revenue | Indicator | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Attributable profit (including non-recurring items) | 803 | 878 | -9% | | Attributable profit (excluding non-recurring items) | 861 | 878 | -2% | | Revenue | 21,515 | 17,139 | +25% | - Total revenue (including Shanghai Shenmei revenue and excluding sales to other bottlers) increased by **25% to HKD 22.188 billion**, with sales volume rising by **20% to 1.038 billion standard cases**, primarily due to the TNCC acquisition[100](index=100&type=chunk) - Mainland China operations' attributable profit increased by **8%**, with revenue (in local currency) rising by **3%**, driven by increased sales of sparkling, juice, and energy drinks[19](index=19&type=chunk)[103](index=103&type=chunk) - Hong Kong operations' attributable profit decreased by **15%**, despite a **3% increase in revenue**, but total sales volume fell by **2%** due to increased expenses for production facility upgrades[19](index=19&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) - Taiwan operations' attributable profit decreased by **26%**, with revenue (in local currency) falling by **2%**, impacted by increased expenses and depreciation from the Taoyuan production line upgrade project[19](index=19&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - Vietnam and Cambodia operations' attributable profit decreased by **31%**, with revenue falling by **8%**, affected by increased expenses from the Ho Chi Minh City plant relocation, VND depreciation, and Cambodia equity restructuring[19](index=19&type=chunk)[109](index=109&type=chunk)[111](index=111&type=chunk) - The Stock Exchange of Thailand has confirmed the company's eligibility to proceed with the proposed spin-off and separate listing of TNCC on the SET under Listing Rule 15 Application Guidance[101](index=101&type=chunk) - Looking ahead, mainland China faces challenges from sluggish local consumption, but active measures will be taken; Hong Kong business is expected to be stable; Taiwan sales volume is projected to rebound; Vietnam business will see moderate growth; Cambodia and Thailand markets remain challenging[24](index=24&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) [Aviation Division](index=27&type=section&id=航空部門) The Aviation Division's profit increased by 6.7% in H1 2025, driven by robust passenger traffic and resilient cargo operations at Cathay Group, alongside strong performance from HAECO Group Aviation Division 2025 First Half Attributable Profit | Indicator | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Aviation Division attributable profit | 2,233 | 2,093 | +6.7% | | Cathay Group attributable profit after tax from associates | 1,642 | 1,625 | +1.0% | | HAECO Group attributable profit | 599 | 597 | +0.3% | - Cathay Group's passenger volume increased by **30%**, available seat kilometers increased by **26.3%**, and passenger revenue grew by **14% to HKD 34.208 billion**[120](index=120&type=chunk)[127](index=127&type=chunk) - Cathay Cargo revenue increased by **2.2% to HKD 11.141 billion**, demonstrating resilience in cargo operations, with cargo tonnage increasing by **11.4%**[129](index=129&type=chunk) - HAECO Group's recurring attributable profit increased by **HKD 161 million**, primarily due to a **6% increase** in man-hours sold for base maintenance services and growing demand for engine overhaul services[139](index=139&type=chunk)[140](index=140&type=chunk)[145](index=145&type=chunk) - HAECO Component Overhaul (Xiamen) Co Ltd scaled down its operations, and its profit is now classified as a non-recurring item, no longer recording recurring losses[139](index=139&type=chunk) - Looking ahead, Cathay Group will continue to invest over **HKD 100 billion** to strengthen Hong Kong's position as an international aviation hub; HAECO Group expects stable demand for base maintenance and continued growth in line maintenance work[25](index=25&type=chunk)[133](index=133&type=chunk)[149](index=149&type=chunk) - HAECO Group's new airport hangar in Xiamen has completed its enclosure structure, with maintenance, repair, and overhaul equipment installation expected to be completed in 2026[25](index=25&type=chunk)[149](index=149&type=chunk) [Healthcare](index=34&type=section&id=醫療保健) The Healthcare business narrowed its loss in H1 2025, strategically investing in the Greater China and Indonesia healthcare sectors, with Shanghai Delta Hospital becoming China's first wholly foreign-owned cardiovascular hospital Healthcare Business 2025 First Half Attributable Loss | Indicator | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Attributable loss | (117) | (132) | -11.4% | - The Group has invested **HKD 3.1 billion** in the healthcare sector in the Yangtze River Delta, Greater Bay Area in mainland China, and Indonesia[156](index=156&type=chunk) - Shanghai Delta Hospital became mainland China's first wholly foreign-owned cardiovascular specialist hospital in March 2025[17](index=17&type=chunk)[151](index=151&type=chunk) - The Group's equity interest in SHH Core Holding Limited was diluted to **15.04%**[153](index=153&type=chunk) - Looking ahead, the Group will continue to seek investment opportunities in major city clusters in mainland China and Southeast Asia, maintaining rigorous valuation assessments[156](index=156&type=chunk) [Trading and Industrial](index=35&type=section&id=貿易及實業) The Trading and Industrial division's profit significantly declined by 73% in H1 2025, impacted by reduced consumer spending, a weak auto market, and specific contract expirations Trading and Industrial 2025 First Half Attributable Profit | Indicator | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Attributable profit | 41 | 152 | -73% | | Swire Resources attributable profit | 17 | 47 | -64% | | Swire Motors attributable profit | 37 | 86 | -57% | | Swire Foods attributable profit | (16) | 5 | Not applicable | | Swire Waste Management attributable profit | 7 | 22 | -68% | - Swire Resources' revenue and gross profit decreased by **9% year-on-year**, with profit decline primarily due to local residents traveling abroad and reduced tourist spending[161](index=161&type=chunk)[162](index=162&type=chunk) - Swire Motors' revenue decreased by **12%**, with car sales falling by **20% to 6,715 units**, and profit decline mainly due to a weak automotive market and increased inventory levels[163](index=163&type=chunk) - Swire Foods recorded a loss of **HKD 16 million**, with the number of Qin Yuan Food Company stores decreasing from 413 to 394[165](index=165&type=chunk) - Swire Sugar achieved break-even due to investments in production facilities in the Greater Bay Area, while sugar product sales in Hong Kong and mainland China decreased by **13%** and **4%** respectively[165](index=165&type=chunk) - Swire Waste Management's profit declined due to the expiration of a government contract in March 2024[166](index=166&type=chunk) - In the second half, Swire Resources' revenue and profit will continue to be adversely affected; Swire Motors' sales are expected to rebound moderately; Qin Yuan Food will optimize its store portfolio and expand sales channels; Swire Sugar's sales face pressure but business performance will remain stable[167](index=167&type=chunk)[168](index=168&type=chunk) [Financial Review](index=37&type=section&id=35%20財務評述) This section provides an in-depth analysis of the company's financial performance, including audited data, cash flow, financing activities, and overall financial position, demonstrating prudent financial management [Audited Financial Information](index=37&type=section&id=經核數師審閲的財務資料) This section presents audited financial data, reconciling profit attributable to shareholders with underlying profit and detailing recurring underlying profit, with adjustments for non-cash or non-recurring items Reconciliation of Underlying Profit Attributable to Company Shareholders (2025 First Half) | Item | Amount (HKD million) | | :--- | :--- | | Profit attributable to company shareholders (as per financial statements) | 815 | | Fair value loss on investment properties | 4,674 | | Deferred tax on investment properties | (44) | | Fair value gain realized on disposal of investment property interests | 1,001 | | Depreciation of group's own-use investment properties | 14 | | Amortization of right-of-use assets presented under investment properties | (40) | | Fair value changes less deferred tax attributable to non-controlling interests | (944) | | **Underlying profit attributable to company shareholders** | **5,476** | Recurring Underlying Profit (2025 First Half) | Item | Amount (HKD million) | | :--- | :--- | | Underlying profit attributable to company shareholders | 5,476 | | Significant non-recurring items (net) | (764) | | **Recurring underlying profit** | **4,712** | [Financing](index=39&type=section&id=融資) This section details the group's cash flow, financing changes, funding sources, repayment schedules, and refinancing activities, highlighting a robust financial position with HKD 52.6 billion in available liquidity Cash Flow Summary (2025 First Half) | Indicator | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Net cash generated from operating activities | 7,653 | 4,723 | +62% | | Net cash used in investing activities | (1,492) | (6,688) | +77.7% | | Net cash inflow/(outflow) before financing activities | 6,161 | (1,965) | Not applicable | | Net cash (used in)/generated from financing activities | (1,897) | 5,706 | Not applicable | | Increase in cash and cash equivalents | 4,264 | 3,741 | +14% | | Cash and cash equivalents at end of period | 24,598 | 15,335 | +60.4% | - The Group has committed borrowing facilities and debt securities totaling **HKD 124.017 billion**, of which **HKD 25.711 billion (21%)** remains undrawn[178](index=178&type=chunk) - The weighted average maturity of the Group's debt is **3.2 years**, with a weighted average cost of debt of **3.7%**[180](index=180&type=chunk) - **66%** of the Group's total borrowings are at fixed rates, while **34%** are at floating rates[186](index=186&type=chunk) - The Group's share of net debt in joint ventures and associates is **HKD 19.170 billion**, which if included, would increase the net debt-to-capital ratio to **28.8%**[188](index=188&type=chunk) [Review Report on Condensed Interim Financial Statements](index=42&type=section&id=42%20簡明中期財務報表的審閱報告) PricewaterhouseCoopers has reviewed the condensed interim financial statements, confirming compliance with HKAS 34, but without expressing an audit opinion due to the limited scope of the review - PricewaterhouseCoopers has reviewed the condensed interim financial statements and confirmed their compliance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[191](index=191&type=chunk)[193](index=193&type=chunk) - The scope of the review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, therefore no audit opinion is expressed[192](index=192&type=chunk) [Condensed Interim Financial Statements](index=45&type=section&id=43%20簡明中期財務報表) This section presents the condensed interim financial statements, including the income statement, comprehensive income, balance sheet, cash flow, and equity changes for the period, offering a snapshot of the group's financial health [Consolidated Income Statement](index=45&type=section&id=綜合損益表) In H1 2025, group revenue increased by 16% to HKD 45.77 billion, but operating profit decreased by 62% to HKD 1.86 billion due to a significant fair value loss on investment properties Consolidated Income Statement Key Data (2025 First Half) | Indicator | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 45,774 | 39,563 | +16% | | Gross profit | 17,275 | 15,044 | +15% | | Fair value changes of investment properties | (3,884) | (840) | Not applicable | | Operating profit | 1,861 | 4,945 | -62% | | Profit before tax | 2,074 | 6,253 | -67% | | Profit for the period | 971 | 4,579 | -79% | | Profit attributable to company shareholders | 815 | 3,914 | -79% | [Consolidated Statement of Comprehensive Income](index=46&type=section&id=綜合其他全面收益表) In H1 2025, profit for the period was HKD 971 million, with total comprehensive income of HKD 3.64 billion, primarily influenced by net exchange differences and cash flow hedges Consolidated Statement of Comprehensive Income Key Data (2025 First Half) | Indicator | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Profit for the period | 971 | 4,579 | -79% | | Net exchange differences (not reclassified to profit or loss) | 749 | (259) | Not applicable | | Cash flow hedges (may be reclassified to profit or loss) | 1,931 | (2,025) | Not applicable | | Other comprehensive income/(loss) for the period, net of tax | 2,668 | (2,301) | Not applicable | | Total comprehensive income for the period | 3,639 | 2,278 | +59.7% | | Total comprehensive income attributable to company shareholders | 2,629 | 1,979 | +32.8% | [Consolidated Statement of Financial Position](index=47&type=section&id=綜合財務狀況表) As of June 30, 2025, total assets were HKD 480.03 billion, with investment properties remaining the largest asset class, while net assets decreased by 1.4% to HKD 314.09 billion Consolidated Statement of Financial Position Key Data (As of June 30, 2025) | Indicator | 2025 June 30 (HKD million) | 2024 December 31 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Total non-current assets | 417,327 | 417,175 | +0.04% | | Total current assets | 62,706 | 59,386 | +5.6% | | Investment properties | 268,861 | 270,950 | -0.8% | | Bank balances and short-term deposits | 26,839 | 21,028 | +27.6% | | Total current liabilities | 61,502 | 56,026 | +9.8% | | Total non-current liabilities | 104,441 | 101,868 | +2.5% | | Net assets | 314,090 | 318,667 | -1.4% | | Equity attributable to company shareholders | 257,884 | 258,300 | -0.16% | | Non-controlling interests | 56,206 | 60,367 | -6.9% | [Consolidated Cash Flow Statement](index=48&type=section&id=綜合現金流量表) In H1 2025, net cash from operating activities significantly increased by 62% to HKD 7.65 billion, while net cash used in investing activities decreased by 77.7% due to proceeds from subsidiary disposals Consolidated Cash Flow Statement Key Data (2025 First Half) | Indicator | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Net cash generated from operating activities | 7,653 | 4,723 | +62% | | Net cash used in investing activities | (1,492) | (6,688) | +77.7% | | Net cash inflow/(outflow) before financing activities | 6,161 | (1,965) | Not applicable | | Net cash (used in)/generated from financing activities | (1,897) | 5,706 | Not applicable | | Increase in cash and cash equivalents | 4,264 | 3,741 | +14% | | Cash and cash equivalents at end of period | 24,598 | 15,335 | +60.4% | - Net proceeds from the disposal of subsidiaries amounted to **HKD 3.908 billion**, significantly improving cash flow from investing activities[200](index=200&type=chunk)[31](index=31&type=chunk) - **HKD 1.851 billion** was paid for share repurchases, and **HKD 2.866 billion** was paid for dividends to company shareholders[200](index=200&type=chunk) [Consolidated Statement of Changes in Equity](index=49&type=section&id=綜合權益變動表) As of June 30, 2025, equity attributable to company shareholders was HKD 257.88 billion, with total comprehensive income of HKD 3.64 billion, impacted by share repurchases and dividend payments Consolidated Statement of Changes in Equity Key Data (2025 First Half) | Indicator | 2025 June 30 (HKD million) | 2025 January 1 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Equity attributable to company shareholders | 257,884 | 258,300 | -0.16% | | Non-controlling interests | 56,206 | 60,367 | -6.9% | | Total equity | 314,090 | 318,667 | -1.4% | | Total comprehensive income for the period | 3,639 | (2,301) (2024 First Half) | Not applicable | | Repurchase of company shares | (1,847) | (2,019) (2024 First Half) | -8.5% | | Dividends paid | (4,483) | (3,988) (2024 First Half) | +12.4% | - Changes in group composition led to a **HKD 2.360 billion decrease** in non-controlling interests, primarily including Swire Properties share repurchases and net transactions related to non-controlling interests in the Beverages Division[261](index=261&type=chunk) [Notes to the Condensed Interim Financial Statements](index=50&type=section&id=簡明中期財務報表附註) This section provides detailed notes to the condensed interim financial statements, covering segment information, basis of preparation, financial risk management, and various asset and liability details, offering comprehensive financial insights [1. Segment Information](index=50&type=section&id=1.%20分部資料) - Provides analysis of the Group's consolidated income statement, total assets, total liabilities, and non-controlling interests by business segment (Property, Beverages, Aviation, Trading and Industrial, Head Office/Healthcare and Other)[202](index=202&type=chunk)[209](index=209&type=chunk)[211](index=211&type=chunk) - In the first half of 2025, the Group's total external revenue was **HKD 45.774 billion**, with **HKD 27.638 billion** recognized at a point in time, **HKD 11.651 billion** recognized over a period of time, and **HKD 6.485 billion** from rental income[213](index=213&type=chunk) [2. Basis of Preparation](index=58&type=section&id=2.%20編製基準) - The condensed interim financial statements comply with Hong Kong Accounting Standard 34 and the disclosure requirements of the Listing Rules[216](index=216&type=chunk) - The adoption of amendments to Hong Kong Accounting Standard 21 and Hong Kong Financial Reporting Standard 1 "Lack of Exchangeability" had no significant impact[217](index=217&type=chunk) - Hong Kong enacted legislation for the global minimum tax framework (Pillar Two) on June 6, 2025, effective from January 1, 2025, with the Group assessing no significant risk[217](index=217&type=chunk) [3. Financial Risk Management](index=59&type=section&id=3.%20財務風險管理) - The Group faces financial risks related to interest rates, currency, credit, and liquidity[218](index=218&type=chunk) - Financial risk management framework, policies, and procedures have not undergone significant changes since year-end[218](index=218&type=chunk) [4. Revenue](index=59&type=section&id=4.%20收益) Revenue Composition (2025 First Half) | Revenue Source | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Gross rental income from investment properties | 6,485 | 6,641 | -2.4% | | Property sales | 1,706 | 88 | +1838.6% | | Hotels | 441 | 464 | -5.0% | | Sale of goods | 25,662 | 21,803 | +17.7% | | Aircraft and engine maintenance services | 10,678 | 9,538 | +12.0% | | Provision of other services | 802 | 1,029 | -22.1% | | **Total** | **45,774** | **39,563** | **+15.7%** | [5. Other Net Income](index=60&type=section&id=5.%20其他收益淨額) Other Net Income Major Components (2025 First Half) | Item | 2025 First Half (HKD million) | 2024 First Half (HKD million) | | :--- | :--- | :--- | | Gain on deemed disposal of an associate | 31 | 20 | | Loss on disposal of subsidiaries | (121) | – | | Net exchange (loss)/gain | (333) | 188 | | Fair value (loss)/gain on investments at fair value through profit or loss | (80) | 233 | | Fair value gain/(loss) on derivative financial instruments transferred from cash flow hedge reserve | 302 | (168) | | Government grants | 79 | 71 | | **Total** | **76** | **533** | [6. Expenses by Nature](index=61&type=section&id=6.%20按性質劃分的開支) Expenses by Nature (2025 First Half) | Expense Category | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Direct operating expenses relating to investment properties | 1,587 | 1,501 | +5.7% | | Cost of goods sold | 20,036 | 16,723 | +19.8% | | Depreciation of property, plant and equipment | 1,564 | 1,251 | +25.0% | | Depreciation of right-of-use assets | 574 | 513 | +11.9% | | Amortization of intangible assets | 124 | 116 | +6.9% | | Staff costs | 8,721 | 7,472 | +16.7% | | Other expenses | 7,276 | 6,550 | +11.1% | | **Total** | **40,105** | **34,311** | **+16.9%** | [7. Net Finance Costs](index=62&type=section&id=7.%20財務支出淨額) Net Finance Costs (2025 First Half) | Item | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Interest expense (bank borrowings and bonds) | 1,685 | 1,492 | +12.9% | | Interest on lease liabilities | 104 | 95 | +9.5% | | Fair value changes relating to put option liabilities for non-controlling interests | (74) | 48 | Not applicable | | Other finance costs | 88 | 90 | -2.2% | | Capitalized interest | (356) | (368) | -3.3% | | **Total interest expense** | **1,447** | **1,257** | **+15.1%** | | Less: Interest income | (318) | (267) | +19.1% | | **Net finance costs** | **1,178** | **1,119** | **+5.3%** | [8. Taxation](index=62&type=section&id=8.%20税項) Taxation Expense (2025 First Half) | Item | 2025 First Half (HKD million) | 2024 First Half (HKD million) | Change | | :--- | :--- | :--- | :--- | | Hong Kong profits tax | 263 | 251 | +4.8% | | Mainland China corporate income tax | 68 | 760 | -91.0% | | Other taxation | 981 | 138 | +610.9% | | Deferred taxation | (179) | 518 | Not applicable | | **Total** | **1,103** | **1,674** | **-34.1%** | - Mainland China subsidiaries are subject to a tax rate of **25%**, while Hong Kong profits tax rate is **16.5%**[225](index=225&type=chunk) [9. Underlying Profit Attributable to Company Shareholders](index=62&type=section&id=9.%20公司股東應佔基本溢利) - The underlying profit attributable to company shareholders was **HKD 5.476 billion**[227](index=227&type=chunk) - For detailed reconciliation information, please refer to the "Audited Financial Information" table on page 35[227](index=227&type=chunk) [10. Dividends](index=63&type=section&id=10.%20股息) 2025 First Interim Dividend | Dividend Type | Amount per Share (HKD) | Total Amount (HKD million) | 2024 Corresponding Period (HKD million) | Change | | :--- | :--- | :--- | :--- | :--- | | 'A' shares | 1.30 | 1,753 | 1,745 | +4% (per share) | | 'B' shares | 0.26 | | | +4% (per share) | - Dividends will be paid on October 10, 2025, with the record date set for September 12, 2025[229](index=229&type=chunk) [11. Earnings Per Share (Basic and Diluted)](index=63&type=section&id=11.%20每股盈利（基本及攤薄）) Earnings Per Share (2025 First Half) | Indicator | 2025 First Half (HKD) | 2024 First Half (HKD) | Change | | :--- | :--- | :--- | :--- | | 'A' shares — Basic | 0.60 | 2.74 | -78% | | 'B' shares — Basic | 0.12 | 0.55 | -78% | | 'A' shares — Diluted | 0.56 | 2.62 | -78.6% | | 'B' shares — Diluted | 0.11 | 0.52 | -78.8% | - Basic earnings per share are calculated based on the profit attributable to company shareholders of **HKD 815 million** and the weighted average number of shares[230](index=230&type=chunk) - Diluted earnings per share are adjusted for the attributable impact of potentially dilutive ordinary shares of Cathay Pacific Airways Limited[231](index=231&type=chunk) [12. Property, Plant and Equipment](index=64&type=section&id=12.%20物業、廠房及設備) Property, Plant and Equipment Net Book Value (As of June 30, 2025) | Item | 2025 June 30 (HKD million) | 2025 January 1 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Net book value | 24,382 | 23,510 | +3.7% | - Additions during the period amounted to **HKD 2.251 billion**, with depreciation of **HKD 1.564 billion**[232](index=232&type=chunk) [13. Investment Properties](index=65&type=section&id=13.%20投資物業) Investment Properties Net Book Value (As of June 30, 2025) | Item | 2025 June 30 (HKD million) | 2025 January 1 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Net book value | 268,861 | 270,950 | -0.8% | - A net fair value loss of **HKD 3.884 billion** was recorded during the period[233](index=233&type=chunk) [14. Intangible Assets](index=65&type=section&id=14.%20無形資產) Intangible Assets Net Book Value (As of June 30, 2025) | Item | 2025 June 30 (HKD million) | 2025 January 1 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Goodwill | 10,983 | 10,807 | +1.6% | | Services, franchises and operating rights | 20,358 | 19,544 | +4.2% | | **Total** | **32,117** | **31,166** | **+3.0%** | - Management assessed that no impairment occurred for goodwill and franchises related to Swire Coca-Cola's businesses in Thailand and Laos[234](index=234&type=chunk) [15. Right-of-Use Assets](index=66&type=section&id=15.%20使用權資產) Right-of-Use Assets Composition (As of June 30, 2025) | Asset Category | 2025 June 30 (HKD million) | 2024 December 31 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Leased land held for own use | 3,570 | 3,535 | +1.0% | | Land use rights | 1,527 | 1,334 | +14.5% | | Properties | 4,271 | 4,028 | +6.0% | | Plant and equipment | 512 | 144 | +255.6% | | **Total** | **9,880** | **9,041** | **+9.3%** | - Additions to right-of-use assets during the period amounted to **HKD 886 million**[236](index=236&type=chunk) [16. Interests in Joint Ventures](index=67&type=section&id=16.%20於合資公司的權益) Interests in Joint Ventures (As of June 30, 2025) | Item | 2025 June 30 (HKD million) | 2024 December 31 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Share of net assets — Unlisted | 27,057 | 26,188 | +3.3% | | Goodwill | 755 | 744 | +1.5% | | **Total** | **27,812** | **26,932** | **+3.3%** | | Amounts due from joint ventures | 14,507 | 15,036 | -3.5% | - Swire Properties acquired a **25% equity interest** in the Miami Mandarin Oriental Hotel joint venture, making it a wholly-owned subsidiary, with the transaction accounted for as an asset acquisition[238](index=238&type=chunk) [17. Interests in Associates](index=67&type=section&id=17.%20於聯屬公司的權益) Interests in Associates (As of June 30, 2025) | Item | 2025 June 30 (HKD million) | 2024 December 31 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Share of net assets | 33,626 | 33,721 | -0.3% | | Goodwill | 1,796 | 1,807 | -0.6% | | **Total** | **35,422** | **35,528** | **-0.3%** | | Amounts due from associates | 662 | 653 | +1.4% | - The market capitalization of listed associate Cathay Pacific Airways (**HKD 30.995 billion**) was higher than its carrying value (**HKD 23.676 billion**)[239](index=239&type=chunk) [18. Fair Value Measurement of Financial Instruments](index=68&type=section&id=18.%20金融工具公平值計量) Financial Assets Measured at Fair Value (As of June 30, 2025) | Item | Level 1 (HKD million) | Level 2 (HKD million) | Level 3 (HKD million) | Total (HKD million) | | :--- | :--- | :--- | :--- | :--- | | Investments at fair value through other comprehensive income | 67 | – | 363 | 430 | | Investments at fair value through profit or loss | 684 | – | 1,007 | 1,691 | | Derivative financial assets | – | 81 | – | 81 | | **Total** | **751** | **81** | **1,370** | **2,202** | Financial Liabilities Measured at Fair Value (As of June 30, 2025) | Item | Level 1 (HKD million) | Level 2 (HKD million) | Level 3 (HKD million) | Total (HKD million) | | :--- | :--- | :--- | :--- | :--- | | Derivative financial liabilities | – | 573 | – | 573 | | **Total** | **–** | **573** | **–** | **573** | - Changes in Level 3 financial instruments include additions of unlisted investments of **HKD 245 million**, disposals of **HKD 220 million**, and derecognition of non-controlling interests put options of **HKD 570 million**[243](index=243&type=chunk) [19. Derivative Financial Instruments](index=70&type=section&id=19.%20衍生金融工具) Derivative Financial Instruments (As of June 30, 2025) | Instrument Type | Assets (HKD million) | Liabilities (HKD million) | | :--- | :--- | :--- | | Cross currency swaps — Cash flow hedges | 70 | 459 | | Interest rate swaps — Cash flow hedges | – | 96 | | Forward foreign exchange contracts (cash flow hedges) | 3 | 7 | | Forward foreign exchange contracts (not qualifying as hedging instruments) | 4 | 11 | | Commodity swaps — Not qualifying as hedging instruments | 4 | – | | **Total** | **81** | **573** | - The Group's policy is not to engage in speculative derivative transactions[245](index=245&type=chunk) [20. Trade and Other Receivables and Other Non-Current Assets](index=70&type=section&id=20.%20貿易及其他應收款項及其他非流動資產) Trade and Other Receivables (As of June 30, 2025) | Item | 2025 June 30 (HKD million) | 2024 December 31 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Trade receivables | 4,682 | 3,862 | +21.2% | | Prepayments and accrued income | 2,533 | 2,438 | +3.9% | | Other non-current assets | 283 | – | Not applicable | | Other receivables | 3,864 | 4,435 | -12.9% | | **Total** | **11,874** | **11,250** | **+5.5%** | - Other non-current assets of **HKD 283 million** represent contingent consideration from the disposal of investment property interests in Brickell City Centre, USA, expected to be received in 2028[249](index=249&type=chunk) [21. Assets Classified as Held for Sale / Liabilities Associated with Assets Classified as Held for Sale](index=71&type=section&id=21.%20歸類為持作出售的資產／歸類為持作出售的資產相關的負債) - Assets classified as held for sale amounted to **HKD 577 million**, primarily comprising Swire Properties' investment property interest on the 43rd floor of One Island East office tower in Hong Kong[250](index=250&type=chunk) - Management expects the 43rd floor of One Island East to be sold within one year for **HKD 451 million**[250](index=250&type=chunk) [22. Trade and Other Payables](index=71&type=section&id=22.%20貿易及其他應付款項) Trade and Other Payables (As of June 30, 2025) | Item | 2025 June 30 (HKD million) | 2024 December 31 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Trade payables | 6,199 | 6,606 | -6.3% | | Interest-bearing advances from joint ventures | 405 | 656 | -38.3% | | Interest-bearing advances from associates | 2,867 | 2,207 | +29.9% | | Put options for non-controlling interests | 1,877 | 2,514 | -25.3% | | Accrued capital expenditure | 2,399 | 1,972 | +21.7% | | Other payables | 8,089 | 8,809 | -8.2% | | **Total** | **35,844** | **36,526** | **-1.9%** | [23. Lease Liabilities](index=72&type=section&id=23.%20租賃負債) Lease Liabilities Repayment Schedule (As of June 30, 2025) | Term | 2025 June 30 (HKD million) | 2024 December 31 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Within one year | 1,003 | 912 | +9.9% | | Between one and two years | 725 | 700 | +3.6% | | Between two and five years | 1,492 | 1,261 | +18.3% | | Over five years | 2,444 | 2,148 | +13.8% | | **Total** | **5,664** | **5,021** | **+12.8%** | [24. Deferred Taxation](index=72&type=section&id=24.%20遞延税項) Net Deferred Tax Liabilities (As of June 30, 2025) | Item | 2025 June 30 (HKD million) | 2025 January 1 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Net deferred tax liabilities | 19,344 | 19,088 | +1.3% | | Deferred tax assets | (994) | (711) (2024 December 31) | +39.8% | | Deferred tax liabilities | 20,338 | 19,799 (2024 December 31) | +2.7% | [25. Share Capital](index=73&type=section&id=25.%20股本) Share Capital Movement (2025 First Half) | Share Type | 2025 January 1 (Shares) | Repurchased and Cancelled (Shares) | 2025 June 30 (Shares) | | :--- | :--- | :--- | :--- | | 'A' shares | 805,569,500 | (25,119,000) | 778,988,000 | | 'B' shares | 2,865,850,000 | (15,402,500) | 2,848,932,500 | - During the period, **HKD 1.842 billion** worth of 'A' and 'B' shares were repurchased, and all repurchased shares have been cancelled[256](index=256&type=chunk) - 'A' and 'B' shareholders have equal voting rights, but other equity entitlements are in a five-to-one ratio[259](index=259&type=chunk) [26. Reserves](index=74&type=section&id=26.%20儲備) Reserves Composition (As of June 30, 2025) | Reserve Type | 2025 June 30 (HKD million) | 2025 January 1 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Retained earnings | 258,457 | 260,696 | -0.86% | | Property revaluation reserve | 2,465 | 2,464 | +0.04% | | Investment revaluation reserve | (198) | (195) | -1.5% | | Cash flow hedge reserve | (830) | 275 | Not applicable | | Exchange reserve | (3,304) | (6,234) | +47.0% | | **Total** | **256,590** | **257,006** | **-0.16%** | - Changes in group composition include Swire Properties share repurchases of **HKD 1.630 billion** and net transactions related to non-controlling interests in the Beverages Division of **HKD 21 million**[260](index=260&type=chunk) [27. Non-controlling Interests](index=75&type=section&id=27.%20非控股權益) Non-controlling Interests Movement (2025 First Half) | Item | 2025 First Half (HKD million) | 2025 January 1 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Balance at beginning of period | 60,367 | 60,367 | - | | Share of profit less loss for the period | 156 | - | - | | Share of total comprehensive income for the period | 1,010 | - | - | | Derecognition upon disposal of subsidiaries | (1,370) | - | - | | Dividends declared and/or paid | (1,634) | - | - | | Changes in group composition | (2,360) | - | - | | **Balance at end of period** | **56,206** | **60,367** | **-6.9%** | - Changes in group composition led to a **HKD 2.360 billion decrease** in non-controlling interests, primarily including Swire Properties share repurchases and net transactions related to non-controlling interests in the Beverages Division[261](index=261&type=chunk) [28. Capital Commitments](index=75&type=section&id=28.%20資本承擔) Capital Commitments (As of June 30, 2025) | Item | Contracted but not provided (HKD million) | Approved by Board but not contracted (HKD million) | Total (HKD million) | | :--- | :--- | :--- | :--- | | Property, plant and equipment and other | 3,984 | 6,671 | 10,655 | | Investment properties | 5,119 | 13,880 | 18,999 | | **Group Total** | **9,103** | **20,551** | **29,654** | | Group's share of capital commitments in joint ventures | 4,145 | 7,140 | 11,285 | - The Group has committed to injecting **HKD 851 million** into joint ventures[263](index=263&type=chunk) [29. Contingent Liabilities](index=76&type=section&id=29.%20或有事項) - Guarantees for bank borrowings and other liabilities owed by joint ventures total **HKD 2.478 billion**[264](index=264&type=chunk) - Cathay Pacific Airways faces multiple antitrust lawsuits and civil claims, primarily related to agreements on cargo surcharges, with uncertain outcomes[265](index=265&type=chunk)[266](index=266&type=chunk) - The European Commission previously imposed fines on Cathay Pacific Airways, some rulings have been overturned, and Cathay Pacific has received partial refunds, with a final ruling expected in the second half of 2025[266](index=266&type=chunk) [30. Related Party Transactions](index=77&type=section&id=30.%20關聯方交易) - The Group has service agreements with John Swire & Sons (H.K.) Limited, receiving service costs and fees, with **HKD 165 million** payable for services in the first half of 2025[267](index=267&type=chunk) - Group companies have entered into lease agreements with John Swire & Sons (H.K.) Limited member companies, with total rent receivable of **HKD 57 million** in the first half of 2025[268](index=268&type=chunk) - Swire Coca-Cola provides management and administrative support services to Swire Pacific Holdings Inc., with management fees receivable of **HKD 81 million** in the first half of 2025[268](index=268&type=chunk) - All related party transactions are conducted in the ordinary course of business, at market competitive prices and terms[271](index=271&type=chunk) [31. Disposal of Subsidiaries](index=79&type=section&id=31.%20出售附屬公司) - Swire Properties disposed of its investment property interests in Brickell City Centre, USA, for a maximum consideration of **USD 549 million**[273](index=273&type=chunk) - The disposal resulted in a loss of **HKD 121 million** but generated net cash inflow of **HKD 3.908 billion**[274](index=274&type=chunk) [32. Acquisition of Subsidiaries](index=80&type=section&id=32.%20收購附屬公司) - Swire Properties acquired a **25% equity interest** in the Miami Mandarin Oriental Hotel joint venture, making it a wholly-owned subsidiary, with a cash purchase consideration of **HKD 290 million**[275](index=275&type=chunk) - During the period, **HKD 70 million** was paid for the 2024 acquisition of franchise companies in Thailand and Laos[275](index=275&type=chunk) [Additional Information](index=81&type=section&id=79%20附加資料) This section provides supplementary details on corporate governance, share capital movements, director information, and significant shareholder interests, ensuring transparency and compliance [Corporate Governance](index=81&type=section&id=企業管治) The company adhered to all applicable code provisions of the Corporate Governance Code, with interim results reviewed by the audit committee and external auditors - The company complied with all applicable code provisions of Appendix C1 "Corporate Governance Code" to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[276](index=276&type=chunk) - The company adopted a code for securities transactions by directors and relevant employees that is no less stringent than the requirements of the Model Code[276](index=276&type=chunk) - The interim results have been reviewed by the company's Audit Committee and external auditors[276](index=276&type=chunk) [Share Capital](index=81&type=section&id=股本) During the reporting period, the company repurchased and cancelled 25,119,000 A shares and 15,402,500 B shares, totaling HKD 1.842 billion in cost - During the period, **25,119,000 'A' shares** and **15,402,500 'B' shares** were repurchased and cancelled[277](index=277&type=chunk) - The total cost (excluding transaction fees) was **HKD 1.842 billion**[277](index=277&type=chunk) [Directors' Information](index=81&type=section&id=董事資料) This section outlines changes in the board of directors, including the retirement of Ms. Li Wai Man and Mr. Bao Yi Qiu - Ms. Li Wai Man retired as an Independent Non-Executive Director of the company[279](index=279&type=chunk) - Mr. Bao Yi Qiu retired as an Independent Non-Executive Director of Samsonite International S.A[279](index=279&type=chunk) [Directors' Interests](index=82&type=section&id=董事權益) As of June 30, 2025, certain directors held interests in shares of Swire Pacific Limited, John Swire & Sons Limited, and Swire Properties Limited, as required by the SFO - As of June 30, 2025, certain directors held interests in shares of Swire Pacific Limited, John Swire & Sons Limited, and Swire Properties Limited, in accordance with the Securities and Futures Ordinance[280](index=280&type=chunk) - Merlin Swire held significant trust interests in the ordinary and preference shares of John Swire & Sons Limited[280](index=280&type=chunk) [Major Shareholders' and Other Shareholders' Interests](index=83&type=section&id=主要股東及其他股東權益) As of June 30, 2025, John Swire & Sons Limited was deemed to hold interests in 442,879,720 A shares and 2,131,969,282 B shares, representing 64.45% of the company's equity and 70.97% of voting rights - As of June 30, 2025, John Swire & Sons Limited was deemed to have interests in **442,879,720 'A' shares** and **2,131,969,282 'B' shares** of the company[282](index=282&type=chunk) - John Swire & Sons Limited held **64.45%** of the company's equity interest and controlled **70.97%** of the voting rights[283](index=283&type=chunk) [Glossary](index=84&type=section&id=82%20詞彙) This section provides definitions for key financial and aviation terms, along with calculation formulas for various financial and operational ratios - Provides definitions for financial terms such as underlying profit, recurring underlying profit, EBIT, and EBITDA[285](index=285&type=chunk)[286](index=286&type=chunk)[287](index=287&type=chunk) - Provides definitions for aviation terms such as available tonne kilometers, available seat kilometers, and revenue tonne kilometers[289](index=289&type=chunk)[290](index=290&type=chunk)[292](index=292&type=chunk) - Lists calculation formulas for financial and aviation ratios including earnings per share, net debt-to-capital ratio, and passenger/cargo load factor[294](index=294&type=chunk)[295](index=295&type=chunk) [Financial Calendar and Investor Information](index=86&type=section&id=84%20財務日誌及投資者資訊) This section outlines key dates in the 2025 financial calendar and provides essential investor contact information, including a forward-looking statement disclaimer regarding future performance 2025 Financial Calendar Key Dates | Event | Date | | :--- | :--- | | Interim Report available to shareholders | September 5 | | 'A' and 'B' shares ex-dividend trading | September 10 | | Record date for eligibility to receive 2025 first interim dividend | September 12 | | Payment of 2025 first interim dividend | October 10 | - Provides contact information for the company's registered office, share registrars, stock depositary, stock codes, investor relations, and public affairs[296](index=296&type=chunk)[297](index=297&type=chunk) - Includes a disclaimer regarding forward-looking statements, indicating that actual results may differ materially from expectations due to various factors[298](index=298&type=chunk)

[Company Profile](index=2&type=section&id=Company%20Profile) The company is the holding entity for China Resources Group's cement, concrete, and aggregates businesses, incorporated in 2003 and relisted in 2009 - The company was incorporated in the Cayman Islands on March 13, 2003, as the holding company for China Resources Group's cement, concrete, and aggregates businesses[1](index=1&type=chunk)[2](index=2&type=chunk) - Initially listed on the Hong Kong Stock Exchange on July 29, 2003, it was later privatized in 2006 and relisted on October 6, 2009[1](index=1&type=chunk)[3](index=3&type=chunk)[4](index=4&type=chunk) - The company was renamed China Resources Building Materials Technology Holdings Limited on November 3, 2023, with **China Resources Group holding approximately 68.72%** of the issued shares as of the report date[1](index=1&type=chunk)[4](index=4&type=chunk) [Corporate Information](index=4&type=section&id=Corporate%20Information) The company's board, committees, auditor, principal bankers, share registrar, and contact details are outlined [Executive and Non-executive Directors](index=4&type=section&id=Executive%20and%20Non-executive%20Directors) The Board of Directors comprises executive, non-executive, and independent non-executive members with defined key leadership roles - Executive Directors include Jing Shiqing (Chairman) and Xie Ji (President)[7](index=7&type=chunk)[8](index=8&type=chunk) - Independent Non-executive Director Gong Xiaofeng has been appointed with effect from September 1, 2025[7](index=7&type=chunk)[8](index=8&type=chunk) [Committee Composition](index=5&type=section&id=Committee%20Composition) The company has established five committees to ensure effective corporate governance - Jing Shiqing chairs the Strategy and Investment Committee, with Gong Xiaofeng appointed as a member and Zhu Ping ceasing to serve from September 1, 2025[8](index=8&type=chunk)[9](index=9&type=chunk) - The Audit Committee is chaired by Ng Kam Wah, and the Risk and Compliance Committee is chaired by Ngan Bik Lan[11](index=11&type=chunk)[12](index=12&type=chunk) [Independent Auditor and Principal Bankers](index=5&type=section&id=Independent%20Auditor%20and%20Principal%20Bankers) The company's independent auditor is KPMG, and it maintains relationships with several major banks - The independent auditor is KPMG[11](index=11&type=chunk)[12](index=12&type=chunk) - Principal bankers include Agricultural Bank of China, Bank of China, Bank of Communications, and China Construction Bank[11](index=11&type=chunk)[13](index=13&type=chunk) [Share Registrar and Contact Information](index=6&type=section&id=Share%20Registrar%20and%20Contact%20Information) This section provides details on the company's share registrar, Hong Kong headquarters, stock code, and website - The share registrar is Hong Kong Registrars Limited[14](index=14&type=chunk)[15](index=15&type=chunk) - The Hong Kong headquarters and principal place of business is located at China Resources Building, 26 Harbour Road, Wanchai, Hong Kong[14](index=14&type=chunk)[15](index=15&type=chunk) - The company's stock code on the Hong Kong Stock Exchange is 1313, and its website is www.cr-bmt.com[14](index=14&type=chunk)[15](index=15&type=chunk) [Definitions](index=7&type=section&id=Definitions) This section provides definitions for key terms and abbreviations used throughout the interim report to ensure clarity and consistency [Business Overview](index=10&type=section&id=Business%20Overview) The company is a leading producer of cement, clinker, and concrete in Southern China, focusing on infrastructure and high-rise construction projects - The company is a large-scale and competitive producer of cement, clinker, and concrete in Southern China, with operations covering limestone quarrying, production, sales, and distribution[22](index=22&type=chunk)[23](index=23&type=chunk) - Products are mainly sold in Guangdong, Guangxi, Fujian, Hainan, Yunnan, Guizhou, Shanxi, and Hunan for infrastructure projects and high-rise buildings[22](index=22&type=chunk)[23](index=23&type=chunk) Production Capacity of Self-owned Facilities as of June 30, 2025 | Province/Autonomous Region/SAR | Annual Cement Capacity (million tonnes) | Annual Clinker Capacity (million tonnes) | Annual Concrete Capacity (million cubic meters) | | :------------------- | :------------------- | :------------------- | :------------------- | | Guangdong | 27.7 | 15.5 | 16.0 | | Guangxi | 34.8 | 27.9 | 19.6 | | Fujian | 10.1 | 7.0 | 0.6 | | Hainan | 4.4 | 2.9 | 3.3 | | Yunnan | 5.1 | 4.2 | 0.6 | | Guizhou | 4.0 | 2.8 | 0.8 | | Shanxi | 2.0 | 1.5 | 0.6 | | Hunan | 2.1 | 1.5 | – | | Zhejiang | – | – | 1.1 | | Hong Kong | – | – | 1.6 | | **Total** | **90.2** | **63.3** | **44.2** | - The company's attributable annual capacity from associates and joint ventures is **22.3 million tonnes of cement**, **12.0 million tonnes of clinker**, and **3.9 million cubic meters of concrete**[27](index=27&type=chunk)[28](index=28&type=chunk) - The company emphasizes corporate social responsibility, focusing on safety, energy conservation, and carbon management, with all cement production bases equipped with waste heat recovery systems[27](index=27&type=chunk)[29](index=29&type=chunk) [Significant Events in 2025](index=12&type=section&id=Significant%20Events%20in%202025) The company successfully acquired mining rights for a limestone quarry in Guangdong, significantly increasing its resource reserves - In July 2025, the Group successfully bid for the mining rights of the first batch of cement-grade limestone quarry in Dadong Mining Area, Shiling Town, Lianjiang City, Guangdong[30](index=30&type=chunk)[31](index=31&type=chunk) - The mining area has resource reserves of approximately **10.5 million tonnes** and a planned annual production capacity of about **2.0 million tonnes**[30](index=30&type=chunk)[31](index=31&type=chunk) [Financial Highlights](index=13&type=section&id=Financial%20Highlights) This section presents key financial data for the six months ended June 30, 2025, with comparative figures from the previous two years Financial Highlights for the Six Months Ended June 30 | Indicator | 2025 (RMB million) | 2024 (RMB million) | 2023 (RMB million) | | :----------------------- | :-------------------- | :-------------------- | :-------------------- | | Revenue | 10,205.6 | 10,311.7 | 11,974.6 | | EBITDA | 2,043.6 | 1,871.6 | 2,189.3 | | Profit for the period | 171.0 | 135.2 | 529.5 | | Profit attributable to owners of the Company | 306.7 | 165.8 | 556.0 | | Basic earnings per share (RMB) | 0.044 | 0.024 | 0.080 | **Balance Sheet Highlights as of June 30:** | Indicator | 2025 (RMB million) | 2024 (RMB million) | 2023 (RMB million) | | :----------------------- | :-------------------- | :-------------------- | :-------------------- | | Total assets | 71,921.9 | 71,963.1 | 72,792.2 | | Equity attributable to owners of the Company | 44,410.9 | 44,121.2 | 44,108.5 | | Non-controlling interests | 1,445.6 | 1,575.6 | 1,638.7 | | Gearing ratio | 35.1% | 34.6% | 36.9% | | Net asset value per share (RMB) | 6.36 | 6.32 | 6.32 | - For the six months ended June 30, 2025, **revenue decreased by 1.0%** year-on-year, while **profit attributable to owners of the Company surged by 85.0%**[33](index=33&type=chunk)[36](index=36&type=chunk)[38](index=38&type=chunk) [Chairman's Statement](index=14&type=section&id=Chairman's%20Statement) The Chairman reviews the company's performance, business environment, and strategic initiatives for transformation and innovation [Interim Results](index=14&type=section&id=Interim%20Results) The company's revenue slightly decreased, but profit attributable to its owners saw a significant increase in the first half of 2025 Interim Results for H1 2025 | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :------------------- | :-------------------------- | :-------------------------- | :------- | | Revenue | 10,205.6 | 10,311.7 | -1.0% | | Profit attributable to owners of the Company | 306.7 | 165.8 | +85.0% | | Basic earnings per share (RMB) | 0.044 | 0.024 | +83.3% | [Interim Dividend](index=14&type=section&id=Interim%20Dividend) The Board declared an interim dividend of HKD0.014 per share, payable in October 2025 - The Board of Directors declared an interim dividend of **HKD0.014 per share** (2024: HKD0.02)[37](index=37&type=chunk)[39](index=39&type=chunk) - The total interim dividend amounts to approximately **HKD97.8 million** (2024: HKD139.7 million), expected to be paid on or about October 24, 2025[37](index=37&type=chunk)[39](index=39&type=chunk) - Shareholders may elect to receive the dividend in HKD or RMB, at an exchange rate of HKD1.0 to RMB0.91054[37](index=37&type=chunk)[40](index=40&type=chunk) [Closure of Register of Members](index=15&type=section&id=Closure%20of%20Register%20of%20Members) The register of members will be closed from September 15 to September 19, 2025, to determine dividend entitlement - The register of members will be closed from **September 15 to September 19, 2025**[43](index=43&type=chunk)[47](index=47&type=chunk) - To qualify for the interim dividend, all transfer documents must be lodged with the share registrar by 4:30 p.m. on September 12, 2025[43](index=43&type=chunk)[47](index=47&type=chunk) [Business Environment](index=16&type=section&id=Business%20Environment) China's economy showed stable growth in H1 2025, though the real estate market continued its adjustment phase - In H1 2025, China's **GDP grew by 5.3%** year-on-year to **RMB66.1 trillion**[48](index=48&type=chunk)[49](index=49&type=chunk) - National fixed asset investment (excluding rural households) increased by **2.8%** year-on-year to **RMB24.9 trillion**[48](index=48&type=chunk)[49](index=49&type=chunk) - Approximately **RMB2.2 trillion** of new local government special-purpose bonds were issued, a **45% increase** year-on-year[50](index=50&type=chunk) - The real estate market continued to recover, but sales area and sales value of new commodity housing **decreased by 3.5% and 5.5%** respectively, with real estate development investment **down by 11.2%**[52](index=52&type=chunk)[54](index=54&type=chunk) - The government emphasized expanding effective investment, promoting new urbanization, and renovating 17,000 old urban residential communities in H1[53](index=53&type=chunk)[55](index=55&type=chunk) [Industry](index=18&type=section&id=Industry) National cement output declined in H1 2025, with policies focusing on industry structure optimization and environmental protection - In H1 2025, national cement output **decreased by 4.3%** year-on-year to **820 million tonnes**[56](index=56&type=chunk)[58](index=58&type=chunk) Cement Production and YoY Change in Key Operating Regions for H1 2025 | Region | Cement Production (million tonnes) | YoY Change | | :----- | :---------------- | :------- | | Guangdong | 60.2 | +1.1% | | Guangxi | 42.5 | -1.7% | | Fujian | 29.1 | -2.0% | | Hainan | 6.2 | -7.7% | | Yunnan | 41.5 | -7.3% | | Guizhou | 22.6 | -5.0% | | Shanxi | 15.3 | -14.3% | | Hunan | 30.0 | -5.4% | - Three new clinker production lines were added nationwide, increasing annual capacity by about 4.9 million tonnes, but no new capacity was added in the Group's main operating regions[59](index=59&type=chunk) - Government and industry associations introduced policies to address disorderly low-price competition and promote the exit of outdated capacity[57](index=57&type=chunk)[60](index=60&type=chunk) - The Ministry of Ecology and Environment issued guidelines to strengthen hazardous waste management and enhance environmental inspections[62](index=62&type=chunk)[63](index=63&type=chunk) [Transformation and Innovation](index=20&type=section&id=Transformation%20and%20Innovation) The company integrates green and low-carbon concepts into its operations and has received multiple awards for technological innovation - The company integrates green and low-carbon concepts throughout its production and operations, advancing energy-saving and carbon-reduction technological upgrades[64](index=64&type=chunk)[66](index=66&type=chunk) - In H1, **32 mines were listed as provincial-level green mines**, and 9 mines were selected as national-level green mines[64](index=64&type=chunk)[66](index=66&type=chunk) - Three of the company's technological achievements won the "2024 Building Materials Science and Technology Award," including one first prize for technological progress[65](index=65&type=chunk)[67](index=67&type=chunk) [Strategy and Outlook](index=21&type=section&id=Strategy%20and%20Outlook) The company will focus on deepening reforms and enhancing core competitiveness while accelerating its intelligent, green, and high-end development - The Chinese government plans to implement a more proactive fiscal policy, including issuing **RMB1.3 trillion** in ultra-long-term special treasury bonds and arranging **RMB4.4 trillion** in local government special-purpose bonds[69](index=69&type=chunk)[71](index=71&type=chunk) - In real estate, the government will promote the construction of "good housing" and provide policy support in planning, land, finance, and taxation[69](index=69&type=chunk)[72](index=72&type=chunk) - The company will focus on "deepening reform and embracing innovation" to strengthen its three main businesses of cement, aggregates, and concrete[73](index=73&type=chunk)[75](index=75&type=chunk) - The company will accelerate the upgrade of traditional industries, increase R&D investment, and advance the layout of strategic emerging industries to lead digital and intelligent transformation[73](index=73&type=chunk)[75](index=75&type=chunk) [Appreciation](index=22&type=section&id=Appreciation) The Chairman extends gratitude to the directors, management, employees, and all stakeholders for their contributions and support - The Chairman thanks the directors, management team, and all employees for their contributions to the Group's high-quality development[74](index=74&type=chunk)[76](index=76&type=chunk) - The Chairman also expresses gratitude to shareholders, customers, suppliers, business partners, and other stakeholders for their continued trust and support[74](index=74&type=chunk)[76](index=76&type=chunk) [Management Discussion and Analysis](index=23&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed analysis of the company's operational and financial performance for the first half of 2025 [Production Capacity](index=23&type=section&id=Production%20Capacity) The company's production capacity remained stable in H1 2025, with varying utilisation rates across its product segments [Changes in Production Bases](index=23&type=section&id=Changes%20in%20Production%20Bases) The Group's production capacity for clinker, cement, aggregates, and concrete remained unchanged during the first half of 2025 - During the period, there were **no changes** in the Group's production capacity for clinker, cement, aggregates, and concrete[79](index=79&type=chunk)[82](index=82&type=chunk) [Capacity Utilisation](index=23&type=section&id=Capacity%20Utilisation) In H1 2025, the utilisation rate for cement production lines was 56.8%, concrete was 32.0%, and aggregates was 80.2% Capacity Utilisation Rate for H1 2025 | Product | H1 2025 | H1 2024 | | :----- | :----------- | :----------- | | Cement | 56.8% | 64.2% | | Concrete | 32.0% | 27.1% | | Aggregates | 80.2% | 75.1% | [Cost Management](index=23&type=section&id=Cost%20Management) The company achieved significant cost reductions in H1 2025 through optimized procurement, equipment upgrades, and refined operational management [Operational Management](index=23&type=section&id=Operational%20Management) The company deepened its full value chain cost reduction initiatives, significantly lowering clinker costs through various operational enhancements - In H1 2025, the Group deepened its full value chain cost reduction initiatives for cement, achieving a **significant decrease in clinker costs**[81](index=81&type=chunk)[84](index=84&type=chunk) - Optimized coal procurement management and an integrated logistics model led to a **substantial reduction in coal usage and procurement costs**[81](index=81&type=chunk)[84](index=84&type=chunk) - **16 production lines**, accounting for 44% of output, met the benchmark level of the national energy consumption standard GB16780[81](index=81&type=chunk)[85](index=85&type=chunk) - Quarry operations were enhanced through long-term planning and the adoption of new energy mining trucks to replace traditional diesel ones[86](index=86&type=chunk)[87](index=87&type=chunk) - The aggregates business adopted a "full production, full sales" philosophy, focusing on major projects and strengthening cost control across the entire process[91](index=91&type=chunk) - The artificial stone business achieved cost savings through centralized procurement, raw material substitution, and formula optimization[89](index=89&type=chunk)[92](index=92&type=chunk) [Procurement Management](index=25&type=section&id=Procurement%20Management) The company effectively reduced procurement costs for coal, admixtures, and aggregates through strategic sourcing and negotiation - In H1 2025, total coal procurement was approximately **3.0 million tonnes** (H1 2024: approx 3.6 million tonnes)[94](index=94&type=chunk)[96](index=96&type=chunk) - The average coal procurement price was approximately **RMB681 per tonne**, a **17.8% decrease** from RMB828 in the same period of 2024[94](index=94&type=chunk)[97](index=97&type=chunk) - Future plans include deepening strategic cooperation with major domestic coal enterprises and leveraging the "integrated logistics" advantage to reduce costs[94](index=94&type=chunk)[97](index=97&type=chunk) - Admixture procurement costs were reduced by broadening channels, direct sourcing, regional centralized purchasing, and price negotiations[95](index=95&type=chunk)[98](index=98&type=chunk) - Aggregates procurement was optimized through enhanced internal synergy, benchmarking, dynamic price management, and improved procurement strategies[99](index=99&type=chunk)[100](index=100&type=chunk) [Logistics Management](index=26&type=section&id=Logistics%20Management) The company achieved an overall reduction in logistics costs in H1 2025 through optimized shipping, road transport, and its extensive logistics network - In H1 2025, the Group's logistics costs showed an overall downward trend due to a series of measures[102](index=102&type=chunk) - Shipping costs were reduced by exploring lower freight rates, optimizing tender schemes, and improving vessel type matching[100](index=100&type=chunk)[102](index=102&type=chunk) - Road transport efficiency was improved by promoting two-way logistics for raw materials and exploring new energy electric vehicle business[100](index=100&type=chunk)[102](index=102&type=chunk) - The Group's annual transport capacity in the Xijiang River Basin is approximately **47 million tonnes**, and it controls 30 transit depots with an annual transit capacity of **31 million tonnes**[101](index=101&type=chunk)[102](index=102&type=chunk) [Marketing](index=27&type=section&id=Marketing) The company focused on promoting specialty products and strengthening its "Runfeng" and "Runpin" brands to build a competitive edge [Product Promotion](index=27&type=section&id=Product%20Promotion) The company continued to promote specialty products like nuclear power cement to establish a differentiated competitive advantage - In H1 2025, the Group continued to focus on promoting specialty products such as nuclear power cement and road silicate cement to build a differentiated competitive advantage[104](index=104&type=chunk)[106](index=106&type=chunk) - Specialty products were used in key projects of the Sichuan-Tibet Railway and six plateau hydropower station projects[104](index=104&type=chunk)[106](index=106&type=chunk) [Brand Building](index=27&type=section&id=Brand%20Building) The company enhanced its "Runfeng" and "Runpin" brand influence through strategic updates and customer engagement activities - In H1 2025, the Group comprehensively deepened the brand building of "Runfeng" and "Runpin," releasing the "Runfeng Brand Optimization Strategy" to enhance brand influence[105](index=105&type=chunk)[107](index=107&type=chunk) - The "Runpin" brand construction was continuously deepened through its network of flagship stores and showrooms[105](index=105&type=chunk)[107](index=107&type=chunk) - On June 28, 2025, the Group held its ninth consecutive brand anniversary event to boost customer confidence[105](index=105&type=chunk)[107](index=107&type=chunk) [Transformation and Innovation](index=28&type=section&id=Transformation%20and%20Innovation) The company advanced its new business development, digital transformation, and R&D initiatives to optimize its business structure and foster innovation [New Business Development](index=28&type=section&id=New%20Business%20Development) The company actively promoted new business development in H1 2025, enhancing synergies and increasing the revenue share of new segments - In H1 2025, the Group actively promoted new business development, leveraging the integrated synergies of cement, aggregates, and concrete[108](index=108&type=chunk)[110](index=110&type=chunk) - The business structure was continuously optimized by accelerating the construction and operation of aggregates projects, leading to an increased share of new business assets and revenue[108](index=108&type=chunk)[110](index=110&type=chunk) [Aggregates](index=28&type=section&id=Aggregates) No new aggregate projects were commissioned in H1 2025, with total operational capacity remaining stable - In H1 2025, the Group had **no new aggregate projects** commissioned[111](index=111&type=chunk) - As of June 30, 2025, the Group's operational annual aggregates capacity through subsidiaries was approximately **108.6 million tonnes**, with an attributable capacity from associates of about **3.7 million tonnes**[112](index=112&type=chunk) - Upon full completion, the total annual capacity is expected to reach **134.8 million tonnes** (subsidiaries) and **13.6 million tonnes** (attributable from associates and joint ventures)[112](index=112&type=chunk) [Functional Building Materials](index=29&type=section&id=Functional%20Building%20Materials) The company's artificial stone business faced market challenges due to economic downturn, leading to low capacity utilisation and increased operational pressure - In H1 2025, the Group completed its national layout for artificial stone, with an annual production capacity of approximately **26.1 million square meters**[114](index=114&type=chunk)[116](index=116&type=chunk) - Due to the macroeconomic downturn and sluggish real estate market, the artificial stone business faced **declining demand, falling prices, and intensified competition**, resulting in low capacity utilisation[114](index=114&type=chunk)[117](index=117&type=chunk) - The Group is deepening cost reduction efforts, reshaping its sales system, and exploring new customer channels for the artificial stone business[114](index=114&type=chunk)[117](index=117&type=chunk) [Digital Transformation](index=29&type=section&id=Digital%20Transformation) As a digital benchmark enterprise, the company advanced smart factory construction and explored AI applications to upgrade traditional industries - As a digital and intelligent benchmark enterprise of China Resources Group, the company continues to promote digital and intelligent construction[115](index=115&type=chunk)[118](index=118&type=chunk) - In smart factories, the company increased the digitalization rate of key processes and promoted advanced control and intelligent operation applications[119](index=119&type=chunk) - The company is actively exploring AI applications, piloting AI control for alternative fuels and AI-based aggregate particle size detection[120](index=120&type=chunk)[121](index=121&type=chunk) - A localized deployment of the **DeepSeek large model** was achieved to build a knowledge base for new concrete product R&D[120](index=120&type=chunk)[121](index=121&type=chunk) - The Fengkai, Hepu, and Luoding cement bases were rated as **national advanced-level smart factories**[122](index=122&type=chunk)[124](index=124&type=chunk) [Smart Logistics](index=30&type=section&id=Smart%20Logistics) The company enhanced logistics efficiency and safety by piloting a new dispatch system and upgrading its one-code pass system at multiple sites - A pilot project for the Fengkai terminal dispatch system was launched to improve operational efficiency and reduce safety risks[123](index=123&type=chunk)[125](index=125&type=chunk) - The one-code pass system was expanded to three more weighbridges at the Runsheng aggregates mine and upgraded at four cement bases[123](index=123&type=chunk)[125](index=125&type=chunk) [Smart Marketing](index=31&type=section&id=Smart%20Marketing) The company's e-commerce platform continued its steady development in logistics distribution and supply chain finance - In H1 2025, the Group's e-commerce platform saw steady development in logistics distribution and supply chain finance businesses[127](index=127&type=chunk)[129](index=129&type=chunk) E-commerce Platform Data as of June 30, 2025 | Indicator | Data | | :--------------- | :--------- | | Cumulative shipment volume | 330 million tonnes | | Cumulative registered users | 49,000 | | Cumulative registered carriers | 592 | | Cumulative registered vehicles/vessels | 117,000 | | Cumulative delivery volume | 713,000 tonnes | [R&D and Innovation](index=31&type=section&id=R&D%20and%20Innovation) The company maintained a strong focus on R&D, with 525 technology professionals driving innovation in new products and AI applications - As of June 30, 2025, the Group had **525 technology professionals**, including 104 full-time R&D personnel[130](index=130&type=chunk) - The company actively promoted R&D of new products and technologies, improving the rotary furnace technology and building a demonstration plant for alternative fuels[131](index=131&type=chunk) - Continuous technological upgrades were carried out for quartz powder modifiers and resin-reducing additives to reduce costs and improve the quality of artificial stone products[131](index=131&type=chunk) - The company embraced AI technology, conducting research on AI-based inspection, grinding system optimization, and intelligent clinker quality analysis[131](index=131&type=chunk) - External cooperation was strengthened through participation in national key laboratories and a strategic agreement with the University of Jinan, winning three industry association awards[132](index=132&type=chunk)[133](index=133&type=chunk) - As of June 30, 2025, the company held **393 valid patents**, including 109 invention patents[132](index=132&type=chunk)[133](index=133&type=chunk) [Employees](index=33&type=section&id=Employees) The company employed 16,837 full-time staff as of June 30, 2025, with a total employee cost of approximately RMB1.36 billion for the first half of the year [General Information](index=33&type=section&id=General%20Information) As of June 30, 2025, the Group employed 16,837 full-time staff, primarily in Mainland China - As of June 30, 2025, the Group employed **16,837 full-time employees**, with 378 in Hong Kong and 16,459 in Mainland China[135](index=135&type=chunk) Employee Distribution by Function | Function | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :------------- | | Management | 490 | 498 | | Finance, Admin & Others | 2,287 | 2,323 | | Production | 8,990 | 9,216 | | Technical | 4,237 | 4,220 | | Marketing | 833 | 773 | | **Total** | **16,837** | **17,030** | - Total employee costs for H1 (including directors' remuneration) were approximately **RMB1,356,471,000** (H1 2024: RMB1,284,462,000)[137](index=137&type=chunk)[139](index=139&type=chunk) - The Group is committed to its "3+1" talent development framework, progressively implementing specialized talent training programs[137](index=137&type=chunk)[140](index=140&type=chunk) [Business Review](index=34&type=section&id=Business%20Review) This section reviews the company's business performance in H1 2025, analyzing revenue, cost of sales, gross profit, and other key financial metrics [Revenue](index=34&type=section&id=Revenue) Consolidated revenue for H1 2025 was RMB10.21 billion, a slight decrease of 1.0% year-on-year Segment Revenue Analysis for the Six Months Ended June 30 | Product | 2025 Sales Volume ('000 tonnes/cubic meters) | 2025 Avg. Selling Price (RMB/tonne/cubic meter) | 2025 Revenue (RMB'000) | 2024 Sales Volume ('000 tonnes/cubic meters) | 2024 Avg. Selling Price (RMB/tonne/cubic meter) | 2024 Revenue (RMB'000) | | :--------- | :----------------------- | :---------------------------------- | :------------------------ | :----------------------- | :---------------------------------- | :------------------------ | | Cement Products | 25,309 | 246.9 | 6,248,989 | 28,963 | 237.9 | 6,891,141 | | Concrete | 6,877 | 302.7 | 2,081,335 | 5,057 | 343.5 | 1,736,957 | | Aggregates | 36,336 | 36.2 | 1,315,625 | 29,497 | 36.8 | 1,086,961 | | Others | | | 559,635 | | | 596,658 | | **Total** | | | **10,205,584** | | | **10,311,717** | - External sales volume of cement products **decreased by 12.6%**, while concrete sales volume **increased by 36.0%** and aggregates sales volume **increased by 23.2%**[143](index=143&type=chunk)[144](index=144&type=chunk) - The average selling price of cement products **increased by 3.8%** to RMB246.9 per tonne, while concrete **decreased by 11.9%** to RMB302.7 per cubic meter, and aggregates **decreased by 1.6%** to RMB36.2 per tonne[147](index=147&type=chunk)[150](index=150&type=chunk) [Cost of Sales](index=35&type=section&id=Cost%20of%20Sales) The cost of sales for cement products was driven by coal and electricity costs, with a significant decrease in coal procurement prices - For cement products, the cost of sales was composed of **37.1% coal**, **13.5% electricity**, 17.4% materials, and 32.0% other costs (H1 2024: 40.5%, 13.7%, 17.5%, and 28.3% respectively)[151](index=151&type=chunk) - The average procurement price of coal was approximately **RMB681 per tonne**, a **17.8% decrease** from RMB828 in the same period of 2024[152](index=152&type=chunk) - Unit coal consumption for clinker production decreased from 129.9 kg to 129.0 kg per tonne, with the average coal cost **decreasing by 18.4%** to RMB87.7 per tonne[152](index=152&type=chunk) - The average electricity cost per tonne of cement **decreased by 6.3%** to RMB27.0[153](index=153&type=chunk) - Waste heat recovery systems generated **631.5 million kWh**, a 7.4% decrease year-on-year, resulting in cost savings of approximately **RMB267.9 million**[153](index=153&type=chunk) - Repair and maintenance costs included in the cost of sales for cement products amounted to **RMB242.8 million**, an **increase of 16.1%** compared to H1 2024[154](index=154&type=chunk)[158](index=158&type=chunk) [Gross Profit and Gross Profit Margin](index=36&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Consolidated gross profit and gross profit margin both increased in H1 2025, driven by higher cement prices and lower costs - Consolidated gross profit was **RMB1,887,200,000**, an **increase of 22.2%** compared to the same period in 2024[155](index=155&type=chunk)[159](index=159&type=chunk) - The consolidated gross profit margin was **18.5%**, an **increase of 3.5 percentage points** from the same period in 2024[155](index=155&type=chunk)[159](index=159&type=chunk) - The gross profit margins for cement products, concrete, and aggregates were **20.1%**, **14.0%**, and **25.3%** respectively (H1 2024: 12.1%, 12.6%, and 39.4%)[155](index=155&type=chunk)[159](index=159&type=chunk) [Other Income](index=36&type=section&id=Other%20Income) Other income for H1 2025 amounted to RMB132.6 million, a decrease of 5.4% from the prior year period - Other income for the period was **RMB132,600,000**, a **decrease of 5.4%** from RMB140,200,000 in the same period of 2024[156](index=156&type=chunk)[160](index=160&type=chunk) [Selling and Distribution Expenses](index=36&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by 8.9% in H1 2025 and represented 1.9% of consolidated revenue - Selling and distribution expenses for the period were **RMB189,500,000**, a **decrease of 8.9%** from RMB208,100,000 in the same period of 2024[157](index=157&type=chunk)[161](index=161&type=chunk) - These expenses as a percentage of consolidated revenue **decreased to 1.9%** from 2.0% in the same period of 2024[157](index=157&type=chunk)[161](index=161&type=chunk) [General and Administrative Expenses](index=37&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses rose by 32.4% in H1 2025, primarily due to an impairment loss on property, plant and equipment - General and administrative expenses for the period were **RMB1,250,500,000**, an **increase of 32.4%** from RMB944,400,000 in the same period of 2024[163](index=163&type=chunk)[168](index=168&type=chunk) - An impairment loss on property, plant and equipment of **RMB112,200,000** (H1 2024: nil) was included in these expenses[163](index=163&type=chunk)[168](index=168&type=chunk) - These expenses as a percentage of consolidated revenue **increased to 12.3%** from 9.2% in the same period of 2024[163](index=163&type=chunk)[168](index=168&type=chunk) [Share of Results of Associates](index=37&type=section&id=Share%20of%20Results%20of%20Associates) The Group's share of losses from associates narrowed in H1 2025 compared to the previous year - The Group's share of results of associates for the period was a **loss of RMB41,900,000** (H1 2024: loss of RMB65,200,000)[164](index=164&type=chunk)[169](index=169&type=chunk) [Share of Results of Joint Ventures](index=37&type=section&id=Share%20of%20Results%20of%20Joint%20Ventures) The Group's share of profits from joint ventures slightly decreased in H1 2025 - The Group's share of results of joint ventures for the period was a **profit of RMB21,200,000** (H1 2024: profit of RMB24,100,000)[165](index=165&type=chunk)[170](index=170&type=chunk) [Taxation](index=37&type=section&id=Taxation) The Group's effective tax rate for H1 2025 was 48.4%, an increase from 43.2% in the same period of 2024 - The Group's effective tax rate for the period was **48.4%**, compared to 43.2% in the same period of 2024[166](index=166&type=chunk)[171](index=171&type=chunk) - Excluding certain impacts, the effective tax rate was **44.2%** (H1 2024: 36.0%)[166](index=166&type=chunk)[171](index=171&type=chunk) [Net Profit Margin](index=37&type=section&id=Net%20Profit%20Margin) The Group's net profit margin improved to 1.7% in H1 2025 from 1.3% in the prior year period - The Group's net profit margin for the period was **1.7%**, an increase of 0.4 percentage points from 1.3% in the same period last year[167](index=167&type=chunk)[172](index=172&type=chunk) [Liquidity and Financial Resources](index=38&type=section&id=Liquidity%20and%20Financial%20Resources) The company's funding is sourced from internal funds, bank loans, and other financing activities, maintaining sufficient financial resources - The Group's funding sources mainly include internal funds, bank loans, medium term notes, loans from related parties, issuance of equity securities, and cash flows from operations[173](index=173&type=chunk) Cash and Bank Balances (RMB'000) | Currency | June 30, 2025 | December 31, 2024 | | :--- | :------------ | :------------- | | HKD | 151,665 | 85,793 | | RMB | 3,141,999 | 2,632,989 | | USD | 127 | 181 | Bank and Other Borrowings (RMB'000) | Category | June 30, 2025 | December 31, 2024 | | :----------- | :------------ | :------------- | | Bank loans | 14,405,826 | 14,067,712 | | Medium term notes | 1,000,000 | 1,000,000 | | Loans from related parties | 199,132 | 194,182 | | **Total** | **15,604,958**| **15,261,894** | Repayment Schedule of Borrowings (RMB'000) | Repayment Period | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :------------- | | Within one year | 5,470,863 | 7,162,187 | | After one year but within two years | 1,960,180 | 1,375,920 | | After two years but within three years | 3,210,344 | 2,142,742 | | After three years but within four years | 1,048,615 | 954,646 | | After four years but within five years | 1,730,237 | 1,180,368 | | After five years | 2,184,719 | 2,446,031 | - As of June 30, 2025, the Group had banking facilities of **HKD2.3 billion** and **RMB39.9944 billion**, of which **RMB27.6861 billion** was unutilised[181](index=181&type=chunk)[183](index=183&type=chunk) - The Group complied with financial covenants in its bank loan agreements, including maintaining China Resources (Holdings) Company Limited's shareholding at no less than 35% and a net gearing ratio not exceeding 180%[181](index=181&type=chunk)[184](index=184&type=chunk) - On April 22, 2024, the Company completed the issuance of the first tranche of medium term notes of **RMB1 billion** with a coupon rate of 2.44% and a term of three years[182](index=182&type=chunk)[185](index=185&type=chunk) - As of June 30, 2025, the Group had **net current liabilities of RMB5.8484 billion**[191](index=191&type=chunk) - As of June 30, 2025, debts denominated in non-RMB currencies accounted for **13%** of the Group's total debt (December 31, 2024: 14%)[190](index=190&type=chunk) [Pledge of Assets](index=42&type=section&id=Pledge%20of%20Assets) Certain assets of the company's subsidiaries with a total carrying value of RMB129.6 million were pledged to secure banking facilities - As of June 30, 2025, certain assets of the Company's subsidiaries with a total carrying value of **RMB129,600,000** (December 31, 2024: nil) were pledged to banks[192](index=192&type=chunk)[195](index=195&type=chunk) [Contingent Liabilities](index=42&type=section&id=Contingent%20Liabilities) The Group has provided guarantees to banks for credit facilities granted to its associates and joint ventures - As of June 30, 2025, the Group had provided guarantees to banks for credit facilities granted to associates and joint ventures amounting to **RMB1,704,000,000**[193](index=193&type=chunk)[196](index=196&type=chunk) - Of this amount, **RMB1,497,700,000** had been utilised[193](index=193&type=chunk)[196](index=196&type=chunk) [Future Plans and Capital Expenditure](index=42&type=section&id=Future%20Plans%20and%20Capital%20Expenditure) The Group has outstanding capital expenditure of approximately RMB3.20 billion for its expansion plans - As of June 30, 2025, the Group's outstanding capital expenditure for its expansion plans was approximately **RMB3,204,000,000**[194](index=194&type=chunk)[197](index=197&type=chunk) - The total capital expenditure payment for the second half of 2025 is expected to be approximately **RMB2,118,500,000**, to be funded by borrowings and internal resources[194](index=194&type=chunk)[197](index=197&type=chunk) [Other Information](index=43&type=section&id=Other%20Information) This section covers corporate governance compliance, changes in directors' information, and interests of directors and substantial shareholders [Model Code](index=43&type=section&id=Model%20Code) The company has adopted a code of conduct for securities transactions by directors that is no less exacting than the required standard - The Board has adopted a code of conduct with terms no less exacting than the required standards set out in the Model Code[199](index=199&type=chunk)[202](index=202&type=chunk) - All directors have confirmed their compliance with the required standards regarding their securities transactions during the period[199](index=199&type=chunk)[202](index=202&type=chunk) [Corporate Governance](index=43&type=section&id=Corporate%20Governance) The company complied with the Corporate Governance Code, with a temporary deviation regarding the roles of Chairman and CEO - During the period, the Company complied with the applicable code provisions of the Corporate Governance Code, except for the period from January 1 to January 5, 2025, when the roles of Chairman and CEO were held by the same individual[200](index=200&type=chunk)[203](index=203&type=chunk) - Effective January 6, 2025, Mr Jing Shiqing was appointed Chairman and ceased to be President, and Mr Xie Ji was appointed President and Executive Director, bringing the company into compliance with code provision C.2.1[200](index=200&type=chunk)[203](index=203&type=chunk) [Changes in Directors' Information](index=43&type=section&id=Changes%20in%20Directors'%20Information) This section details changes in directors' information since the publication of the 2024 annual report - Effective May 14, 2025, Mr Jing Shiqing was elected as the Vice President of the 9th Council of the China Cement Association[201](index=201&type=chunk)[204](index=204&type=chunk) - Effective June 6, 2025, Mr Shih Lai Him was appointed as a non-executive director and chairman of Jingye Management and Holdings Group Limited[205](index=205&type=chunk)[207](index=207&type=chunk) - Effective September 1, 2025, Mr Gong Xiaofeng was appointed as an independent non-executive director and a member of the Company's Strategy and Investment Committee[206](index=206&type=chunk)[209](index=209&type=chunk) [Directors' and Chief Executive's Interests in Securities](index=44&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20in%20Securities) As of June 30, 2025, certain directors held interests in the shares of the company's associated corporations Directors' Interests in China Resources Beer (Holdings) Company Limited (as of June 30, 2025) | Name of Director | Capacity | Number of ordinary shares held | Percentage of total issued shares (%) | | :------- | :------- | :--------------- | :------------------------- | | Yu Shutian | Beneficial owner | 6,000 | 0.01 | Directors' Interests in China Resources Pharmaceutical Group Limited (as of June 30, 2025) | Name of Director | Capacity | Number of ordinary shares held | Percentage of total issued shares (%) | | :------- | :------- | :--------------- | :------------------------- | | Zhu Ping | Beneficial owner | 350,000 | 0.01 | Directors' Interests in China Resources Medical Holdings Company Limited (as of June 30, 2025) | Name of Director | Capacity | Number of ordinary shares held | Percentage of total issued shares (%) | | :------- | :------- | :--------------- | :------------------------- | | Tang Yunghui | Interest of spouse | 150,000 | 0.01 | - Save as disclosed above, as of June 30, 2025, none of the directors or the chief executive of the Company or their respective associates had any interests or short positions in the shares, underlying shares, and debentures of the Company that were required to be notified to the Company and the Stock Exchange pursuant to Part XV of the SFO[217](index=217&type=chunk)[218](index=218&type=chunk) [Substantial Shareholders' Interests](index=47&type=section&id=Substantial%20Shareholders'%20Interests) As of June 30, 2025, China Resources Company Limited and its related entities were the substantial shareholders, holding approximately 68.72% of the company's shares Substantial Shareholders' Interests (as of June 30, 2025) | Name of person having an interest | Long/Short Position | Number of shares | Approximate percentage of shareholding (%) | | :----------------------- | :-------- | :------------- | :----------------- | | China Resources Company Limited | Long | 4,798,453,749 | 68.72 | | China Resources Co., Limited | Long | 4,798,453,749 | 68.72 | | CRC Bluesky Limited | Long | 4,798,453,749 | 68.72 | | China Resources (Holdings) | Long | 4,798,453,749 | 68.72 | | China Resources Group (Cement) Co., Limited | Long | 4,792,189,749 | 68.63 | - China Resources Company Limited and its related entities are the substantial shareholders of the Company, collectively holding approximately **68.72%** of the issued shares[221](index=221&type=chunk)[223](index=223&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=48&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) Neither the company nor its subsidiaries engaged in any purchase, sale, or redemption of the company's listed securities during H1 2025 - Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities during the period[225](index=225&type=chunk)[229](index=229&type=chunk) - As of June 30, 2025, the Company did not hold any treasury shares[226](index=226&type=chunk)[230](index=230&type=chunk) [Review of Interim Report](index=48&type=section&id=Review%20of%20Interim%20Report) The company's interim report for the first half of 2025 has been reviewed by the Audit Committee - The Company's interim report for the period, which includes the unaudited condensed consolidated financial statements, has been reviewed by the Company's Audit Committee[227](index=227&type=chunk)[231](index=231&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=49&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This statement presents the company's unaudited financial performance for the six months ended June 30, 2025 Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :----------------------- | :------------------ | :------------------ | | Revenue | 10,205,584 | 10,311,717 | | Cost of sales | (8,318,370) | (8,766,922) | | Gross profit | 1,887,214 | 1,544,795 | | Other income | 132,577 | 140,192 | | Selling and distribution expenses | (189,479) | (208,079) | | General and administrative expenses | (1,250,450) | (944,363) | | Exchange gain | 1,421 | 2,821 | | Finance costs | (229,041) | (256,431) | | Share of results of associates | (41,912) | (65,159) | | Share of results of joint ventures | 21,208 | 24,111 | | Profit before taxation | 331,538 | 237,887 | | Taxation | (160,568) | (102,667) | | **Profit for the period** | **170,970** | **135,220** | | Other comprehensive income (expense) | 45,823 | (25,170) | | **Total comprehensive income for the period** | **216,793** | **110,050** | | Profit for the period attributable to owners of the Company | 306,653 | 165,764 | | Profit for the period attributable to non-controlling interests | (135,683) | (30,544) | | Basic earnings per share (RMB) | 0.044 | 0.024 | [Condensed Consolidated Statement of Financial Position](index=50&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the company's unaudited financial position as of June 30, 2025 Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :----------------------- | :------------------------- | :-------------------------- | | **Non-current assets** | | | | Property, plant and equipment | 30,532,059 | 31,153,445 | | Right-of-use assets | 5,160,377 | 5,180,396 | | Intangible assets | 18,045,047 | 18,351,715 | | Interests in associates | 5,192,685 | 5,296,366 | | Interests in joint ventures | 1,760,093 | 1,738,709 | | **Current assets** | | | | Inventories | 2,154,503 | 1,762,724 | | Trade receivables | 2,192,469 | 1,968,351 | | Cash and bank balances | 2,781,776 | 2,235,178 | | **Current liabilities** | | | | Trade payables | 2,882,400 | 3,260,380 | | Other payables | 5,494,945 | 5,561,035 | | Bank loans — due within one year | 5,271,731 | 6,968,005 | | **Net current liabilities** | **(5,848,407)** | **(9,081,355)** | | **Non-current liabilities** | | | | Bank loans — due after one year | 9,134,095 | 7,099,707 | | Medium term notes | 1,000,000 | 1,000,000 | | **Equity attributable to owners of the Company** | **44,410,927** | **44,121,216** | | **Total equity** | **45,856,500** | **45,696,840** | [Condensed Consolidated Statement of Cash Flows](index=52&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement presents the company's unaudited cash flows for the six months ended June 30, 2025 Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Activity Category | 2025 (RMB'000) | 2024 (RMB'000) | | :----------------------- | :------------------ | :------------------ | | Net cash generated from (used in) operating activities | 751,822 | (996,765) | | Net cash used in investing activities | (548,621) | (1,298,169) | | Net cash generated from financing activities | 345,105 | 805,856 | | Net increase (decrease) in cash and cash equivalents during the period | 548,306 | (1,489,078) | | Cash and cash equivalents at the beginning of the period | 2,235,178 | 2,603,664 | | Effect of exchange rate changes on cash and bank balances | (1,708) | 1,011 | | **Cash and cash equivalents at the end of the period** | **2,781,776** | **1,115,597** | [Condensed Consolidated Statement of Changes in Equity](index=54&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement shows the unaudited changes in the company's equity for the six months ended June 30, 2025 Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | June 30, 2025 (RMB'000) | June 30, 2024 (RMB'000) | | :----------------------- | :------------------------- | :------------------------- | | At the beginning of the period (audited) | 45,696,840 | 45,747,169 | | Total comprehensive income (expense) for the period | 216,793 | 110,050 | | 2024 final dividend | (63,993) | (38,147) | | Capital contribution from non-controlling shareholders | 6,860 | 13,321 | | Dividend paid to non-controlling shareholders | – | (2,191) | | **At the end of the period (unaudited)** | **45,856,500** | **45,830,202** | [Notes to the Condensed Consolidated Financial Statements](index=56&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining the basis of preparation, accounting policies, and key figures in the financial statements [Basis of Preparation](index=56&type=section&id=Basis%20of%20Preparation) The financial statements have been prepared in accordance with HKAS 34 "Interim Financial Reporting" - The condensed consolidated financial statements have been prepared in accordance with the applicable disclosure requirements of Appendix D2 to the Listing Rules and with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[243](index=243&type=chunk)[245](index=245&type=chunk) [Principal Accounting Policies](index=56&type=section&id=Principal%20Accounting%20Policies) The accounting policies adopted are consistent with the 2024 annual financial statements, with no material impact from new standards - The condensed consolidated financial statements have been prepared on the historical cost basis, except for equity investments measured at fair value through other comprehensive income and certain trade receivables which are measured at fair value[246](index=246&type=chunk) - The accounting policies adopted in the preparation of the condensed consolidated financial statements are consistent with those used in the annual consolidated financial statements for the year ended December 31, 2024, except for the adoption of amended standards effective from January 1, 2025[247](index=247&type=chunk) - The application of the amendments to HKFRSs in the current period has not had a material impact on the amounts reported and/or disclosures set out in these condensed consolidated financial statements[250](index=250&type=chunk)[252](index=252&type=chunk) [Segment Information](index=57&type=section&id=Segment%20Information) The Group's operating and reportable segments are cement, concrete, and aggregates and others - The Group's operating and reportable segments are: cement, concrete, and aggregates and others[254](index=254&type=chunk) Segment Results (For the six months ended June 30, 2025) | Indicator | Cement (RMB'000) | Concrete (RMB'000) | Aggregates and others (RMB'000) | Elimination (RMB'000) | Total (RMB'000) | | :------------- | :---------------- | :------------------ | :---------------------- | :---------------- | :---------------- | | External sales | 6,248,989 | 2,081,335 | 1,875,260 | – | 10,205,584 | | Inter-segment sales | 373,475 | 1,851 | 312,763 | (688,089) | – | | **Segment results** | **546,125** | **157,021** | **99,521** | **–** | **802,667** | Segment Results (For the six months ended June 30, 2024) | Indicator | Cement (RMB'000) | Concrete (RMB'000) | Aggregates and others (RMB'000) | Elimination (RMB'000) | Total (RMB'000) | | :------------- | :---------------- | :------------------ | :---------------------- | :---------------- | :---------------- | | External sales | 6,891,141 | 1,736,957 | 1,683,619 | – | 10,311,717 | | Inter-segment sales | 267,633 | 979 | 195,844 | (464,456) | – | | **Segment results** | **254,495** | **75,076** | **329,217** | **–** | **658,788** | [Finance Costs](index=60&type=section&id=Finance%20Costs) Total finance costs for H1 2025 decreased to RMB245.1 million from RMB287.7 million in the prior year period Details of Finance Costs (For the six months ended June 30) | Item | 2025 (RMB'000) | 2024 (RMB'000) | | :------------------- | :------------------ | :------------------ | | Interest on bank loans and medium term notes | 200,018 | 240,119 | | Interest on loans from non-controlling shareholders | 3,272 | 2,646 | | Provision for environmental restoration | 13,795 | 15,149 | | Payables for acquisition of assets | 25,355 | 23,835 | | Lease liabilities | 2,701 | 5,960 | | **Total** | **245,141** | **287,709** | | Less: Amount capitalised in property, plant and equipment | (16,100) | (31,278) | | **Net Finance Costs** | **229,041** | **256,431** | [Profit Before Taxation](index=61&type=section&id=Profit%20Before%20Taxation) Profit before taxation for H1 2025 was RMB331.5 million, with key deductions including staff costs and depreciation Major Items Deducted (Credited) in Profit Before Taxation (For the six months ended June 30) | Item | 2025 (RMB'000) | 2024 (RMB'000) | | :----------------------- | :------------------ | :------------------ | | Total staff costs | 1,356,471 | 1,284,462 | | Impairment loss on trade receivables | 17,075 | 37,223 | | Amortisation of mining rights | 306,454 | 226,828 | | Depreciation of property, plant and equipment | 1,035,720 | 990,155 | | Depreciation of right-of-use assets | 120,108 | 119,213 | | Impairment of property, plant and equipment | 112,199 | – | | Short-term lease payments | 14,699 | 13,487 | | Variable lease payments — motor vehicles | 162,389 | 173,578 | | Interest income | (13,423) | (19,508) | [Taxation](index=62&type=section&id=Taxation) Total taxation for H1 2025 was RMB160.6 million, an increase from RMB102.7 million in the same period of 2024 Details of Taxation (For the six months ended June 30) | Item | 2025 (RMB'000) | 2024 (RMB'000) | | :--------------- | :------------------ | :------------------ | | Current tax | | | | Hong Kong Profits Tax | 11,923 | 13,658 | | Mainland China Enterprise Income Tax | 191,565 | 247,408 | | **Subtotal** | **203,488** | **261,066** | | Deferred tax | | | | Hong Kong | (1,490) | (974) | | Mainland China | (41,430) | (157,425) | | **Subtotal** | **(42,920)** | **(158,399)** | | **Total Taxation** | **160,568** | **102,667** | - Hong Kong Profits Tax is calculated at 16.5%, Mainland China Enterprise Income Tax at 25%, including a 5% withholding tax on dividends and deferred tax on expected distributable profits[269](index=269&type=chunk)[270](index=270&type=chunk) [Earnings Per Share](index=63&type=section&id=Earnings%20Per%20Share) Basic earnings per share for H1 2025 was RMB0.044, up from RMB0.024 in the prior year period Calculation of Basic Earnings Per Share (For the six months ended June 30) | Item | 2025 (RMB'000) | 2024 (RMB'000) | | :----------------------- | :------------------ | :------------------ | | Profit attributable to owners of the Company | 306,653 | 165,764 | | Weighted average number of shares | 6,982,937,817 | 6,982,937,817 | | **Basic earnings per share (RMB)** | **0.044** | **0.024** | - No diluted earnings per share is presented as the Company had no potential ordinary shares outstanding[274](index=274&type=chunk) [Dividends](index=64&type=section&id=Dividends) The Board proposed a final dividend for 2024 and declared an interim dividend for 2025 - The directors proposed a final dividend of HKD0.01 per share for the year ended December 31, 2024, which was approved by shareholders on May 30, 2025 and paid on July 23, 2025[275](index=275&type=chunk)[277](index=277&type=chunk) - On August 15, 2025, the directors declared an interim dividend of **HKD0.014 per share** for the year ending December 31, 2025 (2024: HKD0.02)[275](index=275&type=chunk)[278](index=278&type=chunk) - The total declared interim dividend of approximately **HKD97,761,000** has not been recognised as a liability in the condensed consolidated statement of financial position[275](index=275&type=chunk)[278](index=278&type=chunk) [Property, Plant and Equipment / Right-of-use Assets / Intangible Assets](index=64&type=section&id=Property,%20Plant%20and%20Equipment%20%2F%20Right-of-use%20Assets%20%2F%20Intangible%20Assets) The Group invested in fixed and right-of-use assets and recognised an impairment loss on fixed assets in H1 2025 - During the six months ended June 30, 2025, the Group acquired property, plant and equipment of **RMB555,719,000** (H1 2024: RMB1,112,138,000)[279](index=279&type=chunk) - An impairment loss on property, plant and equipment of **RMB112,199,000** was recognised (H1 2024: nil)[280](index=280&type=chunk) - Additions to right-of-use assets amounted to **RMB100,744,000** (H1 2024: RMB161,677,000)[281](index=281&type=chunk) - There were no additions to mining rights (H1 2024: RMB29,362,000)[281](index=281&type=chunk) [Trade Receivables](index=65&type=section&id=Trade%20Receivables) Total trade receivables amounted to RMB2.19 billion as of June 30, 2025, with an average credit period of 0 to 60 days Details of Trade Receivables (RMB'000) | Item | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :------------- | | Trade receivables from third parties | 2,016,192 | 1,774,253 | | Trade receivables from related parties | 176,277 | 194,098 | | **Total** | **2,192,469** | **1,968,351** | - The Group has a policy of granting an average credit period of 0 to 60 days from the date of invoice to its customers[284](index=284&type=chunk) Ageing Analysis of Trade Receivables (RMB'000) | Ageing | June 30, 2025 | December 31, 2024 | | :--------- | :------------ | :------------- | | 0 to 90 days | 1,438,812 | 1,351,716 | | 91 to 180 days | 206,982 | 191,731 | | 181 to 365 days | 323,309 | 203,805 | | Over 365 days | 223,366 | 221,099 | | **Total** | **2,192,469** | **1,968,351** | [Other Receivables](index=66&type=section&id=Other%20Receivables) Total other receivables decreased to RMB1.02 billion as of June 30, 2025, from RMB1.13 billion at year-end 2024 Details of Other Receivables (RMB'000) | Item | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :------------- | | Prepayments and deposits | 67,251 | 37,917 | | Deposits paid to raw material suppliers | 220,647 | 235,357 | | VAT and other recoverable taxes | 245,948 | 255,632 | | Current portion of long-term receivables | 97,743 | 97,743 | | Amounts due from associates | 47,936 | 19,698 | | Amounts due from joint ventures | 13,246 | 9,600 | | Consideration receivable for disposal of subsidiaries | – | 187,105 | | Others | 330,469 | 282,211 | | **Total** | **1,023,240** | **1,125,263** | - Amounts due from associates are unsecured and repayable on demand, with an interest-bearing portion of RMB12,206,000[290](index=290&type=chunk) - Amounts due from joint ventures are non-interest-bearing, unsecured, and repayable on demand[290](index=290&type=chunk) [Trade Payables](index=67&type=section&id=Trade%20Payables) Total trade payables decreased to RMB2.88 billion as of June 30, 2025, with a typical credit period of 30 to 90 days Details of Trade Payables (RMB'000) | Item | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :------------- | | Trade payables to third parties | 2,784,756 | 3,152,940 | | Trade payables to related parties | 97,644 | 107,440 | | **Total** | **2,882,400** | **3,260,380** | - The Group normally obtains a credit period of 30 to 90 days from its suppliers[293](index=293&type=chunk) Ageing Analysis of Trade Payables (RMB'000) | Ageing | June 30, 2025 | December 31, 2024 | | :--------- | :------------ | :------------- | | 0 to 90 days | 2,315,916 | 2,952,591 | | 91 to 180 days | 206,226 | 120,700 | | 181 to 365 days | 214,696 | 73,842 | | Over 365 days | 145,562 | 113,247 | | **Total** | **2,882,400** | **3,260,380** | [Other Payables](index=68&type=section&id=Other%20Payables) Total other payables stood at RMB5.49 billion as of June 30, 2025, slightly down from year-end 2024 Details of Other Payables (RMB'000) | Item | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :------------- | | Payables to contractors and for acquisition of assets | 2,307,493 | 2,308,420 | | Consideration payable for acquisition of subsidiaries, associates and joint ventures | 538,451 | 542,565 | | Deposits from customers | 496,850 | 510,374 | | Accrued wages and bonuses payable | 440,226 | 504,577 | | Deposits from suppliers | 455,285 | 402,132 | | Other taxes payable | 281,251 | 436,787 | | Lease liabilities | 120,680 | 134,680 | | Environmental restoration payable | 6,983 | 6,994 | | Amounts due to non-controlling shareholders | 20,734 | 19,863 | | Dividends payable | 63,993 | – | | Others | 762,999 | 694,643 | | **Total** | **5,494,945** | **5,561,035** | - Amounts due to non-controlling shareholders are unsecured, non-interest-bearing, and repayable on demand[297](index=297&type=chunk) [Medium Term Notes](index=68&type=section&id=Medium%20Term%20Notes) The company issued RMB1 billion in unsecured medium term notes in April 2024 with a three-year term - On April 22, 2024, the Company issued medium term notes of **RMB1,000,000,000**[298](index=298&type=chunk)[299](index=299&type=chunk) - The medium term notes are unsecured, bear interest at a rate of **2.44% per annum**, and have a term of three years[298](index=298&type=chunk)[299](index=299&type=chunk) [Other Long-term Payables](index=69&type=section&id=Other%20Long-term%20Payables) Total other long-term payables amounted to RMB1.63 billion as of June 30, 2025 Details of Other Long-term Payables (RMB'000) | Item | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :------------- | | Lease liabilities | 108,768 | 117,181 | | Provision for environmental restoration | 639,193 | 630,877 | | Payables for acquisition of assets | 748,586 | 789,518 | | Others | 134,435 | 148,593 | | **Total** | **1,630,982** | **1,686,169** | [Share Capital](index=69&type=section&id=Share%20Capital) The company's authorised share capital is HKD1 billion, with issued and fully paid capital of approximately HKD698.3 million Share Capital Structure (RMB'000) | Category | Number of shares | Amount (HKD'000) | Amount (RMB'000) | | :--------- | :--------------- | :------------ | :---------------- | | Authorised | 10,000,000,000 | 1,000,000 | – | | Issued and fully paid | 6,982,937,817 | 698,294 | 617,812 | [Contingent Liabilities](index=70&type=section&id=Contingent%20Liabilities) The Group has provided guarantees for bank facilities granted to its associates and joint ventures Contingent Liabilities (RMB'000) | Item | June 30, 2025 | December 31, 2024 | | :--------- | :------------ | :------------- | | Amount of guarantees | 1,704,040 | 1,936,499 | | Amount utilised | 1,497,655 | 1,289,442 | - The directors consider that the fair value of the guarantees at their dates of inception is not significant[306](index=306&type=chunk) [Capital Commitments](index=71&type=sec

2025 2025 於開曼群島註冊成立的有限公司 股份代號 : 1134 中期報告 INTERIM REPORT Incorporated in the Cayman Islands with limited liability Stock code:1134 Interim Report 2025 中期報告 目錄 2 公司資料 3 管理層討論及分析 10 企業管治 11 其他資料 16 簡明綜合損益及其他全面收益表 17 簡明綜合財務狀況表 19 簡明綜合權益變動表 20 簡明綜合現金流量表 21 簡明綜合中期財務資料附註 公司資料 執行董事 郭君暉先生 郭君宇先生 非執行董事 郭茂群先生 陳燕華女士 獨立非執行董事 朱健明先生 康仕龍先生 梁家鈿先生 （於二零二五年一月一日獲委任） 陳漢華先生 （於二零二五年一月一日辭任） 公司秘書 梁家鈿先生 （主席） （於二零二五年一月一日獲委任） 朱健明先生 康仕龍先生 郭君暉先生 陳漢華先生 （前主席，於二零二五年一月一日辭任） 提名委員會 郭君暉先生 （主席） 朱健明先生 康仕龍先生 梁家鈿先生 （於二零二五年一月一日獲委任） 陳漢華先生 （已於二零二五年一月一 ...

Contents 目錄 | Corporate Information | 2 | | --- | --- | | 公司資料 | | | Corporate Profile | 5 | | 公司介紹 | | | Management Discussion and Analysis | 6 | | 管理層討論與分析 | | | Other Information | 32 | | 其他信息 | | | Report on Review of Condensed Consolidated Financial Statements | 59 | | 簡明合併財務報表審閱報告 | | | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | 62 | | 簡明合併損益及其他全面收益表 | | | Condensed Consolidated Statement of Financial Position | 65 | | 簡明合併財務狀況表 | | | Condensed Consolidated Sta ...

[Company Information](index=5&type=section&id=Company%20Information) [Board of Directors and Committees](index=5&type=section&id=Board%20of%20Directors%20and%20Committees) SF Holding disclosed its board composition, including executive and independent non-executive directors, and the formation of audit, nomination, remuneration and appraisal, risk management, and strategy committees - The Board of Directors comprises **four executive directors** (Wang Wei, He Jie, Wang Xin, Xu Bensong) and **three independent non-executive directors** (Chen Shangwei, Li Jiashi, Ding Yi)[11](index=11&type=chunk) - The company established audit, nomination, remuneration and appraisal, risk management, and strategy committees to support Board operations[11](index=11&type=chunk) [Registered and Business Address](index=5&type=section&id=Registered%20and%20Business%20Address) The company maintains registered and principal places of business in mainland China and Hong Kong to support its domestic and international operations - The registered address in China is located on the 3rd floor, Integrated Building, SF South China Transit Center, No 1111 Hangzhan 4th Road, Caowei Community, Hangcheng Street, Bao'an District, Shenzhen, Guangdong Province[11](index=11&type=chunk) - The principal place of business in Hong Kong is located on the 9th floor, Asia Logistics Centre – SF Centre, No 36 Shipping Road, Tsing Yi, New Territories, Hong Kong[12](index=12&type=chunk) [Authorized Representatives and Company Secretaries](index=6&type=section&id=Authorized%20Representatives%20and%20Company%20Secretaries) The company appointed authorized representatives and joint company secretaries to handle matters related to its listing on the Hong Kong Stock Exchange - The authorized representatives are Mr He Jie and Ms Gan Ling[12](index=12&type=chunk) - The joint company secretaries are Ms Gan Ling and Ms Su Jiamin[12](index=12&type=chunk) [Auditors and Legal Advisors](index=5&type=section&id=Auditors%20and%20Legal%20Advisors) The company engaged internationally renowned accounting and law firms as its auditors and legal advisors to ensure financial reporting compliance and professional legal affairs - The auditor is PricewaterhouseCoopers[11](index=11&type=chunk) - The legal advisor regarding Hong Kong law is Herbert Smith Freehills[11](index=11&type=chunk) [Key Accounting Data and Financial Indicators](index=7&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) [Company Overview and Strategic Positioning](index=7&type=section&id=Company%20Overview%20and%20Strategic%20Positioning) SF Holding, as China's and Asia's largest, and the world's fourth-largest integrated logistics service provider, is committed to offering end-to-end one-stop logistics solutions, holding leading positions in multiple niche markets, and leveraging technology to empower smart supply chains, aiming to become a global leader in digital logistics solutions - SF Holding is Asia's largest and the world's fourth-largest integrated logistics service provider, ranking **393rd** on the Fortune Global 500 list[13](index=13&type=chunk)[14](index=14&type=chunk) - The company provides domestic and international end-to-end one-stop integrated logistics solutions, including time-definite express, economy express, freight, cold chain and pharmaceutical, intra-city on-demand delivery, supply chain, and international services[14](index=14&type=chunk) - The company holds a leading position as number one in domestic express, freight, cold chain, intra-city on-demand delivery, and supply chain businesses, as well as in Asia's express, freight, intra-city on-demand delivery, and international businesses[15](index=15&type=chunk)[16](index=16&type=chunk) [Business Segments Introduction](index=8&type=section&id=Business%20Segments%20Introduction) SF Holding's business encompasses two major segments: express logistics and supply chain & international, further subdivided into time-definite express, economy express, freight, cold chain & pharmaceutical, intra-city on-demand delivery, international express, international freight & agency, and supply chain, meeting diverse logistics needs of various customer groups - The express logistics segment primarily serves individuals, enterprises, and mid-to-high-end brand merchants, offering time-definite express, economy express, freight, cold chain & pharmaceutical, and intra-city on-demand delivery services[19](index=19&type=chunk) - The supply chain and international segment serves domestic and international manufacturing enterprises, trading companies, cross-border e-commerce, and consumers, providing international express, overseas local express, cross-border e-commerce parcels and overseas warehousing services, international freight and agency, and digital supply chain solutions[19](index=19&type=chunk) [Financial Highlights](index=9&type=section&id=Financial%20Highlights) In H1 2025, SF Holding achieved operating revenue of **CNY 146.9 billion**, a **9.3% year-on-year increase**, with profit attributable to owners of the company reaching **CNY 5.74 billion**, up **19.4%**, basic earnings per share of **CNY 1.16/share**, and a weighted average return on net assets of **6.07%**, demonstrating robust growth in business scale and profitability 2025 Interim Performance Overview (Amounts in CNY) | Indicator | Amount | YoY Change | | :--- | :--- | :--- | | Operating Revenue | CNY 146.9 billion | 9.3% | | EBITDA (1) | CNY 16.6 billion | 4.3% | | Profit attributable to owners of the company | CNY 5.74 billion | 19.4% | | Equity attributable to owners of the company | CNY 95.4 billion | 3.7% | | Basic Earnings Per Share | CNY 1.16/share | 16% | | Cash Dividend Per Share | CNY 0.46/share | 15% | | Weighted Average Return on Net Assets | 6.07% | 0.8 ppts | | Gross Profit | CNY 19.1 billion | 4.1% | | Total Assets | CNY 218.2 billion | 2.1% | [Detailed Key Financial Data](index=10&type=section&id=Detailed%20Key%20Financial%20Data) This section details SF Holding's operating revenue, gross profit, net profit, assets and liabilities, cash flow, and key financial indicators for H1 2025, compared to the same period last year, also noting no difference in net profit and net assets under IFRS and PRC GAAP Total Volume and Total Revenue (H1 2023-H1 2025) | Indicator | 2023H1 | 2024H1 | 2025H1 | YoY Change (2025H1 vs 2024H1) | | :--- | :--- | :--- | :--- | :--- | | Total Volume (Hundred Million Parcels) | 58.8 | 62.4 | 78.5 | +25.7% | | Total Revenue (Billion CNY) | 1,244 | 1,344 | 1,469 | +9.3% | Revenue by Business Segment and Proportion of Total Revenue (2024H1 vs 2025H1) | Business Segment | 2024H1 Revenue (Billion CNY) | 2024H1 Proportion | 2025H1 Revenue (Billion CNY) | 2025H1 Proportion | | :--- | :--- | :--- | :--- | :--- | | Time-definite Express | 59.19 | 44.0% | 63.23 | 43.1% | | Economy Express | 13.25 | 9.9% | 15.16 | 10.3% | | Freight | 17.55 | 13.1% | 19.57 | 13.3% | | Cold Chain and Pharmaceutical | 5.06 | 3.8% | 5.84 | 4.0% | | Intra-city On-demand Delivery | 3.96 | 2.9% | 5.49 | 3.7% | | Supply Chain and International | 31.20 | 23.2% | 34.23 | 23.3% | | Other Non-logistics Businesses | 4.20 | 3.1% | 3.33 | 2.3% | Gross Profit and Profit Attributable to Owners of the Company (H1 2023-H1 2025) | Indicator | 2023H1 | 2024H1 | 2025H1 | | :--- | :--- | :--- | | Gross Profit (Billion CNY) | 18.3 | 19.1 | 16.6 | | Gross Profit Margin | 13.3% | 13.6% | 13.0% | | Profit attributable to owners of the company (Billion CNY) | 4.18 | 4.81 | 5.74 | | Profit margin attributable to owners of the company | 3.4% | 3.6% | 3.9% | Assets, Liabilities, and Equity (2023/12/31-2025/06/30) | Indicator | 2023/12/31 | 2024/12/31 | 2025/06/30 | | :--- | :--- | :--- | | Total Assets (Billion CNY) | 213.8 | 221.5 | 218.2 | | Equity attributable to owners of the company (Billion CNY) | 92.0 | 92.8 | 95.4 | | Asset-Liability Ratio | 53.4% | 52.1% | 51.4% | Net Cash Flow (2024H1 vs 2025H1) | Cash Flow Type | 2024H1 (Billion CNY) | 2025H1 (Billion CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 13.7 | 12.9 | | Net Cash Flow Used in Investing Activities | -15.4 | -17.5 | | Net Cash Flow Used in Financing Activities | -6.2 | -7.3 | Key Financial Indicators (2024H1 vs 2025H1) | Indicator | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (CNY) | 1.16 | 1.00 | 16.00% | | Diluted Earnings Per Share (CNY) | 1.16 | 1.00 | 16.00% | | Weighted Average Return on Net Assets | 6.07% | 5.23% | Increased by 0.84 percentage points | - There is no difference in profit attributable to owners of the company and equity between financial reports disclosed under International Accounting Standards and Chinese Accounting Standards[44](index=44&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) [Overall Review](index=14&type=section&id=Overall%20Review) In H1 2025, SF Holding, amidst a complex and volatile domestic and international macroeconomic environment, adhered to its operating theme of "Resilience, Breakthrough, Synergy, and Innovation," achieving steady business growth and increased market share through deepening its "Activate Operations" strategy, lean management, and accelerated industry-specific transformation, while actively expanding into international markets [Market Overview](index=14&type=section&id=Market%20Overview) In H1 2025, the domestic market, driven by new quality productive forces and consumption policies, saw high-tech manufacturing and integrated online-offline consumption models propel the logistics industry towards efficiency, flexibility, and intelligence. Despite international market uncertainties, strong Asian regional economic resilience and growth in China's foreign trade exports presented opportunities for logistics enterprises' international development - In H1 2025, the added value of industrial enterprises above designated size nationwide increased by **6.4% year-on-year**, with high-tech manufacturing increasing by **9.5%** and equipment manufacturing by **10.2%**[46](index=46&type=chunk) - In H1 2025, total retail sales of social consumer goods nationwide increased by **5.0% year-on-year**, with online retail sales of physical goods growing by **6.0%**, and new formats like instant retail continuing to thrive[47](index=47&type=chunk) - In H1 2025, total social logistics costs were **CNY 9.2 trillion**, a **5.0% year-on-year increase**, accounting for **14.0% of GDP**, a **0.2 percentage point decrease** from the same period last year, indicating achievements in cost reduction and efficiency improvement[48](index=48&type=chunk) - In H1 2025, cumulative express delivery volume reached **95.64 billion parcels**, a **19.3% year-on-year increase**; cumulative express delivery revenue reached **CNY 718.78 billion**, a **10.1% year-on-year increase**[48](index=48&type=chunk) - The International Monetary Fund predicts that the growth rate for emerging and developing Asian economies will reach **4.5% in 2025**, further strengthening Asia's position in global supply chains[50](index=50&type=chunk) - In H1 2025, China's total goods trade imports and exports increased by **2.9% year-on-year**, with total exports growing by **7.2%**, and the combined exports of "new three items" (new energy vehicles, photovoltaic modules, and lithium batteries) increasing by **over 30%**[51](index=51&type=chunk) - The company adheres to a "sustainable and healthy development" operating philosophy, achieving breakthroughs with a differentiated product strategy, increasing market share, and delivering robust performance[53](index=53&type=chunk) - The "Activate Operations" strategy is deeply promoted, optimizing authorization, incentive, reward and punishment, and evaluation mechanisms to stimulate individual initiative and link operating results with personal returns[55](index=55&type=chunk) - Upholding a lean operating philosophy, the company continuously optimizes its operating model, leveraging technology to achieve intelligent and unmanned applications across the entire end-to-end logistics chain, driving structural cost reduction[56](index=56&type=chunk) - Accelerating industry-specific transformation, shifting from "selling standard products" to "selling solutions," establishing specialized operating departments for key industries, and building industry solution and standardized product portfolio capabilities[58](index=58&type=chunk) - Focusing on the "Asia-only, global coverage" strategy, enhancing cross-border fulfillment capabilities by expanding the global air network, upgrading customs clearance, and extending overseas warehousing[60](index=60&type=chunk)[61](index=61&type=chunk) [Business Development Summary](index=18&type=section&id=Business%20Development%20Summary) SF Holding accelerated its industry-specific transformation, achieving over 20% growth in logistics revenue across various sectors such as consumer goods, automotive, industrial equipment, and high-tech communications. Each business segment enhanced service competitiveness, consolidated market leadership through product upgrades, network expansion, and technology empowerment, and actively expanded into international markets, particularly achieving significant growth in cross-border e-commerce logistics - The company deepened its "accelerated industry-specific transformation" strategy, shifting from "selling standard products" to "selling solutions," achieving **over 20% year-on-year growth** in logistics revenue in consumer goods, automotive, industrial equipment, and high-tech communications sectors[66](index=66&type=chunk)[59](index=59&type=chunk) - Time-definite express business revenue reached **CNY 63.23 billion**, a **6.8% year-on-year increase**, with business volume growing by **18.6%**, strengthening high-quality services through products like "Exclusive Same-Day Delivery" and accelerating the expansion of diversified channels[71](index=71&type=chunk) - Economy express business revenue reached **CNY 15.16 billion**, a **14.4% year-on-year increase**, with business volume growing by **29.6%**, achieving scaled growth through service benchmarks, improved product value-for-money, and upgraded warehousing and distribution integration capabilities[76](index=76&type=chunk) - Freight business revenue reached **CNY 19.57 billion**, a **11.5% year-on-year increase**, with cargo volume growing by **28%**, building a high-end market barrier for road freight and establishing a less-than-truckload logistics network in the industrial sector[79](index=79&type=chunk) - Cold chain and pharmaceutical business revenue reached **CNY 5.84 billion**, a **15.3% year-on-year increase**, driving rapid business growth through refined services in fresh produce delivery, food cold chain, and pharmaceutical logistics[84](index=84&type=chunk) - Intra-city on-demand delivery business revenue reached **CNY 5.49 billion**, a **38.9% year-on-year increase**, with order volume growing by **over 50%**, net profit doubling, active merchants reaching **850,000**, and active consumers totaling **24.77 million**[89](index=89&type=chunk)[90](index=90&type=chunk) - Supply chain and international business revenue reached **CNY 34.23 billion**, a **9.7% year-on-year increase**, supporting Chinese enterprises' global expansion through an intensified global air network, upgraded customs clearance capabilities, and expanded overseas warehousing, achieving **doubled growth** in cross-border e-commerce logistics revenue for European routes[95](index=95&type=chunk)[99](index=99&type=chunk) [Operational Optimization](index=25&type=section&id=Operational%20Optimization) SF Holding comprehensively optimized operations by building an efficient and intelligent transit network, lean management of transportation links, stimulating revenue generation among frontline couriers, and improving work efficiency. Transit centers achieved intelligent and unmanned operations, transportation links reduced costs and increased efficiency through direct routes and intelligent scheduling, and frontline couriers enhanced service quality and efficiency through team mechanisms and digital tools - In the transit segment, the deployment of ultra-high-speed sorting equipment and AGV unmanned forklifts led to a **12.5% increase** in small parcel transit operational efficiency, with per-parcel transit costs continuously decreasing[103](index=103&type=chunk)[105](index=105&type=chunk) - In the transportation segment, optimizing bidding strategies and integrating transport capacity resources resulted in **over 6,000 direct trunk lines** between cities, and the proportion of round-trip combined trunk lines increased by **over 16 percentage points**, effectively reducing transportation costs[107](index=107&type=chunk)[108](index=108&type=chunk) - In the last-mile segment, the team mechanism was further promoted, with approximately **16,000 teams** formed, covering **over 100,000 couriers**, leading to a **13.7% year-on-year increase** in small parcel collection and delivery efficiency and a **19% increase** in large parcel collection and delivery efficiency[109](index=109&type=chunk)[110](index=110&type=chunk) [Core Competencies](index=27&type=section&id=Core%20Competencies) SF Holding's core competencies lie in its efficient and reliable global logistics infrastructure network, leading air cargo capabilities, rich multimodal transport resources, extensive global network layout, cutting-edge logistics technology applications, and unparalleled brand value, which collectively support the company's goal of becoming a respected global leader in digital logistics solutions - The company possesses an efficient and reliable global logistics infrastructure network, covering **339 prefecture-level administrative regions in China (100% coverage)**, with international express, freight forwarding, and supply chain businesses covering **95 countries and regions**[111](index=111&type=chunk)[112](index=112&type=chunk) - It owns China's largest and one of the world's leading cargo airlines, operating **107 all-cargo aircraft**, with international cargo throughput at Ezhou Cargo Hub increasing by **over 100%** compared to H1 2024[114](index=114&type=chunk)[116](index=116&type=chunk) - The company commands rich transportation resources, managing **120,000 trunk and branch line trucks globally**, operating **212 international rail lines**, and **11,000 sea freight routes**[117](index=117&type=chunk)[118](index=118&type=chunk) - Globally, it has **38,000 domestic self-operated and agent outlets** and **39,000 overseas self-operated and agent outlets**, with global warehouse resources exceeding **12 million square meters**[120](index=120&type=chunk)[121](index=121&type=chunk) - The company is committed to becoming a global leader in digital logistics solutions, holding **4,134 effective and pending patents** and **2,530 software copyrights**, and developing "SF Cognitive Decision Intelligence Agent" and "SF Large Language and Multimodal Model" to empower internal operations and external customers[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - The company's brand value is unparalleled, ranking **first in public satisfaction for express services for 16 consecutive years**, listed in the Fortune Global 500 for **4 consecutive years**, and ranking **6th** in the 2025 Global Logistics Brand Value list[135](index=135&type=chunk)[136](index=136&type=chunk) [Financial Review](index=35&type=section&id=Financial%20Review) In H1 2025, SF Holding's total operating revenue reached **CNY 146.86 billion**, a **9.26% year-on-year increase**. Gross profit was **CNY 19.06 billion**, up **4.08%**, with a gross profit margin of **12.98%**. Profit attributable to owners of the listed company was **CNY 5.74 billion**, a **19.37% year-on-year increase**. The company effectively controlled expenses through lean management and technology empowerment, maintaining a stable capital structure and ample operating cash flow Operating Revenue by Industry, Operating Segment, and Geographical Region (2025H1 vs 2024H1) | Category | 2025 Amount (Thousand CNY) | 2025 Proportion | 2024 Amount (Thousand CNY) | 2024 Proportion | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenue** | **146,858,174** | **100.00%** | **134,409,720** | **100.00%** | **9.26%** | | Logistics and Freight Forwarding | 143,530,874 | 97.73% | 130,207,965 | 96.87% | 10.23% | | Other Non-logistics Businesses | 3,327,300 | 2.27% | 4,201,755 | 3.13% | -20.81% | | Express and Freight Segment | 104,772,845 | 71.34% | 96,820,175 | 72.03% | 8.21% | | Intra-city On-demand Delivery Segment | 5,582,531 | 3.80% | 4,022,952 | 2.99% | 38.77% | | Supply Chain and International Segment | 35,768,179 | 24.36% | 32,914,104 | 24.49% | 8.67% | | Mainland China | 126,936,236 | 86.43% | 115,996,449 | 86.30% | 9.43% | | Hong Kong, Macau, Taiwan | 4,705,646 | 3.20% | 4,512,024 | 3.36% | 4.29% | | Other International | 15,216,292 | 10.36% | 13,901,247 | 10.34% | 9.46% | Gross Profit and Gross Profit Margin (2025H1 vs 2024H1) | Indicator | 2025 Amount (Thousand CNY) | 2025 Gross Profit Margin | 2024 Amount (Thousand CNY) | 2024 Gross Profit Margin | Amount Change | Gross Profit Margin Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Gross Profit** | **19,060,542** | **12.98%** | **18,313,439** | **13.63%** | **4.08%** | **Decreased by 0.65 percentage points** | | Logistics and Freight Forwarding | 18,386,430 | 12.81% | 17,727,103 | 13.61% | 3.72% | Decreased by 0.80 percentage points | | Other Non-logistics Businesses | 674,112 | 20.26% | 586,336 | 13.95% | 14.97% | Increased by 6.31 percentage points | - Staff costs as a percentage of revenue increased by **1.87 percentage points**, mainly due to enhanced compensation competitiveness for frontline couriers and increased sales incentives; transport capacity costs as a percentage of revenue decreased by **0.25 percentage points**, benefiting from optimized operating models and transport capacity procurement strategies[147](index=147&type=chunk)[148](index=148&type=chunk) Expense Ratio Changes (2025H1 vs 2024H1) | Expense Type | 2025H1 Expense Ratio | 2024H1 Expense Ratio | Change | | :--- | :--- | :--- | :--- | | Sales and Marketing Expense Ratio | 1.20% | 1.09% | Increased by 0.11 percentage points | | Administrative Expense Ratio | 6.21% | 6.73% | Decreased by 0.52 percentage points | | Research and Development Expense Ratio | 0.79% | 0.97% | Decreased by 0.18 percentage points | - Profit attributable to owners of the listed company was **CNY 5.74 billion**, a **19.4% year-on-year increase**; profit margin was **3.9%**, an increase of **0.3 percentage points** year-on-year[63](index=63&type=chunk)[156](index=156&type=chunk) Segment Net Profit (2025H1 vs 2024H1) | Segment | 2025 (Thousand CNY) | 2024 (Thousand CNY) | YoY Change | | :--- | :--- | :--- | :--- | | Express and Freight Segment | 5,384,678 | 4,795,733 | 12.28% | | Intra-city On-demand Delivery Segment | 137,049 | 62,174 | 120.43% | | Supply Chain and International Segment | -295,907 | -574,213 | 48.47% (Loss Reduction) | | Unallocated Portion | 843,113 | 450,071 | 87.33% | - Excluding the losses from overseas subsidiary KEX and KLN-related financing interest, the comparable net profit of the supply chain and international segment increased by **178%** year-on-year[159](index=159&type=chunk) Net Cash Flow (2025H1 vs 2024H1) | Cash Flow Type | 2025 (Thousand CNY) | 2024 (Thousand CNY) | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 12,936,690 | 13,722,269 | -5.72% | | Net Cash Used in Investing Activities | -17,516,875 | -15,444,553 | -13.42% | | Net Cash Used in Financing Activities | -7,280,764 | -6,181,865 | -17.78% | - As of the end of the reporting period, the company's total assets were **CNY 218.2 billion**, equity attributable to owners of the listed company was **CNY 95.4 billion**, and the asset-liability ratio was **51.35%**, a **0.79 percentage point decrease** from the end of 2024, indicating an overall stable capital structure[65](index=65&type=chunk)[167](index=167&type=chunk) - As of June 30, 2025, total borrowings amounted to **CNY 41.53 billion**, primarily denominated in RMB, HKD, and USD[169](index=169&type=chunk) Restricted Assets (June 30, 2025) | Type of Restricted Asset | Amount (Thousand CNY) | Reason for Restriction | | :--- | :--- | :--- | | Restricted Cash | 940,735 | Primarily statutory reserve deposits with the central bank | | Property, Plant and Equipment | 500,204 | Pledged for bank borrowings | | Right-of-use Assets | 173,923 | Pledged for bank borrowings | | Investment Properties | 117,759 | Pledged for bank borrowings | | Trade and Bills Receivables | 50,259 | Pledged for bank borrowings | | **Total** | **1,782,880** | | [Investment Activities](index=43&type=section&id=Investment%20Activities) In H1 2025, SF Holding's total investment amounted to **CNY 5.401 billion**, a **12.46% year-on-year decrease**. Capital expenditures were primarily for sorting centers, aircraft, vehicles, and equity investments. The company held a significant amount of financial assets measured at fair value, including structured deposits and equity investments. During the reporting period, the company raised funds through H-share placement and the issuance of convertible bonds to strengthen international logistics capabilities, optimize China's logistics network, and invest in R&D technology Capital Expenditure Details (2025H1) | Item | Amount (Thousand CNY) | | :--- | :--- | | Office Complex | 174,400 | | Land | 213,163 | | Warehouses | 354,293 | | Sorting Centers | 1,176,652 | | Aircraft | 906,985 | | Vehicles | 565,177 | | Information Technology Equipment | 358,727 | | Equity Investments | 1,200,980 | | Others | 450,300 | | **Total** | **5,400,677** | - As of June 30, 2025, the company's capital commitments amounted to **CNY 3.81 billion**, primarily representing contractual commitments for the acquisition of property, plant, and equipment for which no provision has yet been made[174](index=174&type=chunk) - Financial assets measured at fair value through profit or loss amounted to **CNY 27.03 billion**, a **140.32% increase** from the end of 2024, mainly due to an increase in structured deposits[165](index=165&type=chunk)[176](index=176&type=chunk) Securities Investment (June 30, 2025) | Security Type | Security Name | Carrying Amount at Period End (Thousand CNY) | | :--- | :--- | :--- | | Stocks | J&T Express | 1,009,813 | | Stocks | Zai Lab | 28,775 | | Funds | China Southern Shenzhen International REIT | 61,500 | | **Total** | | **1,100,088** | - Derivative investments primarily consist of forward foreign exchange contracts for hedging purposes, with an actual loss of approximately **CNY 17.372 million** during the reporting period, effectively mitigating the impact of exchange rate and interest rate fluctuations on the company's profit[179](index=179&type=chunk)[180](index=180&type=chunk) - Net proceeds from the global offering were approximately **CNY 5.30 billion**, with **45%** allocated to strengthening international and cross-border logistics capabilities, **35%** to enhancing and optimizing China's logistics network and services, and **10%** to R&D of advanced technologies and digital solutions[182](index=182&type=chunk) - During the reporting period, there were no significant investments, acquisitions, or disposals of subsidiaries or equity interests in associates, nor any significant investments or disposals of non-equity assets[183](index=183&type=chunk) - As of June 30, 2025, the Group had no significant investment and capital asset plans[184](index=184&type=chunk) [Corporate Governance and Other Information](index=47&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Corporate Governance Practices](index=47&type=section&id=Corporate%20Governance%20Practices) SF Holding is committed to formulating and implementing corporate governance practices suitable for its needs, having adopted the principles and code provisions of the Corporate Governance Code, and continuously reviews and monitors its corporate governance practices - The company has adopted the principles and code provisions of the Corporate Governance Code as the benchmark for its corporate governance practices[186](index=186&type=chunk) - The company will continue to review and monitor its corporate governance practices to ensure compliance with the Corporate Governance Code[187](index=187&type=chunk) [Chairman and General Manager](index=47&type=section&id=Chairman%20and%20General%20Manager) Mr Wang Wei serves concurrently as the company's Chairman and General Manager, an arrangement the Board believes is in the Group's best interest, providing stable and consistent leadership and ensuring swift and effective decision-making - Mr Wang Wei serves as the Chairman and General Manager of the company, and the Board believes his concurrent roles are in the best interest of the Group, providing stable and consistent leadership[187](index=187&type=chunk) - The company has established appropriate checks and balances through its Board of Directors, including three independent non-executive directors, to ensure a balance of power and authority[187](index=187&type=chunk) [Standard Code for Securities Transactions](index=47&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The company has adopted a standard code for securities transactions by directors and supervisors and established written guidelines for employee securities transactions no less stringent than the standard code, ensuring compliance - The company has adopted a standard code for securities transactions by directors and supervisors and has made specific inquiries to all directors and supervisors to confirm their compliance[188](index=188&type=chunk) - The company has established written guidelines for securities transactions by employees who may possess inside information, with terms no less stringent than the standard code[188](index=188&type=chunk) [Interim Dividends](index=47&type=section&id=Interim%20Dividends) The Board approved the 2025 interim profit distribution plan, proposing a cash dividend of **CNY 4.6** (tax inclusive) per 10 shares to all shareholders, with an estimated total dividend of **CNY 2.32 billion**, representing approximately **40%** of the profit attributable to owners of the company for the first half of the year - The Board of Directors approved the 2025 interim profit distribution plan on August 28, 2025, proposing an interim cash dividend of **CNY 4.6** (tax inclusive) per 10 shares to all shareholders[6](index=6&type=chunk)[189](index=189&type=chunk) - The estimated interim cash dividend amount is approximately **CNY 2.32 billion**, representing approximately **40%** of the company's profit attributable to owners of the company for H1 2025[6](index=6&type=chunk)[189](index=189&type=chunk) - The record date for the 2025 interim dividend is September 15, 2025, and H-share dividends will be paid in HKD[191](index=191&type=chunk) [Shares Issued](index=48&type=section&id=Shares%20Issued) As of June 30, 2025, the company had a total of **4,992,692,017 ordinary shares issued**, comprising **4,822,692,017 A-shares** and **170,000,000 H-shares**, with new shares issued during the reporting period due to the exercise of stock options Changes in Shares Issued (January 1, 2025 vs June 30, 2025) | Share Type | Number of Shares as of January 1, 2025 | New Shares Issued During Reporting Period | Number of Shares as of June 30, 2025 | | :--- | :--- | :--- | :--- | | A-shares | 4,816,186,983 | 6,505,034 | 4,822,692,017 | | H-shares | 170,000,000 | – | 170,000,000 | | **Total** | **4,986,186,983** | **6,505,034** | **4,992,692,017** | - During the reporting period, **6,505,034 A-shares** were issued due to the exercise of stock options[192](index=192&type=chunk) [Purchase, Sale, and Redemption of Listed Securities](index=48&type=section&id=Purchase%20Sale%20and%20Redemption%20of%20Listed%20Securities) During the reporting period, the company repurchased **2,499,000 A-shares** on the Shenzhen Stock Exchange for a total consideration of **CNY 101 million**, intended for future employee stock ownership plans or share incentive schemes A-share Repurchase in H1 2025 | Repurchase Date | Number of A-shares Repurchased | Highest Price Paid Per Share (CNY) | Lowest Price Paid Per Share (CNY) | Total Consideration (CNY) | | :--- | :--- | :--- | :--- | :--- | | April 7, 2025 | 2,499,000 | 41.20 | 39.33 | 100,975,115.00 | - Save as disclosed above, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities on the Stock Exchange or the Shenzhen Stock Exchange during the reporting period[193](index=193&type=chunk) [Sufficient Public Float](index=49&type=section&id=Sufficient%20Public%20Float) As of June 30, 2025, the number of H-shares held by the public accounted for **3.42%** of the total issued share capital (excluding treasury A-shares), meeting the minimum public float requirement of the Stock Exchange - The Stock Exchange granted the company a waiver from strict compliance with the Listing Rules, allowing the minimum percentage of H-shares held by the public to be **3.41%** from time to time[194](index=194&type=chunk) - As of June 30, 2025, the number of H-shares held by the public accounted for **3.42%** of the company's total issued share capital (excluding treasury A-shares), meeting the minimum public float requirement of the Stock Exchange[194](index=194&type=chunk) [2022 Stock Option Incentive Plan (A-shares)](index=49&type=section&id=2022%20Stock%20Option%20Incentive%20Plan%20(A-shares)) The company adopted the 2022 Stock Option Incentive Plan, and during the reporting period, some options were vested and exercised by grantees, totaling **6,505,034 options** - The company adopted the 2022 Stock Option Incentive Plan, with stock sources being A-shares repurchased by the company and held in a dedicated repurchase securities account and/or A-shares issued to grantees[195](index=195&type=chunk) Details of Granted Options Changes (H1 2025) | Category of Grantees | Grant Date | Exercise Price (CNY) | Unexercised as of January 1, 2025 | Exercised During Reporting Period | Cancelled During Reporting Period | Unexercised as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Directors | May 30, 2022 | 40.199 | 875,000 | 0 | 312,000 | 563,000 | | Other Eligible Grantees | May 30, 2022 & October 28, 2022 | 40.199 | 26,420,395 | 6,505,034 | 2,827,840 | 17,087,521 | | **Total** | | | **27,295,395** | **6,505,034** | **3,139,840** | **17,650,521** | [Major Shareholders' Interests and Short Positions in the Company's Shares and Related Shares](index=50&type=section&id=Major%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20the%20Company's%20Shares%20and%20Related%20Shares) As of June 30, 2025, Mr Wang Wei, through Mindong Holdings, held A-shares of the company, making him the largest shareholder. Additionally, institutional investors such as Morgan Stanley, Kenneth Cordele Griffin, and JPMorgan Chase & Co. held long and short positions in H-shares - Mr Wang Wei held a long position of **2,661,927,139 A-shares** through Mindong Holdings, representing approximately **55.20%** of the A-share equity and approximately **53.32%** of the total issued shares[199](index=199&type=chunk)[203](index=203&type=chunk) - Morgan Stanley held a long position of **19,156,539 H-shares** and a short position of **8,773,771 H-shares**[199](index=199&type=chunk)[203](index=203&type=chunk) - JPMorgan Chase & Co held a long position of **13,243,447 H-shares** and a short position of **6,415,463 H-shares**[199](index=199&type=chunk)[203](index=203&type=chunk) [Directors' and Chief Executives' Interests and Short Positions in Shares, Underlying Shares, and Debentures of the Company and its Associated Corporations](index=52&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests%20and%20Short%20Positions%20in%20Shares%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, Mr Wang Wei held equity interests in the company's A-shares and associated corporations SF City-wide and KLN. Other executive directors He Jie, Wang Xin, Xu Bensong, and independent non-executive director Li Jiashi also held A-shares of the company - Mr Wang Wei held **2,661,927,139 A-shares** through controlled corporations, representing approximately **55.20%** of the A-share equity[205](index=205&type=chunk)[206](index=206&type=chunk) - Mr Wang Wei held **364,738,662 H-shares (48.92%)** and **171,764,898 unlisted domestic shares (100%)** in associated corporation SF City-wide, and **931,209,117 H-shares (51.52%)** in KLN[207](index=207&type=chunk)[210](index=210&type=chunk) Directors' and Chief Executives' Interests in the Company's Shares (June 30, 2025) | Name | Share Class | Nature of Interest | Number of Shares Held | Approximate Percentage of Equity in Relevant Class of Shares | | :--- | :--- | :--- | :--- | :--- | | He Jie | A-shares | Beneficial Owner | 366,000 | 0.01% | | Wang Xin | A-shares | Beneficial Owner | 355,000 | 0.01% | | Xu Bensong | A-shares | Beneficial Owner | 190,200 | 0.004% | | Li Jiashi | A-shares | Beneficial Owner | 38,000 | 0.001% | [Employees](index=53&type=section&id=Employees) The company upholds a people-oriented culture, committed to creating a fair, just, and open environment for employees, providing training and career development opportunities, and attracting and retaining talent with market-competitive compensation policies. As of June 30, 2025, the Group had **148,200 full-time employees** globally - The company is committed to creating a fair, just, and open environment for employees, aiming to build the SF brand into a platform for outstanding global talent to achieve their dreams[209](index=209&type=chunk) - The Group's adopted compensation policy considers market benchmarks, individual performance, and the company's overall financial performance to ensure a market-competitive compensation system[209](index=209&type=chunk) - As of June 30, 2025, the Group had **148,200 full-time employees** globally[209](index=209&type=chunk) [Audit Committee and Review of Interim Financial Information](index=54&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Financial%20Information) The Audit Committee, composed of all independent non-executive directors, has reviewed the Group's interim results and financial information for the six months ended June 30, 2025, and discussed accounting policies and internal control matters with management and the auditors - The Audit Committee comprises Mr Chen Shangwei (Chairman), Mr Li Jiashi, and Dr Ding Yi, all independent non-executive directors[212](index=212&type=chunk) - The Audit Committee has reviewed the Group's interim results and interim financial information for the six months ended June 30, 2025, and discussed accounting policies and internal control matters[212](index=212&type=chunk) [Changes in Information of Directors and Supervisors](index=54&type=section&id=Changes%20in%20Information%20of%20Directors%20and%20Supervisors) During the reporting period, there were no changes in the information of the company's directors and supervisors that require disclosure under Rule 13.51(B)(1) of the Listing Rules of the Stock Exchange - During the reporting period, there were no changes in the information of the company's directors and supervisors that require disclosure under Rule 13.51(B)(1) of the Listing Rules of the Stock Exchange[213](index=213&type=chunk) [Continuing Disclosure Obligations under the Listing Rules](index=54&type=section&id=Continuing%20Disclosure%20Obligations%20under%20the%20Listing%20Rules) As of the end of the reporting period, the company had no disclosure obligations under Rules 13.20, 13.21, and 13.22 of the Listing Rules of the Stock Exchange - As of the end of the reporting period, the company had no disclosure obligations under Rules 13.20, 13.21, and 13.22 of the Listing Rules of the Stock Exchange[214](index=214&type=chunk) [Material Events After the Reporting Period](index=54&type=section&id=Material%20Events%20After%20the%20Reporting%20Period) After the reporting period, the company completed an H-share placement in July 2025, raising **HKD 2.951 billion**, and issued zero-coupon guaranteed convertible bonds with a principal amount of **HKD 2.950 billion**, further strengthening its capital position - On July 4, 2025, the company completed the allotment and issuance of **70,000,000 new H-shares** at a placement price of **HKD 42.15 per share**, with total proceeds of **HKD 2,950.5 million**[215](index=215&type=chunk)[331](index=331&type=chunk) - On July 10, 2025, the company's subsidiary, SF Holding Investment 2023 Limited, issued zero-coupon guaranteed convertible bonds with a principal amount of **HKD 2,950 million**, with an initial conversion price of **HKD 48.47 per H-share**[215](index=215&type=chunk)[332](index=332&type=chunk) - On August 7, 2025, the company completed the cancellation procedures for **23,270,358 repurchased A-shares**[333](index=333&type=chunk) [Interim Financial Information Review Report](index=55&type=section&id=Interim%20Financial%20Information%20Review%20Report) [Interim Financial Information Review Report](index=55&type=section&id=Interim%20Financial%20Information%20Review%20Report) PricewaterhouseCoopers has reviewed SF Holding's interim financial information for the six months ended June 30, 2025, and concluded, based on International Standard on Review Engagements 2410, that nothing has come to their attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting" - PricewaterhouseCoopers has reviewed the interim financial information of SF Holding and its subsidiaries for the six months ended June 30, 2025[217](index=217&type=chunk) - The review was conducted in accordance with International Standard on Review Engagements 2410, with a scope smaller than an audit, thus no audit opinion is expressed[218](index=218&type=chunk) - Based on the review, nothing has come to attention that causes the interim financial information not to be prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting"[219](index=219&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=56&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) In H1 2025, SF Holding achieved revenue of **CNY 146,858,174 thousand**, a **9.26% year-on-year increase**. Gross profit was **CNY 19,060,542 thousand**, up **4.08%**. Profit for the period was **CNY 6,012,403 thousand**, a **26.29% year-on-year increase**, of which profit attributable to owners of the company was **CNY 5,737,699 thousand**, up **19.37%** Condensed Consolidated Statement of Profit or Loss Key Data (For the six months ended June 30, 2025) | Item | 2025 (Thousand CNY) | 2024 (Thousand CNY) | | :--- | :--- | :--- | | Revenue | 146,858,174 | 134,409,720 | | Cost of Sales | (127,797,632) | (116,096,281) | | Gross Profit | 19,060,542 | 18,313,439 | | Selling and Marketing Expenses | (1,762,136) | (1,470,892) | | Administrative Expenses | (9,120,144) | (9,049,272) | | Research and Development Expenses | (1,153,311) | (1,301,455) | | Operating Profit | 8,449,349 | 7,198,491 | | Net Finance Costs | (773,324) | (815,854) | | Income Tax Expense | (1,627,325) | (1,559,135) | | Profit for the Period | 6,012,403 | 4,760,922 | | Attributable to Owners of the Company | 5,737,699 | 4,806,714 | | Basic Earnings Per Share (CNY) | 1.16 | 1.00 | [Condensed Consolidated Statement of Comprehensive Income](index=57&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) In H1 2025, SF Holding's profit for the period was **CNY 6,012,403 thousand**. Net other comprehensive income was **CNY 355,375 thousand**, mainly affected by currency translation differences of overseas operations and fair value changes of equity investments. Total comprehensive income for the period was **CNY 6,367,778 thousand**, of which **CNY 5,617,090 thousand** was attributable to owners of the company Condensed Consolidated Statement of Comprehensive Income Key Data (For the six months ended June 30, 2025) | Item | 2025 (Thousand CNY) | 2024 (Thousand CNY) | | :--- | :--- | :--- | | Profit for the Period | 6,012,403 | 4,760,922 | | Other Comprehensive Income, Net of Tax | 355,375 | (1,459,677) | | Total Comprehensive Income for the Period | 6,367,778 | 3,301,245 | | Attributable to Owners of the Company | 5,617,090 | 3,746,395 | | Attributable to Non-controlling Interests | 750,688 | (445,150) | - Other comprehensive income in H1 2025 primarily included currency translation differences of overseas operations of **CNY 274,856 thousand** and fair value changes of equity investments designated as fair value through other comprehensive income of **CNY 168,278 thousand**[223](index=223&type=chunk) [Condensed Consolidated Statement of Financial Position](index=58&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, SF Holding's total assets reached **CNY 218,236,503 thousand**, a **2.06% increase** from the end of 2024. Total liabilities were **CNY 112,071,266 thousand**, total equity was **CNY 106,165,237 thousand**, equity attributable to owners of the company was **CNY 95,399,730 thousand**, and the asset-liability ratio was **51.35%**, maintaining a stable capital structure Condensed Consolidated Statement of Financial Position Key Data (As of June 30, 2025) | Item | June 30, 2025 (Thousand CNY) | December 31, 2024 (Thousand CNY) | | :--- | :--- | :--- | | Total Assets | 218,236,503 | 213,824,213 | | Total Liabilities | 112,071,266 | 111,488,992 | | Total Equity | 106,165,237 | 102,335,221 | | Equity attributable to owners of the company | 95,399,730 | 91,993,286 | | Share Capital | 4,992,692 | 4,986,187 | | Retained Earnings | 42,707,381 | 39,140,246 | - As of June 30, 2025, the asset-liability ratio was **51.35%**, a **0.79 percentage point decrease** from **52.14%** at the end of 2024, indicating an overall stable capital structure[43](index=43&type=chunk)[225](index=225&type=chunk) - Financial assets measured at fair value through profit or loss amounted to **CNY 27,026,920 thousand**, a **140.32% increase** from the end of 2024, mainly due to an increase in structured deposits[165](index=165&type=chunk)[225](index=225&type=chunk) - Cash and cash equivalents amounted to **CNY 20,742,661 thousand**, a **36.46% decrease** from the end of 2024[225](index=225&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=61&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) In H1 2025, equity attributable to owners of the company increased from **CNY 91,993,286 thousand** at the beginning of the period to **CNY 95,399,730 thousand** at the end, primarily driven by profit for the period, proceeds from stock option exercises, and appropriations for safety production expenses Condensed Consolidated Statement of Changes in Equity Key Data (For the six months ended June 30, 2025) | Item | Total Attributable to Owners of the Company (Thousand CNY) | Non-controlling Interests (Thousand CNY) | Total Equity (Thousand CNY) | | :--- | :--- | :--- | :--- | | January 1, 2025 | 91,993,286 | 10,341,935 | 102,335,221 | | Profit for the Period | 5,737,699 | 274,704 | 6,012,403 | | Other Comprehensive Income | (120,609) | 475,984 | 355,375 | | Total Comprehensive Income | 5,617,090 | 750,688 | 6,367,778 | | Net Proceeds from Exercise of Stock Options | 261,498 | – | 261,498 | | Share Repurchase | (100,984) | – | (100,984) | | Dividends | (2,186,424) | (160,714) | (2,347,138) | | June 30, 2025 | 95,399,730 | 10,765,507 | 106,165,237 | [Condensed Consolidated Statement of Cash Flows](index=63&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2025, SF Holding's net cash generated from operating activities was **CNY 12,936,690 thousand**, a **5.72% year-on-year decrease**. Net cash used in investing activities was an outflow of **CNY 17,516,875 thousand**, and net cash used in financing activities was an outflow of **CNY 7,280,764 thousand**. Cash and cash equivalents at period-end amounted to **CNY 20,742,661 thousand** Condensed Consolidated Statement of Cash Flows Key Data (For the six months ended June 30, 2025) | Item | 2025 (Thousand CNY) | 2024 (Thousand CNY) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 12,936,690 | 13,722,269 | | Net Cash Used in Investing Activities | -17,516,875 | -15,444,553 | | Net Cash Used in Financing Activities | -7,280,764 | -6,181,865 | | Net Decrease in Cash and Cash Equivalents | -11,860,949 | -7,904,149 | | Cash and Cash Equivalents at Period End | 20,742,661 | 32,515,989 | - The increase in net cash outflow from investing activities was primarily due to a net increase in cash outflow from structured deposits, an increase in cash inflow from disposal of subsidiaries, and a net decrease in cash outflow from purchases of property, plant, and equipment, among other comprehensive effects[161](index=161&type=chunk) - The increase in net cash outflow from financing activities was primarily due to a net increase in borrowings, a decrease in share repurchases, and a decrease in acquisition of non-controlling interests, among other comprehensive effects[162](index=162&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=64&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [General Information](index=65&type=section&id=General%20Information) SF Holding was incorporated in China, with its A-shares and H-shares listed, primarily engaged in logistics ecosystem businesses including express delivery, freight, cold chain and pharmaceutical logistics, intra-city on-demand delivery, international logistics services, and supply chain solutions - SF Holding was incorporated in China in 2003, and its shares are listed on the Shenzhen Stock Exchange and The Stock Exchange of Hong Kong Limited[236](index=236&type=chunk) - The company and its subsidiaries are primarily engaged in developing a logistics ecosystem encompassing express delivery, freight, cold chain and pharmaceutical logistics, intra-city on-demand delivery, international logistics services, and supply chain solutions[236](index=236&type=chunk) - As of June 30, 2025, the total number of issued and outstanding shares was **4,992,692,017**, comprising **4,822,692,017 A-shares** and **170,000,000 H-shares**[236](index=236&type=chunk) [Basis of Preparation and Accounting Policies](index=65&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated interim financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the disclosure requirements of the Hong Kong Listing Rules, with accounting policies consistent with the 2024 annual financial statements, and the first-time application of IFRS 1 and IAS 21 (Amendments) "Lack of Exchangeability" - The condensed consolidated interim financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the disclosure requirements of the Hong Kong Listing Rules[238](index=238&type=chunk) - The accounting policies adopted in the preparation of this condensed consolidated interim financial information are consistent with those applied in the annual financial statements for the year ended December 31, 2024[238](index=238&type=chunk) - The first-time application of IFRS 1 and IAS 21 (Amendments) "Lack of Exchangeability" during this interim period had no material impact on the Group's accounting policies[239](index=239&type=chunk) [Financial Risk Management](index=66&type=section&id=Financial%20Risk%20Management) The Group's operations are exposed to market risks (including foreign exchange risk, price risk, and interest rate risk), credit risk, and liquidity risk, which are managed by the Board and senior management. This section also details the fair value measurement and sensitivity analysis of financial instruments recognized at fair value - The Group's operations are exposed to market risks (including foreign exchange risk, price risk, and interest rate risk), credit risk, and liquidity risk[243](index=243&type=chunk) - Risk management is carried out by the Group's Board and senior management, and there have been no changes in the financial risk management structure and policies since the year-end[243](index=243&type=chunk) Financial Assets Measured at Fair Value (June 30, 2025) | Item | Level 1 (Thousand CNY) | Level 2 (Thousand CNY) | Level 3 (Thousand CNY) | Total (Thousand CNY) | | :--- | :--- | :--- | :--- | :--- | | Non-current: | | | | | | Financial assets at fair value through profit or loss | – | – | 505,009 | 505,009 | | Financial assets at fair value through other comprehensive income | 1,100,088 | – | 7,052,225 | 8,152,313 | | Current: | | | | | | Financial assets at fair value through profit or loss | 79 | 15,461 | 26,928,678 | 27,026,920 | | Financial assets at fair value through other comprehensive income | – | 165,187 | – | 165,187 | - An increase/decrease of **10%** in the expected return rate of structured deposits measured at Level 3 fair value would result in an increase/decrease of **0.03% to 0.04%** in fair value[248](index=248&type=chunk) [Revenue and Segment Information](index=70&type=section&id=Revenue%20and%20Segment%20Information) The Group's operating segments include express and freight, intra-city on-demand delivery, and supply chain & international businesses, with key operating decision-makers allocating resources and assessing performance by reviewing internal reports. In H1 2025, total revenue from external customers was **CNY 146,858,174 thousand**, with logistics and freight forwarding services accounting for the vast majority - The Group's operating segments include the express and freight business segment, the intra-city on-demand delivery business segment, and the supply chain and international business segment[253](index=253&type=chunk) Business Segment Revenue and Net Profit (Loss) (For the six months ended June 30, 2025) | Segment | Revenue from External Customers (Thousand CNY) | Net Profit (Loss) (Thousand CNY) | | :--- | :--- | :--- | | Express and Freight Business Segment | 104,772,845 | 5,384,678 | | Supply Chain and International Business Segment | 35,768,179 | (295,907) | | Intra-city On-demand Delivery Business Segment | 5,582,531 | 137,049 | | Unallocated Portion | 734,619 | 843,113 | | **Total** | **146,858,174** | **6,012,403** | Revenue by Timing of Performance Obligation (For the six months ended June 30, 2025) | Revenue Type | Logistics and Freight Forwarding Services (Thousand CNY) | Sale of Goods (Thousand CNY) | Other (Thousand CNY) | Total (Thousand CNY) | | :--- | :--- | :--- | :--- | :--- | | Recognized at a point in time | – | 2,361,627 | 259,362 | 2,620,989 | | Recognized over time | 143,530,874 | – | 255,439 | 143,786,313 | | Lease Income | – | – | 189,652 | 189,652 | | **Total** | **143,530,874** | **2,361,627** | **965,673** | **146,858,174** | [Other Income](index=74&type=section&id=Other%20Income) In H1 2025, the Group's total other income amounted to **CNY 485,428 thousand**, primarily from government grants, followed by other income and dividend income Other Income Components (For the six months ended June 30, 2025) | Item | 2025 (Thousand CNY) | 2024 (Thousand CNY) | | :--- | :--- | :--- | | Government Grants | 317,688 | 404,911 | | Dividend Income | 1,360 | 426 | | Other | 166,380 | 167,413 | | **Total** | **485,428** | **572,750** | - Government grants primarily consist of awards and tax incentives provided by local government authorities in China, with no unfulfilled conditions or contingencies during the reporting period[261](index=261&type=chunk) [Net Other Gains](index=75&type=section&id=Net%20Other%20Gains) In H1 2025, the Group's net other gains amounted to **CNY 821,866 thousand**, primarily benefiting from gains on disposal of investments in subsidiaries and fair value changes of financial assets measured at fair value through profit or loss Net Other Gains Components (For the six months ended June 30, 2025) | Item | 2025 (Thousand CNY) | 2024 (Thousand CNY) | | :--- | :--- | :--- | | Gains on Disposal of Investments in Subsidiaries | 777,717 | 91,950 | | Fair Value Changes of Financial Assets at Fair Value Through Profit or Loss | 293,339 | 238,687 | | Gains on Repurchase of Corporate Bonds | 65,199 | 55,982 | | Net Exchange (Loss)/Gain | (125,935) | 4,703 | | **Total** | **821,866** | **293,793** | [Expenses by Nature](index=75&type=section&id=Expenses%20by%20Nature) In H1 2025, the Group's total expenses, including cost of sales, selling and marketing expenses, administrative expenses, and research and development expenses, amounted to **CNY 139,833,223 thousand**, with outsourced labor costs, transportation expenses, and employee benefits being the main components Expenses by Nature (For the six months ended June 30, 2025) | Item | 2025 (Thousand CNY) | 2024 (Thousand CNY) | | :--- | :--- | :--- | | Outsourced Labor Costs | 54,280,302 | 46,426,202 | | Transportation Expenses | 26,171,863 | 24,040,343 | | Outsourced Transportation Costs | 20,602,909 | 18,725,511 | | Employee Benefits Expenses | 16,751,576 | 16,170,240 | | Depreciation and Amortization (excluding right-of-use assets) | 4,860,146 | 5,360,734 | | Rent and Site Usage Fees | 3,816,529 | 3,599,946 | | Depreciation of Right-of-use Assets | 3,337,161 | 3,428,916 | | Other | 10,012,737 | 10,166,008 | | **Total** | **139,833,223** | **127,917,900** | - For the six months ended June 30, 2025, government grants of approximately **CNY 612,658,000** were recognized as a deduction from cost of sales[263](index=263&type=chunk) [Finance Income and Expenses](index=76&type=section&id=Finance%20Income%20and%20Expenses) In H1 2025, the Group's finance income primarily consisted of interest income from deposits with financial institutions of **CNY 155,037 thousand**. Total finance expenses amounted to **CNY 928,361 thousand**, mainly comprising interest expenses on borrowings and lease liabilities, resulting in net finance costs of **CNY 773,324 thousand** Finance Income and Expenses (For the six months ended June 30, 2025) | Item | 2025 (Thousand CNY) | 2024 (Thousand CNY) | | :--- | :--- | :--- | | Finance Income: | | | | 　Interest income from deposits with financial institutions | 155,037 | 415,064 | | Finance Expenses: | | | | 　Interest expenses on borrowings | 695,519 | 997,654 | | 　Interest expenses on lease liabilities | 243,551 | 262,301 | | 　Less: Capitalized interest | (10,709) | (29,037) | | **Net Finance Costs** | **773,324** | **815,854** | [Income Tax Expense](index=76&type=section&id=Income%20Tax%20Expense) In H1 2025, the Group's income tax expense was **CNY 1,627,325 thousand**, primarily composed of current income tax and deferred income tax. The company calculates income tax based on applicable tax rates and preferential tax rates in different jurisdictions and has assessed that the OECD Pillar Two Model Rules have no material quantitative impact on the Group Income Tax Expense Components (For the six months ended June 30, 2025) | Item | 2025 (Thousand CNY) | 2024 (Thousand CNY) | | :--- | :--- | :--- | | Current Income Tax | 1,659,277 | 1,421,021 | | Deferred Income Tax | (31,952) | 138,114 | | **Total** | **1,627,325** | **1,559,135** | - The applicable income tax rate for major subsidiaries in China is **25%**, Hong Kong profits tax is accrued at **8.25% or 16.5%**, and overseas profit income tax is calculated based on local tax rates[268](index=268&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk) - The Group has assessed that the OECD Pillar Two Model Rules have no material quantitative impact on the Group[271](index=271&type=chunk) [Dividends](index=77&type=section&id=Dividends) The interim dividend of **CNY 0.46** per ordinary share (tax inclusive) for the six months ended June 30, 2025, was approved by the directors on August 28, 2025, and has not yet been recognized as a liability - The interim dividend of **CNY 0.46** per ordinary share (tax inclusive) for the six months ended June 30, 2025, was approved by the directors on August 28, 2025[272](index=272&type=chunk) - This dividend had not been recognized as a liability as of June 30, 2025[272](index=272&type=chunk) [Property, Plant and Equipment](index=78&type=section&id=Property%20Plant%20and%20Equipment) As of June 30, 2025, the Group's property, plant and equipment had a net carrying amount of **CNY 55,891,747 thousand**. During the reporting period, additions amounted to **CNY 3,481,081 thousand**, disposals were **CNY 1,224,943 thousand**, and depreciation charged was **CNY 4,025,376 thousand** Net Carrying Amount of Property, Plant and Equipment (As of June 30, 2025) | Item | Net Carrying Amount (Thousand CNY) | | :--- | :--- | | Freehold Land and Buildings | 25,742,065 | | Aircraft, Aircraft Engines, Rotables, and High-Value Maintenance | 9,812,991 | | Machinery and Equipment | 9,893,298 | | Transportation Vehicles | 2,234,533 | | Computers and Electronic Equipment | 1,208,686 | | Office and Other Equipment | 2,439,020 | | Leasehold Improvements | 1,938,833 | | Construction in Progress | 2,622,321 | | **Total** | **55,891,747** | - As of June 30, 2025, certain property, plant and equipment with a net carrying amount of approximately **CNY 500,204,000** were pledged as collateral for bank loan financing and bank overdrafts[274](index=274&type=chunk) [Leases](index=79&type=section&id=Leases) As of June 30, 2025, the Group's total right-of-use assets amounted to **CNY 21,376,908 thousand**, and total lease liabilities amounted to **CNY 15,034,295 thousand**. During the reporting period, additions to right-of-use assets were approximately **CNY 6,006,348 thousand**, and depreciation expense of **CNY 3,337,161 thousand** was recognized Right-of-Use Assets and Lease Liabilities (As of June 30, 2025) | Item | June 30, 2025 (Thousand CNY) | December 31, 2024 (Thousand CNY) | | :--- | :--- | :--- | | Total Right-of-Use Assets | 21,376,908 | 19,625,629 | | Total Lease Liabilities | 15,034,295 | 12,595,797 | | 　Of which: Current | 5,442,703 | 5,501,314 | | 　Of which: Non-current | 9,591,592 | 7,094,483 | - During the six months ended June 30, 2025, additions to right-of-use assets amounted to approximately **CNY 6,006,348,000**[277](index=277&type=chunk) - As of June 30, 2025, leasehold land and land use rights with a net carrying amount of approximately **CNY 173,923,000** were pledged as collateral for bank loan financing and bank overdrafts[278](index=278&type=chunk) Lease-Related Expenses (For the six months ended June 30, 2025) | Item | 2025 (Thousand CNY) | 2024 (Thousand CNY) | | :--- | :--- | :--- | | Total Depreciation Expense of Right-of-Use Assets | 3,337,161 | 3,428,916 | | Interest Expense | 243,551 | 262,301 | | Expenses Related to Short-term Leases and Low-value Assets | 2,108,487 | 1,885,251 | | Total Cash Outflow for Leases | 5,788,850 | 5,703,150 | [Investment Properties](index=81&type=section&id=Investment%20Properties) As of June 30, 2025, the Group's investment properties had a net carrying amount of **CNY 7,547,509 thousand**. During the reporting period, disposals of subsidiaries resulted in a cost reduction of **CNY 254,536 thousand**, and **CNY 731,776 thousand** was transferred/reclassified Net Carrying Amount of Investment Properties (As of June 30, 2025) | Item | June 30, 2025 (Thousand CNY) | | :--- | :--- | | Cost at Period End | 8,317,901 | | Accumulated Depreciation at Period End | 770,392 | | **Net Carrying Amount at Period End** | **7,547,509** | - As of June 30, 2025, certain investment properties with a net carrying amount of approximately **CNY 117,759,000** were pledged as collateral for bank loan financing and bank overdrafts[281](index=281&type=chunk) Minimum Lease Payments Receivable for Investment Properties (As of June 30, 2025)

[About HKT](index=3&type=section&id=About%20HKT) HKT, a leader in technology, media, and telecommunications with over 150 years of history, is committed to driving Hong Kong's digital transformation and smart city development through 5G networks, comprehensive enterprise solutions, and smart living services, while expanding into international markets - HKT is a leader in technology, media, and telecommunications, rooted in Hong Kong for over 150 years, connecting local and global markets as a true 5G network operator[3](index=3&type=chunk) - The company provides comprehensive enterprise application solutions to facilitate digital transformation and enriches daily life through a full suite of network and smart living services[3](index=3&type=chunk) - HKT is dedicated to supporting digital economic development, assisting Hong Kong as an international financial center to connect with the world, and contributing to smart city development[3](index=3&type=chunk) [Chairman's Statement](index=4&type=section&id=Chairman's%20Statement) Despite evolving global economic conditions and weak consumer sentiment in H1 2025, HKT focused on strengthening core digital capabilities, accelerating public and private sector digital transformation via 800G AI Superhighway, 5G infrastructure, and AI-driven platforms, while expanding into ASEAN markets - Amidst evolving global economic conditions and weak consumer sentiment, HKT focuses on strengthening core digital capabilities to enhance Hong Kong's connectivity and resilience[4](index=4&type=chunk) - The company deployed an **800G AI Superhighway** connecting major data center clusters, designed for real-time AI workflows, fostering innovation in Hong Kong[4](index=4&type=chunk) - Accelerating digital transformation for public and private organizations, leveraging ultra-reliable, low-latency 5G infrastructure to support logistics hubs and urban facility automation, and applying AI in healthcare to optimize workflows[4](index=4&type=chunk) - Expanding into ASEAN markets, strengthening cross-border connectivity for mainland and Hong Kong enterprises, with a global network extending along the "Belt and Road" corridor[4](index=4&type=chunk) - **5G users** account for over **54% of postpaid users**, personal outbound roaming revenue increased by **11%**, and the DrGo telehealth platform supports the Greater Bay Area and six Asian markets[5](index=5&type=chunk) [Group Managing Director's Statement](index=5&type=section&id=Group%20Managing%20Director's%20Statement) Despite a challenging operating environment, HKT's total revenue grew 4% to HK$17.322 billion in H1 2025, EBITDA rose over 3% to HK$6.380 billion, and adjusted funds flow increased 3% to HK$2.562 billion, driven by AI innovation optimizing customer service, providing customized enterprise solutions, and reshaping internal workflows for efficiency and cost savings 2025 H1 Key Financial Performance | Metric | H1 2025 (HK$ billion) | YoY Growth | | :--- | :--- | :--- | | Total Revenue | 17.322 | 4% | | EBITDA | 6.380 | >3% | | Adjusted Funds Flow | 2.562 | 3% | - AI innovation drives growth, integrating AI into business operations to enhance service quality and deepen competitive advantages, such as the **800G AI Superhighway** supporting AI-driven workflows[8](index=8&type=chunk) - For individual users, AI provides more flexible and intelligent services, predicting customer needs and customizing personalized experiences, with The Club ecosystem boosting incremental and cross-selling conversion rates[9](index=9&type=chunk) - As of June 2025, **5G postpaid customers** reached **1.894 million**, a **21% year-on-year increase**; **2.5G fiber service customer base** grew **141% year-on-year**, with ARPU increasing by approximately **HK$75**[10](index=10&type=chunk) - For enterprise customers, over **130 large-scale projects** were successfully delivered, incorporating 5G, AI, IoT, and cybersecurity technologies, and assisting mainland Chinese enterprises in expanding into Southeast Asian markets[11](index=11&type=chunk)[12](index=12&type=chunk) - AI reshapes workflows through intelligent automation, predictive analytics, and natural language processing, significantly reducing customer service processing time and achieving an overall **7% year-on-year cost saving**[13](index=13&type=chunk) [Board of Directors](index=7&type=section&id=Board%20of%20Directors) This chapter lists the board members of HKT Trust and HKT Limited, including executive, non-executive, and independent non-executive directors, providing detailed biographies covering their age, positions, tenure, educational backgrounds, and professional qualifications, showcasing the board's diverse expertise and extensive experience - Executive Directors include Mr. Richard Li Tzar Kai (Executive Chairman) and Ms. Susanna Hui Hon Hing (Group Managing Director), possessing extensive experience in telecommunications, technology, and finance[16](index=16&type=chunk)[17](index=17&type=chunk) - Non-executive Directors include Mr. Peter Allen, Mr. Chung Cho Yee, Mr. Tang Yongbo, and Mr. Zhao Xingfu, with Mr. Tang Yongbo and Mr. Zhao Xingfu bringing telecommunications industry expertise from China Unicom background[20](index=20&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - Independent Non-executive Directors include Professor Chang Hsin-kang, Mr. Sunil Varma, Mr. Michael Mak, Ms. Wong Wai Kwan, and Ms. Du Jia Yi, who possess broad expertise in academia, accounting, banking, management consulting, and catering management[26](index=26&type=chunk)[28](index=28&type=chunk)[31](index=31&type=chunk)[33](index=33&type=chunk)[35](index=35&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) This chapter details HKT's operating environment, financial performance, and strategic priorities for H1 2025; despite macroeconomic challenges, the company achieved robust growth in total revenue and EBITDA by expanding its broadband market leadership, steadily driving 5G service adoption, growing enterprise business, and applying AI to enhance efficiency [Financial Summary](index=13&type=section&id=Financial%20Summary) HKT's H1 2025 financial performance was robust, with total revenue growing 4% to HK$17.322 billion, EBITDA increasing over 3% to HK$6.380 billion, and adjusted funds flow rising 3% to HK$2.562 billion; profit attributable to stapled unitholders grew 4% to HK$2.070 billion, with an interim distribution of HK$33.80 cents per unit declared 2025 H1 Key Financial Indicators | Metric | H1 2025 | YoY Growth | | :--- | :--- | :--- | | Total Revenue | HK$17.322 billion | 4% | | EBITDA | HK$6.380 billion | >3% | | Adjusted Funds Flow | HK$2.562 billion | 3% | | Profit attributable to stapled unitholders | HK$2.070 billion | 4% | | Basic earnings per stapled unit | HK$27.32 cents | - | | Interim distribution per stapled unit | HK$33.80 cents | - | - Broadband market leadership expanded, with total fiber-to-the-home connections increasing **3% to 1.055 million**, and the **2.5G service user base** expanding **141%**[37](index=37&type=chunk) - Mobile 5G customer base increased **21% to 1.894 million**, with roaming revenue growth driving a **5% increase** in mobile communication service revenue[37](index=37&type=chunk) - Enterprise business revenue grew **11%**, securing over **HK$2.2 billion** in new project orders in H1[37](index=37&type=chunk) [Segmental Financial Review](index=14&type=section&id=Segmental%20Financial%20Review) This section details HKT's financial performance across its business segments; total telecommunications services revenue grew 4%, mobile communication total revenue increased 5%, and other businesses recorded 3% revenue growth, with total EBITDA increasing 3% and stable margins Segmental Revenue and EBITDA (HK$ million) | Segment | H1 2024 Revenue | H1 2025 Revenue | YoY Revenue Change | H1 2024 EBITDA | H1 2025 EBITDA | YoY EBITDA Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Telecommunications Services | 12,063 | 12,527 | 4% | 4,296 | 4,421 | 3% | | Mobile Communications | 4,976 | 5,200 | 5% | 2,302 | 2,412 | 5% | | Other Businesses | 552 | 570 | 3% | (430) | (453) | (5)% | | Total | 16,669 | 17,322 | 4% | 6,168 | 6,380 | 3% | Key Operating Items (thousands/units) | Metric | H1 2024 | H1 2025 | YoY Change | | :--- | :--- | :--- | :--- | | Telephone Lines | 2,168 | 2,070 | (5)% | | Total Broadband Lines | 1,646 | 1,657 | 1% | | Mobile Subscribers | 4,884 | 4,875 | - | | Postpaid Subscribers | 3,433 | 3,478 | 1% | | Installed Pay-TV Subscribers | 1,430 | 1,448 | 1% | | The Club Members | 3,939 | 4,070 | 3% | [Telecommunications Services](index=17&type=section&id=Telecommunications%20Services) Total telecommunications services revenue grew 4% to HK$12.527 billion, driven by an 8% increase in local data services revenue to HK$6.867 billion, accounting for 79% of local telecommunications services revenue; broadband revenue grew 3%, with fiber-to-the-home connections reaching 1.055 million, and the 2.5G service customer base growing 141% year-on-year Telecommunications Services Revenue and EBITDA (HK$ million) | Metric | June 30, 2024 | June 30, 2025 | YoY Change | | :--- | :--- | :--- | :--- | | Local Telecommunications Services Revenue | 8,289 | 8,714 | 5% | | International Telecommunications Services Revenue | 3,774 | 3,813 | 1% | | Total Telecommunications Services Revenue | 12,063 | 12,527 | 4% | | Total Telecommunications Services EBITDA | 4,296 | 4,421 | 3% | | Telecommunications Services EBITDA Margin | 36% | 35% | -1% | - Local data services revenue (including broadband revenue and local data revenue) increased **8% year-on-year** to **HK$6.867 billion**[43](index=43&type=chunk) - Fiber-to-the-home (FTTH) connections reached **1.055 million**, a net increase of **27,000 or 3%** from last year; **2.5G service customer base** increased **141% year-on-year**, with ARPU rising by approximately **HK$75**[44](index=44&type=chunk) - Enterprise business local data revenue grew **11% year-on-year**, successfully delivering over **130 large-scale projects** incorporating the latest technologies such as 5G, AI, and IoT[44](index=44&type=chunk)[45](index=45&type=chunk) - Pay-TV services revenue was **HK$1.160 billion**, with Now TV streaming service customers increasing **17%**, driving total installed pay-TV subscribers to **1.448 million**[47](index=47&type=chunk) - International telecommunications services revenue increased **1% to HK$3.813 billion**, primarily driven by increased data revenue and rising demand for the Console Connect platform[48](index=48&type=chunk) [Mobile Communications](index=19&type=section&id=Mobile%20Communications) Mobile communication services revenue grew 5% to HK$4.189 billion, primarily driven by continued growth in roaming services, an expanding postpaid customer base, and increased 5G adoption; personal outbound roaming revenue increased 11% year-on-year, and total 5G postpaid customers reached 1.894 million, a 21% year-on-year increase, with postpaid ARPU rising 1% to HK$193 and churn remaining low Mobile Communications Revenue and EBITDA (HK$ million) | Metric | June 30, 2024 | June 30, 2025 | YoY Change | | :--- | :--- | :--- | :--- | | Mobile Communications Service Revenue | 3,990 | 4,189 | 5% | | Mobile Communications Product Sales | 986 | 1,011 | 3% | | Total Mobile Communications Revenue | 4,976 | 5,200 | 5% | | Mobile Communications Service EBITDA | 2,300 | 2,409 | 5% | | Total Mobile Communications EBITDA | 2,302 | 2,412 | 5% | | Mobile Communications EBITDA Margin | 46% | 46% | 0% | - Personal outbound roaming revenue in H1 2025 increased **11% year-on-year**, reaching **141% of pre-pandemic levels**, driving total roaming revenue up **7% year-on-year**[50](index=50&type=chunk) - As of June 2025, over **54% of mobile postpaid customers** were on 5G plans, totaling **1.894 million**, a **21% year-on-year increase**[50](index=50&type=chunk) - Postpaid ARPU increased **1% to HK$193**, with churn for core 1O1O and csl businesses remaining low at **0.7%**[51](index=51&type=chunk) [Other Businesses](index=20&type=section&id=Other%20Businesses) Other businesses revenue increased 3% to HK$570 million, primarily driven by The Club membership platform and the DrGo health tech platform; The Club membership expanded 3% to 4.07 million, and DrGo registered users grew 3% year-on-year to 406,000, extending telehealth solutions to the Greater Bay Area and parts of Asia - Other businesses revenue increased **3% to HK$570 million**, primarily comprising The Club membership platform and enterprise support services[52](index=52&type=chunk) - The Club membership expanded **3%** from **3.94 million** in the prior year to **4.07 million** in H1 2025[52](index=52&type=chunk) - The DrGo health tech platform's registered users grew **3% year-on-year to 406,000**, extending telehealth solutions to the Greater Bay Area and parts of Asia[52](index=52&type=chunk) [Cost of Sales and General and Administrative Expenses](index=20&type=section&id=Cost%20of%20Sales%20and%20General%20and%20Administrative%20Expenses) Cost of sales increased 6% year-on-year to HK$9.021 billion, reflecting changes in revenue mix; operating costs, excluding depreciation, amortization, and net gain on disposal of property, plant and equipment and right-of-use assets, decreased 4% year-on-year to HK$1.921 billion, primarily due to operational efficiencies and cost optimization from AI application in workflow reshaping - Cost of sales increased **6% to HK$9.021 billion**, reflecting changes in the revenue mix during the period[54](index=54&type=chunk) - Operating costs, excluding depreciation, amortization, and net gain on disposal of property, plant and equipment and right-of-use assets, decreased **4% year-on-year to HK$1.921 billion**[55](index=55&type=chunk) - The ratio of operating costs to revenue reached **11.1%**, compared to 12.1% in the prior year, primarily due to AI application in workflow reshaping, business structure streamlining, and human resource optimization[55](index=55&type=chunk) - Total depreciation and amortization expenses increased **3% to HK$2.757 billion**, with higher amortization due to increased investment in intangible assets for enterprise customer project R&D[55](index=55&type=chunk) [EBITDA](index=20&type=section&id=EBITDA) For the six months ended June 30, 2025, total EBITDA increased over 3% to HK$6.380 billion, driven by revenue growth in telecommunications and mobile communication services and enhanced operational efficiency; the overall EBITDA margin remained stable at 37% Total EBITDA (HK$ million) | Metric | June 30, 2024 | June 30, 2025 | YoY Change | | :--- | :--- | :--- | :--- | | Total EBITDA | 6,168 | 6,380 | >3% | | Overall EBITDA Margin | 37% | 37% | 0% | | Total EBITDA excluding mobile product sales | - | 6,377 | 3% | | EBITDA Margin excluding mobile product sales | - | 39% | - | [Net Finance Costs and Income Tax](index=20&type=section&id=Net%20Finance%20Costs%20and%20Income%20Tax) Net finance costs significantly decreased 19% to HK$885 million, primarily due to debt reduction at the end of 2024 and a decline in HIBOR; the average cost of debt for the period was 3.96%, while income tax expense increased to HK$414 million, with an effective tax rate of 15.3%, mainly due to higher profit - Net finance costs significantly decreased **19% to HK$885 million** from HK$1.092 billion in the prior year[57](index=57&type=chunk) - The average cost of debt for the period was **3.96%**, compared to 4.26% last year[57](index=57&type=chunk) - Income tax expense was **HK$414 million**, with an effective tax rate of **15.3%**, primarily due to increased profit for the period[58](index=58&type=chunk) [Profit Attributable to Stapled Unitholders](index=21&type=section&id=Profit%20Attributable%20to%20Stapled%20Unitholders) For the six months ended June 30, 2025, profit attributable to stapled unitholders increased 4% to HK$2.070 billion Profit Attributable to Stapled Unitholders (HK$ million) | Metric | June 30, 2024 | June 30, 2025 | YoY Change | | :--- | :--- | :--- | :--- | | Profit attributable to stapled unitholders | 1,990 | 2,070 | 4% | [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) HKT's total debt as of June 30, 2025, was HK$43.433 billion, with cash and short-term deposits totaling HK$1.940 billion; the total debt to total assets ratio was 37%, and the company has ample liquidity, with HK$40.581 billion in bank facilities, of which HK$15.973 billion was undrawn, while capital expenditure was HK$1.075 billion, representing 6.2% of revenue, with prudent investment in digital capabilities Liquidity and Capital Resources (HK$ million) | Metric | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Total Debt | 41,723 | 43,433 | | Cash and Short-term Deposits | 2,145 | 1,940 | | Total Debt to Total Assets Ratio | 36% | 37% | | Undrawn Bank Facilities | - | 15,973 | | Capital Expenditure | 1,103 | 1,075 | | Capital Expenditure as % of Revenue | 6.6% | 6.2% | - Hong Kong Telecommunications (HKT) Limited obtained investment grade ratings of **"Baa2" from Moody's** and **"BBB" from S&P Global Ratings**[62](index=62&type=chunk) - Adjusted funds flow increased **3% to HK$2.562 billion**, positively impacted by expanded EBITDA, prudent capital expenditure, lower customer acquisition costs, and reduced right-of-use asset expenditures[64](index=64&type=chunk) [Hedging](index=22&type=section&id=Hedging) HKT continuously manages foreign currency and interest rate market risks through financial management policies and derivative instruments, such as forward and swap contracts, avoiding speculative transactions; as most revenue and costs are denominated in HKD, and related costs and revenues for foreign currency operations are in the same currency, foreign exchange fluctuation risk is not significant - HKT's policy is to continuously manage market risks directly related to its business and financing, and it does not engage in any speculative derivative transactions[65](index=65&type=chunk) - Over three-quarters of consolidated revenue and costs are denominated in HKD, and related costs and expenses for foreign currency operations are generally denominated in the same foreign currency, providing a natural hedge, thus the business is not exposed to significant foreign exchange fluctuation risk[65](index=65&type=chunk) - The Group has entered into forward and swap contracts to manage risks arising from adverse fluctuations in foreign currency exchange rates and interest rates, with all contracts designated as cash flow hedges for the underlying financing[65](index=65&type=chunk) [Contingent Liabilities](index=22&type=section&id=Contingent%20Liabilities) As of June 30, 2025, HKT's total contingent liabilities amounted to HK$799 million, primarily comprising performance guarantees; the Directors believe that liabilities arising from these corporate guarantees will not have a material impact on the Group's financial position Contingent Liabilities (HK$ million) | Item | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Performance Guarantees | 903 | 797 | | Others | 2 | 2 | | Total | 905 | 799 | - The Group has certain corporate guarantee obligations to ensure its subsidiaries fulfill contracts in the ordinary course of business, and the Directors believe that any liabilities arising therefrom will not have a material impact on the Group's financial position[67](index=67&type=chunk) [Human Resources](index=22&type=section&id=Human%20Resources) As of June 30, 2025, HKT employed over 12,500 employees across 22 countries and cities globally, with approximately 66% working in Hong Kong; the company has performance bonus and incentive schemes to encourage and reward employees at all levels for achieving business performance targets - As of June 30, 2025, HKT employed over **12,500 employees** across 22 countries and cities globally (June 30, 2024: 13,400 employees)[68](index=68&type=chunk) - Approximately **66% of employees** work in Hong Kong, with the majority of others employed in mainland China, the US, the UK, and the Philippines[68](index=68&type=chunk) - The company has performance bonus and incentive schemes, awarded based on overall and business unit revenue, EBITDA, and free cash flow targets achieved, as well as employee performance appraisals[68](index=68&type=chunk) [Interim Dividends/Distributions](index=22&type=section&id=Interim%20Dividends%2FDistributions) The Board of Directors of the Trustee-Manager has declared an interim distribution of HK$33.80 cents per stapled unit for the six months ended June 30, 2025; the Board of Directors of the Company has also declared an interim dividend of HK$33.80 cents per ordinary share for the same period held by the Trustee-Manager Interim Dividends/Distributions | Item | Amount | | :--- | :--- | | Interim distribution per stapled unit | HK$33.80 cents | | Interim dividend per ordinary share | HK$33.80 cents | - The Board of Directors of the Trustee-Manager has confirmed that, after making the above distribution, HKT Trust will be able to meet its liabilities as they fall due from the trust property[69](index=69&type=chunk) [Consolidated Financial Statements](index=23&type=section&id=Consolidated%20Financial%20Statements) This chapter presents the unaudited condensed consolidated financial statements of HKT Trust and HKT Limited for the six months ended June 30, 2025, including the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, and condensed consolidated cash flow statement, providing an overview of the Group's financial performance and position during the reporting period [Consolidated Income Statement](index=23&type=section&id=Consolidated%20Income%20Statement) For the six months ended June 30, 2025, HKT's total revenue was HK$17.322 billion, profit for the period was HK$2.298 billion, of which profit attributable to stapled unitholders was HK$2.070 billion; basic earnings per stapled unit were HK$27.32 cents Consolidated Income Statement Summary (HK$ million) | Metric | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Revenue | 16,669 | 17,322 | | Cost of Sales | (8,491) | (9,021) | | General and Administrative Expenses | (4,684) | (4,677) | | Net Finance Costs | (1,092) | (885) | | Profit before Income Tax | 2,334 | 2,712 | | Income Tax Expense | (342) | (414) | | Profit for the Period | 1,992 | 2,298 | | Profit attributable to stapled unitholders/equity holders of the Company | 1,990 | 2,070 | | Non-controlling Interests | 2 | 228 | | Basic earnings per stapled unit | 26.27 cents | 27.32 cents | [Consolidated Statement of Comprehensive Income](index=24&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, profit for the period was HK$2.298 billion, but due to other comprehensive losses (primarily from changes in fair value of financial assets at fair value through other comprehensive income and cash flow hedge transfers), total comprehensive income for the period was HK$1.719 billion Consolidated Statement of Comprehensive Income Summary (HK$ million) | Metric | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Profit for the Period | 1,992 | 2,298 | | Changes in fair value of financial assets at fair value through other comprehensive income | (9) | (225) | | Exchange differences on translation of foreign operations of subsidiaries | (40) | 127 | | Cash flow hedges: transferred from equity to consolidated income statement | 56 | (396) | | Other comprehensive loss for the period | (67) | (579) | | Total comprehensive income for the period | 1,925 | 1,719 | | Attributable to stapled unitholders/equity holders of the Company | 1,923 | 1,491 | | Attributable to non-controlling interests | 2 | 228 | [Consolidated Statement of Financial Position](index=25&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were HK$107.812 billion, with non-current assets primarily comprising property, plant and equipment, goodwill, and intangible assets; current liabilities exceeded current assets by HK$11.563 billion, but management believes the Group can meet its obligations due within the next 12 months, and total equity was HK$37.880 billion Consolidated Statement of Financial Position Summary (HK$ million) | Metric | December 31, 2024 (Audited) | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | Non-current Assets | 105,928 | 107,812 | | Current Assets | 10,885 | 10,687 | | Current Liabilities | (25,821) | (22,250) | | Non-current Liabilities | (51,347) | (58,369) | | Net Assets | 39,645 | 37,880 | | Total Equity | 39,645 | 37,880 | - As of June 30, 2025, the Group's current liabilities exceeded its current assets by **HK$11.563 billion**, but management believes the Group is able to meet its obligations due within the next 12 months, thus preparing financial information on a going concern basis[88](index=88&type=chunk) [Consolidated Statement of Changes in Equity](index=27&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement outlines the changes in equity attributable to stapled unitholders/equity holders of the Company and non-controlling interests for the six months ended June 30, 2025, including profit for the period, other comprehensive income/loss, and transactions with equity holders such as dividend payments and share-based compensation Consolidated Statement of Changes in Equity Summary (HK$ million) | Item | Balance at January 1, 2025 | Profit for the Period | Other Comprehensive Income/(Loss) | Total Transactions with Equity Holders | Balance at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity attributable to stapled unitholders/equity holders of the Company | 38,282 | 2,070 | (579) | (3,470) | 36,303 | | Non-controlling Interests | 1,363 | 228 | - | (14) | 1,577 | | Total Equity | 39,645 | 2,298 | (579) | (3,484) | 37,880 | [Condensed Consolidated Cash Flow Statement](index=29&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) For the six months ended June 30, 2025, net cash generated from operating activities was HK$5.313 billion; net cash used in investing activities was HK$3.037 billion, and net cash used in financing activities was HK$2.691 billion, resulting in a net decrease in cash and cash equivalents of HK$415 million Condensed Consolidated Cash Flow Statement Summary (HK$ million) | Item | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Net cash generated from operating activities | 5,345 | 5,313 | | Net cash used in investing activities | (2,728) | (3,037) | | Net cash used in financing activities | (2,775) | (2,691) | | Net decrease in cash and cash equivalents | (158) | (415) | | Cash and cash equivalents at January 1 | 1,630 | 1,850 | | Cash and cash equivalents at June 30 | 1,480 | 1,437 | [Notes to the Unaudited Condensed Consolidated Interim Financial Information](index=30&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) This chapter provides detailed notes to the unaudited condensed consolidated interim financial information of HKT Trust and HKT Limited, explaining the basis of preparation, accounting policies, specific financial data for each business segment, income tax treatment, dividend distributions, trade receivables and payables, share award schemes, commitments, contingent liabilities, related party transactions, and fair value estimation of financial instruments [Basis of Preparation and Presentation](index=30&type=section&id=Basis%20of%20Preparation%20and%20Presentation) The unaudited condensed consolidated interim financial information of HKT Trust and the Company is prepared in accordance with Appendix D2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34, and presented in HKD; as HKT Trust's sole business activity is investing in the Company, their consolidated financial results are identical, thus presented together, and the Group prepares financial information on a going concern basis, despite current liabilities exceeding current assets, as management is confident in its ability to meet obligations due within the next 12 months - The unaudited condensed consolidated interim financial information of HKT Trust and the Company is presented together, as HKT Trust's sole business activity is limited to investing in the Company[84](index=84&type=chunk) - The financial information is prepared in accordance with Appendix D2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants[85](index=85&type=chunk) - The Group prepares financial information on a going concern basis, as management believes it can meet its obligations due within the next 12 months, despite current liabilities exceeding current assets by **HK$11.563 billion**[88](index=88&type=chunk) [Company Statement of Financial Position](index=31&type=section&id=Company%20Statement%20of%20Financial%20Position) As of June 30, 2025, HKT Limited's net assets were HK$32.961 billion, primarily comprising interests in subsidiaries; share capital was HK$8 million, and reserves were HK$32.953 billion HKT Limited Statement of Financial Position Summary (HK$ million) | Metric | December 31, 2024 (Audited) | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | Interests in Subsidiaries | 30,750 | 30,750 | | Current Assets | 4,490 | 4,490 | | Current Liabilities | (2,279) | (2,279) | | Net Assets | 32,961 | 32,961 | | Share Capital | 8 | 8 | | Reserves | 32,953 | 32,953 | [Segment Information](index=32&type=section&id=Segment%20Information) The Group's operating decision-makers assess business performance from a product perspective, primarily divided into telecommunications services, mobile communications, and other businesses; for the six months ended June 30, 2025, external revenue for telecommunications services was HK$11.914 billion, with EBITDA of HK$4.421 billion; mobile communications external revenue was HK$4.861 billion, with EBITDA of HK$2.412 billion; and other businesses external revenue was HK$547 million, with EBITDA of HK$(453) million External Revenue and EBITDA by Business Segment (HK$ million) | Segment | 2025 External Revenue | 2025 EBITDA | | :--- | :--- | :--- | | Telecommunications Services | 11,914 | 4,421 | | Mobile Communications | 4,861 | 2,412 | | Other Businesses | 547 | (453) | | Consolidated Total | 17,322 | 6,380 | - Operating decision-makers measure the performance of each business segment based on adjusted earnings before interest, tax, depreciation, and amortization (EBITDA)[91](index=91&type=chunk) - Telecommunications services include enterprise solutions, integrated home solutions, and media entertainment, primarily operating in Hong Kong, also providing services to customers in mainland China and other parts of the world[93](index=93&type=chunk) [Profit Before Income Tax](index=34&type=section&id=Profit%20Before%20Income%20Tax) For the six months ended June 30, 2025, profit before income tax is accounted for after deducting cost of inventories sold of HK$4.240 billion, cost of sales (excluding cost of inventories sold) of HK$4.781 billion, depreciation and amortization expenses (including depreciation of property, plant and equipment of HK$519 million, depreciation of right-of-use assets of HK$640 million, amortization of intangible assets of HK$823 million, etc.), and finance costs on borrowings of HK$826 million Profit Before Income Tax Deductions (HK$ million) | Item | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Cost of Inventories Sold | 3,152 | 4,240 | | Cost of Sales (excluding cost of inventories sold) | 5,339 | 4,781 | | Depreciation of Property, Plant and Equipment | 512 | 519 | | Depreciation of Right-of-Use Assets | 668 | 640 | | Amortization of Intangible Assets | 664 | 823 | | Finance Costs on Borrowings | 1,011 | 826 | [Income Tax](index=34&type=section&id=Income%20Tax) For the six months ended June 30, 2025, income tax expense was HK$414 million, including Hong Kong profits tax of HK$141 million, overseas tax of HK$19 million, and deferred income tax changes of HK$254 million; the Group has assessed the potential impact of global anti-base erosion (Pillar Two) rules and found no tax risks as of the reporting date Income Tax Expense (HK$ million) | Item | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 156 | 141 | | Overseas Tax | 23 | 19 | | Deferred Income Tax Changes | 163 | 254 | | Total | 342 | 414 | - Hong Kong profits tax is provided at a rate of **16.5%**, and overseas tax is calculated based on prevailing tax rates in respective jurisdictions[96](index=96&type=chunk) - The Group has assessed the potential impact of global anti-base erosion (Pillar Two) rules and found no tax risks as of the reporting date[97](index=97&type=chunk) [Distributions/Dividends](index=35&type=section&id=Distributions%2FDividends) The Trustee-Manager and Company Directors have declared an interim distribution/dividend of HK$33.80 cents per stapled unit/ordinary share for the year ending December 31, 2025; additionally, a final distribution/dividend of HK$45.88 cents per stapled unit/ordinary share for the previous financial year, totaling HK$3.476 billion, was approved and paid during the interim period Distributions/Dividends Attributable to Interim Period (HK$ million) | Item | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Interim distribution/dividend of HK$33.80 cents per stapled unit/ordinary share (2024: HK$32.92 cents) | 2,495 | 2,562 | Distributions/Dividends Approved and Paid During Interim Period (HK$ million) | Item | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Final distribution/dividend of HK$45.88 cents per stapled unit/ordinary share for the previous financial year declared, approved, and paid during the interim period (2024: HK$44.44 cents) | 3,369 | 3,478 | | Less: Distributions/dividends on stapled units/ordinary shares held by the stapled unit award scheme | (2) | (2) | | Total | 3,367 | 3,476 | [Earnings Per Stapled Unit/Share](index=36&type=section&id=Earnings%20Per%20Stapled%20Unit%2FShare) For the six months ended June 30, 2025, the profit used to calculate basic and diluted earnings per stapled unit/share was HK$2.070 billion; basic earnings were HK$27.32 cents, and diluted earnings were also HK$27.32 cents Earnings Per Stapled Unit/Share Calculation | Metric | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Profit for calculating basic and diluted earnings (HK$ million) | 1,990 | 2,070 | | Weighted average number of stapled units/ordinary shares | 7,579,742,334 | 7,579,776,147 | | Weighted average number for calculating basic earnings | 7,575,429,751 | 7,576,346,362 | | Basic earnings (HK$ cents) | 26.27 | 27.32 | | Weighted average number for calculating diluted earnings | 7,576,754,546 | 7,578,134,410 | | Diluted earnings (HK$ cents) | 26.26 | 27.32 | [Net Trade Receivables](index=36&type=section&id=Net%20Trade%20Receivables) As of June 30, 2025, net trade receivables amounted to HK$2.525 billion, with HK$1.446 billion aged 1-30 days; the Group implements clear credit policies for customers, with a general credit period of up to 30 days from the invoice date Trade Receivables Ageing Analysis (HK$ million) | Ageing | December 31, 2024 (Audited) | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | 1 – 30 days | 1,580 | 1,446 | | 31 – 60 days | 389 | 288 | | 61 – 90 days | 177 | 257 | | 91 – 120 days | 170 | 185 | | Over 120 days | 531 | 518 | | Total | 2,847 | 2,694 | | Less: Loss allowance | (137) | (169) | | Net Trade Receivables | 2,710 | 2,525 | - Net trade receivables include amounts due from related parties of **HK$120 million** (December 31, 2024: HK$152 million)[101](index=101&type=chunk) - The Group's general credit period for customers is up to **30 days** from the invoice date, with individual credit assessments for credits above a certain amount[101](index=101&type=chunk) [Trade Payables](index=37&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables amounted to HK$8.167 billion, with HK$3.408 billion aged 1-30 days; trade payables include amounts due to related parties of HK$135 million Trade Payables Ageing Analysis (HK$ million) | Ageing | December 31, 2024 (Audited) | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | 1 – 30 days | 2,841 | 3,408 | | 31 – 60 days | 1,685 | 2,280 | | 61 – 90 days | 895 | 827 | | 91 – 120 days | 980 | 665 | | Over 120 days | 811 | 987 | | Total | 7,212 | 8,167 | - Trade payables include amounts due to related parties of **HK$135 million** (December 31, 2024: HK$155 million)[103](index=103&type=chunk) [Equity of HKT Limited](index=37&type=section&id=Equity%20of%20HKT%20Limited) As of June 30, 2025, HKT Limited's authorized share capital included 20 billion ordinary shares and 20 billion preference shares, each with a par value of HK$0.0005; issued and fully paid share capital comprised 7,579,776,147 ordinary shares and 7,579,776,147 preference shares, and company reserves as of June 30, 2025, were HK$32.953 billion HKT Limited Share Capital (HK$) | Share Capital Type | Number of Shares at Jan 1 & Jun 30, 2024 | Par Value at Jan 1 & Jun 30, 2024 | Number of Shares at Jan 1 & Jun 30, 2025 | Par Value at Jan 1 & Jun 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Authorized Ordinary Shares (HK$0.0005 per share) | 20,000,000,000 | 10,000,000 | 20,000,000,000 | 10,000,000 | | Authorized Preference Shares (HK$0.0005 per share) | 20,000,000,000 | 10,000,000 | 20,000,000,000 | 10,000,000 | | Issued and Fully Paid Ordinary Shares (HK$0.0005 per share) | 7,579,742,334 | 3,789,871 | 7,579,776,147 | 3,789,888 | | Issued and Fully Paid Preference Shares (HK$0.0005 per share) | 7,579,742,334 | 3,789,871 | 7,579,776,147 | 3,789,888 | Company Reserves Movement (HK$ million) | Item | Share Premium Account | Retained Profits | Total | | :--- | :--- | :--- | :--- | | At January 1, 2025 | 32,958 | (5) | 32,953 | | Total comprehensive income for the period | – | 3,478 | 3,478 | | Dividends paid for previous year | – | (3,478) | (3,478) | | At June 30, 2025 | 32,958 | (5) | 32,953 | [Share Award Schemes](index=38&type=section&id=Share%20Award%20Schemes) HKT Trust and the Company operate share stapled unit award schemes, including the 2011 Share Stapled Unit Award Scheme, the 2024 to 2034 Share Stapled Unit Option Scheme, and the 2024 Share Stapled Unit Award Scheme; for the six months ended June 30, 2025, 1,099,449 stapled units were vested under the 2011 scheme, and 2,630,211 stapled unit options and awards were granted under the new schemes Summary of Share Stapled Unit Award Scheme Movements | Item | Unvested at January 1, 2025 | Granted during the period | Lapsed/Forfeited during the period | Vested during the period | Unvested at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Employee Participants | 1,812,671 | – | (76,256) | (1,099,449) | 636,966 | Summary of 2024 Share Stapled Unit Award Scheme Movements (as of June 30, 2025) | Item | Unvested at January 1, 2025 | Granted during the period | Lapsed/Forfeited during the period | Vested during the period | Unvested at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Directors/Chief Executive | – | 1,031,380 | – | – | 1,031,380 | | Total Employee Participants | – | 887,709 | (8,156) | – | 879,958 | | Total Related Entity Participants | 34,395 | 295,757 | (385) | – | 329,768 | | Total | 34,395 | 2,630,211 | (8,541) | – | 2,656,065 | - For the six months ended June 30, 2025, the weighted average fair value of stapled units granted at the grant date was **HK$11.02 per stapled unit**[108](index=108&type=chunk) - For the six months ended June 30, 2025, a total of **2,630,211 stapled unit options and awards** were granted under all stapled unit schemes involving the issuance of new stapled units, representing approximately **0.03%** of the weighted average number of issued stapled units[165](index=165&type=chunk) [Commitments](index=39&type=section&id=Commitments) As of June 30, 2025, the Group's authorized and contracted capital commitments for the acquisition of property, plant and equipment amounted to HK$1.666 billion; other commitments included HK$1.051 billion for the acquisition of broadcasting rights for certain TV content and HK$445 million for operating expense commitments Capital Commitments (HK$ million) | Item | December 31, 2024 (Audited) | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | Authorized and contracted – acquisition of property, plant and equipment | 1,612 | 1,666 | Other Commitments (HK$ million) | Item | December 31, 2024 (Audited) | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | Acquisition of broadcasting rights for certain TV content | 1,302 | 1,051 | | Operating expense commitments | 961 | 445 | | Total | 2,263 | 1,496 | [Contingent Liabilities](index=40&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group's total contingent liabilities amounted to HK$799 million, primarily comprising performance guarantees; the Directors believe that liabilities arising from these corporate guarantees will not have a material impact on the Group's financial position Contingent Liabilities (HK$ million) | Item | December 31, 2024 (Audited) | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | Performance Guarantees | 903 | 797 | | Others | 2 | 2 | | Total | 905 | 799 | - The Group has certain corporate guarantee obligations to ensure its subsidiaries fulfill contracts in the ordinary course of business, and the Directors believe that any liabilities arising therefrom will not have a material impact on the Group's financial position[111](index=111&type=chunk) [Related Party Transactions](index=40&type=section&id=Related%20Party%20Transactions) The Group engaged in several significant related party transactions during the period, including telecommunications service fees, data center service fees, IT fees, and content supply fees with PCCW's major shareholders, joint ventures, associates, and fellow subsidiaries; total key management compensation was HK$29 million Key Related Party Transactions (HK$ million) | Transaction Type | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Telecommunications service fees received or receivable from PCCW's major shareholders, etc | 84 | 80 | | Telecommunications service fees paid or payable to PCCW's major shareholders, etc | 82 | 98 | | Telecommunications service fees received or receivable from joint ventures, etc | 24 | 23 | | Telecommunications service fees paid or payable to joint ventures, etc | 142 | 126 | | Telecommunications service fees received or receivable from fellow subsidiaries, etc | 763 | 643 | | Content supply fees paid or payable to fellow subsidiaries, etc | 123 | 117 | Key Management Compensation (HK$ million) | Item | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Salaries and other short-term employee benefits | 18 | 22 | | Share-based compensation | 3 | 7 | | Total | 21 | 29 | [Financial Instruments](index=42&type=section&id=Financial%20Instruments) The Group faces credit, liquidity, and market risks in its ordinary course of business and manages these risks through financial management policies and derivative instruments such as cross-currency swaps, interest rate swaps, and forward foreign exchange contracts; financial instruments are measured at fair value using Level 1, Level 2, and Level 3 valuation methods, with the fair value of long-term borrowings calculated as the present value of estimated future cash flows discounted at current market interest rates - The Group controls credit, liquidity, and market risks (including foreign exchange risk and interest rate risk) through financial management policies and practices, and does not engage in any speculative derivative transactions[115](index=115&type=chunk) - Financial instruments measured at fair value are analyzed by valuation method and their different level definitions: Level 1 for quoted prices in active markets, Level 2 for observable market data valuation, and Level 3 for unobservable market data valuation[116](index=116&type=chunk) Fair Value Measurement of Financial Assets and Liabilities (HK$ million) | Item | Level | Total at December 31, 2024 | Total at June 30, 2025 | | :--- | :--- | :--- | :--- | | Financial assets at fair value through other comprehensive income | Level 1/Level 3 | 823 | 598 | | Financial assets at fair value through profit or loss | Level 1/Level 3 | 35 | 22 | | Derivative financial instruments (assets) | Level 2 | 58 | 152 | | Derivative financial instruments (liabilities) | Level 2 | (810) | (986) | - The fair value of long-term borrowings is the present value of estimated future cash flows discounted at current market interest rates, and its fair value is within Level 2 of the fair value hierarchy[123](index=123&type=chunk) [HKT Management Limited Financial Statements](index=44&type=section&id=HKT%20Management%20Limited%20Financial%20Statements) This chapter provides the unaudited condensed interim financial information of HKT Management Limited for the six months ended June 30, 2025, including the income statement, statement of comprehensive income, statement of financial position, statement of changes in equity, and condensed cash flow statement, along with related notes, detailing its financial performance and position as the Trustee-Manager of HKT Trust [Income Statement](index=44&type=section&id=Income%20Statement) For the six months ended June 30, 2025, HKT Management Limited's management fee income was HK$32 thousand, and general and administrative expenses were also HK$32 thousand, resulting in zero profit before income tax and profit for the period Income Statement Summary (HK$ thousand) | Metric | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Management Fee Income | 30 | 32 | | General and Administrative Expenses | (30) | (32) | | Profit before Income Tax | – | – | | Profit for the Period | – | – | [Statement of Comprehensive Income](index=46&type=section&id=Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, HKT Management Limited's profit for the period and other comprehensive income were both zero, thus total comprehensive income for the period was also zero Statement of Comprehensive Income Summary (HK$ thousand) | Metric | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Profit for the Period | – | – | | Other Comprehensive Income | – | – | | Total Comprehensive Income for the Period | – | – | [Statement of Financial Position](index=47&type=section&id=Statement%20of%20Financial%20Position) As of June 30, 2025, HKT Management Limited's net assets were zero; current assets primarily consisted of amounts receivable from a fellow subsidiary of HK$699 thousand, and current liabilities primarily consisted of amounts payable to a fellow subsidiary of HK$671 thousand and accruals and other payables of HK$28 thousand Statement of Financial Position Summary (HK$ thousand) | Metric | December 31, 2024 (Audited) | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | | Amounts receivable from a fellow subsidiary | 667 | 699 | | Total Current Assets | 667 | 699 | | Accruals and Other Payables | (57) | (28) | | Amounts payable to a fellow subsidiary | (610) | (671) | | Total Current Liabilities | (667) | (699) | | Net Assets | – | – | | Total Equity | – | – | [Statement of Changes in Equity](index=48&type=section&id=Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, HKT Management Limited's share capital, retained profits, and total equity all remained at zero, with no changes Statement of Changes in Equity Summary (HK$ thousand) | Item | Share Capital | Retained Profits | Total | | :--- | :--- | :--- | :--- | | At January 1, 2025 | – | – | – | | Total comprehensive income for the period | – | – | – | | Transactions with Equity Holders of the Company | – | – | – | | At June 30, 2025 | – | – | – | [Condensed Cash Flow Statement](index=49&type=section&id=Condensed%20Cash%20Flow%20Statement) For the six months ended June 30, 2025, HKT Management Limited's net cash generated from operating activities, investing activities, and financing activities were all zero, resulting in zero net change in cash and cash equivalents and zero balance at period-end Condensed Cash Flow Statement Summary (HK$ thousand) | Item | 2024 (Unaudited) | 2025 (Unaudited) | | :--- | :--- | :--- | | Net cash generated from operating activities | – | – | | Net cash generated from investing activities | – | – | | Net cash generated from financing activities | – | – | | Net change in cash and cash equivalents | – | – | | Cash and cash equivalents at January 1 | – | – | | Cash and cash equivalents at June 30 | – | – | [Notes to the Financial Statements](index=50&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides notes to HKT Management Limited's unaudited condensed interim financial information, stating that its preparation basis complies with Appendix D2 of the Listing Rules and Hong Kong Accounting Standard 34; the company had no taxable profit during the period, thus no provision for Hong Kong profits tax, and key related party transactions include management fees receivable from a fellow subsidiary of HK$32 thousand - The Company's unaudited condensed interim financial information is prepared in accordance with Appendix D2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants[135](index=135&type=chunk) - For the six months ended June 30, 2024 and 2025, the Company had no taxable profit, thus no provision for Hong Kong profits tax was made[140](index=140&type=chunk) - Key related party transactions include management fees receivable from a fellow subsidiary of **HK$32 thousand** (2024: HK$30 thousand)[142](index=142&type=chunk) [General Information](index=52&type=section&id=General%20Information) This chapter provides extensive general information about HKT Trust and HKT Limited, including directors' and chief executive's interests in the company and its associated corporations, details of the stapled unit award schemes, interests of major holders, dealings in listed securities, and the company's statements on audit, model code for securities transactions, and corporate governance [Directors' and Chief Executive's Interests](index=52&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests) As of June 30, 2025, directors and the chief executive held interests in HKT Trust and HKT Limited stapled units and PCCW shares; Executive Chairman Mr. Richard Li Tzar Kai held 220,458,245 stapled units (2.91%) and 2,464,133,358 PCCW shares (31.83%) Directors' and Chief Executive's Interests in Stapled Units (as of June 30, 2025) | Name | Personal Interests | Corporate Interests | Other Interests | Total | Approximate Percentage of Total Issued Stapled Units | | :--- | :--- | :--- | :--- | :--- | :--- | | Richard Li Tzar Kai | – | 67,655,964 | 152,802,281 | 220,458,245 | 2.91% | | Susanna Hui Hon Hing | 4,133,441 | – | 2,024,571 | 6,158,012 | 0.08% | | Peter Allen | 48,735 | – | 27,172 | 75,907 | 0.001% | Directors' and Chief Executive's Interests in PCCW Shares (as of June 30, 2025) | Name | Personal Interests | Corporate Interests | Other Interests | Total | Approximate Percentage of Total Issued PCCW Shares | | :--- | :--- | :--- | :--- | :--- | :--- | | Richard Li Tzar Kai | – | 535,291,134 | 1,928,842,224 | 2,464,133,358 | 31.83% | | Susanna Hui Hon Hing | 8,435,883 | – | 4,652,529 | 13,088,412 | 0.17% | | Peter Allen | 314,420 | – | 60,164 | 374,584 | 0.005% | [Stapled Unit Schemes](index=54&type=section&id=Stapled%20Unit%20Schemes) HKT Trust and the Company operate the 2024 to 2034 Share Stapled Unit Option Scheme, the 2024 Share Stapled Unit Award Scheme, and the 2011 Share Stapled Unit Award Scheme; for the six months ended June 30, 2025, 1,099,449 stapled units were vested under the 2011 scheme, and 2,630,211 stapled unit awards were granted under the 2024 scheme, with the total number of stapled unit options and awards available for grant being 755,318,168 - HKT Trust and the Company's existing stapled unit schemes include the **2024 to 2034 Share Stapled Unit Option Scheme**, the **2024 Share Stapled Unit Award Scheme**, and the **2011 Share Stapled Unit Award Scheme**[154](index=154&type=chunk) HKT Share Stapled Unit Subscription Scheme Movements (as of June 30, 2025) | Item | Unvested at January 1, 2025 | Granted during the period | Lapsed/Forfeited during the period | Vested during the period | Unvested at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Employee Participants | 1,812,671 | – | (76,256) | (1,099,449) | 636,966 | 2024 Share Stapled Unit Award Scheme Movements (as of June 30, 2025) | Item | Unvested at January 1, 2025 | Granted during the period | Lapsed/Forfeited during the period | Vested during the period | Unvested at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Directors/Chief Executive | – | 1,031,380 | – | – | 1,031,380 | | Total Employee Participants | – | 887,709 | (8,156) | – | 879,958 | | Total Related Entity Participants | 34,395 | 295,757 | (385) | – | 329,768 | | Total | 34,395 | 2,630,211 | (8,541) | – | 2,656,065 | - For the six months ended June 30, 2025, the weighted average fair value of stapled units granted at the grant date was **HK$11.02 per stapled unit**[108](index=108&type=chunk) - For the six months ended June 30, 2025, a total of **2,630,211 stapled unit options and awards** were granted under all stapled unit schemes involving the issuance of new stapled units, representing approximately **0.03%** of the weighted average number of issued stapled units[165](index=165&type=chunk) [Major Holders' Interests and Short Positions in Stapled Units](index=58&type=section&id=Major%20Holders'%20Interests%20and%20Short%20Positions%20in%20Stapled%20Units) As of June 30, 2025, PCCW and its wholly-owned subsidiary CAS Holding No. 1 Limited were the major holders of stapled units, holding 3,959,683,681 stapled units, representing 52.24% of the total issued stapled units Major Holders' Interests in Stapled Units (as of June 30, 2025) | Name | Capacity | Long Position in Number of Stapled Units Held | Approximate Percentage of Total Issued Stapled Units | | :--- | :--- | :--- | :--- | | PCCW | Interest in controlled corporation | 3,959,683,681 | 52.24% | | CAS Holding No. 1 Limited | Beneficial owner | 3,959,683,681 | 52.24% | - PCCW indirectly holds these interests through its direct wholly-owned subsidiary, CAS Holding No. 1 Limited[170](index=170&type=chunk) [Dealings in Listed Securities](index=59&type=section&id=Dealings%20in%20Listed%20Securities) For the six months ended June 30, 2025, HKT Trust (including the Trustee-Manager), the Company, or its subsidiaries did not purchase, sell, or redeem any stapled units - For the six months ended June 30, 2025, HKT Trust (including the Trustee-Manager), the Company, or its subsidiaries did not purchase, sell, or redeem any stapled units[171](index=171&type=chunk) [Audit Committee](index=59&type=section&id=Audit%20Committee) The Audit Committee of the Trustee-Manager and the Audit Committee of the Company have reviewed the unaudited condensed consolidated interim financial information of HKT Trust and the Company and its subsidiaries, as well as the unaudited condensed interim financial information of the Trustee-Manager - The Audit Committee has reviewed the accounting policies adopted and related financial information of HKT Trust and the Company, together with the Company's subsidiaries, and the Trustee-Manager[172](index=172&type=chunk) [Model Code for Securities Transactions](index=59&type=section&id=Model%20Code%20for%20Securities%20Transactions) HKT Trust and the Company have adopted the "HKT Code," whose terms are no less stringent than the "Model Code" set out in Appendix C3 of the Listing Rules; following inquiries with all Directors, it has been confirmed that the "Model Code" and "HKT Code" have been complied with throughout the period - HKT Trust and the Company have adopted the **"HKT Code,"** whose terms are no less stringent than the standards stipulated in the **"Model Code"** set out in Appendix C3 of the Listing Rules[173](index=173&type=chunk) - Following specific inquiries with all Directors, it has been confirmed that the standards stipulated in the **"Model Code"** and **"HKT Code"** have been complied with throughout the period[173](index=173&type=chunk) [Corporate Governance Code](index=59&type=section&id=Corporate%20Governance%20Code) HKT Trust and the Company are committed to maintaining high standards of corporate governance and have applied the principles of the Corporate Governance Code set out in Appendix C1 of the Listing Rules throughout the six months ended June 30, 2025, complying with all relevant code provisions, with exceptions for the Trustee-Manager's Remuneration Committee and Nomination Committee due to the unique circumstances of the Trust Deed - HKT Trust and the Company are committed to maintaining high standards of corporate governance and have applied the principles of the **Corporate Governance Code** set out in Appendix C1 of the Listing Rules throughout the period[174](index=174&type=chunk) - The Trustee-Manager's Remuneration Committee and Nomination Committee did not comply with relevant provisions of the **Corporate Governance Code** because the Trust Deed stipulates that its directors are not entitled to remuneration and that the Company's directors and the Trustee-Manager's directors must be the same individuals[174](index=174&type=chunk) - Directors have requested and received reports from management regarding risk management and internal control systems, confirming no significant risks or internal control deficiencies were found that were not adequately and appropriately mitigated and/or managed[175](index=175&type=chunk) [Corporate Information](index=60&type=section&id=Corporate%20Information) This chapter provides essential corporate information for HKT Limited and HKT Management Limited, including board members, registered office, stapled unit details, dividend distributions, financial calendar, investor relations contact, and listing information - The Board of Directors of HKT Limited includes Executive Directors Richard Li Tzar Kai (Executive Chairman) and Susanna Hui Hon Hing (Group Managing Director), as well as several Non-executive Directors and Independent Non-executive Directors[176](index=176&type=chunk) - Stapled units are traded in board lots of **1,000 units**, with **7,579,776,147 units** issued as of June 30, 2025[176](index=176&type=chunk) - The interim distribution per stapled unit for the six months ended June 30, 2025, was **HK$33.80 cents**, with a payment date on or about September 4, 2025[176](index=176&type=chunk) - HKT Trust and HKT Limited stapled units are listed on The Stock Exchange of Hong Kong Limited under stock code **6823**[177](index=177&type=chunk)[178](index=178&type=chunk) [Forward-Looking Statements](index=62&type=section&id=Forward-Looking%20Statements) This chapter contains forward-looking statements based on the current beliefs, assumptions, expectations, estimates, and projections of HKT's directors and management, but these are not guarantees of future business performance; actual results may differ materially due to risks and uncertainties such as macroeconomic and geopolitical uncertainties, increased competition, regulatory developments, ability to access capital, and challenges in executing business strategies - Forward-looking statements include, but are not limited to, statements regarding revenue, profit, and outlook, using words such as "believe," "plan," "project," "expect," "forecast," "estimate," etc[183](index=183&type=chunk) - Forward-looking statements are not guarantees of future business performance and are subject to risks, uncertainties, and other factors beyond the Company's control, which may cause actual results to differ materially from projections[183](index=183&type=chunk) - Factors that could cause actual results to differ include macroeconomic, public health, and geopolitical uncertainties, ability to execute business strategies, interest rate risks, regulatory developments, and increased market competition[182](index=182&type=chunk)[183](index=183&type=chunk)

[Definitions](index=3&type=section&id=Definitions) [Definition of Terms](index=3&type=section&id=2.1%20Definition%20of%20Terms) This section defines key terms and abbreviations used in the report, ensuring clarity for readers, covering the Company, Corporation, Board, Shareholders, currency, and regulatory rules - The reporting period is defined as the six months ended June 30, 2025[3](index=3&type=chunk) - Goldview Development Limited is the Company's controlling shareholder and an associated corporation, wholly owned by Mr. Jiang Xueming, a non-executive director[2](index=2&type=chunk) - The Group refers to Dongwu Cement International Limited and its subsidiaries[2](index=2&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) [Board of Directors](index=4&type=section&id=3.1%20Board%20of%20Directors) This section lists the composition of the company's board, including executive, non-executive, and independent non-executive directors, noting the resignation of independent non-executive director Cao Kuangyu and the appointment of Yuan Yuan on June 4, 2025 - Independent Non-Executive Director Cao Kuangyu resigned on June 4, 2025, and Yuan Yuan was appointed on the same day[4](index=4&type=chunk) [Key Positions and Committees](index=4&type=section&id=3.2%20Key%20Positions%20and%20Committees) This section details the composition of the company secretary, auditor, authorized representatives, and the audit, remuneration, and nomination committees, updating changes to reflect board adjustments - The chairpersons of the Audit Committee, Remuneration Committee, and Nomination Committee are all Suo Suo, and following Cao Kuangyu's resignation, Yuan Yuan was appointed to all three committees[4](index=4&type=chunk) [Company Basic Information](index=4&type=section&id=3.3%20Company%20Basic%20Information) This section provides the company's basic registration and listing information, including stock code, registered office, principal places of business, share registrar, legal advisors, and contact details, ensuring transparency - The company's stock code is **695**, listed on the Main Board of the Stock Exchange[4](index=4&type=chunk) - The company's principal places of business in China are located in Ganxian District, Ganzhou City, Jiangxi Province, and Lili Town, Wujiang District, Suzhou City, Jiangsu Province[4](index=4&type=chunk) - The company's website is http://www.dongwucement.com[6](index=6&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) [Industry Overview](index=7&type=section&id=4.1%20Industry%20Overview) This section analyzes the industry characteristics, market performance, and policy impacts across four business segments—cement, rare earth, biomedicine, and international trade—in H1 2025, noting weak cement demand but improved efficiency, policy-affected rare earth, terminated biomedicine investment, and diversified international trade [Cement Segment](index=7&type=section&id=4.1.1%20Cement%20Segment) In H1 2025, the cement industry saw weak demand, fluctuating prices, and improved year-on-year efficiency, with a strong Q1 driven by infrastructure, but a weaker Q2 due to real estate adjustments and slower infrastructure investment - In H1 2025, China's GDP grew by **5.3%** year-on-year, fixed asset investment by **2.8%** year-on-year, and real estate development investment decreased by **11.2%** year-on-year[8](index=8&type=chunk) - In H1 2025, national cement output was **815 million tons**, a year-on-year decrease of **4.3%**, the lowest level for the same period since 2010[8](index=8&type=chunk) Major Sales Regions PO42.5 Bulk Cement Average Price (June 2025 vs. Prior Year) | City | 2025 June (RMB/ton) | Prior Year (RMB/ton) | YoY Change | | :--- | :--- | :--- | :--- | | Nanjing | 296 | 319 | -7.1% | | Hangzhou | 345 | 360 | -4.3% | | Shanghai | 346 | 363 | -4.8% | [Rare Earth Segment](index=10&type=section&id=4.1.2%20Rare%20Earth%20Segment) Rare earth, a strategic resource, saw increased government control and export restrictions in H1 2025, impacting the Group's segment revenue due to high unit fixed costs and rising raw material prices, leading to exploration of strategic partnerships or divestment - In 2024, China's rare earth reserves were approximately **44 million tons**, accounting for **40%** globally; production was **270,000 tons**, accounting for **70%** globally[11](index=11&type=chunk) - The Ministry of Industry and Information Technology issued draft regulations to include monazite and imported rare earth minerals in total volume control[13](index=13&type=chunk) - The Ministry of Commerce and General Administration of Customs implemented export controls on seven categories of medium and heavy rare earth-related items, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium[13](index=13&type=chunk) - From January to May 2025, China's cumulative imports of rare earth oxides were **22,245.1 tons**, a year-on-year decrease of **6.86%**[13](index=13&type=chunk) - The Group's rare earth segment revenue fell short of expectations, primarily due to insufficient production and sales scale, resulting in high unit fixed costs and rising raw material prices, which prevented a turnaround from losses, leading to a proactive reduction in output[14](index=14&type=chunk) - The Group plans to lead with technological innovation to enhance the motor segment's capacity, efficiency, and quality, and actively seek strategic cooperation opportunities for divesting the rare earth segment or exploring other rare and precious metal businesses[14](index=14&type=chunk) [Biomedical Segment](index=12&type=section&id=4.1.3%20Biomedical%20Segment) The Group terminated its investment in the biomedical sector in H1 2024 due to higher-than-expected CAR-T drug R&D difficulties, completing related asset disposal on June 26, 2025 - The Group terminated its investment in the biomedical sector in H1 2024 and completed the disposal of related assets on June 26, 2025[15](index=15&type=chunk) [International Trade Segment](index=12&type=section&id=4.1.4%20International%20Trade%20Segment) In H1 2025, commodity prices fluctuated significantly due to geopolitical factors and uncertainties, prompting the Group to diversify its international trade operations and seek synergistic strategic partners and commercial opportunities - The Group is actively seeking and expanding diversified international trade operations, and exploring strategic partners and potential business opportunities with synergistic effects[16](index=16&type=chunk) [Revenue](index=13&type=section&id=4.2%20Revenue) During the reporting period, the Group's total revenue was approximately **HKD 125.811 million**, a year-on-year increase of **17.9%**, with the cement segment revenue growing significantly by **28.0%** due to staggered production and narrowing demand decline. The rare earth segment revenue was **HKD 7.170 million** Group Revenue Overview (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 125,811 | 106,613 | 17.9% | | Cement Segment Revenue | 118,641 | 92,689 | 28.0% | | Rare Earth Segment Revenue | 7,170 | 13,866 | -48.3% | Cement Product Sales Analysis (Six Months Ended June 30) | Product Category | 2025 Sales (thousand tons) | 2025 Average Selling Price (HKD/ton) | 2025 Revenue (HKD thousands) | 2024 Sales (thousand tons) | 2024 Average Selling Price (HKD/ton) | 2024 Revenue (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | PO 42.5 Cement | 394 | 218 | 85,809 | 293 | 225 | 66,003 | | PC 42.5 Cement | 120 | 242 | 28,947 | 91 | 241 | 21,897 | | PSS 32.5 | 23 | 169 | 3,885 | – | – | – | | PC 32.5 | – | – | – | 19 | 251 | 4,761 | | **Total** | **537** | **-** | **118,641** | **403** | **-** | **92,661** | - Cement product sales volume increased by approximately **33.3%** year-on-year, with sales revenue increasing by approximately **28.0%** year-on-year[18](index=18&type=chunk) - The Group's sales in Zhejiang Province achieved significant year-on-year growth, demonstrating the effectiveness of multi-regional sales channel expansion[19](index=19&type=chunk) [Gross Profit and Gross Margin](index=15&type=section&id=4.3%20Gross%20Profit%20and%20Gross%20Margin) During the reporting period, the cement segment's gross loss narrowed by **25.4%**, and its gross margin improved by **2.3 percentage points** to **-3.3%**, driven by cost reduction and price recovery, while the rare earth segment recorded a gross loss of **HKD 1.883 million** and a gross margin of **-26.3%** due to insufficient production scale Gross Profit and Gross Margin (Six Months Ended June 30) | Segment | 2025 Gross Loss (HKD thousands) | 2024 Gross Loss (HKD thousands) | Gross Loss Change (%) | 2025 Gross Margin (%) | 2024 Gross Margin (%) | Gross Margin Change (percentage points) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cement Segment | (3,873) | (5,192) | -25.4% | -3.3% | -5.6% | 2.3% | | Rare Earth Segment | (1,883) | - | - | -26.3% | - | - | - The narrowing of the cement segment's gross loss was primarily due to the Company's efforts in optimizing management for cost reduction and efficiency improvement, alongside initiatives to restore prices and optimize costs[21](index=21&type=chunk) - The rare earth segment recorded a gross loss primarily because production and sales had not yet achieved scale, leading to higher unit fixed costs[21](index=21&type=chunk) [Other Income](index=16&type=section&id=4.4%20Other%20Income) During the reporting period, the Group's other income significantly increased by **889.5%** to **HKD 26.401 million**, primarily due to gains from the transfer of cement clinker production capacity quotas Other Income (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Other Income | 26,401 | 2,668 | 889.5% | | Gain from transfer of cement clinker production capacity quotas | 22,052 | – | - | - The significant increase in other income was primarily due to the Company's transfer of **750,000 tons/year** of cement clinker production capacity quotas during the reporting period, and it will continue to ensure supply through external clinker procurement[22](index=22&type=chunk)[101](index=101&type=chunk) [Distribution Expenses](index=16&type=section&id=4.5%20Distribution%20Expenses) The Group's distribution expenses decreased by **39.7%** year-on-year to **HKD 1.022 million**, primarily attributed to refined management reforms, improved management efficiency, and enhanced resource allocation efficiency Distribution Expenses (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Distribution Expenses | 1,022 | 1,695 | -39.7% | - The decrease in distribution expenses was primarily due to the Company's continuous promotion of refined management reforms, improved management efficiency driving cost optimization, and enhanced resource allocation efficiency[23](index=23&type=chunk) [Administrative Expenses](index=16&type=section&id=4.6%20Administrative%20Expenses) During the reporting period, the Group's general and administrative expenses decreased by **13.8%** to **HKD 19.017 million**, primarily benefiting from efficient allocation of administrative resources and cost savings achieved through management optimization Administrative Expenses (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | General and Administrative Expenses | 19,017 | 22,063 | -13.8% | - The decrease in administrative expenses was due to efficient allocation of administrative resources and cost savings achieved through management optimization[24](index=24&type=chunk) [Income Tax Credit](index=16&type=section&id=4.7%20Income%20Tax%20Credit) The Group's income tax credit significantly increased during the reporting period, primarily due to the release of deferred tax liabilities related to withholding tax on distributable profits Income Tax Credit (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Income Tax Credit | 4,250 | 1,299 | - The significant increase in income tax credit was primarily due to the release of deferred tax liabilities related to withholding tax on distributable profits[25](index=25&type=chunk) [Net Profit Margin](index=17&type=section&id=4.8%20Net%20Profit%20Margin) During the reporting period, the Group's net profit margin improved by **27.2 percentage points** to **-10.3%**, primarily driven by domestic cement industry policies leading to performance recovery, slowing market demand, and gains from transferring cement clinker production capacity quotas Net Profit Margin (Six Months Ended June 30) | Metric | 2025 (%) | 2024 (%) | Change (percentage points) | | :--- | :--- | :--- | :--- | | Net Profit Margin | -10.3% | -37.5% | 27.2% | - The increase in net profit margin was primarily due to the recovery in performance driven by domestic cement industry policies, slowing overall market demand in China, and gains from transferring cement clinker production capacity quotas[27](index=27&type=chunk) [Liquidity and Capital Resources](index=17&type=section&id=4.9%20Liquidity%20and%20Capital%20Resources) The Group primarily meets its working capital needs through operating cash flows, bank loans, trade and other payables, and IPO proceeds; during the reporting period, cash and cash equivalents significantly increased, and the gearing ratio decreased, indicating improved liquidity [Cash and Cash Equivalents](index=17&type=section&id=4.9.1%20Cash%20and%20Cash%20Equivalents) As of June 30, 2025, the Group's cash and cash equivalents were **HKD 268.647 million**, a significant increase of **98.3%** from December 31, 2024, mainly due to the withdrawal of short-term deposits during the reporting period Cash and Cash Equivalents (Period End) | Metric | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 268,647 | 135,495 | 98.3% | - The increase in cash and cash equivalents was primarily due to the withdrawal of short-term deposits during the reporting period[30](index=30&type=chunk) [Borrowings](index=18&type=section&id=4.9.2%20Borrowings) As of June 30, 2025, the Group's bank borrowings were approximately **HKD 284.440 million**, a slight decrease of **1.6%** from December 31, 2024, remaining stable, with some borrowings secured by property, plant and equipment, land use rights, and subsidiary equity Borrowings Composition (Period End) | Category | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Current Borrowings | 295,140 | 299,755 | | - Cement Segment | 89,018 | 96,829 | | - Rare Earth Segment | 195,422 | 192,226 | | - Unallocated | 10,700 | 10,700 | | Total Bank Borrowings | 284,440 | 289,055 | | Other Loans | 10,700 | 10,700 | - Approximately **HKD 157.110 million** of borrowings were secured by the Group's property, plant and equipment, land use rights, and equity interests in subsidiaries[31](index=31&type=chunk) - As of June 30, 2025, the Group had no unutilized bank facilities[33](index=33&type=chunk) [Gearing Ratio](index=18&type=section&id=4.9.3%20Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was **96.0%**, a decrease from **118.6%** as of December 31, 2024, indicating an improvement in financial leverage Gearing Ratio (Period End) | Metric | 2025 June 30 (%) | 2024 December 31 (%) | Change (percentage points) | | :--- | :--- | :--- | :--- | | Gearing Ratio | 96.0% | 118.6% | -22.6% | - The decrease in the gearing ratio indicates an improvement in the Group's financial leverage[34](index=34&type=chunk) [Capital Expenditure and Capital Commitments](index=19&type=section&id=4.9.4%20Capital%20Expenditure%20and%20Capital%20Commitments) As of June 30, 2025, the Group's capital expenditure was approximately **HKD 4.375 million**, primarily from the cement segment, a significant increase from the prior year, with no capital commitments during the same period Capital Expenditure (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Total Capital Expenditure | 4,375 | 966 | | - Cement Segment | 4,012 | 966 | - As of June 30, 2025, the Group had no capital commitments (December 31, 2024: **HKD 4.521 million**)[37](index=37&type=chunk) [Pledged Assets](index=19&type=section&id=4.9.5%20Pledged%20Assets) As of June 30, 2025, certain property, plant and equipment, land use rights, and equity interests in subsidiaries within the Group's rare earth segment were pledged as collateral for bank borrowings Carrying Value of Pledged Assets (Rare Earth Segment, Period End) | Asset Category | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Property, Plant and Equipment | 18,781 | 22,153 | | Land Use Rights | 2,286 | 2,290 | - Equity interests in subsidiaries were also pledged as collateral for certain bank borrowings of the Group[38](index=38&type=chunk) [Contingent Liabilities](index=19&type=section&id=4.9.6%20Contingent%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[39](index=39&type=chunk) [Foreign Exchange Risk](index=19&type=section&id=4.9.7%20Foreign%20Exchange%20Risk) The Group's operations are primarily in mainland China, mainly denominated in RMB, with minor HKD receipts and payments; it was not significantly affected by exchange rate fluctuations during the reporting period and did not implement hedging measures, but management will monitor and consider necessary actions - The Group's operations are primarily in mainland China, with operating expenses and capital receipts and payments mainly denominated in RMB, and a small portion in HKD[40](index=40&type=chunk) - During the reporting period, the Group was not significantly affected by exchange rate fluctuations in its business operations and operating funds, nor did it implement any hedging measures[40](index=40&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries and Associates](index=20&type=section&id=4.10%20Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) During the reporting period, the Group did not undertake any significant acquisitions or disposals of its subsidiaries or associates - During the reporting period, the Group did not undertake any significant acquisitions or disposals of its subsidiaries or associates[41](index=41&type=chunk) [Interim Dividend](index=20&type=section&id=4.11%20Interim%20Dividend) The Board resolved on December 5, 2024, to declare a special dividend of **HKD 0.136 per share**, which was paid on March 31, 2025, due to delayed tax payment; no interim dividend is recommended for this reporting period - The Board resolved on December 5, 2024, to declare a special dividend of **HKD 0.136 per share**, and due to delayed tax payment, the payment date was postponed to March 31, 2025[42](index=42&type=chunk) - Save as disclosed above, the Board did not recommend the payment of any interim dividend for the six months ended June 30, 2025[42](index=42&type=chunk) [Employees and Remuneration Policy](index=20&type=section&id=4.12%20Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had **275 employees**, with total remuneration of approximately **HKD 13.999 million** during the reporting period, and remuneration levels are determined based on responsibilities, performance, contributions, merits, qualifications, and abilities Employee and Remuneration Overview (Six Months Ended June 30) | Metric | 2025 | | :--- | :--- | | Number of Employees | 275 people | | Total Employee Remuneration | HKD 13,999,000 | - Employee remuneration levels are commensurate with their responsibilities, performance, and contributions, and are determined with reference to their merits, qualifications, and abilities, as well as the recommendations of the Remuneration Committee[43](index=43&type=chunk) [Future Outlook](index=21&type=section&id=4.13%20Future%20Outlook) In H2 2025, the Group aims to maximize shareholder value by optimizing operations, focusing on market and talent development, exploring diverse investment opportunities, and optimizing asset structure to enhance overall competitiveness, while continuing to monitor the cement segment and actively explore rare earth divestment or other precious metal ventures - The Group will focus on "enhancing overall shareholder equity and maximizing shareholder value"[45](index=45&type=chunk) - Operationally, it will leverage process improvements and technological upgrades to enhance operational efficiency, reduce costs, and increase efficiency[45](index=45&type=chunk) - In business development, it will actively explore diverse investment opportunities, promote the development of the international trade segment, and focus on core businesses, improving profitability and operational efficiency through asset structure optimization and capital operations[45](index=45&type=chunk) - Regarding the rare earth segment, due to lower-than-expected revenue, the company is seeking diversified business opportunities and actively exploring potential strategic collaborations, including but not limited to developing other rare and precious metal businesses and seeking opportunities for rare earth segment divestment[45](index=45&type=chunk) [Other Information](index=22&type=section&id=Other%20Information) [Share Capital](index=22&type=section&id=5.1%20Share%20Capital) As of June 30, 2025, the Company's issued share capital was **HKD 5.520 million**, divided into **552 million shares** with a par value of **HKD 0.01 per share** Share Capital Overview (As of June 30, 2025) | Metric | Value | | :--- | :--- | | Issued Share Capital | HKD 5,520,000 | | Number of Issued Shares | 552,000,000 shares | | Par Value per Share | HKD 0.01 | [Supplementary Information on Share Option Scheme](index=22&type=section&id=5.2%20Supplementary%20Information%20on%20Share%20Option%20Scheme) The company's share option scheme adopted on May 28, 2015, expired on May 28, 2025; no options were granted or exercised in the year ended December 31, 2024, with **55.2 million** options available for grant - The share option scheme expired at the close of business on May 28, 2025, being the tenth anniversary of its adoption date[49](index=49&type=chunk) - For the year ended December 31, 2024, no share options were granted under the share option scheme, and no share options remained outstanding or unexercised[47](index=47&type=chunk) - The total number of shares available for issue under the share option scheme was **55.2 million shares**, representing **10%** of the total issued shares as of the annual report date[47](index=47&type=chunk) [Directors', Supervisors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=23&type=section&id=5.3%20Directors'%2C%20Supervisors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, Non-Executive Director Mr. Jiang Xueming held **53.89%** of the company's shares through his wholly-owned Goldview Development Limited, with Executive Director Mr. Liu Dong and Company Secretary Ms. Lu Rulan also holding minor shares; no other disclosable interests or short positions were held by directors and chief executives Directors' and Chief Executive's Shareholding Profile (As of June 30, 2025) | Name | Capacity | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Jiang Xueming | Interest in controlled corporation | 297,500,000 | 53.89% | | Mr. Liu Dong | Beneficial owner | 1,484,000 | 0.27% | | Ms. Lu Rulan | Beneficial owner | 834,000 | 0.15% | - Mr. Jiang Xueming is deemed to be interested in the same shares of the Company as Goldview, which is wholly owned by Mr. Jiang Xueming[50](index=50&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares of the Company](index=24&type=section&id=5.4%20Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20of%20the%20Company) As of June 30, 2025, Goldview Development Limited, as the controlling shareholder, held **53.89%** of the company's shares, and Mr. Huang Yingbiao held **12.07%** of the shares, both being substantial shareholders Substantial Shareholders' Shareholding Profile (As of June 30, 2025) | Name/Name | Capacity | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Goldview | Beneficial owner | 297,500,000 | 53.89% | | Mr. Huang Yingbiao | Beneficial owner | 66,650,000 | 12.07% | - Goldview is wholly owned by Mr. Jiang Xueming, a Non-Executive Director, who is deemed to be interested in the same shares of the Company as Goldview[52](index=52&type=chunk) [Share Option Scheme](index=24&type=section&id=5.5%20Share%20Option%20Scheme) The Company's share option scheme adopted on May 28, 2015, expired on May 28, 2025; **55.2 million** options were available for grant at the beginning of the reporting period, with zero at the end, and no options were granted, exercised, cancelled, or lapsed during the period - The share option scheme expired on May 28, 2025[53](index=53&type=chunk) - The number of share options available for grant at the beginning of the reporting period was **55.2 million**, and zero at the end of the period[53](index=53&type=chunk) - During the reporting period, no share options were granted by the Company, and no share options were exercised, cancelled, or lapsed[53](index=53&type=chunk) [Changes in Directors' Information](index=25&type=section&id=5.6%20Changes%20in%20Directors'%20Information) The Directors confirmed that as of June 30, 2025, no information was required to be disclosed under Rule 13.51B(1) of the Listing Rules - The Directors confirmed that as of June 30, 2025, no information was required to be disclosed under Rule 13.51B(1) of the Listing Rules[54](index=54&type=chunk) [Repurchase, Sale or Redemption of the Company's Listed Securities](index=25&type=section&id=5.7%20Repurchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[55](index=55&type=chunk) [Material Litigation and Arbitration](index=25&type=section&id=5.8%20Material%20Litigation%20and%20Arbitration) To the best knowledge of the Directors, the Group was not involved in any material litigation, arbitration, or claims during the reporting period, nor was it involved in any significant outstanding or threatened litigation or claims against the Company - To the best knowledge of the Directors, the Group was not involved in any material litigation, arbitration, or claims during the reporting period[56](index=56&type=chunk) [Compliance with Corporate Governance Code](index=25&type=section&id=5.9%20Compliance%20with%20Corporate%20Governance%20Code) The Company has adopted and complied with the Corporate Governance Code set out in Appendix C1 to the Listing Rules during the reporting period - The Company has adopted and complied with the Corporate Governance Code set out in Appendix C1 to the Listing Rules during the reporting period[57](index=57&type=chunk)[58](index=58&type=chunk) [Compliance with Model Code](index=26&type=section&id=5.10%20Compliance%20with%20Model%20Code) The Company has adopted the Model Code set out in Appendix C3 to the Listing Rules as the code of conduct for directors' securities transactions, and all directors confirmed compliance during the reporting period after specific enquiry - The Company has adopted the Model Code set out in Appendix C3 to the Listing Rules as the code of conduct for directors' securities transactions[59](index=59&type=chunk) - Following specific enquiry with all Directors, they confirmed compliance with the required standards set out in the Model Code during the reporting period[59](index=59&type=chunk) [Audit Committee](index=26&type=section&id=5.11%20Audit%20Committee) The Audit Committee reviewed the Group's unaudited interim financial report for the six months ended June 30, 2025, and discussed financial reporting, risk management, and internal control matters with management, concluding that the financial statements were prepared in compliance with applicable accounting standards and properly disclosed - The Audit Committee reviewed the Group's unaudited interim financial report for the six months ended June 30, 2025, and discussed financial reporting, risk management, and internal control matters with management[60](index=60&type=chunk) - The Audit Committee believes that the preparation of these financial statements complies with applicable accounting standards and requirements, and appropriate disclosures have been made[60](index=60&type=chunk) [Events After Reporting Period](index=26&type=section&id=5.12%20Events%20After%20Reporting%20Period) As of the date of this report, no significant events requiring additional disclosure or potentially affecting the Company have occurred after the reporting period - As of the date of this report, no significant events requiring additional disclosure or potentially affecting the Company have occurred after the reporting period[61](index=61&type=chunk) [Review Report on Condensed Consolidated Interim Financial Statements](index=27&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Scope of Review and Conclusion](index=27&type=section&id=6.1%20Scope%20of%20Review%20and%20Conclusion) The auditor reviewed the condensed consolidated interim financial statements for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410; while the scope is less than an audit, no matters were found to suggest the financial statements were not prepared in all material respects in accordance with HKAS 34 - The auditor reviewed the condensed consolidated interim financial statements in accordance with Hong Kong Standard on Review Engagements 2410[64](index=64&type=chunk) - The scope of review is substantially less than an audit conducted in accordance with Hong Kong Standards on Auditing, and therefore no audit opinion is expressed[64](index=64&type=chunk) - The auditor found no matters that lead them to believe that the condensed consolidated interim financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[65](index=65&type=chunk) [Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income](index=29&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) [Profit or Loss Overview](index=29&type=section&id=7.1%20Profit%20or%20Loss%20Overview) For the six months ended June 30, 2025, the Group's revenue increased to **HKD 125.811 million**, gross loss narrowed, operating loss significantly reduced, income tax credit increased, and loss for the period substantially narrowed to **HKD 12.966 million** Condensed Consolidated Interim Profit or Loss Overview (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 125,811 | 106,613 | 17.9% | | Cost of sales | (131,567) | (114,426) | 15.0% | | Gross loss | (5,756) | (7,813) | -26.3% | | Operating loss | (7,948) | (28,903) | -72.5% | | Loss before income tax | (17,203) | (27,841) | -38.2% | | Income tax credit | 4,250 | 1,299 | 227.2% | | Loss for the period | (12,966) | (39,981) | -67.6% | [Other Comprehensive Income and Attributable Loss](index=30&type=section&id=7.2%20Other%20Comprehensive%20Income%20and%20Attributable%20Loss) During the reporting period, the Group recorded a total comprehensive income of **HKD 2.977 million**, a significant improvement from the prior year, with loss for the period attributable to owners of the Company at **HKD 9.155 million** and to non-controlling interests at **HKD 3.811 million** Other Comprehensive Income and Attributable Loss (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Exchange differences arising from translation of financial statements of overseas operations | 17,059 | (16,573) | | Total comprehensive income for the period | 2,977 | (56,554) | | Loss for the period attributable to owners of the Company | (9,155) | (35,874) | | Loss for the period attributable to non-controlling interests | (3,811) | (4,107) | - Basic and diluted loss per share from continuing operations narrowed to **HKD 0.016 per share**, compared to **HKD 0.041 per share** in the prior year[71](index=71&type=chunk) [Condensed Consolidated Interim Statement of Financial Position](index=32&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) [Assets Overview](index=32&type=section&id=8.1%20Assets%20Overview) As of June 30, 2025, the Group's total non-current assets were **HKD 424.875 million**, and total current assets were **HKD 534.623 million**, with cash and cash equivalents significantly increasing, and all short-term bank deposits withdrawn Condensed Consolidated Interim Assets Overview (Period End) | Asset Category | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 424,875 | 430,227 | | Total Current Assets | 534,623 | 612,008 | | - Inventories | 200,535 | 196,531 | | - Trade and other receivables | 57,833 | 55,119 | | - Short-term bank deposits | – | 206,866 | | - Cash and cash equivalents | 268,647 | 135,495 | - Assets classified as held for sale were fully disposed of during the reporting period, resulting in zero at period end[72](index=72&type=chunk) [Liabilities and Equity Overview](index=33&type=section&id=8.2%20Liabilities%20and%20Equity%20Overview) As of June 30, 2025, the Group's total current liabilities were **HKD 309.990 million**, and total non-current liabilities were **HKD 159.920 million**, with dividends payable paid, leading to a reduction in current liabilities; net assets increased to **HKD 489.588 million**, and equity attributable to owners of the Company was **HKD 391.239 million** Condensed Consolidated Interim Liabilities and Equity Overview (Period End) | Metric | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Total Current Liabilities | 309,990 | 383,353 | | - Trade and other payables | 106,573 | 123,688 | | - Contract liabilities | 22,707 | 11,109 | | - Borrowings | 180,321 | 171,604 | | - Dividends payable | – | 75,072 | | Total Non-current Liabilities | 159,920 | 182,037 | | Net Assets | 489,588 | 476,845 | | Equity attributable to owners of the Company | 391,239 | 387,315 | | Non-controlling interests | 98,349 | 89,530 | - Net current liabilities were **HKD 224.633 million**, a slight decrease from the end of last year[73](index=73&type=chunk) [Condensed Consolidated Interim Statement of Changes in Equity](index=34&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) [Equity Changes Overview](index=34&type=section&id=9.1%20Equity%20Changes%20Overview) For the six months ended June 30, 2025, total equity attributable to owners of the Company increased to **HKD 391.239 million**, primarily due to reduced loss for the period and positive exchange differences, with non-controlling interests also increasing Condensed Consolidated Interim Equity Changes Overview (Six Months Ended June 30) | Metric | 2025 June 30 (HKD thousands) | 2024 January 1 (HKD thousands) | | :--- | :--- | :--- | | Total equity attributable to owners of the Company | 391,239 | 534,855 | | Non-controlling interests | 98,349 | 101,884 | | Total equity | 489,588 | 636,739 | | Loss for the period (attributable to owners of the Company) | (9,155) | (35,874) | | Exchange differences arising from translation of financial statements of overseas operations (attributable to owners of the Company) | 14,195 | (13,916) | | Exchange reserve released on disposal of a subsidiary | (1,116) | – | - Total comprehensive income for the period was **HKD 2.977 million**, a significant improvement from **(HKD 56.554 million)** in the prior year[74](index=74&type=chunk)[75](index=75&type=chunk) [Condensed Consolidated Interim Statement of Cash Flows](index=36&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Cash%20Flows) [Cash Flows Overview](index=36&type=section&id=10.1%20Cash%20Flows%20Overview) For the six months ended June 30, 2025, the Group's net cash used in operating activities was **HKD 766,000**, net cash generated from investing activities was **HKD 222.747 million**, and net cash used in financing activities was **HKD 95.631 million**; cash and cash equivalents significantly increased to **HKD 268.647 million** at period end Condensed Consolidated Interim Cash Flows Overview (Six Months Ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (766) | (57,479) | | Net cash generated from investing activities | 222,747 | 23,635 | | Net cash (used in) / generated from financing activities | (95,631) | 37,715 | | Net increase in cash and cash equivalents | 126,350 | 3,871 | | Cash and cash equivalents at end of period | 268,647 | 25,676 | - Investing activities' net cash inflow primarily benefited from the withdrawal of short-term deposits of **HKD 209.573 million**[77](index=77&type=chunk) - Financing activities' net cash outflow was primarily due to dividends paid of **HKD 75.072 million**[79](index=79&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=38&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [General Information](index=38&type=section&id=11.1%20General%20Information) Dongwu Cement International Limited, incorporated in the Cayman Islands, is an investment holding company primarily engaged in cement production and sales, magnetic materials and other application products production and sales, and trading businesses, with its shares listed on the Main Board of the Hong Kong Stock Exchange since June 13, 2012 - The Company is an investment holding company primarily engaged in cement production and sales, production and sales of magnetic materials and other application products, and trading businesses[80](index=80&type=chunk) - The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since June 13, 2012[81](index=81&type=chunk) [Basis of Preparation](index=38&type=section&id=11.2%20Basis%20of%20Preparation) The condensed consolidated interim financial information is prepared in accordance with HKAS 34 and applicable disclosure provisions of the Listing Rules, approved for publication by the Board on August 22, 2025, and, while unaudited, has been reviewed by an independent auditor - The financial information is prepared in accordance with Hong Kong Accounting Standard 34 and the applicable disclosure provisions of the Listing Rules[82](index=82&type=chunk) - The financial information is unaudited but has been reviewed by BDO Limited in accordance with Hong Kong Standard on Review Engagements 2410[83](index=83&type=chunk) [Significant Accounting Policies](index=39&type=section&id=11.3%20Significant%20Accounting%20Policies) This section outlines the Group's significant accounting policies, including amendments to HKFRS effective January 1, 2025, and the treatment of current income tax, noting that the amendments applied during the period had no significant impact on financial performance or position - The application of amendments to HKFRS accounting standards during the period had no significant impact on the Group's financial performance and position for the current and prior periods, and/or the disclosures presented in these condensed consolidated interim financial statements[85](index=85&type=chunk) - Interim income tax is accrued using the tax rate applicable to the expected total annual earnings[86](index=86&type=chunk) [Application of Judgements and Estimates](index=40&type=section&id=11.4%20Application%20of%20Judgements%20and%20Estimates) In preparing the financial information, management makes judgments, estimates, and assumptions affecting the application of accounting policies, reported amounts of assets and liabilities, and income and expenses; actual results may differ, and key judgments and sources of estimation uncertainty are consistent with the 2024 consolidated financial statements - In preparing the financial information, management is required to make judgments, estimates, and assumptions that affect the application of accounting policies, the reported amounts of assets and liabilities, and income and expenses[88](index=88&type=chunk) - The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty in preparing the financial information are the same as those applied in the consolidated financial statements for the year ended December 31, 2024[88](index=88&type=chunk) [Financial Risk Management](index=40&type=section&id=11.5%20Financial%20Risk%20Management) The Group's operations involve foreign exchange risk, cash flow interest rate risk, credit risk, and liquidity risk; it aims to maintain sufficient cash and credit lines for liquidity and funds needs through operating cash, bank borrowings, and shareholder support, with no significant changes in risk management since year-end - The Group's operations involve various types of financial risks: foreign exchange risk, cash flow interest rate risk, credit risk, and liquidity risk[89](index=89&type=chunk) - The Group funds its working capital requirements through a combination of funds generated from operations, bank borrowings, and financial support provided by equity holders[90](index=90&type=chunk) - There have been no changes in the Group's risk management department or any risk management policies since year-end[89](index=89&type=chunk) [Segment Reporting](index=41&type=section&id=11.6%20Segment%20Reporting) The Group segments its business into continuing operations—cement production and sales, magnetic materials and other application products production and sales, and trading businesses—and the discontinued biotechnology research and development segment, based on reports reviewed by the chief operating decision maker, with most revenue and non-current assets derived from China operations - The Group's continuing reportable segments include: cement production and sales, production and sales of magnetic materials and other application products, and trading businesses[94](index=94&type=chunk) - The discontinued reportable segment is biotechnology research and development[92](index=92&type=chunk) Segment Revenue and Results (Six Months Ended June 30, 2025) | Segment | Segment Revenue (HKD thousands) | Segment Results (HKD thousands) | | :--- | :--- | :--- | | Cement production and sales | 118,641 | 15,572 | | Production and sales of magnetic materials and other application products | 7,170 | (20,520) | | Trading businesses | – | (871) | | Biotechnology research and development (discontinued operations) | – | (13) | | **Total** | **125,811** | **(5,832)** | - During the period, revenue from the Group's single largest external independent customer accounted for **26.22%** of the Group's revenue (June 30, 2024: **8.54%**)[97](index=97&type=chunk) [Revenue](index=44&type=section&id=11.7%20Revenue) The Group's revenue from continuing operations primarily stems from the cement production and sales segment and the magnetic materials and other application products segment, with significant growth in cement sales revenue and a decrease in magnetic materials sales revenue, and most revenue recognized at a point in time Revenue Analysis from Continuing Operations (Six Months Ended June 30) | Revenue Source | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Cement production and sales segment | 118,641 | 92,689 | | Production and sales of magnetic materials and other application products segment | 7,170 | 13,866 | | Trading businesses segment | – | 58 | | **Total** | **125,811** | **106,613** | Revenue Recognition Timing (Six Months Ended June 30) | Recognition Timing | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Goods transferred at a point in time | 122,572 | 102,895 | | Services transferred over time | 3,239 | 3,660 | - Contract liabilities of **HKD 11.109 million** as of January 1, 2025, were recognized as revenue for the six months ended June 30, 2025, upon satisfaction of current performance obligations[100](index=100&type=chunk) [Other Income and Net Other Gains](index=46&type=section&id=11.8%20Other%20Income%20and%20Net%20Other%20Gains) The Group's other income and net other gains significantly increased to **HKD 26.401 million**, primarily due to a gain of **HKD 22.052 million** from the transfer of cement clinker production capacity quotas and fair value changes of financial assets at fair value through profit or loss Other Income and Net Other Gains (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Government grants | 951 | 1,950 | | Rental income | 741 | – | | Fair value changes of financial assets at fair value through profit or loss | 2,479 | – | | Gain from transfer of cement clinker production capacity quotas | 22,052 | – | | **Total** | **26,401** | **2,668** | - The gain from the transfer of cement clinker production capacity quotas was the main reason for the significant increase in other income this period, and the company will continue to ensure supply through external clinker procurement[101](index=101&type=chunk) [Income Tax Credit](index=47&type=section&id=11.9%20Income%20Tax%20Credit) The Group's income tax credit for the reporting period was **HKD 4.250 million**, primarily from deferred tax credits; Chinese subsidiaries are taxed at **15%** or **25%** corporate income tax rates, with no provision recognized for Hong Kong and other overseas regions due to no estimated taxable profits Income Tax Credit (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Current tax | 4,125 | 38 | | Deferred tax | (8,375) | (1,337) | | **Income tax credit relating to continuing operations** | **(4,250)** | **(1,299)** | - The income tax credit primarily arose from deferred tax credits[102](index=102&type=chunk) - Chinese high-tech enterprise subsidiaries pay corporate income tax at a reduced rate of **15%**, while others pay at **25%**[102](index=102&type=chunk) [Loss Before Income Tax](index=48&type=section&id=11.10%20Loss%20Before%20Income%20Tax) The Group's loss before income tax from continuing operations was **HKD 17.203 million**, a significant narrowing from the prior year; the biomedical business was terminated during the period, with the disposal of related subsidiaries completed on June 26, 2025, resulting in a disposal loss of **HKD 7.073 million** Loss Before Income Tax Composition (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Cost of inventories sold | 125,635 | 107,426 | | Impairment provision for inventories | 2,756 | – | | Depreciation of property, plant and equipment | 9,557 | 12,574 | | Employee benefit expenses (including directors' emoluments) | 13,999 | 15,906 | - The Group completed the disposal of a subsidiary primarily engaged in biotechnology research and development on June 26, 2025, recording a disposal loss of **HKD 7.073 million**[106](index=106&type=chunk)[110](index=110&type=chunk) Loss for the Period from Discontinued Operations (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Administrative expenses | (13) | (1,056) | | Impairment provision for goodwill | – | (12,411) | | **Loss for the period from discontinued operations** | **(13)** | **(13,439)** | [Property, Plant and Equipment](index=52&type=section&id=11.11%20Property%20Plant%20and%20Equipment) As of June 30, 2025, the carrying value of property, plant and equipment was **HKD 223.503 million**, with additions of **HKD 4.375 million** during the period; certain land use rights and property, plant and equipment were pledged as collateral for bank borrowings Changes in Carrying Value of Property, Plant and Equipment (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Opening carrying value | 222,022 | 220,625 | | Additions | 4,375 | 32,713 | | Depreciation | (10,030) | (13,065) | | Exchange differences | 7,136 | (6,033) | | **Closing carrying value** | **223,503** | **234,110** | - As of June 30, 2025, certain land use rights and property, plant and equipment were pledged to secure bank borrowings of **HKD 157.110 million** for the Group[113](index=113&type=chunk) [Goodwill](index=53&type=section&id=11.12%20Goodwill) As of June 30, 2025, the carrying value of goodwill was **HKD 40.008 million**, with an impairment loss of **HKD 8.554 million** recognized during the period, primarily due to underperforming cash-generating units and competitive environment; goodwill is mainly allocated to the production and sales of magnetic materials and other application products segment Changes in Carrying Value of Goodwill (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Opening carrying value | 47,183 | 61,589 | | Impairment loss | (8,554) | (12,411) | | Exchange differences | 1,379 | (1,512) | | **Closing carrying value** | **40,008** | **47,563** | - The impairment loss of **HKD 8.554 million** was primarily due to underperforming cash-generating units and the competitive environment[116](index=116&type=chunk) - Goodwill is allocated to Cheng Zheng Group and its subsidiaries, for the production and sales of magnetic materials and other application products segment[115](index=115&type=chunk) [Intangible Assets](index=55&type=section&id=11.13%20Intangible%20Assets) As of June 30, 2025, the carrying value of intangible assets (technical know-how) was **HKD 11.758 million**, with amortization of **HKD 1.479 million** during the period; technical know-how has an estimated useful life of **10 years** and is amortized on a straight-line basis Changes in Carrying Value of Intangible Assets (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Opening carrying value | 12,845 | 22,046 | | Amortization | (1,479) | (1,842) | | Exchange differences | 392 | (565) | | **Closing carrying value** | **11,758** | **14,420** | - Technical know-how refers to intellectual property with a finite useful life and is amortized on a straight-line basis over its estimated useful life of **10 years**[117](index=117&type=chunk) [Investments in Associates](index=55&type=section&id=11.14%20Investments%20in%20Associates) As of June 30, 2025, the Group's investments in associates had a carrying value of **HKD 33.264 million**, primarily including investments in Suzhou Dongtong Environmental Protection Technology Co., Ltd. (**43.2%** interest) and Zhuhai Huiyin Huiheng Equity Investment Fund Management Co., Ltd. (**30%** interest); the share of associates' results for the period was a loss of **HKD 211,000** Changes in Carrying Value of Investments in Associates (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Opening carrying value | 32,417 | 34,798 | | Share of results of associates | (211) | (1,212) | | Exchange differences | 1,058 | (1,169) | | **Closing carrying value** | **33,264** | **32,417** | - The Group holds a **43.2%** interest in Dongtong Environmental Protection Technology, whose principal business is R&D of environmental protection technologies and provision of related services[118](index=118&type=chunk) - The Group holds a **30%** interest in Zhuhai Huiyin Huiheng Equity Investment Fund Management Co., Ltd., whose principal business is financial investment management[119](index=119&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=58&type=section&id=11.15%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the Group's financial assets at fair value through profit or loss were **HKD 109.576 million**, primarily investments in trust agreements managed by Guomin Trust to generate investment returns for the Group, classified as non-current assets Financial Assets at Fair Value Through Profit or Loss (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Investment in trust agreements | 109,576 | 108,027 | - The trust funds are managed by Guomin Trust, which is responsible for managing the trust assets to generate investment returns for the Group[129](index=129&type=chunk) - The Group has classified investments in trust agreements as non-current assets, expected to be realized within twelve months after the reporting period[129](index=129&type=chunk) [Inventories](index=58&type=section&id=11.16%20Inventories) As of June 30, 2025, the Group's total inventories were **HKD 200.535 million**, primarily comprising raw materials, work-in-progress, and finished goods, a slight increase from December 31, 2024 Inventories Composition (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Raw materials | 129,653 | 125,105 | | Work-in-progress | 13,447 | 13,564 | | Finished goods | 57,435 | 57,862 | | **Total** | **200,535** | **196,531** | [Trade and Other Receivables](index=59&type=section&id=11.17%20Trade%20and%20Other%20Receivables) As of June 30, 2025, the Group's total trade and other receivables were **HKD 57.833 million**, including trade receivables and bills receivable net, prepayments and deposits, and other receivables; impairment provisions for trade receivables increased during the period Trade and Other Receivables Composition (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Trade receivables and bills receivable, net | 25,221 | 24,850 | | Prepayments and deposits | 11,190 | 17,550 | | Other receivables | 21,667 | 13,219 | | **Total trade and other receivables** | **57,833** | **55,460** | Ageing Analysis of Trade Receivables and Bills Receivable (Period End) | Ageing | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Within 90 days | 15,459 | 15,601 | | 91 to 180 days | 5,977 | 6,186 | | 181 days to 1 year | 3,681 | 2,482 | | Over 1 year | 104 | 581 | - Other receivables include consideration receivable from the disposal of a subsidiary and transfer of cement clinker production capacity quotas of approximately **HKD 2.191 million** and **HKD 2.575 million**, respectively, and advances to non-controlling shareholders of the Group's subsidiaries of **HKD 8.020 million**[134](index=134&type=chunk) [Trade and Other Payables](index=62&type=section&id=11.18%20Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables were **HKD 106.573 million**, a decrease from December 31, 2024; credit terms from major suppliers range from **30 to 90 days**, with most amounts denominated in RMB Trade and Other Payables Composition (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Trade payables | 31,511 | 27,298 | | Bills payable | 10,616 | 29,426 | | Other payables | 34,015 | 36,395 | | Consideration payable | 21,912 | 21,217 | | **Total** | **106,573** | **123,688** | - Credit terms granted by the Group's major suppliers range from **30 to 90 days**[137](index=137&type=chunk) [Borrowings](index=63&type=section&id=11.19%20Borrowings) As of June 30, 2025, the Group's total bank and other loans were **HKD 295.140 million**, mostly bank borrowings, with some secured by the Company's guarantee, and others by subsidiary equity, land use rights, and property, plant and equipment Borrowings Composition and Repayment Terms (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Bank borrowings (unsecured) | 127,330 | 133,959 | | Bank borrowings (secured) | 157,110 | 155,096 | | Other loans (unsecured) | 10,700 | 10,700 | | **Total bank and other loans** | **295,140** | **299,755** | | Current portion | 180,321 | 171,604 | | Non-current portion | 114,819 | 128,151 | - Approximately **HKD 127.330 million** of bank borrowings are guaranteed by the Company, bearing fixed annual interest rates ranging from **2.90% to 4.45%**[140](index=140&type=chunk) - Approximately **HKD 157.110 million** of bank borrowings are secured by equity interests in the Company's subsidiaries, land use rights, and the Group's property, plant and equipment[142](index=142&type=chunk) [Deferred Income](index=64&type=section&id=11.20%20Deferred%20Income) As of June 30, 2025, the Group's deferred income was **HKD 19.962 million**, primarily government grants received from Chinese local government authorities to support subsidiaries' R&D activities Changes in Deferred Income (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Opening balance | 20,232 | 23,278 | | Credited to profit or loss | (915) | (1,115) | | Exchange differences | 645 | (604) | | **Closing balance** | **19,962** | **21,305** | - Deferred income refers to government grants received from Chinese local government authorities to support subsidiaries' R&D activities[141](index=141&type=chunk) [Deferred Tax](index=65&type=section&id=11.21%20Deferred%20Tax) As of June 30, 2025, the Group's net deferred tax liability was **HKD 18.106 million**, comprising deferred tax assets of **HKD 6.766 million** and deferred tax liabilities of **HKD 24.872 million**; unused tax losses were approximately **HKD 87.897 million**, of which **HKD 27.066 million** were recognized as deferred tax assets Deferred Tax Overview (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Deferred tax assets | 6,766 | 7,392 | | Deferred tax liabilities | (24,872) | (33,191) | | **Net deferred tax** | **(18,106)** | **(25,799)** | - As of June 30, 2025, the Group had unused tax losses of approximately **HKD 87.897 million** available to offset future profits[146](index=146&type=chunk) - Approximately **HKD 27.066 million** of unused tax losses were recognized as deferred tax assets, while approximately **HKD 60.831 million** remained unrecognized[146](index=146&type=chunk) [Share Capital](index=66&type=section&id=11.22%20Share%20Capital) As of June 30, 2025, the Company's authorized share capital was **HKD 100 million**, divided into **10 billion ordinary shares** with a par value of **HKD 0.01 per share;** issued and fully paid share capital was **HKD 5.520 million**, comprising **552 million shares** Share Capital Overview (Period End) | Item | Number of Ordinary Shares (thousands) | Par Value of Ordinary Shares (HKD thousands) | | :--- | :--- | :--- | | Authorized share capital | 10,000,000 | 100,000 | | Issued and fully paid share capital | 552,000 | 5,520 | [Loss Per Share](index=67&type=section&id=11.23%20Loss%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share from continuing and discontinued operations was **HKD 0.017**, a significant narrowing from **HKD 0.065** in the prior year; loss per share from continuing operations was **HKD 0.016** Loss Per Share (Six Months Ended June 30) | Item | 2025 (HKD/share) | 2024 (HKD/share) | | :--- | :--- | :--- | | Loss per share from continuing and discontinued operations | (0.017) | (0.065) | | Loss per share from continuing operations | (0.016) | (0.041) | | Loss per share from discontinued operations | (0.000) | (0.024) | - Diluted loss per share is the same as basic loss per share as there were no dilutive potential ordinary shares outstanding during the six months ended June 30, 2025 and 2024[147](index=147&type=chunk) [Dividends](index=67&type=section&id=11.24%20Dividends) No dividends were declared for the six months ended June 30, 2025; the special dividend of **HKD 0.136 per share** declared on December 5, 2024, was paid during this interim period - No dividends were declared for the six months ended June 30, 2025[150](index=150&type=chunk) - The special dividend of **HKD 0.136 per share** declared on December 5, 2024, was paid during this interim period[150](index=150&type=chunk) [Lease Liabilities](index=68&type=section&id=11.25%20Lease%20Liabilities) As of June 30, 2025, the Group's total lease liabilities were **HKD 656,000**, primarily for leased land and buildings, with most future lease payments due within one year Changes in Lease Liabilities (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Opening balance | 845 | 83 | | Interest expense | 13 | 13 | | Lease payments | (202) | (218) | | **Closing balance** | **656** | **1,031** | Lease Liabilities Liquidity Analysis (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Current portion | 389 | 382 | | Non-current portion | 267 | 463 | | **Total** | **656** | **845** | [Related Party Transactions](index=69&type=section&id=11.26%20Related%20Party%20Transactions) This section discloses key management personnel compensation of **HKD 1.544 million** and significant related party transactions; other payables include **HKD 3.839 million** owed to companies controlled by Mr. Jiang, which are unsecured, interest-free, and repayable on demand, with no significant non-exempt related party transactions under Listing Rules during the period Key Management Personnel Compensation (Six Months Ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Basic salaries and benefits in kind | 1,544 | 2,419 | - Other payables include amounts due to companies controlled by Mr. Jiang of **HKD 3.839 million**, which are unsecured, interest-free, and repayable on demand[157](index=157&type=chunk) - During the period, there were no significant related party transactions that constituted non-exempt connected transactions or non-exempt continuing connected transactions under the Listing Rules[160](index=160&type=chunk) [Capital Commitments](index=70&type=section&id=11.27%20Capital%20Commitments) As of June 30, 2025, the Group had no capital commitments for the acquisition of property, plant and equipment Capital Commitments (Period End) | Item | 2025 June 30 (HKD thousands) | 2024 December 31 (HKD thousands) | | :--- | :--- | :--- | | Commitments for acquisition of property, plant and equipment | – | 151 | [Financial Instruments](index=71&type=section&id=11.28%20Financial%20Instruments) This section presents the carrying amounts and fair values of financial assets and liabilities; as of June 30, 2025, total financial assets were **HKD 432.474 million** and total financial liabilities were **HKD 401.707 million**, with financial assets at fair value through profit or loss (trust agreement investments) classified as Level 3, valued based on fund manager estimates Carrying Amounts and Fair Values of Financial Assets and Liabilitie

Financial Performance - Revenue for the six months ended June 30, 2025, was HKD 12,593,839, a decrease of 7.7% compared to HKD 13,639,486 in 2024[5] - Profit attributable to owners of the company was HKD 263,523, down 20.2% from HKD 330,288 in the previous year[5] - Basic earnings per share decreased to HKD 42.11, a decline of 20.2% from HKD 52.78 in 2024[5] - Gross profit for the period was HKD 579,120, compared to HKD 804,243 in 2024, reflecting a decrease in gross margin[6] - Total comprehensive income for the period was HKD 368,916, down from HKD 442,720 in the previous year[8] - Sales of electronic components and semiconductors amounted to HKD 12,529,065 for the six months ended June 30, 2025, down from HKD 13,569,461 in 2024, reflecting a decrease of about 7.7%[20] - The company reported a total comprehensive income of HKD 368,916 for the six months ended June 30, 2025, compared to HKD 442,087 for the same period in 2024, indicating a decline of approximately 16.6%[14] - The company reported a profit of HKD 263,523,000 for the six months ended June 30, 2025, down from HKD 330,288,000 in 2024, a decrease of about 20.2%[30] - The company’s basic earnings per share for the six months ended June 30, 2025, were HKD 0.42, compared to HKD 0.53 in 2024, reflecting a decrease of approximately 20.8%[30] Dividends and Shareholder Returns - The company maintained an interim dividend of HKD 15.00 per share, unchanged from the previous year[5] - The company paid dividends totaling HKD 156,459 during the reporting period[14] - The company declared an interim dividend of HKD 0.15 per share for the fiscal year ending December 31, 2024, totaling HKD 156,459,360, approved on May 20, 2025[29] Assets and Liabilities - Current assets increased to HKD 9,317,950, compared to HKD 9,154,134 as of December 31, 2024[9] - Cash and cash equivalents significantly rose to HKD 4,507,011 from HKD 2,927,070 in the previous period[9] - Total liabilities decreased slightly to HKD 7,099,921 from HKD 7,154,103 as of December 31, 2024[10] - Net assets increased to HKD 3,296,331, up from HKD 3,083,874 at the end of 2024[10] - Total trade and other receivables amounted to HKD 1,013,573,000 as of June 30, 2025, compared to HKD 1,367,908,000 as of December 31, 2024, a decrease of approximately 26%[31] - Trade payables as of June 30, 2025, were HKD 3,451,520,000, down from HKD 3,837,230,000 as of December 31, 2024, indicating a reduction of about 10.1%[34] Cash Flow - The net cash generated from operating activities for the six months ended June 30, 2025, was HKD 1,355,057, compared to a net cash outflow of HKD 898,414 for the same period in 2024[16] - Cash and cash equivalents increased to HKD 4,507,011 as of June 30, 2025, up from HKD 1,041,839 at the end of the previous year[16] - The company’s investment activities generated a net cash inflow of HKD 129,995 for the six months ended June 30, 2025, compared to a net cash outflow of HKD 5,411 in 2024[16] - Operating cash inflow for the six months ended June 30, 2025, was HKD 1,355,057,000, compared to an outflow of HKD 898,414,000 in the same period last year[43] Business Strategy and Market Conditions - The company anticipates ongoing challenges in managing operating costs due to the complex global supply chain and demand visibility amid U.S.-China trade tensions and high interest rates[41] - The company plans to maintain a cautious approach focusing on cash flow management and capital expenditures to enhance competitiveness in the Greater China region[41] - The smartphone segment recorded significant revenue by providing competitive products to manufacturers and design companies in the Greater China region[38] - The company aims to expand its semiconductor supplier base and regional sales network to offer comprehensive design and supply chain services[37] Corporate Governance - The company has adopted the corporate governance code and has taken sufficient measures to ensure compliance[55] - The audit committee reviewed the accounting principles, internal controls, and risk management for the six months ending June 30, 2025[56] - All directors complied with the standard code of conduct for securities trading during the six months ending June 30, 2025[57] - The chairman and CEO positions are held by the same individual, which the board considers acceptable given the current business operations[55] - Changes in the board include the appointment of Ms. Yan Jiwen to the nomination committee and the departure of Mr. Huang Ruichuan from the same committee[58] - The company has not disclosed any legal claims or lawsuits against its directors, indicating effective management communication[55] Shareholder Information - Foxconn holds 124,000,000 shares, representing 19.81% of the company's issued share capital[52] - The company did not purchase, sell, or redeem any of its listed securities during the review period[54] - There were no known additional interests or short positions in the company's issued share capital as of June 30, 2025[53] - The company expressed gratitude to all employees for their contributions during challenging times[59]

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